Exhibit 4.4
DATED 27 September 2001
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(1) Publicis Groupe SA
- and -
(2) Cordiant Communications Group plc
- and -
(3) Mediavista Limited
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JOINT VENTURE AGREEMENT
RELATING TO
MEDIAVISTA LIMITED
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TABLE OF CONTENTS
ClauseHeadings Page
1. DEFINITIONS AND INTERPRETATION..........................................2
1.1 Definitions.............................................................2
1.2 Interpretation..........................................................7
2. TRANSFER OF Z SHARES AND OHL SHARES TO THE COMPANY,
SUBSCRIPTION OF A SHARES AND TRANSFER OF O GERMAN SHARES
TO OHL8
2.1 Transfer of Z B Shares to the Company by P..............................8
2.2 Transfer of Z A Shares to the Company by C..............................8
2.3 Further subscription of shares in the Company by P......................8
2.4 Buy-back of deferred shares.............................................8
2.5 Transfer of OHL Shares to the Company...................................8
2.6 Transfer of O German Shares to OHL......................................8
2.7 Allotment, Issue and Transfer of Shares.................................9
3. COMPLETION..............................................................9
3.1 Arrangements for Completion.............................................9
3.2 Further Obligations at Completion......................................10
4. THE BUSINESS...........................................................10
4.1 Nature of Business.....................................................10
4.2 Relationship with Shareholders.........................................10
4.3 Undertakings with regard to conduct of Business........................10
4.4 Undertakings with regard to the O German Companies.....................11
5. GENERAL UNDERTAKINGS...................................................11
5.1 Undertakings of the Company............................................11
5.2 Undertakings and agreement of the Shareholders.........................12
5.3 Undertakings of all parties............................................15
6. ANNUAL ACCOUNTS........................................................18
7. DIVIDENDS..............................................................18
7.1 Intention as regards dividends.........................................18
7.2 Policy.................................................................18
7.3 Recommendation, Declaration and Payment................................19
7.4 Interim Dividend of Z..................................................19
8. ADMISSION..............................................................19
8.1 Intention to seek Admission............................................19
8.2 First Put Option.......................................................20
8.3 First Call Option......................................................22
8.4 Provisions relating to First Put Option and to First Call Option.......23
9. SECOND CALL OPTION, SECOND PUT OPTION AND THIRD PUT OPTION.............23
9.1 Grant of Second Call Option............................................23
9.2 Grant of Second and Third Put Options..................................24
9.3 Provisions relating to the Second Put Option and to Third Put Option...24
10. OPTION STATEMENT.......................................................25
11. PROTECTION OF THE BUSINESS.............................................26
11.1 Definitions............................................................26
11.2 Restrictions...........................................................26
11.3 Restrictions Separate..................................................27
11.4 Exclusions.............................................................27
12. REPRESENTATIONS AND WARRANTIES.........................................27
12.1 General................................................................28
12.2 Relating to the Company................................................28
12.3 Relating to OHL........................................................28
13. TERMINATION............................................................28
13.1 Full Termination.......................................................28
13.2 Consequences of Termination............................................29
14. COSTS AND EXPENSES.....................................................29
15. CONFIDENTIALITY AND ANNOUNCEMENTS......................................29
15.1 General Restrictions...................................................29
15.2 Exceptions.............................................................30
16. DISPUTE RESOLUTION.....................................................30
17. GROUP RELIEF...........................................................30
18. CONDUCT OF TAX AFFAIRS.................................................32
19. MISCELLANEOUS PROVISIONS...............................................32
19.1 No Partnership.........................................................32
19.2 Assignment.............................................................32
19.3 Waiver.................................................................32
19.4 Entire Agreement.......................................................32
19.5 Notices................................................................33
19.6 Counterparts...........................................................34
19.7 Variations.............................................................34
19.8 Options................................................................34
19.9 Franchises.............................................................34
20. GOVERNING LAW, JURISDICTION AND SERVICE OF PROCESS.....................34
20.1 English Law............................................................34
20.2 Jurisdiction...........................................................34
20.3 Waiver.................................................................34
20.4 Other jurisdictions....................................................34
20.5 Service of documents...................................................35
SCHEDULE 1 Shareholders......................................................36
SCHEDULE 2 The Company.......................................................37
SCHEDULE 3 The O Business....................................................39
SCHEDULE 4 Form of Deed of Accession.........................................41
SCHEDULE 5 NEW ARTICLES......................................................45
SCHEDULE 5 NEW ARTICLES......................................................46
SCHEDULE 6 Dispute resolution................................................47
SCHEDULE 7 FRANCHISE AGREEMENTS..............................................50
AGREED DRAFTS
Agreed Draft A New Media Services Agreement
Agreed Draft B First Termination Letter
Agreed Draft C Tax Indemnity
Agreed Draft D Second Termination Letter
THIS AGREEMENT is made on 27 September 2001
BETWEEN:
1. The companies each of whose name, country of incorporation, registered
number and registered office is set out in Schedule 1 (each of those
parties whilst bound by this Agreement a "Shareholder" and together whilst
bound by this Agreement the "Shareholders"); and
2. Mediavista Limited (registered number 4244479) and whose registered office
is at 82 Baker Street, W1U 6AE, London (the "Company").
WHEREAS:
(A) Z is a company incorporated in England under the Companies Act 1985 and has
an authorised share capital of (pound)23,100,004 ordinary shares of
(pound)1 each divided into 11,550,002 A ordinary shares of (pound)1 each
and 11,550,002 B ordinary shares of (pound)1 each of which 23,100,004
shares have been issued credited as fully paid;
(B) Saatchi & Saatchi Holdings Limited, a wholly owned subsidiary of P, is the
holder of 11,550,002 Z Shares, all of which are B shares and C is the
registered holder of 11,550,002 Z Shares, all of which are A shares;
(C) OHL, a wholly owned subsidiary of P, is the holder of the O Shares (subject
to the exceptions set out in this Agreement);
(D) P and C intend to combine their interests in Z and the O Business (subject
to the exceptions set out in this Agreement);
(E) P intends to transfer the P Group's shareholding in Z to the Company in
exchange for the issue to Saatchi & Saatchi Holdings Limited of 2,500 A
Shares in the Company;
(F) C intends to transfer its shareholding in Z to the Company in exchange for
the issue to it of 2,500 B Shares in the Company;
(G) P intends to transfer its interest in OHL to the Company for the
consideration set out in this Agreement;
(H) It is the intention of P and C that the Company should be the subject of an
initial public offering on the London Stock Exchange by the Admission
Deadline and that if this should not occur by that date, (a) C shall have
the option to require P to purchase or procure the purchase of C's shares
in the Company and (b) P shall have the option to purchase C's shares in
the Company, in each case on the terms set out in this Agreement.
(I) It is the intention of the parties that they may transfer other media
services and buying businesses carried on by their respective groups to the
Company in exchange for the issue to them of shares in the Company;
(J) The Company was incorporated in England on 2 July 2001 under the Companies
Act 1985 and is a private company limited by shares;
(K) The Company has not traded and has no liabilities;
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(L) The authorised share capital of the Company is (pound)100 divided into 100
shares of (pound)1 each, two of which have been issued and are beneficially
owned by Saatchi & Saatchi Holdings Limited and C, and no person has any
right to call for the issue or allotment of any shares or other securities
in the Company save as contemplated in this Agreement;
(M) On 18 July 2001 P, C and OHL entered into the First JVA pursuant to which P
undertook to transfer or procure the transfer of the O Business to OHL and
P and C undertook to transfer their respective interest in Z to OHL;
(N) P, after 18 July 2001, transferred the O Business to OHL (with the
exception of the O German Shares which are to be transferred pursuant to
the terms of this Agreement) for the consideration set out under Schedule
3;
(O) As a result of the transfer mentioned under Recital (N) above OHL is
currently the beneficial owner of all the O Shares (with the exception of
the O German Shares), which are free from any Encumbrances;
(P) P and C have agreed to amend the terms and conditions of the First JVA;
(Q) For the purpose set out in Recital (P) above, P and C have agreed to
terminate by mutual consent the First JVA effective as of the date hereof
and to enter into a new joint venture agreement pursuant to the terms and
conditions set forth herein;
(R) The Shareholders and the Company have agreed to make provision for the
management and administration of its affairs on the terms and conditions
set out in this Agreement.
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement, the following words and expressions shall have the
following meanings:
"Accounts Date" means 31st December 2000;
"Act" means the Companies Act 1985 (as amended by the Companies Act
1989);
"Admission" means admission of all of the issued share capital of the
Company to trading on the London Stock Exchange and "Admitted" shall
be constmed accordingly;
"Admission Deadline" means the later of the second anniversary of
Completion and 31st December 2003;
"Agreed Draft" means a draft document in a form agreed between the
parties bearing an identifying letter and initialled by the parties
for the purpose of identification;
"Article" means a reference to a regulation set out in the New
Articles;
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"A Shares" means A ordinary shares of (pound)1 each in the capital of
the Company to be reduced to 50p each after the relevant resolution
referred to in clause 3.1.1(D) has been duly passed;
"A Directors" means A Directors of the Company as defined in the New
Articles;
"Auditors" means Ernst & Young and Mazars, chartered accountants, or
such other firm of international accountants as the Board may
determine from time to time, subject to clause 5.2.2(T);
"Board" means the board of directors of the Company;
"B Shares" means B ordinary shares of (pound)1 each in the capital of
the Company;
"B Directors" means B Directors of the Company as defined in the New
Articles;
"Business" means the business of Media Buying, Media Planning and
Related Services as such terms are defined in the New Media Services
Agreement;
"Business Day" means a day (excluding Saturdays) on which banks are
open for business in the City of London, Paris and New York;
"C" means Cordiant Communications Group plc;
"C Group" means C and the entities which are under its Control;
"Company's Group" means the Company and any undertaking under its
control from time to time;
"Completion" means, save in respect of the transfer of the O German
Shares, the completion of the obligations set out in clause 3 and the
due compliance with the obligations in clause 3;
"Control" means:
(a) the power (whether directly or indirectly and whether by the
ownership of share capital, the possession of voting power,
contract or otherwise) to appoint and/or remove all or such of
the members of the board of directors or other governing body of
a person as are able to cast a majority of the votes capable of
being cast by the members of that board or body on all, or
substantially all, matters, or otherwise to control or have the
power to control the policies and affairs of that person; and/or
(b) the holding and/or possession of the beneficial interest in
and/or the ability to exercise the voting rights applicable to
shares or other securities in any person (whether directly or by
means of holding such interests in one or more other persons)
which confer in aggregate on the holders thereof more than 50 per
cent of the total voting rights exercisable at general meetings
of that person on all, or substantially all, matters;
"Director" means a director of the Company;
"Deed of Accession" means a deed substantially in the form set out in
Schedule 4;
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"Encumbrance" means any mortgage, pledge, lien, charge, assignment,
hypothecation, or other agreement or arrangement which has the same or
a similar effect to the granting of security;
"Draft Statement" means the statement served under clause 10.1;
"financial year" means each period for which the Company is required
to produce accounts in accordance with the Act;
"First Call Option" means the option granted by C to P under clause
8.3;
"First Termination Letter" means the letter, in the form of Agreed
Draft "B", relating to the termination of (a) the shareholders
agreement, entered into on 11 December 1997, among C, Z, Saatchi &
Saatchi Holdings Ltd and Saatchi & Saatchi Plc, and (b) the media
services agreement, entered into on 11 December 1997, between C and Z,
and (c) the media services agreement, entered into on 11 December
1997, between Saatchi & Saatchi plc and Z;
"First JVA" means the joint venture agreement entered into on 18 July
2001 by and among P, C and OHL;
"First Put Option" means the option granted under sub-clause 8.2.1;
"Interest Period" means, in relation to a debt, each period determined
in accordance with Clause 6;
"Intermediate Articles" means the articles of association of the
Company which are set out in Schedule 5B;
"Investment Bank" means the investment bank appointed by the Company
to advise in relation to the Admission;
"LIBOR" means:
(a) the applicable Screen Rate; or
(c) (if no Screen Rate is available for the relevant currency or
period) the arithmetic mean of the rates (rounded upwards to four
decimal places) as supplied by the Reference Banks to leading
banks in the London interbank market,
as at close of business on the Quotation Day for the offering of
deposits in the currency of the relevant debt and for a period
comparable to the Interest Period for that debt;
"London Stock Exchange" means London Stock Exchange PLC (or its
successors);
"New Articles" means the articles of association of the Company which
are set out in Schedule 5A;
"New Media Services Agreement means the agreement relating to the
provision of media services in the form of Agreed Draft "A";
"O Business" means the companies set out in Schedule 3;
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"O German Companies" means Optimedia Gesellshaft fur Media-Services
mbH (Dusseldorf), More Media-Agentur GmbH (Dusseldorf) and More
Media-Agentur GmbH (Munchen);
"O German Shares" means the issued shares in the O German Companies
listed in Schedule 3, representing the percentages of the respective
share capitals specified therein;
"OHL" means Optimedia Holdings Limited, whose details are set out in
Schedule 2B;
"OHL Shares" means all the issued ordinary shares in the capital of
OHL;
"O Shares" means all the issued shares of each of the companies listed
in Schedule 3;
"Option" means any of the options set out under clauses 8 and 9
hereunder;
"Option Price" means the price at which the relevant Option is to be
exercised calculated pursuant to sub-clause 8.2.2;
"Option Shares" means the shares in the Company which are the subject
of an option hereunder;
"P" means Publicis Groupe SA;
"Permitted Transferee" means, in the case of the A Shares a member of
the P Group and in the case of the B Shares a member of the C Group;
"P Group" means P and the entities which are under its Control;
"Quotation Day" means, in relation to any period for which an interest
rate is to be determined:
(a) (if the currency is sterling) the first day of that period;
(b) (if the currency is Euro) two TARGET Days before the first day of
that period; or
(c) (for any other currency) two Business Days before the first day
of that period,
unless market practice differs in the relevant interbank market for a
currency, in which case the Quotation Day for that currency will be
determined in accordance with market practice in the relevant
interbank market (and if quotations would normally be given by leading
banks in the relevant interbank market on more than one day, the
Quotation Day will be the last of those days);
"Reference Banks" means, in relation to LIBOR, the principal London
offices of Barclays. Bank of Scotland and Lloyds TSB;
"Relevant Act" means:
(a) the establishment of an agency in the United Kingdom and/or
France and/or the Federal Republic of Germany for the
primary purpose of
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carrying out the business of media buying or media planning
in those countries, or
(b) the direct or indirect acquisition of an agency (other than
a full service advertising agency), in any country in which
the Company's Group carries on Business, whose principal
business is media buying or media planning, provided that if
such acquisition is an incidental part of a larger
transaction this shall not be considered to be a Relevant
Act if the media buying or media planning business is sold
within twelve months of the original acquisition, or
(c) the entering into, directly or indirectly, any partnership,
joint venture or other agreement for the principal purpose
of forming a business whose principal activity is media
buying or media planning competing with the Business in at
least two continents;
provided that where any member of the C Group is requested by a client
to set up, alone or jointly with another person, a media buying or a
media planning business (including but not limited to in the manners
set out under (a), (b) or (c) above) exclusively for such client, then
(i) compliance with such request and/or (ii) any act permitted under
the New Media Services Agreement shall not constitute a Relevant Act,
provided always that any such member of the C Group shall consult with
the Company before doing so;
"Screen Rate" means in relation to LIBOR, the British Bankers
Association Interest Settlement Rate for the relevant currency and
period displayed on the appropriate page of the Telerate/Reuters
screen;
"Second Call Option" means the option granted by C to P under clause
9.1;
"Second Put Option" means the option granted by P to C under clause
9.2.1;
"Second Termination Letter" means the letter, in the form of Agreed
Draft "D", relating to the termination of the First JVA;
"Shareholder" means, as at the date of this Agreement, each company
listed in Schedule 1;
"Shares" means A Shares and/or (as the case may be) B Shares;
"TARGET" means Trans-European Automated Real-time Gross Settlement
Express Transfer Payment system;
"TARGET Day" means any day on which TARGET is open for the settlement
of payments in euro;
"the Tax Indemnity" means a deed of indemnity against liability to Tax
in the form of Agreed Draft "C";
"Termination Date" means the date of termination of this Agreement;
"Third Put Option" means the option granted by P to C under clause
9.2.3;
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"UK Listing Authority" means the Financial Services Authority as the
competent authority for listing in the United Kingdom under Part IV of
the Financial Services Act 1986;
"Z" means Zenith Media Holdings Limited, whose details are set out in
Schedule 2A;
"Z Accounts" means the audited consolidated balance sheet of Z and its
subsidiaries as at the Accounts Date and the audited consolidated
profit and loss account of Z and its subsidiaries in respect of the
accounting reference period of Z and its subsidiaries ended on the
Accounts Date;
"Z Group" means Z and the entities under its Control;
"Z A Shares" means A ordinary shares of (pound)1 each in Z;
"Z B Shares" means B ordinary shares of (pound)1 each in Z; and
"Z Shares" means Z A Shares and Z B Shares.
1.2 Interpretation
1.2.1 In this Agreement, save where the context otherwise
requires:
1.2.2 the singular includes the plural and vice versa and
reference to any gender includes a reference to all other
genders;
1.2.3 headings and the use of bold typeface shall be ignored;
1.2.4 references to any enactment shall include references to such
enactment as it may, after the date of this Agreement, from
time to time be amended, supplemented or re-enacted;
1.2.5 a reference to a clause, sub-clause, paragraph,
sub-paragraph or schedule is, unless indicated to the
contrary, a reference to a clause, sub-clause, paragraph or
schedule of this Agreement;
1.2.6 a reference to a balance sheet or profit and loss account
includes a reference to any note forming part of it;
1.2.7 unless otherwise expressly provided, expressions defined in
the Act have the meanings there given to them;
1.2.8 a reference to a person includes a reference to a firm, a
body corporate, an unincorporated association or to a
person's executors or administrators;
1.2.9 a reference to a "party" is to a party to this Agreement for
the time being and a reference to the "parties" is, unless
otherwise stated to the contrary, a reference to all parties
to this Agreement for the time being;
1.2.10 references to writing shall include any modes of reproducing
words in a legible and non-transitory form; and a reference
to a document `in the agreed form' is a reference to a
document in the form of the draft which, for identification,
is endorsed with a statement (signed by or on behalf of the
parties) to the effect that it is such a document for the
purpose of this Agreement; and
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1.2.11 words and expressions defined in the Tax Indemnity shall
have the same meaning.
2. TRANSFER OF Z SHARES AND OHL SHARES TO THE COMPANY, SUBSCRIPTION OF A
SHARES AND TRANSFER OF O GERMAN SHARES TO OHL
2.1 Transfer of Z B Shares to the Company by P
P shall procure the sale of, as beneficial owner and with full title
guarantee, all of the Z B Shares to the Company, free from all
Encumbrances and with all the rights attaching thereto at the date of
this Agreement, in consideration of the issue to it by the Company of
2,499 B Shares.
2.2 Transfer of Z A Shares to the Company by C
C shall sell or procure the sale of, as beneficial owner and with full
title guarantee, all of the Z A Shares to the Company, free from all
Encumbrances and with all the rights attaching thereto at the date of
this Agreement, in consideration of the issue to it by the Company of
2,499 A Shares.
2.3 Further subscription of shares in the Company by P
P shall procure that another member of the P Group subscribes for
further 5,000 B Shares in the Company upon payment to the Company of
(pound)5,000.
2.4 Buy-back of deferred shares
Conditional upon and following the subscription of shares referred to
in clause 3.1.1(C) and the creation of the deferred shares referred to
in clause 3.1.1(D) and prior to the transfer of the OHL Shares to the
Company referred to in clauses 2.4 below, C shall sell to the Company
and the Company shall purchase such deferred shares for the sum of
(pound)1, and the parties shall procure that all necessary resolutions
are passed to approve such transfer.
2.5 Transfer of OHL Shares to the Company
Conditional upon and following the subscription of shares referred to
in clause 3.1.1(C), the creation of the deferred shares referred to in
clause 3.1.1(D) and the buy back of deferred shares referred to in
clause 3.1.1(E), P shall procure the sale of the OHL Shares to the
Company, as beneficial owner and with full title guarantee, free from
all Encumbrances and with all the rights attaching thereto at the date
of this Agreement, in consideration of (pound)5,000.
2.6 Transfer of O German Shares to OHL
P shall procure the sale of, as beneficial owner and with full title
guarantee, all of the O German Shares to OHL, free from all
Encumbrances and with all the rights attaching thereto at the date of
this Agreement, for the consideration set out in Schedule 3.
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2.7 Allotment, Issue and Transfer of Shares
The Shares to be allotted, issued and transferred in accordance with
sub-clauses 2.1, 2.2, 2.3, 2.4, 2.5 and 2.6 shall respectively be
allotted and issued and transferred fully paid at Completion free from
all Encumbrances and with all the rights attaching to them pursuant to
the New Articles (where relevant).
3. COMPLETION
3.1 Arrangements for Completion
Completion of the sale of the Z Shares and of the OHL Shares to the
Company and of the O German Shares to OHL shall take place at the
offices of P's solicitors (or at such other place as the parties may
agree) as set out in this clause 3.
3.1.1 On or before 14 September 2001, or such other date as P and
C shall agree:
(A) P shall procure the transfer of the Z B Shares to the
Company for the consideration set out in clause 2.1
above;
(B) C shall transfer the Z A Shares to the Company for the
consideration set out in clause 2.2 above;
(C) P shall procure that another member of the P Group
subscribes for a further 5,000 B Shares in the Company
for the consideration set out in clause 2.3 above (one
share of which will be issued by the Company for the
purposes of the buy-back referred to under clause
3.1.1(E) below);
(D) an EGM of the Company shall be held at which:
(1) the 2,500 A Shares of (pound)1 each held by C shall
be converted into 2,500 A Shares of 50p each
and 2,500 deferred shares of 50 p each;
(2) the Intermediate Articles shall be approved as the
Articles of the Company;
(E) conditional upon due performance of the actions set out
under clause 3.1.1(D) above and following the creation
of the deferred shares referred to in such clause
3.1.1(D) above, and prior to the transfer of the OHL
Shares to the Company referred to in clauses 2.4 above,
C shall sell to the Company and the Company shall
purchase such deferred shares for the sum of (pound)1,
and the parties shall procure that all necessary
resolutions are passed to approve such transfer;
(F) conditional upon due performance of the actions set out
under clause 3.1.1(C), 3.1.1(D) and 3.1.1(E) above, and
immediately after the transfer referred to in such
clause 3.1.1(E) above P shall procure the transfer of
the OHL Shares to the Company for the consideration set
out in clause 2.4 above;
(G) an EGM of the Company shall be held at which the New
Articles shall be approved as the Articles of the
Company;
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(H) the Company shall become liable for the relevant debt
or issue the relevant A Shares and B Shares (as set out
above) simultaneously with each of the transfers
carried out by P or C, as the case may be pursuant to
this sub-clause 3.1.1.
3.1.2 On or before 15th January 2002, or such other date as P and
C shall agree P shall transfer the O German Shares to OHL
for the consideration set out in Schedule 3.
3.1.3 P or C, as the case may be, shall deliver such documents and
shall take such steps as are required to vest the
transferred shares and or other assets in the Company
including the delivery of those documents listed in Schedule
8.
3.2 Further Obligations at Completion
Immediately after the transfers set out in clause 3.1 above:
3.2.1 Each of P and C shall execute an agreement in the form of
the New Media Services Agreement and the Company shall
execute each such agreement;
3.2.2 Each of P, C and the Company shall execute the Tax
Indemnity;
3.2.3 the First Termination Letter shall be executed by all
parties thereto;
3.2.4 the Second Termination Letter shall be executed by all
parties thereto;
3.2.5 the parties shall execute and/or deliver all other documents
and instruments required to be executed and/or delivered in
order to duly implement the transactions set forth in this
Agreement; and
3.2.6 a meeting of the Board shall be held at which up to 3
(three) directors shall be appointed as B Directors, and 1
(one) director shall be appointed as A Director.
4. THE BUSINESS
4.1 Nature of Business
It is the intention of the parties that at all times during the
continuance of this Agreement the business of the Company and its
subsidiaries shall be the Business.
4.2 Relationship with Shareholders
In conducting its day to day operations, the Company shall operate
independently of P and C and shall not hold itself out as acting in
the interests of P or C provided that the Company shall comply with P
Group procedures and guidelines from time to time in force (to the
extent that to do so will not override or prejudice the rights of the
holders of the B Shares as set out in clause 5.2.2).
4.3 Undertakings with regard to conduct of Business
Each of the Shareholders undertakes to each of the other Shareholders:
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4.3.1 to exercise its respective rights and powers under this
Agreement and as a holder of Shares to ensure, so far as it
lawfully can, that the provisions of this Agreement are
complied with; and
4.3.2 to procure, so far as it is able to do so, that any Director
appointed by it shall so act and vote in relation to the
affairs of the Company (subject always to the fiduciary
duties of such Directors to the Company) to ensure that the
Business and all the affairs of the Company are carried on
in a proper manner and bona fide in the best interests of
the Company.
4.4 Undertakings with regard to the O German Companies
P represents, warrants and undertakes that at all times during the
period between the execution of this Agreement and Completion of the
transfer set out under clause 3.1.2 above, unless otherwise agreed in
writing, the business of the O German Companies will be carried out in
the ordinary course.
5. GENERAL UNDERTAKINGS
5.1 Undertakings of the Company
The Company undertakes to each of the Shareholders that:
5.1.1 Compliance with Agreement
It will duly and punctually perform, enforce and comply with
all its rights and obligations pursuant to this Agreement.
5.1.2 Information
(A) The Shareholders and the Company agree that, for this
purpose, the A Directors and the B Director shall be
entitled to pass to P and C respectively any
information relating to the Company, its Business or
affairs, and neither the Shareholder nor the Company
shall raise any objection to such passing of
information nor allege any breach of any duty of
confidence to the Company as a result of such action.
(B) Neither C nor P shall pass to the other any
commercially sensitive information about their
respective businesses and C shall not pass to the
Company any commercially sensitive information about
C's business, except:
(1) where necessary for the implementation of the New
Media Services Agreement to which C or P
respectively is a party; or
(2) where such information is already in the public
domain.
5.1.3 No Agency
It shall not and shall not permit any member of the
Company's Group to hold itself out as agent or
representative of any member of the P Group or the C Group
except as required in relation to the provision of media
services in the normal course of the Business or as
otherwise agreed in writing between the relevant parties.
11
5.1.4 Monthly Management Accounts
The Company undertakes to deliver monthly management
accounts to P and C within 30 days from the end of the
relevant calendar month.
5.2 Undertakings and agreement of the Shareholders
5.2.1 General Undertaking
Each Shareholder agrees to exercise its voting and any other
rights attaching to the Shares and its rights pursuant to
this Agreement (all such rights being together for the
purposes of this clause "Shareholder Rights") to procure, so
far as it lawfully can, that the Board shall determine the
general policy of the Company in the carrying on of the
Business in accordance with the express provisions of this
Agreement and of the New Articles.
5.2.2 Matters requiring approval
Each Shareholder agrees that, for so long as the other
Shareholder holds not less than 15 (fifteen) per cent of the
Company's issued shares (by reference to the number of
shares held and irrespective of nominal value), it shall
exercise its Shareholder Rights to procure, so far as it
lawfully can, that, except for matters specifically provided
by this Agreement or any other agreement between P and C,
the Company shall not carry out (and shall not enter into
any agreement to carry out) any of the activities specified
below without the prior approval of at least one "A"
Director and the "B" Director at a meeting duly convened and
held in accordance with the New Articles, provided that this
sub-clause 5.2.2 shall not apply if any person or persons
acting in concert (as defined in the City Code on Takeovers
and Mergers) has acquired Control of C and/or if the
circumstances set out under sub-clause 9.1.1(C) have arisen:
Acquisitions or disposals
(A) any sale or other disposition of any asset or connected
group of assets or any acquisition (other than that of
the O German Shares pursuant to clause 3.1.2) of any
asset or connected group of assets (other than real
estate) where the overall value of the relevant
transaction (meaning the purchase price plus the
maximum amount of any earn-outs and any funding to be
provided by the Company to an acquired company or
business) is higher than (pound)3,000.000 (three
million pounds sterling);
(B) the acquisition or disposal of any freehold real estate
for an amount in excess of (pound)3,000,000 (three
million pounds sterling) or the acquisition of any
other interest in real estate outside the ordinary
course of business;
Incurring of commitments, liabilities, etc
(C) the creation by the Company of any borrowings or other
indebtedness or obligation in the nature of borrowings
(including, without limitation, obligations pursuant to
any debenture, bond, note, loan stock or other security
of the Company and obligations pursuant to finance
leases) other than in the ordinary course of business;
12
(D) the incurring of any capital expenditure by the Company
other than in the ordinary course of business;
(E) the granting of any guarantee or indemnity other than
in the ordinary course of business;
(F) the creation of any Encumbrance over the whole or a
substantial part of the Company's undertaking;
Manner of carrying on business
(G) any transaction with any member of the P Group or the C
Group otherwise than at arms length and for full value;
(H) any proposal for the winding-up or liquidation of the
Company or for the Company to go into administration or
for any compromise or arrangement within the meaning of
section 425 of the Act;
(I) any material change in the nature of the Business;
(J) the entry by the Company into any partnership, joint
venture or other profit sharing agreement (not
including employee incentive plans) where the amount of
the relevant investment by the Company is greater than
(pound)3,000,000 (three million pounds sterling);
(K) any advance, loan or deposit of money by the Company
other than in the ordinary course of business;
(L) the entering into any agreement for the management of
the Company or any of its assets other than in the
ordinary course of business;
(M) the incurring of management charges other than under an
agreement permitted by sub-paragraph 5.2.2(L);
(N) any proposal to initiate any litigation or arbitration
proceedings involving the Company (other than routine
debt collection) other than in the ordinary course of
business;
Matters affecting capital and corporate governance
(O) the issue of any shares in the Company (by way of
bonus, rights or otherwise) and/or the grant of any
option or right to acquire or call for the issue of the
same whether by conversion, subscription or otherwise
unless both (a) the issue is to a third party for fair
value in an arm's length transaction; and (b) as a
result the issued share capital of the Company would be
increased by not more than 5% of the level which it has
or would have following the transfer to the Company of
the Z Shares and the O Business;
(P) the redemption or purchase by the Company of any share
or the reduction in the Company's share capital, or any
uncalled or unpaid liability in respect thereof, unless
the aggregate of all such transactions represents not
more than 5% of the issued share capital of the
13
Company which it has or would have following the
transfer to the Company of the Z Shares and the O
Business;
(Q) the consolidation, subdivision or variation of the
rights attached to, or any reorganisation of any share
capital of the Company;
(R) any change to the New Articles;
(S) the grant to any person other than a representative of
the P Group or the C Group of the right to appoint a
director of the Company;
Accounts and auditors
(T) any change in the Company's auditors from time to time,
provided that this shall not apply to the appointment
of an auditor which is one of Arthur Andersen,
PricewaterhouseCoopers, Deloitte & Touche, KPMG or
Ernst & Young, each of these alone or jointly with
Mazars;
(U) the making of any change to the accounting practices
and policies of the Company except where such change is
recommended by the Auditors as a consequence of a
change in generally accepted accounting practices or
policies applicable to companies carrying on businesses
of a similar nature to the Business or as a consequence
of a change in law, provided that where a change has or
will have an immaterial effect on the interests of C ,
the approval of the B Director shall not be
unreasonably withheld or delayed.
5.2.3 Failure to agree
If a proposal to transact any matter specified in sub-clause
5.2.2 is put to a meeting of the Directors and such meeting
is unable to agree the course of action to be followed:
(A) the Shareholders shall use all reasonable endeavours to
resolve the matter expeditiously and to the
satisfaction of themselves and the Directors; and
(B) in the absence of such agreement, the Company shall not
proceed with the matter in question.
5.2.4 Negative Pledge
Each of the Shareholders undertakes to each of the other
Shareholders and to the Company that it shall not at any
time create or permit to subsist any Encumbrance on or
affecting any of the Shares held by it.
5.2.5 Restriction on Disposal of Shares
(A) Subject to the following provisions of this sub-clause
5.2.5, each of the Shareholders undertakes to each of
the other Shareholders and to the Company that it shall
not at any time transfer or otherwise dispose of any
Shares or of any interest in or option over any Shares
other than in connection with or following Admission or
pursuant to the exercise of the Put Option or the First
Call Option or the Second Call Option;
14
(B) a Shareholder may transfer any Shares to a Permitted
Transferee provided that if any Permitted Transferee
ceases to be a member of the P Group or the C Group
respectively, it shall be the duty of the Permitted
Transferee and P or C (as the case may be) to notify
the Board of such event and to procure that the Shares
concerned are forthwith transferred to another
Permitted Transferee;
(C) P or C (as the case may be) shall procure that its
Permitted Transferee:
(1) enters into and complies with the terms of a Deed
of Accession; and
(2) complies with all the obligations imposed on P or C
respectively under this Agreement.
5.2.6 Relationship of Agreement and New Articles
If, during the continuance of this Agreement, there shall be
any conflict between the provisions of this Agreement and of
the New Articles, then as between the Shareholders, during
such period, the provisions of this Agreement shall prevail.
5.2.7 No amendment to New Articles
Nothing contained in this Agreement shall be deemed to
constitute an amendment of the New Articles or of any
previous articles of association of the Company.
5.3 Undertakings of all parties
5.3.1 Compliance with New Articles
Each of the parties agrees that at all times during the
currency of this Agreement it shall fully and punctually
perform, enforce and comply with all rights and obligations
on its part under the New Articles.
5.3.2 Effect of undertaking
It is agreed that it is the intention of each of the parties
that the effect of the undertaking contained in sub-clause
5.3.1 is that each provision of the New Articles shall be
enforceable by the parties inter se and in whatever
capacity.
5.4 Save for any transfers or dividends specified in Schedule 3 of this
Agreement and any transactions or arrangements disclosed in the
audited accounts of the O Business for the financial period ended 31
December 2000 and other than trading transactions entered into in the
normal course of the O Business P represents and warrants to C that
since 31 December 2000 the O Business has not entered into any
transactions or arrangements which have or will reduce the net assets
or net equity of the O Business.
5.5 Save for the agreement to acquire Sponsorship Research International
and the entering into of the joint venture known as Zenith Direct LLC
and any transactions or arrangements disclosed in the audited accounts
of Z for the financial period ended 31 December 2000 and other than
trading transactions entered into in the ordinary course of the
business of Z, C represents and warrants to P that since 31 December
2000 Z
15
has not entered into any transactions or arrangements which have or
will reduce the net assets or net equity of Z.
5.6 P agrees that from the date hereof and during the term of this
Agreement, save for trading balances between any member of the P Group
and the O Business and/or the Company (or any members of their
respective Groups) relating to services provided by or to a member of
the P Group (where interest shall be due and payable in accordance
with clause 5.7 below), interest of LIBOR plus 1% shall be due and
payable on all and any inter-company debt arising between any member
of the P Group and the O Business and/or the Company (or any members
of their respective Groups), such interest to accrue on a daily basis
and be payable on the last Business Day of each calendar month. It is
also agreed that where any company is owed debt specified in Schedule
3, such debt shall be offset against inter-company debt in the same
currency (other than such trading balances) owed by any such company
to any member of the Company's Group before such interest accrues on
such debt specified in Schedule 3.
5.7 P shall procure that each member of its Group pays and settles all and
any trading balances between any member of the P Group and the O
Business and/or the Company and/or Z or any members of their
respective Groups as soon as reasonably practicable (as if the
relevant debt had been incurred on an arm's length basis) following
receipt of the relevant invoice and interest shall be due and payable
thereon after any such balances have been outstanding for 90 days or
more at LIBOR plus 1%, such interest to accrue on a daily basis after
such 90 day period and to be payable on the last Business Day of each
calendar month PROVIDED THAT to the extent that the relevant member of
the P Group has not received payment from the relevant client for any
services to which the relevant outstanding trading balance relates,
then no such interest shall accrue and be payable until such payment
is received PROVIDED FURTHER THAT P and the relevant member(s) of its
Group have and continue to use all reasonable endeavors to collect
such payment from the relevant client.
5.8 C agrees that from the date hereof and during the term of this
Agreement, save for trading balances between any member of the C Group
and Z and/or the Company (or any members of their respective Groups)
relating to services provided by or to a member of the C Group (where
interest shall be due and payable in accordance with clause 5.9 below)
interest of LIBOR plus 1% shall be due and payable on all and any
inter-company debt arising between any member of the C Group and Z
and/or the Company (or any members of their respective Groups), such
interest to accrue on a daily basis and be payable on the last
Business Day of each calendar month.
5.9 C shall procure that each member of its Group pays and settles all and
any trading balances between any member of the P Group and Z and/or
the Company or any members of their respective Groups as reasonably
practicable (as if the relevant debt had been incurred on an arm's
length basis) following receipt of the relevant invoice and interest
shall be due and payable thereon after any such balances have been
outstanding for 90 days or more at LIBOR plus 1%, such interest to
accrue on a daily basis after such 90 day period and to be payable on
the last Business Day of each calendar month PROVIDED THAT to the
extent that the relevant member of the C Group has not received
payment from the relevant client for any services to which the
relevant outstanding trading balance relates, then no such interest
shall accrue and be payable until such payment is received PROVIDED
FURTHER THAT C and the
16
relevant member(s) of its Group have and continue to use all
reasonable endeavors to collect such payment from the relevant client.
5.10 In the event that any trading balances referred to in clause 5.6
remain outstanding for more than 90 days P shall give notice to C
stating why such balances are outstanding and, if relevant, why
interest is not accruing and/or payable, otherwise interest shall
nevertheless accrue and be payable pursuant to clause 5.6, and
following receipt of such notice C or its duly authorized
representatives shall, following reasonable notice, be given access to
any records, correspondence or documents relating to such outstanding
trading balances, and shall at their own cost be allowed to retain
copies of the same.
5.11 In the event that any trading balances referred to in clause 5.9
remain outstanding for more than 90 days C shall give notice to P
stating why such balances are outstanding and, if relevant, why
interest is not accruing and/or payable, otherwise interest shall
nevertheless accrue and be payable pursuant to clause 5.9, and
following receipt of such notice P or its duly authorized
representatives shall, following reasonable notice, be given access to
any records, correspondence or documents relating to such outstanding
trading balances, and shall at their own cost be allowed to retain
copies of the same.
5.12 P represents and warrants to C that the O Business has sufficient
funds to conduct its business up to 4 (four) months from Completion
without financial support from another party notwithstanding the
Reorganisation (as defined in the Tax Indemnity) and save in respect
of any matters or circumstances which are not reasonably foreseeable
at the date hereof.
5.13 P shall procure that all profit sharing arrangements between the
members of the O Business and other members of the P Group shall be
terminated no later than Completion with effect from 31st December
2000 (31st December 2001 in the case of Optimedia Gesellshaft fur
Media-Services mbH) and all appropriate transfers of funds shall be
made to the company entitled thereto with effect from the relevant
effective termination date.
5.14 P undertakes to the Company (as trustee for the benefit of each member
of the Company's Group) to use all reasonable endeavours to obtain the
release of each member of the Company's Group from any guarantee,
indemnity, security and other assurance or obligation given or
undertaken by it in connection with any liability or obligation of any
member of the P Group (other than the Company's Group) (together a "P
Guarantee") and until release is obtained P undertakes to the Company
(as trustee for the benefit of each member of the Company's Group) to
indemnify each member of the Company's Group against any liability
incurred under any P Guarantee.
5.15 P undertakes to C (for itself and as trustee for the benefit of each
member of the C Group) to use all reasonable endeavours to obtain the
release of each member of the C Group from any guarantee, indemnity,
security and other assurance or obligation given or undertaken by it
in connection with any liability or obligation of any member of the Z
Group (together a "C Guarantee") and until release is obtained P
undertakes to C (for itself and as trustee for the benefit of each
member of the C Group) to indemnify C and each member of the C Group
against any liability incurred under any C Guarantee; provided that C
shall provide reasonable assistance to P for the purposes of this
sub-clause.
17
5.16 C warrants that as at the date of this Agreement there are no actual
accrued liabilities outstanding in connection with C Guarantees.
5.17 Save as where otherwise provided in this Agreement or in the Articles
of Association of the Company from time to time, it is agreed that for
the entire duration of the period during which the A Shares have a
different nominal value from the B Shares, each A Share shall have the
same rights (including but not limited to voting rights and
entitlement to dividends) as each B Share as if they had the same
nominal value, and the Company and all other parties shall operate on
the basis of this agreed principle. In the event that the holder of
the A Shares suffering any losses, costs, claims or damages as a
result of the nominal value of its shares being different from the
nominal value of the B Shares, P shall indemnify and hold harmless C
and any member of its group in respect of any such losses, costs,
claims or damages.
6. ANNUAL ACCOUNTS
At the end of each financial year, or as soon as reasonably
practicable thereafter, the Company shall procure:
6.1 that an account shall be taken of all the assets and liabilities of
the Company's Group and of all dealings and transactions of the
Company's Group during such financial year;
6.2 that the Directors shall prepare a report and accounts of the
Company's Group on a consolidated basis as if the Company was a stand
alone company and not part of the P Group in accordance with the Act
and, subject as aforesaid, the accounting practices and policies of P
to be audited by the Auditors within two (2) months of the end of each
financial year; and
6.3 that such accounts shall be laid before the Company in general meeting
not later than three (3) months after the relevant accounting
reference date;
7. DIVIDENDS
7.1 Intention as regards dividends
The parties agree that it is their common intention that dividends be
paid in respect of the Shares.
7.2 Policy
The parties agree that whenever the amount of a dividend to be paid
falls to be ascertained:
7.2.1 the total profits of the Company available for distribution
within the meaning given in Part VIII of the Act (the
"distributable profits"), shall be determined;
7.2.2 the Directors shall identify amounts (the "retained
amounts") which they consider (having regard to all other
sources of funding available to the Company) should be
retained in order:
(A) to meet foreseeable commitments and contingencies; and
18
(B) to develop the Business in accordance with the budget
approved by the Board and the terms of this Agreement;
and
7.2.3 75 per cent of the balance (if any) remaining after
deducting the retained amounts from the distributable
profits shall be paid to the Shareholders by way of interim
or, as the case may be, final dividend on the Shares.
7.3 Recommendation, Declaration and Payment
7.3.1 The parties undertake to procure (so far, in each case, as
they are able) that dividends are declared or recommended,
as appropriate; and
7.3.2 the Shareholders undertake to exercise the votes attaching
to the Shares to approve any recommendations made , in each
case in accordance with the principles set out in this
clause 7.
7.4 Interim Dividend of Z
On or before the earlier of 31st October 2001 and the second Business
Day following the determination by the Independent Accountants under
sub-clause 7.4.5 below, P shall procure that Z pays an interim
dividend on the following basis:
7.4.1 The amount of the dividend shall equal the amount of the
distributable profit of Z earned in the period from 31st
January 2001 to 30th September 2001 (the "Z Profit").
7.4.2 The dividend shall be payable to the shareholders on the
register of members of Z at close of business on 26th
September 2001.
7.4.3 The amount of the dividend shall be divided amongst such
shareholders in accordance with their entitlement under the
Articles of Association of the Company in force immediately
prior to the execution of this Agreement and shall be
calculated in the same proportions as are set out in the
August 2001 management accounts of Z.
7.4.4 The Z Profit shall be determined on the basis of the
existing management accounts of Z and the management
accounts of Z for the period from 1st September to 30th
September 2001 which shall be prepared on a basis consistent
with those of the existing management accounts of Z for
2001.
7.4.5 In the event of any disagreement in respect of the amount of
the Z Profit the provisions of sub-clauses 10.3 to 10.6 of
this Agreement shall apply as if references to "Option
Price" were to the Z Profit and references to "Draft
Statement" were references to the calculation of the Z
Profit.
8. ADMISSION
8.1 Intention to seek Admission
8.1.1 The Shareholders agree, without being legally bound in this
respect, that their common objective is that the Business
shall be carried out with a view to Admission by the
Admission Deadline.
19
8.1.2 The parties will procure that the Board shall from time to
time discuss the timing of Admission and shall appoint the
Investment Bank to advise in relation to Admission.
8.1.3 C shall procure that if a majority of the A Directors and
the B Director votes to proceed with Admission the B
Director shall proceed with Admission and cooperate fully
therewith subject to compliance with all applicable laws and
regulations.
8.1.4 If a majority of the A Directors and the B Director vote to
proceed with Admission:
(A) each Shareholder shall co-operate fully with, and
procure that any Permitted Transferee (as defined in
the New Articles) to which it has transferred Shares
shall co-operate fully with the Company and its
financial and other advisers in order to achieve
Admission;
(B) each Shareholder shall agree with the other parties to
this Agreement (and procure that any such Permitted
Transferee agrees) such amendments to the New Articles
as are determined by the Board to be reasonably
necessary in order to achieve Admission or as are
required by the relevant regulatory authority as a
condition of such Admission; provided, however, that no
Shareholder shall thereby be required to agree to any
such amendment which shall have the effect of imposing
upon it an obligation to contribute a greater amount of
capital (whether in cash or kind) than it is already
obliged to contribute; and
(C) each of P and C shall offer for sale as part of the
initial public offering an equal number of Shares,
provided that P shall not be required to offer for sale
more than five per cent of the issued share capital as
enlarged by the issue of new Shares to the public as
part of the initial public offering.
8.2 First Put Option
8.2.1 If Admission does not take place by the Admission Deadline,
then, provided that C has not committed any Relevant Act, C
shall have the option to require P to purchase all (but not
some only) of the Shares in the Company legally held or
beneficially owned by any member of the C Group subject to
the following provisions of this clause 8.
8.2.2 Subject to the following provisions of this clause 8, the
Option Price shall be the greater of (pound)75 (seventy
five) million in cash and the cash sum calculated as
follows:
(EP + EC) x NI x (CS)
--------- -- ----
2 2 IS
Where:
EP = The multiple represented by the average closing
price of a P share as published by the Paris
Bourse on each of the 60 days immediately prior to
the date of exercise of
20
the Option on which the Paris Bourse is open for
the transaction of business divided by the average
EPS of P for each of the two financial years ended
immediately prior to the date of exercise of the
Option (calculated by reference to the audited
consolidated accounts of P for each of those
years).
EC = The multiple represented by the average closing
middle market quotation of a C share as derived
from the Stock Exchange Daily Official List on
each of the 60 days immediately prior to the date
of exercise of the Option on which the London
Stock Exchange is open for the transaction of
business) divided by the average EPS of C for each
of the two financial years ended immediately prior
to the date of exercise of the Option (calculated
by reference to the audited consolidated accounts
of C for each of those years) provided that in the
event of C or a potential or actual offeror for C
having made an announcement concerning an actual
or potential offer for the whole of the issued
shares of C (not already owned by the offeror or
its concert parties) before the date of exercise
of the Option the aforesaid period of 60 days
shall be that 60 day period ended 7 days prior to
the date of such announcement.
EPS = The fully diluted earnings per share (before any
distribution and before goodwill amortisation and
exceptional and extraordinary items as defined by
UK GAAP in the case of C and French GAAP in the
case of P) calculated by reference to the audited
consolidated accounts of C or P as relevant and to
the number of shares of C and P (as the case may
be) in issue on the first day of the said 60 day
period.
NI = The audited consolidated profit attributable to
the Shareholders (before any distribution and
before goodwill amortisation and exceptional and
extraordinary items as defined by UK GAAP) for
each of the two financial years ending immediately
prior to the date of exercise of the Option save
that if two financial years of the Company have
not occurred before the date of exercise of the
Option the parties shall negotiate in good faith
an appropriate NI figure taking into account the
consolidated net income of the Company and its
subsidiaries for the period from Completion until
the date of exercise of the Option and twice the
audited consolidated profit attributable to the
shareholders of Z (before any distribution and
before goodwill amortisation and exceptional and
extraordinary items as defined by UK GAAP) for the
balance of such two years (apportioned on a time
basis for periods not equivalent
21
to a completed financial year), and if no such
agreement is reached within a period of 15 days
following the date of exercise of the Option
either party shall be entitled to serve a
Disagreement Notice pursuant to clause 11 of this
Agreement and any independent firm of chartered
accountants appointed pursuant thereto shall
decide upon an NI figure taking account of the
above.
CS = The number of Shares held by members of the C
Group
IS = The number of Shares in issue.
Provided that if a capital reorganisation or issue of shares
is announced or effected by P or C in the said 60 day
period, such adjustments (if any) shall be made to the EP or
EC, as the case may be, as the Auditors recommend in order
to ensure that EP and EC reflect the effect of such capital
reorganization or issue of shares, provided that the said
recommendation of the Auditors shall be subject to clause
10.
8.2.3 For so long as C is subject to the Listing Rules of the UK
Listing Authority the Option Price shall not, under any
circumstance, be higher than 25 per cent. of the market
capitalisation of C at the time the relevant Option is
exercised, or such other percentage as would require C under
the aforesaid rules to procure the approval of its
shareholders to the exercise of the relevant Option.
8.2.4 If Admission has not been obtained by the Admission Deadline
as a result of:
(A) a decision to that effect by P or the A Directors, the
purchase price for the Option Share shall be the Option
Price;
(B) a result of a refusal by C or the B Director to agree
to Admission in circumstances where (i) the Investment
Bank has advised that it would be appropriate seek
Admission prior to the Admission Deadline and (ii) the
Board has resolved to seek Admission prior to the
Admission Deadline, the Option Price shall be reduced
by 15% save that it shall not be less than (pound)75
(seventy five) million.
8.2.5 The First Put Option shall be exercisable no later than nine
months after the Admission Deadline by written notice served
on P by C.
8.3 First Call Option
8.3.1 If Admission does not take place by the Admission Deadline,
because C or the B Director have refused to agree to
Admission in circumstances where (i) the Investment Bank has
advised that it would be appropriate to seek Admission prior
to the Admission Deadline and (ii) the Board has resolved to
seek Admission prior to the Admission Deadline, P shall have
the option to require C to sell all (but not some only) of
the Shares in the Company legally held or beneficially owned
by any member of the C Group subject to the following
provisions of this clause 8.
22
8.3.2 The price at which the First Call Option shall be
exercisable shall be the Option Price reduced by 15%, save
that it shall not be less than (pound)75 (seventy five)
million.
8.3.3 The First Call Option shall be exercisable no later than
nine months after the Admission Deadline by written notice
served on C by P.
8.4 Provisions relating to First Put Option and to First Call Option
8.4.1 The Option Shares shall be sold with full title guarantee
and free from all liens, charges, encumbrances and
restrictions (other than any restrictions in the articles of
association of the Company) and with all rights attaching
thereto as at the date of service of the notice exercising
the relevant option or arising thereafter.
8.4.2 Completion of the sale of the Option Shares shall take place
within 14 days after (i) the date of service of the Draft
Statement, or (ii) the settlement of the matters set out in
a Disagreement Notice, or (iii) the independent firm of
chartered accountants appointed under sub-clause 10.4 has
issued a final decision, as the case may be. On completion C
shall deliver or procure to be delivered to P or as it shall
reasonably direct duly executed transfers of the Option
Shares together with the relative certificates and upon
receipt thereof P shall transfer the Option Price in cash,
calculated pursuant to the above provisions, to such account
as C shall reasonably require.
9. SECOND CALL OPTION, SECOND PUT OPTION AND THIRD PUT OPTION
9.1 Grant of Second Call Option
9.1.1 P shall have the option to acquire all (but not some only)
of C's shares in the Company subject to the following
provisions of this clause 9:-
The Second Call Option shall be exercisable by P within 60
days after P becomes aware of that any of the following has
occurred:
(A) any person or group of persons acting in concert (as
defined in the City Code on Takeovers and Mergers) has
acquired Control of C;
(B) C has committed a Relevant Act;
(C) the C Group has become unable or admitted inability to
pay its debts as they fall due;
(D) a moratorium has been declared in respect of a material
part of the total indebtedness of the C Group.
9.1.2 The price at which the Second Call Option shall be
exercisable is the Option Price
9.1.3 The Option Shares shall be sold with full title guarantee
and free from all liens, charges, encumbrances and
restrictions (other than any restrictions in the articles of
association of the Company) and with all rights attaching
thereto as
23
at the date of service of the notice exercising the Second
Call Option or arising thereafter.
9.1.4 Completion of the sale of the Option Shares shall take place
within 14 days after (i) the date of service of the Draft
Statement (if it is accepted by the relevant recipient
party), or (ii) the settlement of the matters set out in a
Disagreement Notice, or (iii) the independent firm of
chartered accountants appointed under sub-clause 10.4 has
issued a final decision, as the case may be. On completion C
shall deliver or procure to be delivered to P or as it shall
reasonably direct duly executed transfers of the Option
Shares together with the relative certificates and upon
receipt thereof P shall transfer the Option Price in cash to
such account as C shall reasonably require.
9.2 Grant of Second and Third Put Options
9.2.1 C shall have the option to require P to purchase all (but
not some only) of the Shares in the Company legally held or
beneficially owned by any member of the C Group subject to
the following provisions of this clause 9.
9.2.2 The Second Put Option shall be exercisable by C within 60
days after any person or group of persons acting in concert
(as defined in the City Code on Takeovers and Mergers) has
acquired Control of C;
9.2.3 The Third Put Option shall be exercisable by C within 60
days after the approval, by the annual general meeting of
the Company, of the annual accounts of the Company (as set
out in clause 6.3 above), if the Company has fallen short by
more than 10% (ten per cent.), of the targets (in respect of
profits) as set out in the budget approved by the Board for
the relevant financial year.
9.2.4 The price at which the Second Put Option or the Third Put
Option shall be exercisable is the Option Price.
9.3 Provisions relating to the Second Put Option and to Third Put Option
9.3.1 The Option Shares shall be sold with full title guarantee
and free from all liens, charges, encumbrances and
restrictions (other than any restrictions in the articles of
association of the Company) and with all rights attaching
thereto as at the date of service of the notice exercising
the Second Put Option or Third Put Option, as the case may
be, or arising thereafter.
9.3.2 Completion of the sale of the Option Shares shall take place
within 14 days after (i) the date of service of the Draft
Statement (if it is accepted by P), or (ii) the settlement
of the matters set out in a Disagreement Notice, or (iii)
the independent firm of chartered accountants appointed
under sub-clause 10.4 has issued a final decision, as the
case may be. On completion C shall deliver or procure to be
delivered to P or as it shall reasonably direct duly
executed transfers of the Option Shares together with the
relevant certificates and upon receipt thereof P shall
transfer the Option Price, in cash, as the case may be, to
such account as C shall reasonably require.
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10. OPTION STATEMENT
10.1 Within 5 Business Days of the date of exercise of any of the Options C
(in the case of a put option) or P (in the case of a call option)
shall prepare a draft statement of the calculation of the Option
Price. C or P (as relevant) shall send the Draft Statement to the
other, and in respect of the First Put Option and the First Call
Option, C or P (as relevant) shall also send a copy of its audited
consolidated accounts for the year ending 31st December 2003 (the
"Accounts"), within the 5 Business Day period referred to above.
10.2 If C or P (as relevant) accepts the matters contained in the Draft
Statement or if C or P (as relevant) does not elect, by notice in
writing to the other, within 10 Business Days of receipt of the Draft
Statement to refer the matter for determination pursuant to clause
10.3 below, then the option price contained in the Draft Statement
shall constitute the Option Price for the relevant Option for the
purposes of this Agreement and shall be final and binding upon the
Parties.
10.3 If C or P (as relevant) does not agree with the option price stated in
the Draft Statement, C or P (as relevant) shall within the 10 Business
Day period referred to in clause 10.2 above serve written notice on
the other to that effect stating the reasons behind such disagreement
(`a Disagreement Notice').
10.4 If C or P (as relevant) serves a Disagreement Notice on the other
within the period of 10 Business Days referred to in clause 10.3 then
C and P shall, acting in good faith, try to settle the matters set out
in the Disagreement Notice and agree the Option Price within the
period of 10 Business Days after the date of service of the
Disagreement Notice (`the Resolution Period'). If C and P do not agree
the option price contained in the Draft Statement within the
Resolution Period then the matters set out in the Disagreement Notice
and remaining in dispute shall be referred to an independent firm of
chartered accountants, to be appointed jointly by C and P within 5
Business Days of the expiry of the Resolution Period or (in default)
as soon as practicable by the President for the time being of the
Institute of Chartered Accountants in England and Wales on the
application of either C or P; the firm of accountants so appointed
shall be deemed to act as an expert and not as an arbitrator and its
decision shall be final and binding on the parties.
10.5 The Parties shall give such assistance as may be reasonably required
to enable the Accounts to be prepared and, if applicable, to enable
the firm of chartered accountants appointed under clause 10.4 to carry
out their duties under this Agreement; and C and P shall procure that
proper access to the books of account and accounting records of the
Company and its subsidiary and associated undertakings is given to C
and P and their accountants for the purposes of this clause 10.5 and,
if applicable, to the chartered accountants appointed under clause
10.4, to enable them to carry out their duties under this Agreement.
10.6 The fees of any firm of chartered accountants appointed under clause
10.4 shall be paid equally by C and P.
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11. PROTECTION OF THE BUSINESS
11.1 Definitions
In this clause 11:
11.1.1 "competing business" means;
(A) in the case of C any business in Argentina, Australia,
Austria, Belgium, Canada, Denmark, France, Germany,
Greece, Ireland, Italy, Malaysia, Netherlands, New
Zealand, Poland, Portugal, Singapore, Spain, Sweden,
Switzerland, United Kingdom and USA (but excluding any
business carried on in any of the above countries by a
franchisee named in Schedule 7 or Cordiant US Holdings
Inc and any company under its Control) which competes
with the Business;
(B) in the case of P any business in Canada, France,
Germany, Italy, Netherlands, Portugal, Spain, United
Kingdom, USA (only in respect of Agency Clients (as
such term is defined in the New Media Services
Agreement) of Publicis Bloom, Inc., Publicis Dialog,
Inc. and Saatchi & Saatchi USA including, but not
limited to Saatchi & Saatchi Compton Worldwide, Inc,
Saatchi & Saatchi North America, Inc and any companies
under their Control) which competes with the Business;
11.1.2 "restricted services" means services of the same type as or
similar to any services supplied by Z or the O Business at
Completion;
11.1.3 in relation to units of the O Business not transferred at
Completion, the restrictions in this clause shall apply to
the territories in which such units carry on business with
effect from completion of the acquisition by the Company of
the relevant units and the expression "Completion" shall be
construed accordingly in relation to such units;
11.1.4 references to acting directly or indirectly include (without
prejudice to the generality of that expression) references
to acting alone or jointly with or by means of any other
person.
11.2 Restrictions
Each of the P and C covenants with each of the other parties that,
unless otherwise permitted by the New Media Services Agreement:
11.2.1 until the Termination Date, it shall not directly or
indirectly:
(A) solicit, canvass or approach or endeavour to solicit,
canvass or approach on behalf of a competing business
any person for the purpose of offering to that person
restricted services or supply on behalf of a competing
business restricted services to any person:
(1) who, to its knowledge, was provided with services
by Z or the O Business in the course of carry-
ing on the Business at any time during the 2
years prior to Completion; or
26
(2) who, to its knowledge, was negotiating with Z or
the O Business for the supply of services in the
course of the carrying on of the Business at any
time during the 12 months prior to Completion;
(B) solicit or entice away or endeavour to solicit or
entice away from the Company on behalf of a competing
business any person employed by the Company in an
executive, technical, or sales capacity with a view to
inducing that person to leave such employment and to
act for another employer in the same or a similar
capacity in relation to the same field of work.
11.3 Restrictions Separate
Each of the restrictions set out in sub-clause 11.2.1 is separate and
severable and in the event of any such restriction being determined as
unenforceable in whole or in part for any reason, such
unenforceability shall not affect the enforceability of the remaining
restrictions or (in the case of restrictions unenforceable in part)
the remainder of that restriction.
11.4 Exclusions
11.4.1 Nothing in sub-clause 11.2 shall prevent C or P from
carrying on any activities permitted by the New Media
Services Agreement.
11.4.2 Nothing in sub-clause 11.2.1(B) shall operate to prevent any
member of the P Group from employing or using the services
of any person who is or was at any time an employee of any
member of the P Group.
11.4.3 Nothing in sub-clause 11.2.1(B) shall operate to prevent any
member of the C Group from employing or using the services
of any person who is or was at any time an employee of any
member of the C Group.
11.4.4 Nothing in sub-clause 11.2.1(B) shall operate to prevent any
member of the C Group or of the P Group from employing or
using the services of any person who responds to general
advertising of an employment vacancy not targeted at such
person or at employees of the Company's Group.
12. REPRESENTATIONS AND WARRANTIES
12.1 General
12.1.1 Each party to this Agreement (or, in the case of sub-clauses
12.1.7 and 12.1.8 each of the Shareholders) represents and
warrants to each of the other parties that:
12.1.2 it is duly incorporated;
12.1.3 it has the power to enter into and to exercise its rights
and to perform its obligations under this Agreement;
12.1.4 it has taken all necessary action to authorise the execution
of and the performance of its obligations under this
Agreement;
27
12.1.5 the obligations expressed to be assumed by it under this
Agreement are legal, valid, binding and enforceable;
12.1.6 neither execution nor performance of this Agreement will
contravene any provision of:
(A) any existing law, treaty or regulation;
(B) its memorandum or articles of association; or
(C) any obligation (contractual or otherwise) which is
binding upon it, or upon any of its assets;
12.1.7 (in the case of each of the Shareholders) neither its
execution nor its performance of this Agreement will result
in the creation of, or oblige it to create or permit to
subsist, an Encumbrance over any of its present or future
assets or revenues; and
12.1.8 (in the case of each of the Shareholders) the Shares to be
transferred to and/or subscribed for by it will not, upon or
after such transfer and/or subscription, become subject to
any Encumbrance.
12.2 Relating to the Company
P warrants to C that the Company is a wholly owned subsidiary of P and
that prior to the execution of this Agreement the Company has not
traded and has no assets or liabilities and that prior to Completion
the Company will not acquire any assets or incur any liabilities other
than as expressly set out in this Agreement.
12.3 Relating to OHL
P warrants to C that:
12.3.1 OHL is a wholly owned subsidiary of P;
12.3.2 prior to the execution of this Agreement the Company has not
traded and has no assets or liabilities other than the O
Business (with the exception of the O German Shares which
are to be transferred pursuant to the terms of this
Agreement);
12.3.3 prior to Completion the Company will not acquire any assets
or incur any liabilities other than as expressly set out in
this Agreement.
13. TERMINATION
13.1 Full Termination
This Agreement shall, notwithstanding Completion, remain in full force
and effect as between all the parties until the earliest of:
13.1.1 the dissolution of the Company; or
13.1.2 the obtaining of Admission; or
13.1.3 no Shares being held by the P Group or the C Group; or
28
13.1.4 the agreement of all the parties that it be terminated; or
13.1.5 the date on which C ceases to hold, directly or indirectly,
at least 15 (fifteen) per cent of the Company's issued
shares (by reference to the number of shares held and
irrespective of nominal value).
13.2 Consequences of Termination
Termination of this Agreement shall be without prejudice to any
accrued rights or obligations of the parties up to the date of
termination and the provisions of clauses 11 (Protection of the
Business), 14 (Costs and Expenses), 15 (Confidentiality and
Announcements), 19 (Miscellaneous Provisions) and 20 (Governing Law,
Jurisdiction and Service of Process) shall remain in full force and
effect notwithstanding termination.
14. COSTS AND EXPENSES
Each party shall bear its own costs and expenses, including the fees
and expenses of its legal and other advisers and VAT or any similar
tax thereon, incurred in connection with the establishment of the
joint venture pursuant to this Agreement including:
14.1.1 the negotiation, preparation, printing and execution of this
Agreement and any other documents referred to in this
Agreement or ancillary or incidental to it; and
14.1.2 the negotiation, preparation, printing and execution of all
supplements, waivers and variations of this Agreement or any
other such documents as are referred to in sub-clause
14.1.1.
15. CONFIDENTIALITY AND ANNOUNCEMENTS
15.1 General Restrictions
Subject to the exceptions provided in sub-clause 15.2, none of the
parties shall, at any time, whether before or after the expiry or
sooner termination of this Agreement, without the written consent of
the other parties, divulge or permit its officers, employees, agents,
advisers or contractors to divulge to any person (other than to any
respective officers or employees of a party or a person to whom, in
each case, disclosure of information is permitted by this Agreement
and who require the same to enable them properly to carry out their
duties):
15.1.1 any of the contents of this Agreement;
15.1.2 any information which it may have or acquire (whether before
or after the date of this Agreement) relating to the
Business and/or any customers of or suppliers to the
Business, or otherwise to the business, assets or affairs of
the Company;
15.1.3 any information which, in consequence of the negotiations
relating to this Agreement or of a party being involved in
the Business or the Company in any manner whatsoever
(including as a Shareholder and as an appointor of a
director) or performing or exercising its rights and
obligations under this Agreement, any party may have
acquired (whether before or after the date of
29
this Agreement) with respect to the customers, business,
assets or affairs of any other party.
15.2 Exceptions
The restrictions imposed by sub-clause 15.1 shall not apply to the
disclosure of any information by a party (the "disclosing party"):
15.2.1 which now or hereafter comes into the public domain
otherwise than as a result of a breach of such undertaking
of confidentiality;
15.2.2 which is required by law to be disclosed to any person who
is authorised by law or competent regulatory authority to
receive the same or which is required by any governmental or
other authority or regulatory body;
15.2.3 which is required to be disclosed by the regulations of any
recognised exchange upon which the share capital of the
disclosing party is or is proposed to be from time to time
listed or dealt in;
15.2.4 to a court, arbitrator or administrative tribunal in the
course of proceedings before it to which the disclosing
party is a party in a case where such disclosure is required
by such proceedings;
15.2.5 to any professional advisers to the disclosing party who are
bound to the disclosing party by a duty of confidence which
applies to any information disclosed;
15.2.6 to the other parties to this Agreement; or
15.2.7 pursuant to the terms of this Agreement.
16. DISPUTE RESOLUTION
In the event of a dispute between the parties under this Agreement or
under the respective New Media Services Agreement, the provisions of
Schedule 6 shall apply save where clause 10 applies.
17. GROUP RELIEF
17.1 Upon notification by P that it requires the surrender of group relief
to it or to a member of P's Group the Company agrees to surrender or,
in the case of a member of the Company's Group, to procure the
surrender by way of group relief under Section 402 of the Taxes Act to
P or to any member of P's Group, as P shall direct, losses or other
amounts eligible for relief from corporation tax which are eligible
for surrender by way of group relief within the provisions of Chapter
IV of Part X of the Taxes Act ("Losses"), up to the maximum amount to
which P or the member of P's Group is or are entitled as determined by
the application of the relevant provisions of Chapter IV of Part X of
the Act in return for payment as referred to in clause 17.4 below.
17.2 P may by notice require the Company or a member of the Company's Group
to accept (and the Company agrees to so accept or to procure that the
member of the Company's Group so accepts) a surrender to it by P or by
a member of P's Group by way of group relief under Section 402 of the
Taxes Act of losses up to the maximum amount which P or the member of
P's Group is entitled to surrender and the Company
30
or the member of the Company's Group is entitled to accept as
determined by the application of the relevant provisions of Chapter IV
of Part X of the Act; provided, however, that where there are
companies with taxable profits in the Company's Group, these will
first be reduced by any losses available for surrender within the
Company's Group.
17.3 The Company and P will give (or will procure that there is given)
appropriate consents as referred to in Paragraph 70 of Part VIII of
Schedule 18 to the Finance Act 1998, and otherwise take such action as
P shall reasonably request to ensure that the amounts can be and are
duly surrendered in accordance with relevant statutory provisions and
Inland Revenue practice, in all cases promptly and in any event within
relevant time limits.
17.4 As consideration for any surrender of Losses made in accordance with
Clauses 17.1 or 17.2, the party accepting the surrender of Losses (the
"Claimant") shall pay (or where the Claimant is a member of P's Group
or the Company's Group, P or the Company as appropriate shall procure
that the Claimant shall so pay), on or before the date (the "Payment
Date") on which the tax would otherwise have been payable to the
surrendering company a sum equal to the tax which but for the
surrender would have been payable by the Claimant; provided, however,
that no payment shall be made for group relief or any other relief for
any period ending on or before 31 December 1997 other than payments
which have already been made or accrued as at 31 December 1996. The
amount of any payment shall be reduced by the amount of any surplus
Advance Corporation Tax which is generated in the Company's Group as a
result of the surrender of losses.
17.5 If the Claimant does not make payment of any amount due under
sub-clause 17.4 by the Payment Date it shall also pay (or, if the
Claimant is a member of P's Group or the Company's Group, then P or
the Company as appropriate shall procure that the Claimant shall pay)
to the surrendering company interest (before as well as after any
judgement) on the unpaid amount at the interest rate prevailing under
Section 87A of the Taxes Management Act 1970 during the relevant
period in respect of underpaid tax.
17.6 In the event that any payment made under Clause 17.4 above proves to
be an overpayment (because the amount of the Losses proves to be lower
than the amount assumed to be available at the time the payment is
made), the party receiving the overpayment shall (and where the party
receiving the overpayment is a member of P's Group or a member of the
Company's Group, P or the Company as appropriate shall procure that
the party receiving the overpayment shall) refund to the surrendering
party the amount of the overpayment, together with interest from the
relevant Payment Date on the amount of the overpayment calculated at
the interest rate prevailing under Section 87A of the Taxes Management
Act 1970 in respect of the period from the date on which the relevant
payment was made until the date the overpayment is refunded.
17.7 In the event of any dispute with the Inland Revenue in relation to a
surrender or proposed surrender of Losses within the scope of this
clause 17 or in respect of any other taxation matters, the Company
shall take such steps as may reasonably and properly be requested by P
to appeal or compromise the dispute.
31
18. CONDUCT OF TAX AFFAIRS
18.1 The Company shall at the request of P make any elections or
notifications necessary to obtain the benefit of any treaties relating
to double taxation or otherwise for the purposes of minimising any
withholding taxes in respect of interest or other payments made by or
to the Company.
18.2 The Company shall conduct its tax affairs (including, without
limitation, the submission of returns and the making of any claims,
elections, consents and any other correspondence or matters relating
to tax) in accordance with the reasonable and proper requests of P.
19. MISCELLANEOUS PROVISIONS
19.1 No Partnership
Nothing in this Agreement or in any document referred to in it shall
constitute any of the parties a partner of any other, nor shall the
execution, completion and implementation of this Agreement confer on
any party any power to bind or impose any obligations to any third
parties on any other party or to pledge the credit of any other party.
19.2 Assignment
None of the parties may assign any of their respective rights or
obligations under this Agreement nor any of the documents referred to
in this Agreement in whole or in part (except for an assignment of
rights (but not obligations) to a person to whom Shares are
transferred in accordance in all respects with the provisions and
requirements of sub-clause 5.2.5(B) of this Agreement).
19.3 Waiver
No delay by or omission of any party in exercising any right, power,
privilege or remedy under this Agreement shall operate to impair such
right, power, privilege or remedy or be construed as a waiver thereof.
Any single or partial exercise of any such right, power, privilege or
remedy shall not preclude any other or future exercise thereof or the
exercise of any other right, power, privilege or remedy. The rights
and remedies provided in this Agreement are cumulative and not
exclusive of any rights and remedies provided by law.
19.4 Entire Agreement
19.4.1 This Agreement, together with the Agreed Drafts, represents
the entire understanding, and constitutes the whole
agreement, in relation to its subject matter and supersedes
any previous agreement between the parties with respect
thereto and, without prejudice to the generality of the
foregoing, excludes any warranty, condition or other
undertaking implied at law or by custom.
19.4.2 Each party confirms that, except as provided in this
Agreement, no party has relied on any representation or
warranty or undertaking which is not contained in this
Agreement, or in the Agreed Drafts and, without prejudice to
any liability for fraudulent misrepresentation, no party
shall be under any liability
32
or shall have any remedy in respect of misrepresentation or
untrue statement unless and to the extent that a claim lies
under this Agreement.
19.4.3 No term of this Agreement is enforceable under the Contracts
(Rights of Third Parties) Act 1999 by a person who is not a
party to this Agreement.
19.5 Notices
19.5.1 Any notice or other communication to be given by one party
to another under, or in connection with the matters
contemplated by this Agreement shall be addressed to the
recipient and sent to the address or facsimile number of
such other party given in this Agreement for the purpose and
marked for the attention of the person so given or such
other address in England or facsimile number and/or marked
for such other attention as such other party may from time
to time specify by notice given in accordance with this
clause to the party giving the relevant notice or
communication to it. In the case of each Shareholder, the
relevant details as at the date of this Agreement are set
out in Schedule 1. In the case of the Company, such details
are:
Address: 82 Baker Street
London
W1U 6AE
Facsimile Number: 020 78303656
For the attention of: the Company Secretary
19.5.2 Any notice or other communication to be given by any party
to any other party under, or in connection with the matters
contemplated by this Agreement shall be in writing and shall
be given by letter delivered by hand or sent by first class
prepaid post (airmail if overseas) or facsimile, and shall
be deemed to have been received:
(A) in the case of delivery by hand, when delivered; or
(B) in the case of first class prepaid post, on the second
day following the day of posting or (if sent airmail
from overseas) on the fifth day following the day of
posting; or
(C) in the case of facsimile, on acknowledgement of the
addressee's facsimile receiving equipment (where such
acknowledgement occurs before 1700 hours on the day of
acknowledgement) and in any other case on the day
following the day of acknowledgement.
19.5.3 Any notice or other communication not received on a Business
Day or received after 1700 hours local time on any Business
Day in the place of receipt shall be deemed to be received
on the next following Business Day.
33
19.6 Counterparts
This Agreement may be executed in any number of counterparts and by
the different parties on separate counterparts, each of which when
executed and delivered shall constitute an original, but all the
counterparts shall together constitute but one and the same
instrument.
19.7 Variations
No variation to this Agreement shall be effective unless made in
writing and signed by or on behalf of the parties.
19.8 Options
P and C agree that upon valid exercise of any of the Options, by the
party entitled to it as set out under this Agreement, all the other
Options will no longer be exercisable.
19.9 Franchises
19.9.1 P will procure that in relation to the franchise agreements
between Z and the franchisees named in Schedule 7, Z shall
not give notice to terminate such agreements with effect
from a date prior to 1 (one) year after C has ceased to
hold, directly or indirectly, at least 15 (fifteen) per cent
of the Company's issued shares (by reference to the number
of shares held and irrespective of nominal value), except
where it is entitled to do so as a result of the breach of
the terms of any such agreement by the relevant franchisee
or as a result of the Change in Control of any of the
franchisees named in Schedule 7.
19.9.2 If any of the relevant franchise agreements is for a fixed
term, such term shall not expire, subject to the consent of
the relevant franchisee, before 1 (one) year after C has
ceased to hold, directly or indirectly, at least 15
(fifteen) per cent. of the Company's issued shares (by
reference to the number of shares held and irrespective of
nominal value).
20. GOVERNING LAW, JURISDICTION AND SERVICE OF PROCESS
20.1 English Law
This Agreement shall be governed by, and construed in accordance with,
English law.
20.2 Jurisdiction
The Courts of England shall have non-exclusive jurisdiction in
relation to any claim, dispute or difference concerning this Agreement
and any matter arising therefrom.
20.3 Waiver
Each party irrevocably waives any right that it may have to object to
an action being brought in those Courts, to claim that the action has
been brought in an inconvenient forum, or to claim that those Courts
do not have jurisdiction.
20.4 Other jurisdictions
The submission to the jurisdiction of the Courts of England shall not
limit the right of either party to bring legal proceedings in any
other court of competent jurisdiction
34
including without limitation the courts having jurisdiction by reason
of either party's domicile. Legal proceedings by either party in any
one or more jurisdictions shall not preclude legal proceedings by it
in any other jurisdiction, whether by way of substantive action,
provisional relief, enforcement or otherwise.
20.5 Service of documents
Each party agrees that without preventing any other mode of service,
any document in an action (including, but not limited to, a claim form
or any other document to be served under the Civil Procedure Rules)
may be served on any party by being delivered to or left for that
party at its address for service of notices under sub-clause 19.5 and
each party undertakes to maintain such an address at all times in the
United Kingdom and to notify the other party in advance of any change
from time to time of the details of such address in accordance with
the manner prescribed for service of notices under clause 19.5.
IN WITNESS whereof the parties have executed this Agreement on the day
and year first hereinbefore mentioned.
35
SIGNED by MICHAEL BUNGEY
On behalf of Cordiant Communications Group plc /s/Michael Bungey
in the presence of: ------------------------------
/s/
SIGNED by MAURICE LEVY
on behalf of Publicis Groupe SA /s/Maurice Levy
in the presence of: ------------------------------
Frances Shiner /s/Frances Shiner
SIGNED by MAURICE LEVY
on behalf of Mediavista Limited /s/Maurice Levy
in the presence of: ------------------------------
Frances Shiner /s/Frances Shiner
61