EX-2 2 ex2-1.htm EXHIBIT 2.1 ex2-1.htm

Exhibit 2.1

 

 

 

 

Agreement

 

 

 

Execution version

 

 

 

Share sale agreement

 

 

 

 

ANZ Tower 161 Castlereagh Street Sydney NSW 2000 Australia

T +61 2 9225 5000 F +61 2 9322 4000
GPO Box 4227 Sydney NSW 2001 Australia herbertsmithfreehills.com DX 361 Sydney
  
 
 

 

 

 

 

  

 

Contents

 

 

 

Table of contents

 
     
     

1

Definitions and interpretation

3

 

1.1

Definitions

3

 

1.2

Interpretation

3

 

1.3

Rights and obligations of the Sellers

4

 

1.4

Business Day

5

 

1.5

Inclusive expressions

5

 

1.6

Agreement components

5

 

1.7

Inconsistency

5

       
2

Conditions for Completion

5

 

2.1

Conditions precedent

5

 

2.2

Notice

6

 

2.3

Reasonable endeavours

6

 

2.4

Waiver

6

 

2.5

Cut Off Date

7

 

2.6

No binding agreement for transfer

7

       
3

Termination

7

 

3.1

Effect of termination

7

 

3.2

No other right to terminate or rescind

8

       
4

Sale and purchase

8

 

4.1

Sale Shares

8

 

4.2

Associated Rights

8

 

4.3

Purchase Price

8

 

4.4

Title and risk

9

       
5

Period before Completion

9

 

5.1

Carrying on of business

9

 

5.2

Permitted acts

9

 

5.3

Access to the Ingeus Group before Completion

10

 

5.4

Exclusivity

10

 

5.5

UK Share Sale Agreement

11

       
6

Completion

11

 

6.1

Time and Place

11

 

6.2

Completion

11

 

6.3

Notice to complete

11

 

6.4

Completion simultaneous

12

       
7

Completion Accounts

12

 

7.1

Preparation of Completion Accounts

12

 

7.2

Purchase Price adjustments following Completion Accounts

12

 

7.3

Payment of adjustments

13

       
8

Warranties

13

 

8.1

Warranties by the Sellers

13

 

8.2

Independent Warranties

13

 

 
Contents 1

 

 

 

 

 

Contents

  

 

8.3

Reliance

13

 

8.4

Tax covenant

14

       
9

Claims

15

 

9.1

Disclosure

15

 

9.2

Awareness

15

 

9.3

No reliance

15

 

9.4

Opinions, estimates and forecasts

16

 

9.5

Maximum and minimum amounts

17

 

9.6

Time limits

17

 

9.7

Recovery under other rights and reimbursement

18

 

9.8

No double claims

18

 

9.9

Mitigation of loss

18

 

9.10

General limitations

19

 

9.11

Other limitations

20

 

9.12

Buyer benefits

21

 

9.13

Sole remedy

21

 

9.14

Warranty insurance

22

 

9.15

Payments affecting the Purchase Price

24

 

9.16

Independent limitations

24

 

9.17

Fraud

24

       
10

Procedures for dealing with Claims

24

 

10.1

Notice of Claims

24

 

10.2

Third Party Claims

25

 

10.3

Tax Demands

27

 

10.4

Right of set off

29

       
11

Buyer Warranties

30

 

11.1

Buyer Warranties

30

 

11.2

Independent Warranties

30

 

11.3

Reliance

30

       
12

Period after Completion

30

 

12.1

Appointment of proxy

30

 

12.2

Access to records by Sellers

30

 

12.3

Pre Completion tax returns

31

 

12.4

ROW Bonds and deposits for premises

33

       
13

Protection of the Business

33

 

13.1

Non Compete

33

 

13.2

No solicitation of customers

33

 

13.3

No solicitation of employees or agents

33

 

13.4

Severability

34

 

13.5

Definitions

34

 

13.6

Acknowledgment

34

 

13.7

Portfolio Interest

35

       
14

Announcements and confidentiality

35

 

14.1

Agreed announcement

35

 

14.2

Confidentiality

35

 

 
Contents 2

 

 

 

 

Contents 

  

15

Duties, costs and expenses

36

 

15.1

Duties

36

 

15.2

Costs and expenses

36

       
16

GST

36

 

16.1

Definitions

36

 

16.2

GST

36

 

16.3

Tax invoices

37

 

16.4

Reimbursements

37

       
17

Guarantee by Buyer’s Guarantor

37

 

17.1

Guarantee and indemnity

37

 

17.2

Extent of guarantee and indemnity

37

 

17.3

Principal and independent obligation

38

 

17.4

Continuing guarantee and indemnity

38

 

17.5

No withholdings

38

 

17.6

Currency

38

 

17.7

No set off

38

       
18

Notices

39

 

18.1

Form of Notice

39

 

18.2

How Notice must be given and when Notice is received

39

 

18.3

Notice must not be given by electronic communication

39

       
19

General

40

 

19.1

Governing law and arbitration

40

 

19.2

Service of process

41

 

19.3

Invalidity and enforceability

41

 

19.4

Waiver

41

 

19.5

Variation

41

 

19.6

Assignment

42

 

19.7

Gross-up

42

 

19.8

Further action to be taken at each party’s own expense

42

 

19.9

Relationship of the parties

42

 

19.10

Exercise of rights

42

 

19.11

Remedies cumulative

43

 

19.12

Counterparts

43

 

19.13

No merger

43

 

19.14

Entire Agreement

43

 

19.15

No reliance

43

 

19.16

Default Interest

43

 

19.17

Benefits held on trust

44

 

19.18

Attorneys

44

       
 

Schedules

 
     
 

Schedule 1

 
 

Notice details

46

 

 
Contents 3

 

 

 

 

Contents

 

  

 

Schedule 2

 
 

Definitions

47

     
 

Schedule 3

 
 

Sellers and their respective shareholdings in the Company

61

     
 

Schedule 4

 
 

Warranties

62

     
 

Schedule 5

 
 

Buyer Warranties

84

     
 

Schedule 6

 
 

Completion Steps

87

     
 

Schedule 7

 
 

Completion Accounts

91

     
 

Schedule 8

 
 

Pro forma Completion Accounts

104

     
 

Schedule 9

 
 

Properties

107

     
 

Schedule 10

 
 

Business Intellectual Property

108

     
 

Schedule 11

 
 

Target Entities

109

     
 

Schedule 12

 
 

Post-Completion Consideration Payments

110

     
 

Schedule 13

 
 

Earn-Out Consideration

115

 

 
Contents 4

 

 

 

 

Contents

 

  

 

Signing page

126

     
 

Exhibits

 
     
 

Exhibit 1

 
 

DWP Parent Company Guarantees

 
     
 

Exhibit 2

 
 

Employee Entitlement List

 
     
 

Exhibit 3

 
 

JV Termination Deed

 
     
 

Exhibit 4

 
 

Employment agreement (Thérèse Virginia Rein)

 
     
 

Exhibit 5

 
 

Employment agreement (Gregory Kenneth Ashmead)

 
     
 

Exhibit 6

 
 

Side Deed

 
     
 

Exhibit 7

 
 

UK Share Sale Agreement

 
     
 

Exhibit 8

 
 

Summary of Systems

 

 

 
Contents 5

 

 

 

 

  

 

 

   
Share sale agreement  
   
   
   
Date
   
   
Between the parties
   
   

Sellers

Each of the persons listed in column 1 of Schedule 3 

  (each a Seller and together the Sellers)
   
   

Buyer

Pinnacle Australia Holdco Pty Ltd

  ACN 168 792 318 of Level 11 68 Pitt Street
  Sydney NSW 2000
  (Buyer)
   
   

Buyer’s Guarantor

The Providence Service Corporation

  of 64 E Broadway Blvd., Tucson, AZ 85701
  United States of America
  (Buyer’s Guarantor)
   

 

Recitals

1

The Sellers own the Sale Shares.

     
  2 The Sellers have agreed to sell and the Buyer has agreed to buy the Sale Shares on the terms and conditions of this agreement.
     
  3 The Buyer’s Guarantor has agreed to guarantee the Buyer’s obligations under this agreement.
     
  4 Ingeus Europe Limited, an indirect wholly owned Subsidiary Undertaking of the Company, owns 50% of the entire issued share capital in Ingeus UK Limited and Deloitte LLP owns the remaining 50% of the entire issued share capital in Ingeus UK Limited.
     
  5 Deloitte LLP has agreed to sell all its shares in Ingeus UK Limited and Ingeus Europe Limited has agreed to buy the same subject to the terms and conditions of the UK Share Sale Agreement to be entered into on the date of this agreement.
     
  6 The relevant parties have agreed to enter into the Key Employment Agreements.
     
  7 The parties intend that completion of this agreement and the UK Share Sale Agreement shall be interconditional upon and shall occur simultaneously with Completion of this agreement.
     

 

 
page 1

 

 

 

 

  

  8 The parties and Deloitte LLP have further agreed to enter into the Side Deed to secure for Deloitte LLP the benefit of certain covenants, indemnities and promises in connection with the sale of its shareholding in Ingeus UK Limited with the intention that the Side Deed shall prevail as between the parties to the extent of any inconsistency between the Side Deed and this agreement.
     
 

The parties agree as follows:

 

 

 
page 2

 

 

 

 

  

 

 

 

1

Definitions and interpretation

 

1.1

Definitions

 

Schedule 2, Schedule 7, Schedule 12 and Schedule 13 contain definitions used in this agreement.

 

1.2

Interpretation

 

In this agreement:

 

 

(a)

Headings and bold type are for convenience only and do not affect the interpretation of this agreement.

 

 

(b)

The singular includes the plural and the plural includes the singular.

 

 

(c)

Words of any gender include all genders.

 

 

(d)

Other parts of speech and grammatical forms of a word or phrase defined in this agreement have a corresponding meaning.

 

 

(e)

An expression importing a person includes any company, partnership, joint venture, association, corporation or other body corporate and any Governmental Agency as well as an individual.

 

 

(f)

A reference to a clause, party, schedule, attachment or exhibit is a reference to a clause of, and a party, schedule, attachment or exhibit to, this agreement.

 

 

(g)

A reference to any legislation includes all delegated legislation made under it and amendments, consolidations, replacements or re-enactments of any of them.

 

 

(h)

A reference to a document includes all amendments or supplements to, or replacements or novations of, that document.

 

 

(i)

A reference to a party to a document includes that party’s successors and permitted assignees.

 

 

(j)

A reference to an agreement other than this agreement includes a deed and any legally enforceable undertaking, agreement, arrangement or understanding, whether or not in writing.

 

 

(k)

No provision of this agreement will be construed adversely to a party because that party was responsible for the preparation of this agreement or that provision.

 

 

(l)

A reference to a body, other than a party to this agreement (including an institute, association or authority), whether statutory or not:

 

 

(1)

which ceases to exist; or

 

 

(2)

whose powers or functions are transferred to another body,

 

 
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1        Definitions and interpretation

  

is a reference to the body which replaces it or which substantially succeeds to its powers or functions.

 

 

(m)

If a period of time is specified and dates from a given day or the day of an act or event, it is to be calculated exclusive of that day.

 

 

(n)

A reference to a day is to be interpreted as the period of time commencing at midnight and ending 24 hours later.

 

 

(o)

A reference to a claim includes any claim, demand, legal proceedings or cause of action including any claim, demand, legal proceedings or cause of action:

 

 

(1)

based in contract (including breach of warranty or covenant);

 

 

(2)

based in tort (including misrepresentation or negligence);

 

 

(3)

under common law; or

 

 

(4)

under statute.

 

 

(p)

If an act prescribed under this agreement to be done by a party on or by a given day is done after 5.00pm on that day, it is taken to be done on the next day.

 

 

(q)

A reference to time is a reference to Brisbane time unless otherwise specified in this agreement or as otherwise agreed between the parties in writing.

 

 

(r)

A reference to $ is to Australian currency unless denominated otherwise.

 

 

(s)

A reference to £ is to pounds sterling, the lawful currency of the United Kingdom.

 

 

(t)

A reference to the Sellers includes Thérèse Virginia Rein in her capacity as Warrantor.

 

 

(u)

A reference to disclosures or fair disclosures from one party to another in this agreement shall mean disclosure in such a manner and in such detail as to enable the recipient to make an informed assessment of the nature and scope of the matters disclosed.

 

 

(v)

Unless the initial letters are capitalized (e,g, “Material Adverse Effect”) as set forth in Schedule 2 of this agreement, a reference to a material adverse effect in this agreement shall solely refer to an adverse effect that would reasonably be considered material to the operations, finances or business of a Target Entity without reference to the defined term “Material Adverse Effect” in Schedule 2 of this agreement.

 

1.3

Rights and obligations of the Sellers

 

Unless otherwise expressly stated in this agreement:

 

 

(a)

an obligation which is expressed to be an obligation of the “Sellers’ is imposed on each of the Sellers severally and, subject to the limitations in clause 9, each Seller is only liable for its Respective Proportion of any Loss arising from a breach of that obligation, or the amount required to be paid to satisfy that obligation, as the case may be;

 

 

(b)

a right which is expressed to be a right of the “Sellers’ is held by each of the Sellers severally; and

 

 

(c)

where an obligation or right under this agreement is expressed to be that of a particular Seller, then that obligation or right is imposed or held (as the case may be) only on or by that Seller and not on or by any other Seller and, subject to the limitations in clause 9, only that Seller is liable for any Loss arising from a breach of that obligation, or the amount required to be paid to satisfy that obligation, as the case may be.

 

 
page 4

 

 

 

2        Conditions for Completion

  

1.4

Business Day

 

Where the day on or by which any thing is to be done is not a Business Day, that thing must be done on or by the next Business Day.

 

1.5

Inclusive expressions

 

Specifying anything in this agreement after the words “include’ or “for example’ or similar expressions does not limit what else is included.

 

1.6

Agreement components

 

This agreement includes any schedule to this agreement.

 

1.7

Inconsistency

 

 

(a)

If there is any inconsistency between a provision in this agreement and a provision in the Side Deed, the provision in the Side Deed shall prevail as between the parties and Deloitte LLP to the extent of the inconsistency.

 

 

(b)

If there is any inconsistency between a provision in this agreement and a provision in either of the Key Employment Agreements, the provision in this agreement shall prevail as between the parties to the extent of the inconsistency.

 

 

2

Conditions for Completion

 

2.1

Conditions precedent

 

Clauses 4 and 6 do not become binding on the parties and are of no force or effect unless and until each of the following Conditions have been satisfied or waived in accordance with clause 2.4:

 

 

(a)

Department of Work and Pensions Work Programme Approval: The Warrantor has received written advice from the Department of Work and Pensions (UK) stating or to the effect that it has no objection to the proposed Sale (including the Buyer’s Guarantor as the new controlling entity of Ingeus UK and as the new controlling entity of the Company which is the guarantor of Ingeus UK) or the acquisition of Deloitte LLP’s shareholding in Ingeus UK Limited as contemplated by the UK Share Sale Agreement and that it will not terminate the DWP Framework Agreement by reason of a change of control of Ingeus UK Limited or as a result of the proposed Sale.

 

 

(b)

Key Contracts Approval: The Warrantor has received written advice from each of the Key Contract Counterparties stating or to the effect that it has no objection to the proposed Sale or the acquisition of Deloitte LLP’s shareholding in Ingeus UK Limited as contemplated by the UK Share Sale Agreement and that it will not terminate the relevant Key Contract by reason of a change of control of the relevant Target Entity or as a result of the proposed Sale.

 

 

(c)

Completion of UK Share Sale Agreement: Completion has occurred under the UK Share Sale Agreement.

 

 
page 5

 

 

 

2        Conditions for Completion

  

 

(d)

Governmental Consent: No governmental authority shall have enacted, issued, promulgated, enforced or entered any governmental order which is in effect and has the effect of making the transactions contemplated by this agreement illegal, otherwise restraining or prohibiting consummation of such transactions or causing any of the transactions contemplated hereunder to be rescinded following completion thereof.

 

 

(e)

No Action: No Action shall have been commenced against Buyer, Sellers or the Target Entities, which would prevent the Completion. No injunction or restraining order shall have been issued by any governmental authority, and be in effect, which restrains or prohibits any transaction contemplated hereby.

 

 

(f)

Key Employment Agreements: The Key Employment Agreements have been executed by all relevant parties.

 

 

(g)

Material Adverse Effect: No Material Adverse Effect has occurred since the date of the agreement.

 

 

(h)

Sellers Obligations. Seller shall not have caused a breach of this agreement that results or would reasonably be expected to result in a Material Adverse Effect.

 

2.2

Notice

 

Each party must promptly notify the others in writing if it becomes aware that any Condition in clause 2.1 has been satisfied or has become incapable of being satisfied.

 

2.3

Reasonable endeavours

 

 

(a)

The Warrantor must use all reasonable endeavours to procure that the relevant Ingeus Group members use their respective reasonable endeavours to ensure that the conditions in clause 2.1 are satisfied as expeditiously as possible and in any event on or before the Cut Off Date.

 

 

(b)

The Warrantor must keep the Buyer informed of the progress towards satisfaction of its obligations under clause 2.3(a).

 

 

(c)

The Buyer must use all reasonable endeavours to ensure that the conditions in clause 2.1(a), (b), (d) and (f) are satisfied as expeditiously as possible and in any event on or before the Cut Off Date; provided, however, that nothing set forth in this Section 2.3(c) shall require Buyer to expend financial resources for such endeavors.

 

 

(d)

If a Third Party requires the Buyer to provide any information as a condition to it providing the requisite consent required to satisfy any Condition, the Buyer agrees to provide such information.

 

 

(e)

If a Third Party requires the Buyer to provide the DWP Parent Company Guarantees or any other guarantee in respect of a Key Contract, as a condition to it providing the requisite consent required to satisfy any Condition, the Buyer agrees to deliver such bank guarantee or parent company guarantee as required.

 

2.4

Waiver

 

 

(a)

The Conditions in clauses 2.1(a)-(g) are for the benefit of both the Warrantor and the Buyer and may only be waived by written agreement between the Warrantor and the Buyer.

 

 
page 6

 

 

 

3        Termination

  

 

(b)

The Condition in clause 2.1(h) is for the benefit of the Buyer alone and may only be waived by the Buyer in writing.

 

2.5

Cut Off Date

 

By not less than 2 Business Days’ notice to the other, this agreement may be terminated at any time before Completion:

 

 

(a)

by the Warrantor or the Buyer, if the Conditions in clauses 2.1(a)-(g) are not satisfied, or waived in accordance with clause 2.4, by the Cut Off Date;

 

 

(b)

by the Buyer, if the Condition in clauses 2.1(h) is not satisfied, or waived in accordance with clause 2.4, by the Cut Off Date;

 

 

(c)

by the Warrantor or the Buyer, if the Conditions in clauses 2.1(a), (b), (c) or (f) become incapable of satisfaction or the parties agree that any of the conditions in clause 2.1 cannot be satisfied.

 

2.6

No binding agreement for transfer

 

For the avoidance of doubt, nothing in this agreement will cause a binding agreement for the transfer of shares or the sale of assets to arise unless and until the Conditions in clause 2.1 have been satisfied or waived in accordance with clause 2.4 and no person will obtain rights in relation to shares as a result of this agreement unless and until those Conditions have been satisfied or waived.

 

 

3

Termination

 

3.1

Effect of termination

 

If this agreement is terminated under clause 2.5, clause 6.3(b) or clause 9.14(b), then:

 

 

(a)

the parties will procure that each Transaction Agreement (if permitted by the terms of that contract) that has already been executed is terminated in accordance with its terms;

 

 

(b)

each party is released from its obligations to further perform its obligations under this agreement and the Transaction Agreements, except those expressed to survive termination;

 

 

(c)

each party retains the rights it has against the other parties in respect of any breach of this agreement occurring before termination;

 

 

(d)

the rights and obligations of each party under each of the following clauses and schedules will continue independently from the other obligations of the parties and survive termination of this agreement:

 

 

(1)

clause 1 (Definitions and Interpretation);

 

 

(2)

clause 3 (Termination);

 

 

(3)

clause 14 (Announcements);

 

 

(4)

clause 15 (Duties, costs and expenses);

 

 

(5)

clause 16 (GST);

 

 

(6)

clause 17 (Guarantee by Buyer’s Guarantor);

 

 
page 7

 

 

 

4        Sale and purchase

  

 

(7)

clause 19 (General).

 

3.2

No other right to terminate or rescind

 

No party may terminate or rescind this agreement (including on the grounds of any breach of Warranty or misrepresentation that occurs or becomes apparent before Completion) except as permitted under clause 2.5, clause 6.3(b) or clause 9.14(b).

 

 

4

Sale and purchase

 

4.1

Sale Shares

 

On the day for Completion determined under clause 6.1, each Seller must sell to the Buyer with Full Title Guarantee, and the Buyer must buy from each Seller, those Sale Shares listed against the name of that Seller in column 2 of Schedule 3, free and clear of all Encumbrances.

 

4.2

Associated Rights

 

 

(a)

Subject to clause 4.2(b), the Sellers must sell the Sale Shares to the Buyer together with all rights attached to them as at the date of Completion.

 

 

(b)

The Sellers are entitled to retain any Permitted Distribution which is declared, paid, distributed or returned by the Company between the date of this agreement and Completion.

 

4.3

Purchase Price

 

 

(a)

The consideration for the sale of the Sale Shares is the payment by the Buyer of the Purchase Price.

 

 

(b)

The Purchase Price will be paid to the accounts and addresses designated by the Sellers as follows:

 

 

(1)

the Completion Payment, payable by the Buyer on Completion in accordance with clause 6;

 

 

(2)

the Adjustment Amount, if any, payable following finalisation of the Completion Accounts in accordance with clauses 7.2 and 7.3;

 

 

(3)

the Deferred Consideration, payable to the Sellers by the Buyer in accordance with the provisions of clause 2 of Schedule 12;

 

 

(4)

the MoJ Payment, if any, payable to the Sellers by the Buyer in accordance with the provisions of clause 3 of Schedule 12;

 

 

(5)

the Earn-Out Consideration, if any, payable to the Sellers in accordance with the provisions of Schedule 13; and

 

 

(6)

any other adjustments to the Purchase Price payable in accordance with this agreement.

 

 

(c)

Subject to Completion occurring, the Sellers are entitled to be paid the Purchase Price in their Respective Proportions.

 

 

(d)

Except as expressly provided for in this agreement, payment of the Purchase Price must be made in Immediately Available Funds without counter-claim or set-off and free and clear without deduction of all present and future withholdings.

 

4.4

Title and risk

 

Title to and risk in the Sale Shares passes to the Buyer on Completion.

 

 

5

Period before Completion

 

5.1

Carrying on of business

 

Subject to clause 5.2, between the date of this agreement and the earlier of Completion and termination of this agreement, the Warrantor must use all reasonable endeavours to ensure that, other than with the consent of the Buyer, the business of the Ingeus Group is conducted in the ordinary course and, in particular without limiting the foregoing, that no Target Entity:

 

 

(a)

distributes or returns any capital to its members;

 

 

(b)

buys back any of its shares;

 

 

(c)

issues any shares, options or securities that are convertible into shares in that Target Entity;

 

 
page 8

 

 

 

5        Period before Completion

  

 

(d)

alters its constitution;

 

 

(e)

acquires or disposes of, or grants any Encumbrance over, any assets in an amount or for a value exceeding £50,000;

 

 

(f)

bids for, enters into, modifies or agrees to terminate any contract which is of material importance to the business, profits or assets of any of the Target Entities or of a value in excess of £100,000 or which is otherwise entered into outside the ordinary course of the business of the Target Entities;

 

 

(g)

incurs, undertakes or commits to any item of capital expenditure in an amount exceeding £250,000 or any item of capital expenditure which alone or in aggregate with all other items of capital expenditure incurred, undertaken or committed to after the date of this agreement exceeds £250,000;

 

 

(h)

incurs any financial indebtedness (other than under the UK Loan Facility or ROW Loan Facility); or

 

 

(i)

engages any new employees, or varies the employment terms of existing employees, where such engagement or variation would have the effect of increasing the total expenditure of the Ingeus Group on salary and wages by more than £150,000 per annum in aggregate.

 

5.2

Permitted acts

 

Nothing in clause 5.1 restricts the Warrantor or any Target Entity from doing any of the following permitted actions:

 

 

(a)

Transaction Agreements: any action that is contemplated in this agreement or any Transaction Agreement or the Disclosure Letter;

 

 

(b)

emergencies: any action constituting a necessary response to a threat to physical security or an unexpected natural disaster;

 

 
page 9

 

 

 

5        Period before Completion

   

 

 

(c)

legal obligations: any action that is necessary for a Target Entity to meet its legal or contractual obligations;

 

 

(d)

ordinary course of business: any action in the ordinary and usual course of carrying out its business;

 

 

(e)

bidding for contracts: bidding for, or entering into, contracts relating to business opportunities arising in the ordinary course of business or which are referred to in the Disclosure Materials;

 

 

(f)

Permitted Distribution: paying, declaring, distributing or returning a Permitted Distribution; or

 

 

(g)

Buyer approval: any action which is approved by the Buyer, such approval not to be unreasonably withheld or delayed.

 

5.3

Access to the Ingeus Group before Completion

 

 

(a)

Subject to clauses 5.3(b) and 5.3(c), during the period between the date of this agreement and the earlier of Completion and termination of this agreement, the Warrantor must ensure that the Buyer and a reasonable number of persons authorised by the Buyer:

 

 

(1)

are given reasonable non-disruptive access during normal business hours and on reasonable notice, to the assets, premises, books and records of the Target Entities reasonably required for the purpose of planning for the operations of the Target Entities following Completion; and

 

 

(2)

have reasonable access to senior management of the Target Entities.

 

 

(b)

The Buyer must ensure that any persons provided with access referred to in clause 5.3(a) comply with the reasonable requirements of the Target Entities or any relevant Third Party in respect of the access and do not interfere with the Business or operations of the Target Entities.

 

 

(c)

Nothing in this clause 5.3 requires the Warrantor or any Target Entity to provide the Buyer or any of its representatives with access to any information where provision of, or access to, that information would cause the Warrantor or any Target Entity to breach an obligation of confidence required pursuant to any trade practices, competition, anti-trust or similar laws.

 

5.4

Exclusivity

 

On and from the date of this agreement until Completion:

 

 

(a)

Sellers shall not and shall cause the Ingeus Group to not initiate, solicit, entertain, negotiate, accept or discuss, directly or indirectly, any proposal or offer from any person or group of persons other than Buyer and its affiliates to acquire all or any significant part of the business and properties, capital stock or capital stock equivalents of the Ingeus Group, whether by merger, purchase of stock, purchase of assets, tender offer or otherwise (Acquisition Proposal);

 

 

(b)

Sellers shall not and shall cause the Ingeus Group not to provide any non-public information to any third party in connection with an Acquisition Proposal;

 

 

(c)

Sellers shall not and shall cause the Ingeus Group not to enter in to any agreement, arrangement or understanding requiring it to abandon, terminate or fail to consummate this agreement;

 

 
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5        Completion

  

 

(d)

subject to any confidentiality obligations, Sellers must immediately notify Buyer if Sellers or any member of the Ingeus Group receives any indications of interest, requests for information or offers in respect of an Acquisition Proposal; and

 

 

(e)

Sellers must, and must cause the Ingeus Group to, suspend any and all existing discussions or negotiations with any person or group of persons other than Buyer and its affiliates regarding an Acquisition Proposal.

 

5.5

UK Share Sale Agreement

 

The Warrantor must procure that Ingeus Europe Limited does not terminate, or agree to any material variation of, the UK Share Sale Agreement without the prior written approval of the Buyer.

 

 

6

Completion

 

6.1

Time and Place

 

Subject to clause 3, Completion must take place at the offices of Herbert Smith Freehills, Central Plaza 1 345 Queen Street, Brisbane QLD 4000, Australia at 6:00 pm (Brisbane time) on the first Business Day of the month following the month in which the Conditions in clauses 2.1(a), (c) and (f) are satisfied or waived in accordance with clause 2.4 (or where such Conditions are satisfied or waived less than 5 Business Days before the end of any month, on the first Business Day of the second subsequent month) provided that on that date:

 

 

(a)

the Conditions in clauses 2.1 (d), (e), (g) and (h), continue to be satisfied or have otherwise been waived (in accordance with clause 2.4); and

 

 

(b)

the Condition in clause 2.1(b) becomes satisfied or is waived (in accordance with clause 2.4),

 

or such other place, time and date as the Warrantor and Buyer agree.

 

6.2

Completion

 

 

(a)

On or before Completion, each party must carry out the Completion Steps applicable to it in accordance with Schedule 6.

 

 

(b)

Completion is taken to have occurred when each party has performed all its obligations under this clause 6 and Schedule 6.

 

6.3

Notice to complete

 

 

(a)

If a party (Defaulting Party) fails to satisfy its obligations under clause 6.2 and Schedule 6 on the day and at the place and time for Completion determined under clause 6.1 then the Buyer (in the case of a default by a Seller) or the Warrantor (in the case of a default by a Buyer) (Notifying Party) may give the Defaulting Party a notice requiring the Defaulting Party to satisfy those obligations within a period of 10 Business Days from the date of the notice and declaring time to be of the essence.

 

 
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7        Completion Accounts

  

 

(b)

If the Defaulting Party fails to satisfy those obligations within those 10 Business Days the Notifying Party may, without limitation to any other rights it may have, terminate this agreement by giving written notice to the Defaulting Party.

 

6.4

Completion simultaneous

 

 

(a)

Subject to clause 6.4(b), the actions to take place as contemplated by this clause 6 and Schedule 6 are interdependent and must take place, as nearly as possible, simultaneously. If one action does not take place, then without prejudice to any rights available to any party as a consequence:

 

 

(1)

there is no obligation on any party to undertake or perform any of the other actions;

 

 

(2)

to the extent that such actions have already been undertaken, the parties must do everything reasonably required to reverse those actions; and

 

 

(3)

each Seller and the Buyer must each return to the other all documents delivered to it under clause 6.2(a) and Schedule 6 and must each repay to the other all payments received by it under clause 6.2(a) and Schedule 6, without prejudice to any other rights any party may have in respect of that failure.

 

 

(b)

The Buyer may, in its sole discretion, waive any or all of the actions that a Seller is required to perform under clause 2.1 of Schedule 6 and the Warrantor may, in its sole discretion, waive any or all of the actions that the Buyer is required to perform under clause 2.2 of Schedule 6.

 

 

7

Completion Accounts

 

7.1

Preparation of Completion Accounts

 

Following Completion the Sellers and the Buyer must procure that the Completion Accounts are prepared and finalised in accordance with Schedule 7.

 

7.2

Purchase Price adjustments following Completion Accounts

 

 

(a)

If the Adjustment Amount:

 

 

(1)

is negative, the Sellers must pay the Adjustment Amount to the Buyer as a reduction to the Purchase Price;

 

 

(2)

is positive, the Buyer must pay the Adjustment Amount to the Sellers as an increase to the Purchase Price; or

 

 
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8        Warranties

   

 

 

(3)

is nil, no amount will be paid by the Buyer or the Sellers in respect of the Adjustment Amount.

 

 

(b)

In addition to any payment which may be required under clause 7.2(a), if the UK Adjustment Amount:

 

 

(1)

is negative, the Sellers must procure that Deloitte LLP pays an amount equal to 50% of the UK Adjustment Amount to Ingeus Europe Limited in accordance with the UK Share Sale Agreement;

 

 

(2)

is positive, the Buyer must procure that:

 

 

(A)

an amount equal to 50% of the UK Adjustment Amount is advanced to Ingeus Europe Limited; and

 

 

(B)

Ingeus Europe Limited promptly pays that amount to Deloitte LLP in accordance with the UK Share Sale Agreement; or

 

 

(3)

is nil, no amount will be paid by Deloitte LLP, Ingeus Europe Limited or any other party in respect of the UK Adjustment Amount.

 

7.3

Payment of adjustments

 

 

(a)

A party required to make a payment to another party under this clause 7 must make the payment in Immediately Available Funds without counter-claim or set-off and free and clear and without deduction of all present and future withholdings within 5 Business Days after the finalisation of the Completion Accounts or relevant Expert’s Report as applicable.

 

 

(b)

If any amount payable under this clause 7 is not paid when due, interest under clause 19.16 will apply from and including the date that payment of that amount was due until the date of payment.

 

 

8

Warranties

 

8.1

Warranties by the Sellers

 

Subject to the qualifications and limitations in clause 9:

 

 

(a)

each of the Sellers give the Title Warranties in favour of the Buyer in respect of itself and the Sale Shares set out next to the name of that Seller in column 2 of Schedule 3 on the date of this agreement and will deemed to be repeated immediately before Completion (and, in the case of the Sale Shares set out against the name of the Seller Trustee in column 2 of Schedule 3, Gregory Kenneth Ashmead gives the Title Warranties in respect of the Seller Trustee’s ownership of and power to sell those Sale Shares); and

 

 

(b)

the Warrantor gives the Non-Title Warranties in favour of the Buyer:

 

 

(1)

in respect of each Non-Title Warranty that is expressed to be given on a particular date, on that date; and

 

 

(2)

in respect of each other Non-Title Warranty, on the date of this agreement and immediately before Completion.

 

8.2

Independent Warranties

 

Each of the Warranties is to be construed independently of the others and is not limited by reference to any other Warranty.

 

8.3

Reliance

 

The Sellers acknowledge that the Buyer has entered into this agreement and will complete this agreement solely in reliance on the Warranties.

 

 
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8        Warranties

  

8.4

Tax covenant

 

The Warrantor covenants to pay to the Buyer on demand, subject to the provisions of this agreement relating to Claims, including clauses 9 and 10, (or if later, 10 days before the liability to Tax or Duty is due and payable or, where applicable, any relief would have been recoverable) an amount equal to:

 

 

(a)

any liability to Tax or Duty of a Target Entity (including any liability which would have been payable but for the application or set off of any Relief against a liability to Tax or Duty, other than any Tax Relief arising to the Target Entity on or before Completion which is not shown as an asset in the Completion Accounts) arising in respect of:

 

 

(1)

any income, profits or gains actually or deemed to be earned, accrued or received by the Target Entity on or before Completion;

 

 

(2)

any transaction, act, event or omission occurring or deemed to occur on or before Completion;

 

 

(3)

the failure by any other person connected with a Seller for any Tax or Duty purpose at any time before Completion to discharge a liability to tax for which a Target Entity is not primarily liable;

 

 

(4)

the grant, exercise, release, vesting, variation or cancellation at any time of a right acquired before Completion to acquire securities or an interest in securities;

 

 

(5)

entry into this agreement or Completion (other than any Duty to be paid by the Buyer under clause 15.1);

 

 

(b)

the amount of Tax or Duty that would be payable but for the denial or loss of any Tax Relief shown as an asset in the Completion Accounts, save in the case of a repayment of Tax or Duty, the amount of the repayment (including any repayment supplement) that would have been due;

 

 

(c)

any liability of a Target Entity to make a payment or repayment under any indemnity, covenant, warranty, mortgage, guarantee or charge entered into or created on or before Completion of a sum equivalent to or by reference to another person's Tax liability; and

 

 

(d)

Tax Costs incurred by or on behalf of a Target Entity to the extent those Tax Costs arise from or relate to any of the matters for which the Warrantor may be liable under clause 8.4(a), 8.4(b) or 8.4(c),

 

except to the extent that the Warrantor’s liability for the Tax or Duty is limited or qualified under clause 9, and this will be the sole remedy of the Buyer and each Target Entity in respect of any such Tax, Duty or Tax Costs.

 

References to the due date for payment of any Tax or Duty shall be read and construed as a reference to the last day on which such Tax or Duty may by law be paid without incurring a penalty or liability for any interest, charge, surcharge, penalty, fine or other similar imposition.

 

 
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9        Claims

  

9

Claims

 

9.1

Disclosure

 

 

(a)

The Buyer acknowledges and agrees that the Sellers have disclosed or are deemed to have disclosed against the Warranties and all Claims, and the Buyer is aware of, and will be treated as having actual knowledge of, all facts, matters and circumstances that:

 

 

(1)

are provided for or described in this agreement or a Transaction Agreement; or

 

 

(2)

are fairly disclosed in, or otherwise evident from the information contained in, the Disclosure Letter.

 

 

(b)

The Warranties are given subject to the disclosures or deemed disclosures described in clause 9.1(a). A Warranty will not be regarded fairly as being untrue by reason of facts, matters or circumstances that have been disclosed or are deemed to have been disclosed under clause 9.1(a) and the Sellers will have no liability under the Warranties to the extent that disclosure is made or is deemed to have been made against the Warranties under this clause 9.1.

 

 

(c)

The Buyer must not make a Claim under a Warranty, and the Sellers will not be in breach of a Warranty, if the facts, matters or circumstances giving rise to such Claim are disclosed or are deemed to have been fairly disclosed under clause 9.1(a).

 

 

 

9.2

Awareness

 

Where a Warranty is given “to the best of the Warrantor’s knowledge’, or “so far as the Warrantor is aware’ or with a similar qualification as to the Warrantor’s awareness or knowledge, the Warrantor’s awareness is limited to and deemed only to include those facts, matters or circumstances of which a Specified Executive is actually aware as at the date of this agreement and would be aware if, at the date of this agreement that Specified Executive had made reasonable enquiries of the Specified Senior Executives, having regard to the Specified Executive’s position and circumstances.

 

9.3

No reliance

 

 

(a)

The Buyer represents and warrants to each Seller, that:

 

 

(1)

at no time has:

 

 

(A)

any Seller or Target Entity, or any person on its behalf, made or given; or

 

 

(B)

any Buyer Group Member relied on,

 

any representation, warranty, promise or undertaking in respect of the Business, the Ingeus Group or the future financial performance or prospects of all or any part of the Ingeus Group or otherwise except those expressly set out in this agreement (including in the Warranties);

 

 

(2)

it has not relied on anything other than the Warranties, indemnification and other contractual provisions of this agreement and the Transaction Agreements in agreeing to buy the Sale Shares and, in particular, no representations, warranties, promises, undertakings, statements or conduct in respect of the Business, the Ingeus Group or the future financial performance or prospects of all or any part of the Ingeus Group or otherwise have:

 

 
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9        Claims

  

 

(A)

induced or influenced the Buyer to enter into, or agree to any terms or conditions of, this agreement;

 

 

(B)

been relied on in any way as being accurate by a Buyer Group Member;

 

 

(C)

been warranted to a Buyer Group Member as being true; or

 

 

(D)

been taken into account by the Buyer as being important to its decision to enter into, or agree to any or all of the terms of, this agreement or the UK Share Sale Agreement,

 

except those expressly set out in this agreement (including in the Warranties);

 

 

(3)

it has entered into this agreement after satisfactory inspection and investigation of the affairs of the Target Entities, including the opportunity to conduct a detailed review of the Disclosure Materials; and

 

 

(4)

it has made, and it relies upon, its own searches, investigations, enquiries and evaluations in respect of the Ingeus Group.

 

 

(b)

The Buyer acknowledges that the Sellers have agreed to sell the Sale Shares and enter into this agreement relying on the representations and warranties in this clause 9.3 and would not be prepared to sell the Sale Shares on any other basis.

 

9.4

Opinions, estimates and forecasts

 

The parties acknowledge that no Seller is under any obligation to provide any Buyer Group Member or its advisers with any information in relation to the future financial performance or prospects of the Ingeus Group. If a Buyer Group Member has received opinions, estimates, projections, business plans, budget information or other forecasts in respect of all or any part of the Ingeus Group (including those set out in the Information Memorandum), the Buyer acknowledges and agrees that:

 

 

(a)

there are uncertainties inherent in attempting to make these estimates, projections, business plans, budgets and forecasts and the Buyer is familiar with these uncertainties;

 

 

(b)

the Buyer is taking full responsibility for making its own evaluation of the adequacy and accuracy of all estimates, projections, business plans, budgets and forecasts furnished to it;

 

 

(c)

the Sellers are not liable under any claim arising out of or relating to any opinions, estimates, projections, business plans, budgets or forecasts in respect of all or any part of the Ingeus Group;

 

 

(d)

without limiting clause 9.4(c), the Sellers are not liable under any claim arising out of or relating to any error, inaccuracy, incompleteness, lack of reasonableness or similar defect in any opinion, estimate, projection, business plan, budget or forecast given in respect of all or any part of the Ingeus Group or any default negligence or lack of care in relation to the preparation or provision of such information; and

  

 
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9        Claims

  

 

(e)

information contained in the Disclosure Materials shall not be deemed to be invalid solely by reason of any error, inaccuracy, incompleteness, lack of reasonableness or similar defect in any opinion, estimate, projection, business plan, budget or forecast given in respect of all or any part of the Ingeus Group.

 

9.5

Maximum and minimum amounts

 

 

(a)

The Sellers are not liable under a Claim unless the amount finally agreed or adjudicated to be payable in respect of that Claim:

 

 

(1)

exceeds £100,000; and

 

 

(2)

either alone or together with the amount finally agreed or adjudicated to be payable in respect of other Claims that satisfy clause 9.5(a)(1) exceeds £1,000,000,

 

in which event, subject to clauses 9.5(b) and 9.5(c), the Sellers are liable for so much of that amount which exceeds £1,000,000.

 

 

(b)

Subject to the remainder of this clause 9, including (without limitation) the limitations in clause 9.14:

 

 

(1)

the maximum aggregate amount that a Seller is required to pay in respect of Title Claims whenever made is limited to its Respective Proportion of the Paid Non-Deloitte Purchase Price, provided, however, that to the extent such Title Claim exceeds the Paid Non-Deloitte Purchase Price, the remaining portion of the Purchase Price which later becomes payable to such Seller (if any) may be utilized by Buyer to satisfy the remaining portion of such Title Claim in accordance with the provisions of clause 10.4.

 

 

(2)

the maximum aggregate amount that the Warrantor is required to pay in respect of all Tax Claims whenever made is limited to the Tax Claim Cap; and

 

 

(3)

the maximum aggregate amount that the Warrantor, or, if applicable, a Seller is required to pay in respect of Non-Title Claims (other than Tax Claims) whenever made is, in respect of the Warrantor, limited to the Non-Title Claim Cap, or in respect of a Seller, that Seller’s Relevant Proportion of the Non-Title Claim Cap, as applicable,

 

provided, that if the Paid Non-Deloitte Purchase Price increases and there are unpaid Claims, any such increase will be applied against such Claims in accordance with the provisions of clause 10.4 up to the applicable Claim cap in sub-clauses (1), (2) or (3) above.

 

 

(c)

For the purposes of clause 9.5(a)(1), Claims arising out of separate sets of facts, matters or circumstances will not be treated as one Claim, even if each set of facts, matters or circumstances may be a breach of the same Warranty. Notwithstanding the foregoing, nothing contained in this agreement shall limit the rights of any party hereto to seek to obtain injunctive relief or specific performance.

 

9.6

Time limits

 

A Seller will not be liable under a Claim unless:

 

 

(a)

the Buyer notifies the Seller of the Claim in accordance with clauses 10.1(a) and 10.1(b) within:

 

 

(1)

7 years after Completion in respect of Tax Claims;

 

 
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9        Claims

  

 

(2)

48 months after Completion in respect of Title Claims; or

 

 

(3)

24 months after Completion in respect of Non-Title Claims (other than Tax Claims); and

 

 

(4)

the Restricted Period in respect of Claims related to clause 13; and

 

 

(b)

within 6 months (or such longer period as may be agreed) of the date the Buyer is required to notify the Seller of the Claim under clause 10.1(a):

 

 

(1)

the Claim has been agreed, compromised or settled; or

 

 

(2)

the Buyer has issued and served legal proceedings against the Seller in respect of the Claim.

 

9.7

Recovery under other rights and reimbursement

 

 

(a)

The Sellers are not liable under a Claim for any Loss to the extent that a Buyer Group Member or a Target Entity is entitled on an after-Tax basis to recover, or be compensated for by any Third Party any Loss from another source (including under a policy of insurance or from a Governmental Agency).

 

 

(b)

If, after a Seller has made a payment in respect of a Claim, a Buyer Group Member or a Target Entity recovers or is compensated for by any other means (including receipt of any benefit referred to in clause 9.12), any Loss that gave rise to the Claim, the Buyer must immediately pay to the Seller as an increase in the Purchase Price, the amount of the Loss that was recovered or compensated for less any Tax thereon.

 

9.8

No double claims

 

 

(a)

The Sellers are not liable under a Claim for any Loss that a Buyer Group Member or a Target Entity recovers, or is compensated for, under a Transaction Agreement.

 

 

(b)

This clause 9.8 does not prevent the Buyer Group Member or Target Entity entitled to make a claim under a Transaction Agreement from commencing that claim. However, if for any reason more than one amount is paid in respect of the same Loss, the Buyer must procure that the additional amount is immediately repaid to one or more Sellers nominated by the Warrantor so as to give full effect to clause 9.8(a).

 

9.9

Mitigation of loss

 

 

(a)

Other than in respect of a Tax Covenant Claim, the Buyer must:

 

 

(1)

take, and procure that each other Buyer Group Member and Target Entity takes, all reasonable actions to mitigate any Loss that may give rise to a Claim; and

 

 

(2)

not omit, and procure that no other Buyer Group Member or Target Entity omits, to take any reasonable action that would mitigate any Loss that may give rise to a Claim.

 

 

(b)

If the Buyer does not comply with clause 9.9(a) and compliance with clause 9.9(a) would have mitigated the Loss, the Sellers are not liable for the amount by which the Loss would have been reduced.

 

 
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9        Claims

  

9.10

General limitations

 

The Sellers are not liable under a Claim for any Loss or amount described below to the extent that Loss or amount:

 

 

(a)

(contingent losses): other than in respect of a Tax Claim is a contingent Loss, unless and until the Loss becomes an actual Loss and is due and payable;

 

 

(b)

(provisions in accounts): arises in respect of a matter that has been disclosed in the Completion Accounts (or, to the extent not reflected in the Completion Accounts, in the Accounts) or the subject matter of which has been included as a provision, allowance, reserve or accrual in the Completion Accounts (or, to the extent not reflected in the Completion Accounts, in the Accounts);

 

 

(c)

(pre Completion actions): arises from an act or omission by or on behalf of a Seller or a Target Entity before Completion that was done or made:

 

 

(1)

with the written consent (including, without limitation, by email) of a Buyer Group Member; or

 

 

(2)

at the written direction or instruction (including, without limitation, by email) of a Buyer Group Member;

 

 

(d)

(post Completion conduct): arises from anything done or not done after Completion by or on behalf of a Buyer Group Member or a Target Entity except where such act is pursuant to a legally binding obligation of Target Entities entered into before Completion and not fairly disclosed in the Disclosure Letter or in relation to a Tax Claim where required by any legislation, regulation, or any practice of (or at the request of) any Governmental Agency, as such legislation, regulation or practice (or request) is in force or applies at Completion, or in relation to a Tax Claim where such act is any filing or submission of documentation in relation to Tax or responding to any Tax audit or enquiry;

 

 

(e)

(promoted claims): arises from a Third Party Claim that is attributable to anything done or not done after Completion by or on behalf of a Buyer Group Member or a Target Entity that was calculated or intended to cause the Third Party Claim to be made, other than any filing or submission of documentation in relation to Tax or responding to any Tax audit or enquiry;

 

 

(f)

(breach of law or contract): arises from a breach of a Warranty that could only have been avoided by Seller or Target Entity breaching its obligations at law or under this agreement or a Transaction Agreement;

 

 

(g)

(change of law or interpretation): arises from:

 

 

(1)

the enactment or amendment of any legislation or regulations;

 

 

(2)

a change in the judicial or administrative interpretation of the law; or

 

 

(3)

a change in the practice or policy of any Governmental Agency,

 

after the date of this agreement, including legislation, regulations, amendments, interpretation, practice or policy that has a retrospective effect;

 

 

(h)

(change in accounting policy): would not have arisen but for a change after Completion in any accounting policy or practice of a Buyer Group Member or a Target Entity that applied before Completion, other than where such change is necessary to comply with the generally accepted accounting principles that applied to the Target Entities up to Completion;

 

 

(i)

(change of Business): arises out of the cessation or alteration of the Business after Completion;

 

 
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9        Claims

  

 

(j)

(legal costs): is not a reasonable legal cost having regard to the circumstances of the Claim; or

 

 

(k)

(consequential loss): is special loss or damage, indirect loss or damage or consequential loss or damage including loss of profit, loss of revenue, loss of anticipated savings or business, loss of data, loss of opportunity and expectation loss or damage; or

 

 

(l)

(remediable loss): is remediable, provided it is remedied to the satisfaction of the Buyer, acting reasonably, within 20 Business Days after the Sellers receive written notice of the Claim under clause 10.1(a).

 

9.11

Other limitations

 

 

(a)

The Sellers’ liability under the Tax Covenant shall be reduced by the amount of any accrual, allowance, provision or reserve included in the Completion Accounts in respect of Tax.

 

 

(b)

If:

 

 

(1)

an accrual, allowance, provision or reserve in the Completion Accounts in respect of a Tax exceeds the actual liability in respect of that Tax and that liability has been finally satisfied; or

 

 

(2)

an entitlement to any Tax Relief that is shown as an asset in the Completion Accounts is understated and the amount of the understatement has been actually received by a Target Entity,

 

then the Sellers’ liability in respect of any Tax Claims shall be reduced by the amount of the actual excess or actual understatement (as applicable).

 

 

(c)

The Sellers are not liable under a Tax Claim for any Loss or amount described below to the extent that:

 

 

(1)

(inconsistent position): Loss that arises from a Buyer Group Member or a Target Entity taking a position in relation to the application of a Tax Law that is inconsistent with the position taken by that Target Entity before Completion (including any position adopted in relation to the preparation of any Pre Completion Returns or in relation to the calculation of any reserve or provision relating to Tax or Duty in the Completion Accounts), unless the Target Entity is required to adopt an inconsistent position to comply with a Tax Law;

 

 

(2)

(failure to take action): Loss that arises from a failure by a Buyer Group Member or a Target Entity to take any action after Completion required by, or that should reasonably be taken under, any applicable Tax Law in relation to any Tax or Duty (including any failure to take any such action within the time allowed); or

 

 

(3)

(action contrary to Completion Accounts): Loss that arises from a failure by a Buyer Group Member or a Target Entity to make any claim, election, surrender or disclaimer or give any notice or consent or do any other thing after Completion, the making, giving or doing of which was taken into account or assumed in computing the provision for Tax in the Completion Accounts other than any claim, election, surrender or disclaimer or giving of notice or consent or other thing that is the Warrantor's responsibility under clause 12.3.

 

 

(d)

If a Target Entity takes a position in relation to the application of a Tax Law that is inconsistent with the position taken by that Target Entity before Completion, the Buyer must notify the Sellers of the change specifying the circumstances of the inconsistent position, at least 15 Business Days before the Target Entity adopts it.

 

 
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9        Claims

  

9.12

Buyer benefits

 

In assessing any Loss recoverable by the Buyer as a result of any Claim or any payment made under clause 9.7, there must be taken into account any financial benefit accruing to the Buyer Group (including any amount of any relief, allowance, exemption, exclusion, set-off, deduction, loss, rebate, refund, right to repayment or credit granted or actually received in respect of a Tax or Duty under any law obtained or obtainable by the Buyer Group and any amount by which any Tax for which the Buyer Group is or may be liable to be assessed or accountable is reduced or extinguished), arising directly or indirectly from the matter that gives rise to that Claim.

 

9.13

Sole remedy

 

 

(a)

It is the intention of the parties that the Buyer’s and Buyer Group’s sole remedies in connection with the Sale and the transactions contemplated by the UK Share Sale Agreement will be as set out in this agreement.

 

 

(b)

No Seller, Seller Representative or Adviser, nor Deloitte LLP, has any liability to a Buyer Group Member or a Target Entity:

 

 

(1)

in connection with the Sale, the transactions contemplated by the UK Share Sale Agreement or the matters the subject of this agreement or the Disclosure Materials; or

 

 

(2)

resulting from or implied by conduct made in the course of communications or negotiations in respect of the Sale, the transactions contemplated by the UK Share Sale Agreement or the matters the subject of this agreement or the Disclosure Materials,

 

under a claim unless the claim may be made under the terms of this agreement or arises out of a statutory right or other claim that cannot be excluded by contract, including, without limitation, fraud, dishonesty or wilful concealment, or, in respect of a breach of an agreement or undertaking of the Sellers for the period prior to Completion, fraud, dishonesty, wilful misconduct or wilful concealment.

 

 

(c)

The Buyer unconditionally and irrevocably releases, and must procure that each Target Entity and each Buyer Group Member unconditionally and irrevocably releases, all current and former directors, officers and employees of a Target Entity from any claim relating to any act, omission or conduct of those directors, officers and employees at any time prior to Completion, except in respect of fraud, dishonesty or wilful concealment by a director, officer or employee, or, in respect of a breach of an agreement or undertaking of the Sellers for the period prior to Completion, fraud, dishonesty, wilful misconduct or wilful concealment except that this clause 9.13(a) shall not apply in respect of any person in their capacity as Warrantor or Seller.

 

 

(d)

The Buyer must not, and must procure that each Target Entity and other Buyer Group Member does not, make a claim:

 

 

(1)

that the Buyer would not be entitled to make under this agreement or that is otherwise inconsistent with the Buyer’s entitlement to make a claim under this agreement; or

 

 

(2)

against Deloitte LLP or any Seller Representative or Adviser with respect to or in connection with this agreement,

 

 
page 21

 

 

 

9        Claims

  

and the Buyer acknowledges that to do so would be to seek to circumvent the parties’ intention expressed in clause 9.13(a) and the Buyer must indemnify the Sellers, Deloitte LLP and each Seller Representative or Adviser against all claims made by a Target Entity or by a Buyer Group Member which are not permitted to be made under, or inconsistent with, this agreement.

 

9.14

Warranty insurance

 

 

(a)

Notwithstanding any provision to the contrary in this agreement:

 

 

(1)

the Buyer and Sellers shall jointly use their reasonable efforts to obtain a W&I Policy with terms acceptable to the Warrantor in an effort to provide the Buyer with cover in respect of any Loss it suffers or incurs in connection with matters giving rise to Claims (other than Claims for injunctive relief or specific performance) arising out of a breach of Warranty, covenant or under an indemnity in this agreement (upon the terms and subject to the limitations set out in the W&I Policy). The Buyer agrees to provide all documentation and information reasonably requested by the insurance broker or the insurer to facilitate the arrangement of a W&I Policy. For the avoidance of doubt, Buyer shall be deemed to have fulfilled its obligations under this clause 9.14(a)(1) if Buyer (i) participates in conference calls with insurance companies and insurance brokers on reasonable notice and at reasonable times and (ii) provides to such insurance companies and insurance brokers all due diligence reports previously prepared by Buyer or Buyer’s agents in connection with Buyer’s investigation of the Ingeus Group. If a W&I Policy is offered which is acceptable to the Warrantor, the Warrantor shall advance the funds to Buyer to purchase the W&I Policy at the sole cost of the Warrantor but nothing in this clause requires the Warrantor to provide such funds or to agree to a W&I Policy;

 

 

(2)

the Buyer and Sellers acknowledge that it may not be possible to obtain a W&I Policy on terms acceptable to the Warrantor, and the Buyer’s rights with respect to Claims shall not be diminished if a W&I Policy is not obtained;

 

 

(3)

the Buyer agrees that no Buyer Group Member will be entitled to make, and must not make, and hereby irrevocably waives any right it may have to make, and must procure that no Buyer Group Member makes, and irrevocably waives any right it may have to make, any Claim against the Sellers arising out of a breach of Warranty, covenant or under an indemnity in this agreement, except only:

 

 

(A)

in respect of a Claim against a Seller relating directly to the fraud, dishonesty or wilful concealment of that Seller, or, in respect of a breach of an agreement or undertaking of that Seller for the period prior to Completion, fraud, dishonesty, wilful misconduct or wilful concealment;

 

 

(B)

after having:

 

 

1.

filed a Claim against the W&I Insurer under or in respect of the W&I Policy (if any); and

 

 

2.

used commercially reasonable efforts to pursue such Claim against the W&I Insurer under or in respect of the W&I Policy (if any) until the earlier of denial of the Claim or payment of the Claim.

 

 
page 22

 

 

 

9        Claims

  

 

(C)

to the extent that the Buyer makes:

 

 

1.

a Non-Title Claim or Non-Title Claims which have not been paid in full under the W&I Policy (if any) , in which case the Warrantor’s aggregate liability shall be limited to the amount by which the Non-Title Claims Cap exceeds the amount recovered under the W&I Policy (if any) (unless Buyer has entered into a settlement agreement with the insurance carrier with respect to such Non-Title Claim in which case, except as otherwise agreed between Buyer and Warrantor with respect to such settlement, the Sellers have no further liability in respect of that Claim);

 

 

2.

a Tax Claim or Tax Claims against the Warrantor which have not been met in full under the W&I Policy (if any), in which case the Warrantor’s aggregate liability shall be limited to the amount by which the Tax Claims Cap exceeds the amount recovered by the Buyer under the W&I Policy (if any) (unless Buyer has entered into a settlement agreement with the insurance carrier with respect to such Tax Claim in which case, except as otherwise agreed between Buyer and Warrantor with respect to such settlement, the Sellers have no further liability in respect of that Claim); or

 

 

3.

a Title Claim or Title Claims against any of the Sellers which have not been paid in full under the W&I Policy (if any), in which case the relevant Seller’s or Sellers’ aggregate liability shall be limited to each relevant Seller’s Respective Proportion of the amount by which the Paid Non-Deloitte Purchase Price exceeds the amount recovered by the Buyer under the W&I Policy (if any) (unless Buyer has entered into a settlement agreement with the insurance carrier with respect to such Title Claim in which case, except as otherwise agreed between Buyer and Warrantor with respect to such settlement, the Sellers have no further liability in respect of that Claim).

 

 

(4)

the Buyer covenants with each of the Sellers that:

 

 

(A)

it will not agree to any amendment, variation, termination or waiver of the W&I Policy (or do anything which has a similar effect) without the consent in writing of the Warrantor;

 

 

(B)

it will not novate, or otherwise assign its rights under, the W&I Policy (or do anything which has similar effect) or do anything which causes any right of the insured under the W&I Policy not to have full force and effect upon its terms; and

 

 

(C)

it will comply with all terms and conditions of the W&I Policy, including any pre or post Completion deliverables required under the W&I Policy; and

 

 

(5)

the Buyer indemnifies each of the Sellers for and against all Loss:

 

 

(A)

arising in connection with a breach of this clause 9.14 by a Buyer Group Member;

 

 
page 23

 

 

 

10        Procedures for dealing with Claims

  

 

(B)

which is suffered or incurred by a Seller as a result of any Claim being made by the Buyer or any Buyer Group Member against that Seller which is not permitted to be made under this clause 9.14.

 

 

(b)

If the Buyer fails to satisfy its obligations under clause 9.14(a), the Warrantor may, without limitation to any other rights the Sellers might have, terminate this agreement by giving written notice to the Buyer at any time prior to Completion.

 

 

(c)

If there is any conflict or inconsistency between this clause 9.14 and any other provisions of this agreement other than clause 9.17, this clause 9.14 prevails.

 

9.15

Payments affecting the Purchase Price

 

 

(a)

Any payment made by a Seller to a Buyer Group Member or a Target Entity or under the W&I Policy in respect of any Claim will be in reduction of the Purchase Price.

 

 

(b)

Any payment (including a reimbursement) made by a Buyer Group Member or a Target Entity to a Seller in respect of any Claim will be an increase in the Purchase Price.

 

9.16

Independent limitations

 

Each qualification and limitation in this clause 9 is to be construed independently of the others and is not limited by any other qualification or limitation.

 

9.17

Fraud

 

Notwithstanding any other provision of this agreement, none of the qualifications and limitations on the liability of the Sellers (including in this clause 9) apply to any Claim against a Seller to the extent that the liability of the Seller in respect of that Claim arises from fraud, dishonesty or wilful concealment on the part of that particular Seller (and not any other Seller or other person), or, in respect of a breach of an agreement or undertaking of that Seller for the period prior to Completion, fraud, dishonesty, wilful misconduct or wilful concealment.

 

 

10

Procedures for dealing with Claims

 

10.1

Notice of Claims

 

 

(a)

(Actual Claims): The Buyer must promptly notify the Warrantor if:

 

 

(1)

it decides to make a Claim against a Seller that either alone or together with other Claims exceeds any applicable thresholds set out in clause 9.5(a) (if applicable) or to make a claim under the W&I Policy; or

 

 
page 24

 

 

 

10        Procedures for dealing with Claims

  

 

(2)

a Third Party Claim or Tax Demand is made that may give rise to a Claim against a Seller.

 

 

(b)

(Potential Claims) Without limiting clause 10.1(a) the Buyer must also promptly notify the Warrantor if:

 

 

(1)

the Buyer believes that it would be entitled to make a Claim against a Seller but for the thresholds set out in clause 9.5(a); or

 

 

(2)

the Buyer becomes aware of any events, matters or circumstances (including any potential threatened Third Party Claim or Tax Demand) that may give rise to a Claim against a Seller, whether alone or with any other Claim or circumstances or with the passage of time).

 

 

(c)

(Details required): The Buyer must include in each notice given under clause 10.1(a) or 10.1(b) all relevant details (including the amount) then known to a Buyer Group Member or a Target Entity of:

 

 

(1)

the Claim and if applicable, any other Claims that together with the Claim give rise to any applicable thresholds in clause 9.5(a) being exceeded;

 

 

(2)

if applicable, the Third Party Claim or Tax Demand; and

 

 

(3)

the events, matters or circumstances giving rise to the Claim.

 

 

(d)

(Extracts): The Buyer must also include in each notice given under clause 10.1(a) or 10.1(b) an extract of:

 

 

(1)

any part of a Demand (including a Tax Demand) that identifies the liability or amount to which the Claim relates or other evidence of the amount of the Demand to which the Claim relates; and

 

 

(2)

if available or relevant, any corresponding part of any adjustment sheet or other explanatory material issued by a Governmental Agency that specifies the basis for the Demand to which the Claim relates or other evidence of that basis.

 

 

(e)

(Demands): The Buyer must provide a copy of any document referred to in clause 10.1(d) to the Warrantor as soon as practicable and in any event within 5 Business Days of receipt of that document by a Buyer Group Member or a Target Entity.

 

 

(f)

(Developments): The Buyer must also, on an on-going basis, keep the Warrantor informed of all developments in relation to the Claim notified under clause 10.1(a) or 10.1(b).

 

 

(g)

(Compliance) If the Buyer does not fully comply with this clause 10 in respect of a Claim, the Sellers are not liable under the Claim to the extent that the non-compliance has increased the amount of the Claim.

 

10.2

Third Party Claims

 

The following additional obligations apply in respect of the Third Party Claims.

 

 

(a)

(No admission): Except with respect to the defence of Third Party Claims which Warrantor does not agree to assume pursuant to subsection (b) below, the Buyer must not, and must ensure that each Target Entity and Buyer Group Member does not:

 

 

(1)

accept, compromise or pay,

 

 

(2)

agree to arbitrate, compromise or settle; or

 

 

(3)

make any admission or take any action in relation to,

 

a Third Party Claim that may lead to liability on the part of a Seller under a Claim without the Warrantor’s prior written approval.

 

 

(b)

(Defence of claim): Following receipt of a notice under clause 10.1(a) in respect of a Claim that arises from or involves or could potentially involve a Third Party Claim, the Warrantor may, by giving written notice to the Buyer, assume the conduct of the defence of the Third Party Claim, provided that such written notice is given to the Buyer no later than the earlier of (1) the 15th Business Day after receipt of a notice under clause 10.1(a) or (2) the last day of the first half of the permitted response time to such notice in the applicable jurisdiction.

 

 
page 25

 

 

 

10        Procedures for dealing with Claims

  

 

(c)

(Sellers assume conduct): If the Warrantor advises the Buyer that it wishes to assume the conduct of the defence of the Third Party Claim:

 

 

(1)

(indemnity) provided that the Warrantor provides the Buyer with an indemnity against all Loss that may result from such action, the Buyer must promptly take, and must procure that each Buyer Group Member and Target Entity promptly takes, all action requested by the Warrantor (acting reasonably) to avoid, contest, compromise or defend the Third Party Claim, including using professional advisers nominated by the Warrantor and approved by the Warrantor for this purpose; and

 

 

(2)

(access) the Buyer must provide, and must procure that each Buyer Group Member and Target Entity provides, the Warrantor with all reasonable assistance requested by it in relation to the Third Party Claim, including providing access to witnesses and documentary or other evidence relevant to the Third Party Claim, allowing it and its legal advisers to inspect and take copies of all relevant books, records, files and documents, and providing it with reasonable access to the personnel, premises and chattels of the Buyer Group Members and the Target Entities for the sole purpose of obtaining information in relation to the Third Party Claim,

 

provided that nothing in this clause shall entitle the Warrantor to access to any information or document which has been prepared by the Buyer or its advisers to assess the merits of a Warranty Claim.

 

 

(d)

(Conduct of claim by Sellers) If the Warrantor assumes the conduct of the defence of a Third Party Claim, in conducting any proceedings or actions in respect of that Third Party Claim the Warrantor must:

 

 

(1)

act in good faith and not take any action that the Buyer believes, acting reasonably, would have a material adverse effect on the goodwill and business of any of the Buyer Group Members or any Target Entities;

 

 

(2)

liaise with the Buyer in relation to the defence of the Third Party Claim and obtain the consent of the Buyer (acting reasonably) prior to agreeing, settling or making any admission in relation to a Third Party Claim; and

 

 

(3)

provide the Buyer with reasonable access to a copy of any notice, correspondence or other document relating to the Third Party Claim.

 

 

(e)

(Buyer assumes conduct) If the Warrantor advises the Buyer that it does not wish to assume the conduct of the defence of the Third Party Claim, then the Buyer must procure that any Buyer Group Member or Target Entity that is conducting any proceedings or actions in respect of that Third Party Claim:

 

 

(1)

acts in good faith;

 

 

(2)

liaises with the Warrantor in relation to the defence of the Third Party Claim;

 

 

(3)

provides the Warrantor with reasonable access to a copy of any notice, correspondence or other document relating to the Third Party Claim except to the extent such material was prepared to assess the merits of a Warranty Claim; and

 

 
page 26

 

 

 

10        Procedures for dealing with Claims

  

 

(4)

acts reasonably in all the circumstances, including, having regard to the likelihood of success.

 

10.3

Tax Demands

 

Without affecting, and subject to, the provisions of this agreement relating to Claims, including clauses 9 and 10, the following additional obligations apply in respect of Claims arising from or involving a Tax Demand.

 

 

(a)

(No admission): The Buyer must not, and must ensure that each Target Entity and Buyer Group Member does not:

 

 

(1)

accept, compromise or pay,

 

 

(2)

agree to arbitrate, compromise or settle; or

 

 

(3)

make any admission or take any action in relation to,

 

a Tax Demand that may lead to liability on the part of the Warrantor under a Claim without the prior written approval of the Warrantor (which must not be unreasonably withheld or delayed). However, the Buyer or a Target Entity may pay any Tax or Duty to a Governmental Agency by the due date for payment without affecting any of its rights under this agreement.

 

 

(b)

(Payment if not contesting a Tax Demand): If the Warrantor does not advise the Buyer that it wishes to contest the Tax Demand then the Warrantor must pay in Immediately Available Funds and as a reduction in the Purchase Price the amount notified by the Buyer by the later of:

 

 

(1)

the date on which the Warrantor is liable for the relevant Tax Claim the Buyer having complied with the provisions of this agreement relating to Claims, including clauses 9 and 10;

 

 

(2)

2 Business Days before the due date for payment to the Governmental Agency; or

 

 

(3)

10 Business Days after receipt of the notice given by the Buyer under clause 10.1.

 

 

(c)

(Contesting a Tax Demand): Following receipt of a notice under clause 10.1 in respect of a Claim that arises from or involves a Tax Demand, the Warrantor may, by written notice to the Buyer no later than 5 Business Days before the date due for payment of the relevant Tax or Duty advise the Buyer that it wishes to contest the Tax Demand.

 

 

(d)

(Procedure for contesting a Tax Demand): If the Warrantor advises the Buyer that it wishes to contest the Tax or Duty the subject of the Tax Demand under this clause 10.3(d) then, subject at all times to the provisions of this agreement relating to Claims, including clauses 9 and 10:

 

 

(1)

(Payment of Tax) the Warrantor must pay the Buyer, in Immediately Available Funds and as a reduction in the Purchase Price, so much of the Tax or Duty as is required by the relevant Governmental Agency to be paid while any action is being taken under this clause 10.3 by the later of (i) the date on which the Warrantor is liable for the relevant Tax Claim the Buyer having complied with the provisions of this agreement relating to Claims, including clauses 9 and 10; (ii) 2 Business Days before the due date for payment to the Governmental Agency; and (iii) 10 Business Days after receipt of the notice given by the Buyer under clause 10.1; and

 

 
page 27

 

 

 

10        Procedures for dealing with Claims

  

 

(2)

(Objection to Tax Demand or Disputing Action) at the Warrantor’s written request, the Buyer must take, or procure that the person required to pay the Tax or Duty (Tax Payor) takes, such Disputing Action in a timely manner in relation to the Tax Demand as the Warrantor may reasonably require.

 

 

(e)

(Conduct of proceedings by the Warrantor): If the Warrantor contests the Tax or Duty the subject of a Tax Demand then the Buyer must follow, and must procure that each Buyer Group Member and Target Entity follows, all reasonable directions of the Warrantor relating to the conduct of any Disputing Action contemplated by this clause 10.3(e), including using professional advisers (at the Warrantor’s expense) nominated by the Warrantor and reasonably acceptable to the Buyer. In making any such directions, the Warrantor must:

 

 

(1)

act in good faith;

 

 

(2)

liaise with the Buyer in relation to conduct of Disputing Action contemplated by this clause 10.3(e); and

 

 

(3)

provide the Buyer with reasonable access to a copy of any notice, correspondence of other document relating to that Disputing Action.

 

The Warrantor shall not be entitled to take, or request the Buyer or a Target Entity to take, or procure the taking of, an action which involves an appeal beyond the first appellate court, which for the avoidance of doubt in the UK shall compromise the Tax Chamber of the First Tier Tribunal, without an opinion at the expense of the Warrantor from a tax counsel of at least 10 years’ experience (acting as expert and not as arbitrator) that the appeal will, on the balance of probabilities, be won.

 

If any of the Sellers, or a Target Entity before Completion, shall have committed acts or omissions which constitute fraud, dishonesty or wilful concealment giving rise to or in connection with the Tax Demand, the rights of the Warrantor set out in this clause 10.3 in respect of the conduct of the Tax Demand shall not apply and the Buyer shall (without prejudice to its rights under this agreement) be free to satisfy or settle the relevant Tax Demand or take such other action on such terms as it may in its absolute discretion think fit.

 

 

(f)

(Access): The Buyer must provide, and must procure that each Buyer Group Member and Target Entity provides, the Warrantor with all reasonable assistance requested by it in relation to the Tax Demand and the Disputing Action contemplated by this clause 10.3 including providing, at the Sellers’ cost, access to witnesses and documentary or other evidence relevant to the Tax Demand or the Disputing Action, allowing it and its legal advisers to inspect and take copies of all relevant books, records, files and documents, and providing it with reasonable access to the personnel, premises and chattels of the Buyer Group Members and the Target Entities.

 

 

(g)

(Repayment of Tax): If the Warrantor contests the Tax or Duty the subject of a Tax Demand and the Warrantor has paid an amount of Tax or Duty to the Buyer under clause 10.3(d)(1) (the Initial Amount) and:

 

 

(1)

the Tax Demand is later withdrawn, the Buyer must repay the Initial Amount to the Warrantor; or

 

 

(2)

the amount of Tax or Duty ultimately required to be paid under Tax Demand is less than the Initial Amount, the Buyer must repay the Initial Amount (less the Tax or Duty which is required to be paid under the Tax Demand) to the Warrantor.

 

10.4

Right of set off

 

 

(a)

If, within the time limit applicable to a Claim as set out in clause 9.6, and prior to:

 

 

(1)

the end of the Escrow Period (as defined in Schedule 12) there remains any Escrowed Stock or Escrowed Cash (as defined in Schedule 12); or

 

 

(2)

the payment of any Earn-Out Consideration becoming due,

 

 
page 28

 

 

 

10        Procedures for dealing with Claims

  

the Buyer (acting reasonably and in good faith) has notified the Sellers or the Warrantor (as applicable) of a Claim and the amount of that Claim in accordance with clause 10.1(a) and 10.1(b), the Buyer shall be entitled to:

 

 

(3)

in the case of a Claim against a Seller, delay the vesting or release of that Seller’s proportion of the Claimable Escrowed Stock (in which case the parties must instruct the Escrow Agent not to release to that Seller its proportion of the Claimable Escrowed Stock from the Escrow Account until instructed otherwise by the parties) or, in the case of a Claim against the Warrantor, delay the vesting or release of the Warrantor’s proportion of the Claimable Escrowed Stock (in which case the parties must instruct the Escrow Agent not to release to the Warrantor its proportion of the Claimable Escrowed Stock from the Escrow Account until instructed otherwise by the parties); and

 

 

(4)

in the case of a Claim against a Seller, pay into escrow up to the Claim Escrow Amount out of any Earn-Out Consideration otherwise payable to that Seller after the date of that notice or, in the case of a Claim against the Warrantor, pay into escrow up to the Claim Escrow Amount out of any Earn-Out Consideration otherwise payable to the Warrantor after the date of that notice,

 

up to the lesser of:

 

 

(5)

 

 

 

(A)

in the case of a Title Claim, the Paid Non-Deloitte Purchase Price;

 

 

(B)

in the case of a Tax Claim, the Tax Claim Cap; or

 

 

(C)

in the case of a Non-Title Claim, the Non-Title Claim Cap; and

 

 

(6)

the amount of the Claim,

 

(Withholding), until the Claim becomes a Substantiated Claim.

 

 

(b)

Within 10 Business Days of any Claim the subject of clause 10.4(a) becoming a Substantiated Claim, if that Substantiated Claim is not paid pursuant to the W&I Policy, then the Buyer shall be entitled to deduct and retain from the Withholding such amount (first out of the Claimable Escrowed Stock and second out of any portion of the Earn-Out Consideration that forms part of the Withholding (if any, such amount the Earn-Out Claim Amount) as to which the Buyer is entitled pursuant to the terms of the agreement, settlement or judgment and the Buyer shall at the same time pay the balance (if any) of the Withholding to the relevant Seller or Sellers (in relevant proportions) or the Warrantor (as applicable).

 

 
page 29

 

 

 

11        Buyer Warranties

  

 

(c)

If the amount of the Substantiated Claim exceeds the amount of the Withholding, the relevant Seller or Sellers remain, or the Warrantor remains (as applicable), liable in respect of the Claim up to the Non-Title Claims Cap less the amount of the Withholding and any amount paid under the W&I Policy.

 

 

11

Buyer Warranties

 

11.1

Buyer Warranties

 

The Buyer and the Buyer’s Guarantor give the Buyer Warranties in favour of the Sellers on the date of this agreement and the Buyer Warranties will be deemed to be repeated immediately before Completion.

 

11.2

Independent Warranties

 

Each of the Buyer Warranties is to be construed independently of the others and is not limited by reference to any other Buyer Warranty.

 

11.3

Reliance

 

The Buyer and the Buyer’s Guarantor respectively acknowledge that the Sellers have entered into this agreement and will complete this agreement in reliance on the Buyer Warranties.

 

 

12

Period after Completion

 

12.1

Appointment of proxy

 

 

(a)

From Completion until the Sale Shares are registered in the name of the Buyer, the Sellers must:

 

 

(1)

appoint the Buyer as the sole proxy of its Sale Shares to attend shareholders’ meetings and exercise the votes attaching to the Sale Shares; and

 

 

(2)

not attend and vote at any shareholders’ meeting.

 

 

(b)

The Buyer indemnifies the Sellers against all Loss suffered or incurred by them arising out of any action taken or omission made by the Buyer pursuant to the proxy granted by the Seller in accordance with in clause 12.1(a).

 

12.2

Access to records by Sellers

 

 

(a)

The Buyer must procure that all Business Records are preserved in respect of the period ending on the Completion Date until the later of:

 

 

(1)

6 years from the Completion Date; and

 

 

(2)

any date required by an applicable law.

 

 

(b)

After Completion the Buyer must, on reasonable notice from a Seller:

 

 
page 30

 

 

 

12        Period after Completion

  

 

(1)

provide the Seller and its advisers with reasonable access to the Business Records and allow the Seller to inspect and obtain copies or certified copies of the Business Records at the expense of the Seller; and

 

 

(2)

provide the relevant Seller and its advisers with reasonable access to the personnel and premises of the Buyer Group Members and the Target Entities,

 

for the purpose of assisting the Seller to prepare tax returns, accounts and other financial statements, discharge statutory obligations or comply with Tax, Duty or other legal requirements or to conduct legal or arbitration proceedings.

 

 

(c)

A Seller given access under clause 12.2(b) must reimburse the Buyer for its reasonable costs in retrieving any Business Records and making personnel and premises available under that clause 12.2(b).

 

 

(d)

The Buyer is not obliged to waive legal professional privilege. The Sellers must comply with any reasonable steps requested by the Buyer to preserve confidentiality, including notifying the Buyer if any Business Records are required to be reasonably disclosed to a Third Party and obtaining undertakings of confidentiality from any such Third Parties if so required by the Buyer.

 

 

(e)

The Buyer agrees that any Seller may retain copies of any Business Records that it may require to enable it to comply with any applicable law after the Completion Date provided that such Seller continues to comply with any confidentiality undertakings reasonably requested by the Buyer.

 

12.3

Pre-Completion tax returns

 

 

(a)

The parties will co-operate in connection with the preparation and filing of any Tax return or Tax statement of a Target Entity with respect to a period or part period before the Completion Date and any administrative proceeding involving any such Tax return or Tax statement.

 

 

(b)

The Warrantor will, at the expense of the Company (or relevant Target Entity), have the sole conduct and control of the preparation and filing of all Tax returns, forms or statements of each Target Entity to the extent they relate to any periods (or part periods) ending on or before the Completion Date (Pre Completion Returns).

 

 

(c)

The Warrantor must deliver each Pre Completion Return to the Buyer as soon as it is available but no later than 20 Business Days before it is due to be filed (taking into account any extension of time to file the Pre Completion Return that has been properly obtained) for the Buyer’s review and comment. If the Buyer objects to any items set forth in the Pre Completion Return it must notify the Warrantor of the objection as soon as it is aware of the objection but no later than 10 Business Days before the Pre Completion Return is due to be filed.

 

 

(d)

The Buyer will, at its own cost and expense, have the sole control of the preparation and filing of all Tax returns, forms or statements of each Target Entity for any period that includes, but does not end on or before the Completion Date (Straddle Returns).

 

 

(e)

The Buyer must procure that each Straddle Return is prepared in a manner consistent with the requirements of any Tax Law and must deliver each Straddle Return to the Warrantor as soon as it is available but no later than 20 Business Days before it is due to be filed for the Warrantor’s review and comment. If the Warrantor objects to any items set forth in the Straddle Return it must notify the Buyer of the objection as soon as it is aware of the objection but no later than 10 Business Days before the Straddle Return is due to be filed.

 

 
page 31

 

 

 

12        Period after Completion

  

 

(f)

If the Warrantor or the Buyer notifies the other of an objection to a Pre Completion Return or Straddle Return as applicable, the parties must attempt in good faith to resolve the dispute. If the parties cannot resolve any such dispute within 10 Business Days of the objection being notified, then the Pre Completion Return or Straddle Return must be completed in the manner specified by the Buyer, provided that the Warrantor will have no liability under the Warranties or clause 8.4 in respect of any additional Tax, Duty or Tax Costs arising from the Buyer’s completion of the Pre Completion Return or Straddle Return as the case may be.

 

 

(g)

The Buyer must procure that each Straddle Return and (subject to the Warrantor complying with clause 12.3(c)) each Pre Completion Return is filed by the due date for filing. If a Pre Completion Return or Straddle Return is due before the date a disputed item is resolved under this clause 12.3, the Buyer must procure that the return is filed as prepared and must procure that an amended return, which reflects the resolution of the disputed items is filed immediately after the disputed items are resolved.

 

 

(h)

Except in relation to the preparation of Pre Completion Returns and Straddle Returns (to which clauses 12.3(b) to 12.3(g) apply) the parties agree that it is the intention for the Warrantor to have the right to determine, control and where appropriate participate in the disclosure (including manner of disclosure) of any material or information to a Governmental Agency and any other dealings with the Governmental Agency in relation to Tax to the extent such disclosure or other dealings is in respect of any event, act, matter or transaction or amount derived (or deemed to be derived) or expenditure incurred before, on, or as a result of, Completion, or could otherwise reasonably be expected to have an impact upon the tax position of the Ingeus Group for the period prior to Completion (Pre Completion Tax Event).

 

 

(i)

Without limiting clause 12.3(h), from and after Completion the Buyer agrees that it will, and will procure that each Target Entity and Buyer Group Member will:

 

 

(1)

not disclose any information or material to a Governmental Agency in relation to a Pre Completion Tax Event without the prior written consent of the Warrantor (which consent will not be unreasonably withheld or delayed), except as required by law;

 

 

(2)

not make any admission of liability, or any agreement, compromise or settlement with a Governmental Agency in relation to a Pre Completion Tax Event without the prior written consent of the Warrantor (such approval not to be unreasonably withheld or delayed); and

 

 

(3)

promptly provide the Warrantor with copies of any correspondence with, or material provided to or by, a Governmental Agency and keep the Warrantor informed of any oral discussions with a Governmental Agency in relation to a Pre Completion Tax Event.

 

 

(j)

If the Buyer provides a notice under clause 10.1 in respect of a Claim that arises from or involves a Tax Demand, then at all times from the date of receipt of that notice the provisions of clause 10.3 will apply to that Tax Demand or the Tax or Pre Completion Tax Event the subject of that Tax Demand and not this clause 12.3.

 

 
page 32

 

 

 

13        Protection of the Business

  

12.4

ROW Bonds and deposits for premises

 

 

(a)

If any portion of the ROW Bonds and deposits for premises is returned to a Target Entity, the Buyer must, within 20 Business Days, pay, or procure that the relevant Target Entity pays, an amount equal to that portion of the ROW Bonds and deposits for premises to the Sellers in their Respective Proportions in Immediately Available Funds.

 

 

(b)

The Buyer and the Buyer’s Guarantor will use their reasonable efforts to support the transition of ROW Bonds and deposits for premises as required.

 

 

13

Protection of the Business

 

 

13.1

Non-Compete

 

During the Restricted Period, Sellers shall not, and shall not permit any of their Affiliates to, directly or indirectly, (i) engage in or assist others in engaging in the Business in the Restricted Area; (ii) have an interest in any person that engages directly or indirectly in the Business in the Restricted Area in any capacity, including as a partner, shareholder, member, employee, principal, agent, trustee or consultant; or (iii) intentionally interfere in any material respect with the business relationships (whether formed prior to or after the date of this agreement) between the Target Entities and customers or suppliers of the Target Entities. The parties agree that damages may not be an adequate remedy for breach of these covenants and that the Sellers agree that in addition and without prejudice to any and all other remedies available to it, the Buyer shall be entitled to obtain relief by way of a temporary or permanent injunction to enforce the covenants contained in this clause 13.

 

The parties acknowledge and agree that this clause 13.1 does not apply in respect of the work to be undertaken by the Sellers in terms of their employment by the Buyer Group or the Ingeus Group on and from Completion.

 

 

13.2

No solicitation of customers

 

During the Restricted Period, the Sellers must not canvass, solicit or approach or cause to be canvassed, solicited or approached (in relation to a business which in any way competes with all or part of the Business in the Restricted Area) any person or organisation who at any time during the 12 month period immediately preceding the Completion Date shall have been a client or customer of the Company or any of its Subsidiary Undertakings in respect of the provision of services of the type provided by the Business in the Restricted Area.

 

 

13.3

No solicitation of employees or agents

 

During the Restricted Period, the Sellers must not offer employment to or employ or offer to conclude any contract of services with senior employees of the Company or of any of its Subsidiary Undertakings or procure or facilitate the making of such an offer by any person, firm or company or entice or endeavour to entice any such individuals or of any of its Subsidiary Undertakings to terminate their employment with the Company or any of its Subsidiary Undertakings). The placing of an advertisement of a post available to a member of the public generally and the recruitment of a person through an employment agency shall not constitute a breach of this clause 13.3 provided that none of the Sellers encourages or advises such agency to approach any senior employee of the Company or of any of its Subsidiary Undertakings.

 

 
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13        Protection of the Business

  

 

13.4

Severability

 

 

(a)

If any part of an undertaking in this clause 13 is unenforceable it may be severed without affecting the remaining enforceability of that or the other undertakings.

 

 

(b)

If any of the restraints in this clause 13 are judged to go beyond what is reasonable in the circumstances and necessary to protect the Business but would be judged reasonable and necessary if any activity were deleted or a period or area were reduced, then such restraints apply with that activity deleted or period or area reduced by the minimum amount necessary to make such restraint reasonable in the circumstances.

 

 

13.5

Definitions

 

The meanings of the terms used in this document are set out below.

 

Term

Meaning

   
   

Restricted Area

Countries where Ingeus currently operates

   
   

Restricted Period

For Claims being enforced under Australian law,

     
  1 five (5) years commencing on the Completion Date, or if that period is found to be unenforceable; then
     
  2 four (4) years commencing on the Completion Date, or if that period is found to be unenforceable; then
     
  3 three (3) years commencing on the Completion Date, or if that period is found to be unenforceable; then
     
  4 two (2) years commencing on the Completion Date, or if that period is found to be unenforceable; then
     
  5 one (1) year commencing on the Completion Date, or if that period is found to be unenforceable; then
     
  6 nine (9) months commencing on the Completion Date, or if that period is found to be unenforceable; then
     
  7 six (6) months commencing on the Completion Date.
     
  For all other Claims, the period from the Completion Date until the fifth anniversary of the Completion Date.
   

 

 

13.6

Acknowledgment

 

The Sellers acknowledge that all the prohibitions and restrictions contained in this clause 13 are reasonable in the circumstances and necessary to protect the goodwill and confidential information of the Business as at the Completion Date.

 

 
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14        Announcements and confidentiality

  

13.7

Portfolio Interest

 

Nothing in this clause 13 in any way restricts a Seller from holding up to a 5% interest in any entity provided such holding is only a passive portfolio holding for investment purposes (where the Seller does not exercise an active role in the operational direction or management of the relevant company), even if that company carries on a business that competes with the Business.

 

 

14

Announcements and confidentiality

 

14.1

Agreed announcement

 

A party may not make any other public announcement relating to this agreement or a Transaction Agreement (including the fact that the parties have executed this agreement or any Transaction Agreement) unless the Buyer and the Warrantor have consented to the announcement, including the timing, form and content of that disclosure.

 

14.2

Confidentiality

 

 

(a)

Each party (recipient) must keep secret and confidential, and must not divulge or disclose any information relating to another party or its business (that is disclosed to the recipient by the other party, its representatives or advisers), this agreement or any Transaction Agreement, the terms of the Sale or the existence or nature of any dispute or Claim, other than to the extent that:

 

 

(1)

the information is in the public domain as at the date of this agreement (or subsequently becomes in the public domain other than by breach of any obligation of confidentiality binding on the recipient);

 

 

(2)

the recipient is required to disclose the information by applicable law or the rules of any recognised stock exchange on which its securities or the securities of any of its Related Bodies Corporate are listed, provided that the recipient has to the extent possible having regard to the required timing of the disclosure consulted with the provider of the information as to the form and content of the disclosure;

 

 

(3)

the disclosure is made by the recipient to its financiers or lawyers, accountants, investment bankers, consultants or other professional advisers to the extent necessary to enable the recipient to properly perform its obligations under this agreement or to conduct their business generally, in which case the recipient must ensure that such persons keep the information secret and confidential and do not divulge or disclose the information to any other person;

 

 

(4)

the disclosure is required for use in arbitration proceedings regarding this agreement or the Sale;

 

 

(5)

the party to whom the information relates has consented in writing before the disclosure;

 

 

(6)

the disclosure is made, in the case of the Sellers, to Deloitte LLP and its representatives and advisers; or

 

 

(7)

disclosure is expressly permitted pursuant to the terms of any Transaction Document.

  

 
page 35

 

 

 

15        Duties, costs and expenses

  

 

(b)

Each recipient must ensure that its directors, officers, employees, agents, representatives and Related Bodies Corporate comply in all respects with the obligations under this clause 14.2 as if they were a party to this agreement.

 

 

(c)

From Completion, the Buyer may disclose confidential information relating to the Business except to the extent that such information relates to a Seller.

 

 

15

Duties, costs and expenses

 

15.1

Duties

 

The Buyer must pay all Duty in respect of the execution, delivery and performance of this agreement and any agreement or document entered into or signed under this agreement and each Transaction Agreement.

 

15.2

Costs and expenses

 

 

(a)

Unless otherwise provided for in this agreement, each party must pay its own costs and expenses in respect of the negotiation, preparation, execution, delivery and registration of this agreement and any other agreement or document entered into or signed under this agreement (including each Transaction Agreement).

 

 

(b)

Any action to be taken by the Buyer or the Sellers in performing its obligations under this agreement must be taken at their own cost and expense unless otherwise provided in this agreement.

 

 

16

GST

 

16.1

Definitions

 

Words used in this clause 16 that have a defined meaning in the GST Law have the same meaning as in the GST Law unless the context indicates otherwise.

 

16.2

GST

 

 

(a)

Unless expressly included, the consideration for any supply under or in connection with this agreement does not include GST.

 

 

(b)

To the extent that any supply made under or in connection with this agreement is a taxable supply (other than any supply made under another agreement that contains a specific provision dealing with GST), the recipient must pay, in addition to the consideration provided under this agreement for that supply (unless it expressly includes GST) an amount (additional amount) equal to the amount of that consideration (or its GST exclusive market value) multiplied by the rate at which GST is imposed in respect of the supply. The recipient must pay the additional amount at the same time as the consideration to which it is referable.

 

 

(c)

Whenever an adjustment event occurs in relation to any taxable supply to which clause 16.2(b) applies:

 

 
page 36

 

 

 

17        Guarantee by Buyer's Guarantor

  

 

(1)

the supplier must determine the amount of the GST component of the consideration payable; and

 

 

(2)

if the GST component of that consideration differs from the amount previously paid, the amount of the difference must be paid by, refunded to or credited to the recipient, as applicable.

 

16.3

Tax invoices

 

The supplier must issue a Tax Invoice to the recipient of a supply to which clause 16.2 applies no later than 5 Business Days following payment of the GST inclusive consideration for that supply under that clause.

 

16.4

Reimbursements

 

If any party is entitled under this agreement to be reimbursed or indemnified by the other party for a cost or expense incurred in connection with this agreement, the reimbursement or indemnity payment must not include any GST component of the cost or expense to the extent that the cost or expense is the consideration for a creditable acquisition made by the party being reimbursed or indemnified, or by its representative member.

 

 

17

Guarantee by Buyer’s Guarantor

 

17.1

Guarantee and indemnity

 

The Buyer’s Guarantor:

 

 

(a)

unconditionally and irrevocably guarantees to the Sellers on demand, the due and punctual performance of the Buyer’s obligations under this agreement; and

 

 

(b)

as a separate and additional liability, indemnifies the Sellers against all Loss and all Claims of any nature arising from any default or delay in the due and punctual performance of the Buyer’s obligations under this agreement.

 

17.2

Extent of guarantee and indemnity

 

The liability of the Buyer’s Guarantor under this clause 17 is not affected by anything that, but for this clause 17, might operate to release or exonerate the Buyer’s Guarantor in whole or in part from its obligations including any of the following, whether with or without the consent of the Buyer’s Guarantor:

 

 

(a)

the grant to the Buyer, the Buyer’s Guarantor or any other person of any time, waiver or other indulgence, or the discharge or release of the Buyer, the Buyer’s Guarantor or any other person from any liability or obligation;

 

 

(b)

any transaction or arrangement that may take place between the Sellers, the Buyer, the Buyer’s Guarantor or any other person;

 

 

(c)

the Sellers exercising or refraining from exercising its rights under any security or any other rights, powers or remedies against the Buyer, the Buyer’s Guarantor or any other person;

 

 

(d)

the amendment, replacement, extinguishment, unenforceability, failure, loss, release, discharge, abandonment or transfer either in whole or in part and either with or without consideration, of any security now or in the future held by the Sellers from the Buyer, the Buyer’s Guarantor or any other person or by the taking of or failure to take any security;

 

 
page 37

 

 

 

17        Guarantee by Buyer's Guarantor

  

 

(e)

the failure or omission or any delay by the Sellers or the Buyer to give notice to the Buyer’s Guarantor of any default by the Buyer or any other person under this agreement; and

 

 

(f)

any legal limitation, disability, incapacity or other circumstances related to the Buyer, the Buyer’s Guarantor or any other person.

 

17.3

Principal and independent obligation

 

This clause 17 is a principal obligation and is not to be treated as ancillary or collateral to any other right or obligation and extends to cover this agreement as amended, varied, supplemented, renewed or replaced.

 

17.4

Continuing guarantee and indemnity

 

This clause 17 is a continuing obligation of the Buyer’s Guarantor, despite Completion, and remains in full force and effect for so long as the Buyer has any liability or obligation to the Sellers under this agreement and until all of those liabilities or obligations have been fully discharged.

 

17.5

No withholdings

 

 

(a)

The Buyer’s Guarantor must make all payments that become due under this clause 17, free and clear and without deduction of all present and future withholdings (including taxes, duties, levies, imposts, deductions and charges of Australia or any other jurisdiction).

 

 

(b)

If the Buyer’s Guarantor is compelled by law to deduct any withholding, then in addition to any payment due under this clause 17, it must pay to the Sellers such amount as is necessary to ensure that the net amount received by the Sellers after withholding equals the amount the Sellers would otherwise have been entitled to if not for the withholding.

 

17.6

Currency

 

The Buyer’s Guarantor must pay all moneys that it becomes liable to pay under this clause 17 in the currency in which they are payable under this agreement and free of any commissions and expenses relating to foreign currency conversion or any other charges or expenses.

 

17.7

No set off

 

Unless expressly provided for in this agreement (including the schedules attached hereto), the Buyer’s Guarantor has no right to set off, deduct or withhold any moneys that it may be or become liable to pay under this clause 17, against any moneys that the Sellers be, or become, liable to pay to a Buyer Group Member whether under this agreement or otherwise.

 

 
page 38

 

 

 

18        Notices

  

18

Notices

 

18.1

Form of Notice

 

A notice or other communication to a party under this agreement (Notice) must be:

 

 

(a)

in writing and in English and signed by or on behalf of the sending party; and

 

 

(b)

addressed to that party in accordance with the details nominated in Schedule 1 (or any alternative details nominated to the sending party by Notice).

 

18.2

How Notice must be given and when Notice is received

 

 

(a)

A Notice must be given by one of the methods set out in the table below.

 

 

(b)

A Notice is regarded as given and received at the time set out in the table below.

 

However, if this means the Notice would be regarded as given and received outside the period between 9.00am and 5.00pm (addressee’s time) on a Business Day (business hours period), then the Notice will instead be regarded as given and received at the start of the following business hours period.

 

Method of giving Notice

When Notice is regarded as given and received

   
   

By hand to the nominated address

When delivered to the nominated address

   
   

By pre-paid post to the nominated address

At 9.00am (addressee’s time) on the fifth Business Day after the date of posting

   
   

By fax to the nominated fax number

At the time indicated by the sending party’s transmission equipment as the time that the fax was sent in its entirety.

   
  However, if the recipient party informs the sending party within 4 hours after that time that the fax transmission was illegible or incomplete, then the Notice will not be regarded as given or received. When calculating this 4 hour period, only time within a business hours period is to be included.
   
   

By email to the nominated email address

When the email (including any attachment) comes to the attention of the recipient party or a person acting on its behalf.

   

 

18.3

Notice must not be given by electronic communication

 

A Notice must not be given by electronic means of communication (other than fax and email as permitted in clause 18.2).

 

 
page 39

 

 

 

19        General

  

19

General

 

19.1

Governing law and arbitration

 

 

(a)

This agreement is governed by the laws of England and Wales.

 

 

(b)

Subject to clause 19.1(c), any dispute, controversy or Claim arising out of or in connection with this agreement or the Sale, including any question regarding the existence, validity or termination of this agreement, will be resolved by arbitration in accordance with the LCIA Arbitration Rules in place at the time of the relevant dispute, controversy or Claim, which Rules are deemed to be incorporated by reference into this clause, and:

 

 

(1)

the arbitration proceedings, and all documents and correspondence relating to the arbitration proceedings, will be confidential;

 

 

(2)

the seat of arbitration shall be London, England;

 

 

(3)

the arbitrators shall be appointed in accordance with clauses 19.1(c) and 19.1(d);

 

 

(4)

the law governing the arbitration agreement shall be the laws of England and Wales; and

 

 

(5)

the language of the arbitration shall be English.

 

 

(c)

The claimant (or claimant parties jointly) shall nominate in the request for arbitration one arbitrator and the respondent (or respondent parties jointly) shall nominate in the response one arbitrator. The two arbitrators nominated by the parties shall within 15 days of the appointment of the second arbitrator, agree upon a third arbitrator who shall act as Chair. Notwithstanding anything to the contrary in the LCIA Arbitration Rules, in agreeing upon a third arbitrator, the two arbitrators may communicate directly with each other and their respective appointing parties. If no agreement is reached upon the third arbitrator within 15 days of the appointment of the second arbitrator, the LCIA Court shall expeditiously nominate and appoint a third arbitrator to act as Chair. If the claimant or claimant parties or the respondent or respondent parties fail to nominate an arbitrator, an arbitrator shall be appointed on their behalf by the LCIA Court in accordance with the LCIA Arbitration Rules. In such circumstances, any existing nomination or confirmation of an arbitrator shall be unaffected, and the remaining arbitrator(s) shall be appointed in accordance with this clause 19.1.

 

 

(d)

Each party expressly agrees and consents to this process for nominating and appointing the arbitrators and, in the event that this clause 19.1 operates to exclude a party's right to choose its own arbitrator, irrevocably and unconditionally waives any right to do so.

 

 

(e)

Any ROW Disputed Matter (as defined in clause 3.2(b)(1) of Schedule 7) must be determined in accordance with clause 3.4 of Schedule 7.

 

 

(f)

Any UK Disputed Matter (as defined in clause 3.2(b)(1) of Schedule 3 of the Side Deed must be determined in accordance with clause 3.4 of Schedule 3 of the Side Deed.

 

 

(g)

The parties acknowledge and agree that the Sellers shall bear the burden of proving on the balance of probabilities any claim that the Buyer was “actually aware” of a breach of any Warranty by Sellers as described in Clause 12 of Schedule 5.

 

 

 
page 40

 

 

 

19        General

  

19.2

Service of process

 

 

(a)

Without preventing any other mode of service, any document in an action (including, any writ of summons or other originating process or any third or other party notice) may be served on any party by being delivered to or left for that party at its address for service of notices under clause 18.

 

 

(b)

The Buyer and the Buyer’s Guarantor irrevocably appoint Pinnacle UK Bidco Limited (with an address at 15 Fetter Lane, London, EC4A 1JP) as its agent for the service of process in England in relation to any matter arising out of this agreement. If Pinnacle UK Bidco Limited ceases to be able to act as such or have an address in England, the Buyer and the Buyer’s Guarantor agree to appoint a new process agent in England and deliver to the other party/parties within 20 Business Days a copy of a written acceptance of appointment by the process agent, upon receipt of which the new appointment becomes effective for the purpose of this agreement and each Transaction Agreement. The Buyer and the Buyer’s Guarantor must inform the other parties in writing of any change in the address of its process agent within 20 Business Days of the change.

 

19.3

Invalidity and enforceability

 

 

(a)

If any provision of this agreement is invalid under the law of any jurisdiction the provision is enforceable in that jurisdiction to the extent that it is not invalid, whether it is in severable terms or not.

 

 

(b)

Clause 19.3(a) does not apply where enforcement of the provision of this agreement in accordance with clause 19.3(a) would materially affect the nature or effect of the parties’ obligations under this agreement.

 

19.4

Waiver

 

 

(a)

No party to this agreement may rely on the words or conduct of any other party as a waiver of any right unless the waiver is in writing and signed by the party granting the waiver.

 

 

(b)

In this clause 19.4:

 

 

(1)

conduct includes delay in the exercise of a right;

 

 

(2)

right means any right arising under or in connection with this agreement and includes the right to rely on this clause; and

 

 

(3)

waiver includes an election between rights and remedies, and conduct which might otherwise give rise to an estoppel.

 

 

(c)

A provision of, or a right, discretion or authority created under, this agreement may not be:

 

 

(1)

waived except in writing signed by the party granting the waiver; and

 

 

(2)

varied except in writing signed by the parties.

 

 

(d)

A failure or delay in exercise, or partial exercise, of a power, right, authority, discretion or remedy arising from a breach of, or default under this agreement does not result in a waiver of that right, power, authority, discretion or remedy.

 

19.5

Variation

 

A variation of any term of this agreement must be in writing and signed by the parties.

 

 
page 41

 

 

 

19        General

  

19.6

Assignment

 

 

(a)

Subject to clause 19.6(b), rights arising out of or under this agreement are not assignable by a party without the prior written consent of the Warrantor and the Buyer.

 

 

(b)

If all of the Target Entities are sold or transferred after Completion as part of one transaction to one buyer, then all of the Buyer’s rights under this agreement may be assigned to the purchaser or transferee of the shares in the Target Entities who may enforce those rights as if that party had been named in this agreement as the Buyer,

 

19.7

Gross-up

 

 

(a)

All sums payable by the Sellers under this agreement shall be paid free and clear of all deductions, withholdings, set-offs or counterclaims unless a deduction or withholding is required by law in which event the Sellers shall; (i) provide such evidence of the relevant withholding or deduction and any applicable Credits as the Buyer may reasonably require; and (ii) pay such additional amount as shall be required to ensure that the net amount received and retained by the Buyer under this agreement will (after such deduction or withholding has been made) equal the full amount that would have been received and retained by it had no such deduction or withholding been required to be made as reduced by any offset, deduction, credit, refund, allowance, relief or other benefit (Credit) to which the Buyer is entitled on account of such deduction or withholding.

 

 

(b)

If any Governmental Agency charges to Tax any sum paid (original payment) to the Buyer under this agreement the Sellers shall be obliged to pay to the Buyer such additional amount (additional payment) as will ensure that, after the payment of the Tax so charged on the original payment and any Tax chargeable on the additional payment, there shall remain a net sum equal to the amount of the original payment, such additional payment to be paid 3 Business Days after the Buyer has served notice that Tax on the original payment has become due and payable, or would have become due and payable but for the availability of a Tax Relief.

 

 

(c)

The Sellers are not liable to make any payment under clauses 19.7(a) or 19.7(b) to the extent that the Buyer is entitled to any Credit in respect of the relevant Loss or payment to the Buyer.

 

19.8

Further action to be taken at each party’s own expense

 

Subject to clause 15, each party must, at its own expense, do all things and execute all documents necessary to give full effect to this agreement and the transactions contemplated by it.

 

19.9

Relationship of the parties

 

Nothing in this agreement imposes any fiduciary duties on a party in relation to any other party.

 

19.10

Exercise of rights

 

 

(a)

Unless expressly required by the terms of this agreement, a party is not required to act reasonably in giving or withholding any consent or approval or exercising any other right, power, authority, discretion or remedy, under or in connection with this agreement.

 

 
page 42

 

 

 

19        General

  

 

(b)

A party may (without any requirement to act reasonably) impose conditions on the grant by it of any consent or approval, or any waiver of any right, power, authority, discretion or remedy, under or in connection with this agreement. Any conditions must be complied with by the party relying on the consent, approval or waiver.

 

19.11

Remedies cumulative

 

Except as provided in this agreement and permitted by law, the rights, powers and remedies provided in this agreement are cumulative with and not exclusive to the rights, powers or remedies provided by law independently of this agreement.

 

19.12

Counterparts

 

 

(a)

This agreement may be executed in any number of counterparts.

 

 

(b)

All counterparts, taken together, constitute one instrument.

 

 

(c)

A party may execute this agreement by signing any counterpart.

 

19.13

No merger

 

The Warranties, Buyer Warranties, undertakings and indemnities in this agreement will not merge on Completion.

 

19.14

Entire Agreement

 

This agreement states all the express terms of the agreement between the parties in respect of its subject matter. It supersedes all prior discussions, negotiations, understandings and agreements in respect of its subject matter.

 

19.15

No reliance

 

No party has relied on any statement by any other party not expressly included in this agreement.

 

19.16

Default Interest

 

 

(a)

If a party fails to pay any amount payable under this agreement on the due date for payment, that party must in addition to a continuing liability to pay the amount unpaid pay interest on the amount unpaid at 5% per annum.

 

 

(b)

The interest payable under clause 19.16(a):

 

 

(1)

accrues from day to day from and including the due date for payment up to and including the actual date of payment, before and, as an additional and independent obligation, after any judgment or other thing into which the liability to pay the amount becomes merged; and

 

 

(2)

may be capitalised by the person to whom it is payable at monthly intervals on the basis of a 360 day year.

 

 
page 43

 

 

 

19        General

  

 

(c)

The right to require payment of interest under this clause 19.16 is without prejudice to any other rights the non-defaulting party may have against the defaulting party at law or in equity.

 

 

(d)

A failure to pay any amount under this agreement is not remedied until both the amount unpaid and any interest payable under this clause 19.16 have been paid in full.

 

19.17

Benefits held on trust

 

 

(a)

The Warrantor holds the benefit of each indemnity, promise and obligation in this agreement expressed to be for the benefit of Deloitte LLP or a Seller Representative or Adviser that is not a party to this agreement, on trust for Deloitte LLP or that Seller Representative or Adviser, as applicable.

 

 

(b)

The Buyer holds the benefit of each indemnity, promise and obligation in this agreement expressed to be for the benefit of a director, officer or employee of a Buyer Group Member or Target Entity, or for the benefit of a Buyer Group Member or Target Entity that is not a party to this agreement, on trust for that director, officer, employee, Buyer Group Member or Target Entity.

 

 

(c)

With the exception of Deloitte LLP, 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.

 

19.18

Attorneys

 

Each of the attorneys executing this agreement states that the attorney has no notice of the revocation of the power of attorney appointing that attorney.

 

 
page 44

 

 

 

 

  

 

Schedules

 

 

 

 

Table of contents

 
   
   
   

Notice details

46

   

Definitions

47

   

Sellers and their respective shareholdings in the Company

61

   

Warranties

62

   

Buyer Warranties

84

   

Completion Steps

87

   

Completion Accounts

91

   

Pro forma Completion Accounts

104

   

Properties

107

   

Business Intellectual Property

153

   

Target Entities

164

   

Post-Completion Consideration Payments

165

   

Earn-Out Consideration

170

 

 
page 45

 

 

 

 

  

Schedule 1 

Notice details

 

Warrantor

Thérèse Virginia Rein

   

Address

85 Norman Crescent, Norman Park, Qld 4170

   

Phone

+61 7 3535 9802

   

Fax

+61 7 3535 9898 

   

Email

trein@ingeus.com 

   

 

Gregory Kenneth Ashmead and GK Ashmead Holdings Pty Limited (as trustee of the GK Ashmead Nominees Trust)

Thérèse Virginia Rein (on behalf of Gregory Kenneth Ashmead & GK Ashmead Holdings Pty Limited (as trustee of the GK Ashmead Nominees Trust))

   

Address

85 Norman Crescent, Norman Park, Qld 4170

   

Phone

+61 7 3535 9802

   

Fax

+61 7 3535 9898 

   

Email

trein@ingeus.com 

   

 

Buyer

Pinnacle Australia Holdco Pty Ltd

   

Address

Level 11 68 Pitt Street

   

Attention

Warren S. Rustand

   

Fax

(520) 747-6605

 

 

Buyer’s Guarantor

The Providence Service Corporation

   

Address

64 E Broadway Blvd., Tucson, AZ 85701

   

Attention

Warren S. Rustand

   

Fax

(520) 747-6605

 

 
page 46

 

 

 

 

  

Schedule 2

 

Definitions

 

Term

Meaning

 

Accounting Standards

1

the accounting standards required under the Corporations Act (including the Approved Accounting Standards issued by the Australian Accounting Standards Board) and other mandatory professional reporting requirements issued by the joint accounting bodies (including the Australian Accounting Standards issued either jointly by CPA Australia and the Institute of Chartered Accountants in Australia or by the Australian Accounting Research Foundation on behalf of CPA Australia and the Institute of Chartered Accountants in Australia); and

     
  2 if no accounting standard applies under the Corporations Act or other mandatory professional reporting requirements, the principles set out in Australian Statements of Accounting Concepts.
     

 

Accounts

the audited balance sheet of the Company and its subsidiaries as at the Accounts Date and the audited profit and loss account of the Company and its subsidiaries for the year ending on the Accounts Date.

   
   

Accounts Date

31 December 2013.

   

 

Adjustment Amount

is defined in Schedule 7.

   
   

Affiliate

any entity which directly or indirectly controls, is controlled by, or is under common control with the subject entity. “Control,” for purposes of this definition, means direct or indirect ownership or control of more than 50% of the voting interests of the subject entity.

   
   

Agreed Form

in relation to a document, the document in the form agreed by the Sellers and the Buyer, as initialled by a representative of those parties for identification purposes.

   
   

Assets

all the property and rights of any nature whatsoever and wheresoever situated owned or operated by the Ingeus Group or to which a Target Entity is contingently entitled.

   
   

Authorisation

any approval, licence, consent, authority or permit.

   

 

 
page 47

 

 

 

Schedule 2        Definitions

  

Term Meaning
   
   

Business

the business carried out by the Ingeus Group as at the date of this agreement.

   
   

Business Day

a day on which banks are open for business in Brisbane and London, other than a Saturday, Sunday or public holiday in either of those cities.

   
   

Business Records

all original and certified copies of the books, records, documents, information, accounts and data (whether machine readable or in printed form) owned by or relating to a Target Entity or the property of a Target Entity and any source material used to prepare them.

   
   

Buyer Group

the Buyer and each of its Related Bodies Corporate (other than the Target Entities) and Buyer Group Member means any member of the Buyer Group.

   
   

Buyer Warranties

the warranties in Schedule 5.

   

 

Claim

any claim, demand, legal proceedings or cause of action, including any claim, demand, legal proceedings or cause of action:

     
  1 based in contract (including breach of Warranty);
     
  2 based in tort (including misrepresentation or negligence);
     
  3 based in equity for specific performance or injunctive relief;
     
  4 under common law; or
     
  5 under statute,
     
  in any way relating to this agreement, the Sale or the divestment of the Ingeus Group and includes a claim, demand, legal proceedings or cause of action arising from a breach of this agreement or a Warranty, or under an indemnity in this agreement or the covenant in clause 8.4.
   
   

Claim Escrow Amount

an amount equal to:

     
  1 £10,000,000, if the aggregate value of the Escrowed Stock (at the Issue Price) and Escrowed Cash is £5,000,000;
     
  2 £12,500,000, if the aggregate value of the Escrowed Stock (at the Issue Price) and Escrowed Cash is £2,500,000; or
     
  3 £15,000,000, if there is no Escrowed Stock and Escrowed Cash,
     
  as at the date the relevant Claim is identified under clause 10.1.
     
     

Claimable Escrowed Stock

the lesser of:

     
  1 £5,000,000 comprised of Escrowed Stock or Escrowed Cash or both (in the case of Escrowed Stock, valued at the Issue Price); and
     
  2 the aggregate of the Escrowed Stock and Escrowed Cash divided by the Deferred Consideration Amount multiplied by £10,000,000,
     

 

 
page 48

 

 

 

Schedule 2        Definitions

  

Term Meaning
   
   
  as at the date the relevant Claim is identified under clause 10.1.
     

 

Companies Acts

the Companies Act 1985 and the Companies Act 2006 both as may be amended from time to time

   
   

Company

Ingeus Limited (ACN 010 948 731) of Level 11, 300 Ann Street, Brisbane, Australia.

   
   

Completion

completion of the sale and purchase of the Sale Shares under clause 6.

   

 

Completion Accounts

1

the ROW Completion Accounts; and

     
  2 the UK Completion Accounts.
   

 

 

Completion Date

the date on which Completion occurs.

     
     

Completion Payment

an amount equal to:

     
  1 £21,312,500; plus
     
  2 the ROW Reference Amount.
     
     

Completion Steps

the steps that each party must carry out at Completion, which are set out in Schedule 6.

     
     

Condition

a condition precedent specified in clause 2.1.

     
     

Contingent Escrow Account

a bank account in the name of the Contingent Escrow Agent with a major UK trading bank, as nominated by the Contingent Escrow Agent and approved by the Sellers and the Buyer.

     
     

Contingent Escrow Agent

an escrow agent agreed between the Sellers and the Buyer, and failing agreement, a reputable accounting firm nominated by the President of the Institute of Chartered Accountants of England & Wales.

     
     

Contingent Escrow Amount

the sum of:

     
  1 the PEB2 Amount; plus
     
  2 the French Termination Amount; plus
     
  3 the Evry Lease Onerous Contract Amount; plus
     

 

 
page 49

 

 

 

Schedule 2        Definitions

  

  4 the German VAT Amount.
     
     

Corporations Act

the Corporations Act 2001 (Cth).

     
     

Cut Off Date

1 August 2014, or such other date as the Warrantor and Buyer may agree in writing.
     
     

Data Protection Legislation

legislation regulating the protection of data in the applicable jurisdiction.

     
     

Deferred Consideration

the deferred consideration to be paid after Completion by the Buyer to the Sellers under clause 2 of Schedule 12.

     
     

Deloitte Completion Amount

an amount equal to the “Completion Payment’ as defined in the UK Share Sale Agreement.

     
     

Deloitte LLP

Deloitte LLP (England and Wales registered number OC303675) of 2 New Street Square, London EC4A 3BZ, United Kingdom.

     
     

Demand

a written notice of, or demand for, an amount payable.

     
     

Disclosure Letter

a letter dated as at the date of this agreement, as amended or supplemented on Completion, together with the attachments to that letter addressed by the Sellers to the Buyer disclosing facts, matters and circumstances that are, or may be, inconsistent with the Warranties.

     
     

Disclosure Materials

1

Due Diligence Materials;

     
  2 the Management Presentation and the Information Memorandum; and
     
  3 the Disclosure Letter.
     
     

Disputing Action

 

in respect of a Tax Demand, any action to cause the Tax Demand to be withdrawn, reduced or postponed or to avoid, resist, object to, defend, appear against or compromise the Tax Demand and any judicial or administrative proceedings arising out of that action.

     
     

Due Diligence Materials

1

all documents and information that were at any time during the period from 24 January 2014 contained in the data room established at https://dataroom.ansarada.com/projectpinnacle/LoginUserProfile.asp and made available to the Buyer, its representatives or advisers and the additional material provided directly to the Buyer or its representatives, as listed in the index in the Agreed Form; and

     
  2 all written answers given to written questions submitted by the Buyer, its representatives or advisers as part of the question and answer process including those answers provided via the online data room referred to above.
     

 

 
page 50

 

 

 

Schedule 2        Definitions

  

Duty

 

any stamp, transaction or registration duty or similar charge imposed by any Governmental Agency and includes any interest, fine, penalty, charge or other amount imposed in respect of any of them, but excludes any Tax.

     
     

DWP Framework Agreement

 

the framework agreement dated 20 January 2011 between the Secretary of State for Work and Pensions (DWP) and Ingeus UK Limited, together with all call off contracts entered into pursuant to the DWP Framework Agreement.

     
     

DWP Parent Company Guarantees

 

the guarantees in relation to the DWP Work Programme in the form attached hereto as Exhibit 1.

     
     

Earn-Out Claim Amount

 

has the meaning given in clause 10.4(b).

     
     

Earn-Out Consideration

 

the earn-out payments to be paid by the Buyer to the Sellers under the provisions of Schedule 13.

     
     

Employee

 

an employee of a Target Entity as at the date of this agreement who remains employed by a Target Entity immediately before Completion.

     
     

Employee Entitlement List

 

a document in the form attached hereto as Exhibit 2.

     
     

Encumbrance

 

includes any claim, interest or equity of any person (including any right to acquire, option or right of pre-emption), any debenture, mortgage, charge, pledge, lien, deposit by way of security, restriction, assignment, hypothecation, security interest, option, right of pre-emption or assignment or factoring or similar agreement (including any created by law), title retention or transfer or other security or preferential agreement or arrangement, and any rental, bill of sale, hire purchase, credit sale or other agreement for payment on deferred terms, a security interest within the meaning of section 12(1) of the PPSA or any agreement or commitment to give or create any of the foregoing, but excluding any Permitted Encumbrance.

     

 

Evry Lease

the former Ingeus SAS lease for the Evry-Courcouronnes site located at 5 Place Copernic, Essonne, France that commenced on 20 November 2006.

   
   

Evry Lease Onerous Contract Amount

£65,258.00.

   

 

 
page 51

 

 

 

Schedule 2        Definitions

  

External Fund

the superannuation funds or other similar funds to which a Target Entity contributes in respect of the Employees.

   
   

French Termination Amount

£72,504.00.

   
   

French Termination Dispute

as at Completion, any dispute between a former employee of Ingeus SAS and Ingeus SAS in respect of the termination of that employee.

   
   

Full Title Guarantee

means with the benefit of the implied covenants set out in Part 1 of the Law of Property (Miscellaneous Provisions) Act 1994 when a disposition is expressed to be made with full title guarantee.

   
   

German VAT Amount

£206,575.00.

   
   

Governmental Agency

any government or governmental, administrative, monetary, fiscal or judicial body, department, commission, authority, tribunal, agency or entity in any part of the world.

   
   

GST

goods and services tax or similar value added tax levied or imposed in Australia under the GST Law or otherwise on a supply.

   
   

GST Act

the A New Tax System (Goods and Services Tax) Act 1999 (Cth).

   
   

GST Law

has the same meaning as in the GST Act.

   
   

Immediately Available Funds

cash, bank cheque or telegraphic or other electronic means of transfer of cleared funds into a bank account nominated in advance by the payee.

   
   

Information Memorandum

the draft information pack prepared by the Company relating to the Ingeus Group dated October 2013.

   
   

Ingeus Group

the Company and its subsidiaries, including the Ingeus UK Group, and Ingeus Group Member means any member of the Ingeus Group.

   
   

Ingeus UK Group

Ingeus UK Limited, Zodiac Training Limited and Ingeus Training Limited.

   
   

Ingeus UK Limited

Ingeus UK Limited (England and Wales registered number 04320853) of Magma House, 16 Davy Court, Castle Mound Way, Rugby, CV23 0UZ, United Kingdom.

   

 

 
page 52

 

 

 

Schedule 2        Definitions

  

Insured Claim

a Claim in respect of a breach of this agreement, Warranty, covenant or under an indemnity in this agreement which, as at the date of this agreement, is insured under the W&I Policy.

   
   

Intellectual Property Rights

all intellectual and industrial property rights and interests throughout the world, whether registered or unregistered, including trade marks, designs, patents, inventions, circuit layouts, copyright and analogous rights confidential information, know-how and all other intellectual property rights as defined in Article 2 of the convention establishing the World Intellectual Property Organisation of 14 July 1967 as amended from time to time.

   
   

Issue Price

in relation to Stock, USD$27.88 per share, converted from USD to GBP at a rate of 1:0.60089.

   
   

IT Contracts

all arrangements and agreements under which any third party (including, without limitation, any source code deposit agents) provides any element of, or services relating to, the Systems, including leasing, hire-purchase, licensing, maintenance and services agreements

   
   

JV Termination Deed

a deed in the Agreed Form, attached hereto as Exhibit 3, between Deloitte LLP, Ingeus UK Limited and other parties pursuant to which that certain shareholders’ agreement, dated 23 February 2011, between and among Deloitte LLP, Ingeus UK Limited and other parties and other associated agreements are terminated.

   

 

Key Contract Counterparties

each of the third parties who are party to a Key Contract with any Target Entity.

   
   
   

Key Contracts

1

The Work Programme between Ingeus UK and the Material Customer in relation to East of England dated June 2011.

     
  2 The Work Programme between Ingeus UK and the Material Customer in relation to East Midlands dated June 2011.
     
  3 The Work Programme between Ingeus UK and the Material Customer in relation to West London dated June 2011.
     
  4

The Work Programme between Ingeus UK and the Material Customer in relation to North East dated June 2011.

     
  5 The Work Programme between Ingeus UK and the Material Customer in relation to Merseyside and Cumbria dated June 2011.
     
  6 The Work Programme between Ingeus UK and the Material Customer in relation to Scotland dated June 2011.
     
  7 The Work Programme between Ingeus UK and the Material Customer in relation to West Yorkshire dated June 2011.
     
       

Key Employment Agreements

each of:

       
  1 the employment agreement between Thérèse Virginia Rein and Ingeus Europe Limited, attached hereto as Exhibit 4; and
     

 

 
page 53

 

 

 

Schedule 2        Definitions

  

  2 the employment agreement for Gregory Kenneth Ashmead and Ingeus Europe Limited, attached hereto as Exhibit 5,
     
  in each case in a form to be agreed by the respective parties.
       
       

LCIA Arbitration Rules

the arbitration rules of the London Court of International Arbitration.

       
       

Leasehold Properties

the properties leased by the Target Entities under the Property Leases.

       
       

Loss

losses, liabilities, damages, costs, charges and expenses and includes Taxes, Duties and Tax Costs.

       
       

Management Accounts

1

For the Ingeus Group, Management Accounts are comprised of the “Consolidated Summary of Financial Performance” and the “Ingeus Group Consolidated Balance Sheet”.

       
  2 For Ingeus UK. Management Accounts are comprised of the:
       
    a. Financial Performance report by contract for MTD and YTD;
       
    b. Revenue Split report MTD and YTD;
       
    c. Balance Sheet;
       
    d. Cashflow; and
       
    e. Funds Flow
       

 

Management Presentation

the written management presentation prepared by the Company relating to the Ingeus Group dated December 2013 and as delivered by the Company, its officers and representatives to the Buyer on 19 December 2013.

   
   

Material Adverse Effect

any event, occurrence, fact, condition or change that is, or could reasonably be expected to, individually or in the aggregate, result in revenue of the Ingeus Group for the financial year from 1 January 2014 to 31 December 2014 to be less than $336,000,000. 

   
   

Material Authorisations

is defined in Warranty 16.5.

   
   

Material Customer

the Department of Work and Pensions (UK).

   
   

Material Proceedings

is defined in Warranty 16.1.

   
   

Material Target Entity

the Company, Ingeus Europe Limited and Ingeus UK Limited.

   

  

MoJ Payment

the amount payable by the Buyer to the Sellers under clause 3 of Schedule 12.

   

 

 
page 54

 

 

 

Schedule 2        Definitions

  

Non-Title Claim

any Claim other than a Claim for breach of a Title Warranty.

   
   

Non-Title Claim Cap

the Claimable Escrowed Stock (if any) plus that amount of the Earn-Out Consideration equal to the Claim Escrow Amount.

   
   

Non-Title Warranties

each of the Warranties, excluding the Title Warranties.

   
   

Off the Shelf Software

any software developed by a third party for use by multiple licensees, regardless of whether the software has been configured, modified, customised or extended by or for the Target Entities..

   

 

Paid Non-Deloitte Purchase Price

that part of:

       
  1 £14,812,500; plus
       
  2 the Deferred Consideration; plus
       
  3 the MoJ Payment; plus
       
  4 the Earn-Out Consideration,
       
  which:
       
  5 in the case of each of the £14,812,500, the MoJ Payment and the Earn-Out Consideration, has actually been received by the Seller; and
       
  6 in the case of the Deferred Consideration, has actually vested,
       
  as at the date on which the claim is notified to the Sellers.
       
       

PEB2 Amount

£1,487,340.00.

   
   

Permitted Distribution

a dividend or return of capital not exceeding £500,000.

       
       

Permitted Encumbrance

1

every lien or retention of title arrangement securing the unpaid balance of purchase money for property acquired in the ordinary course of business;

       
  2 any Encumbrance in relation to personal property (as defined in the PPSA and to which that Act applies) that is created or provided for by:
       
    a transfer of an Account or Chattel Paper;
       
    a PPS Lease; or
       
    a Commercial Consignment,
       
    that is not a security interest within the meaning of section 12(1) of the PPSA;
       
  3 the interest of the lessor or owner in respect of assets subject to a finance or capital lease, a hire-purchase agreement or a conditional sale agreement;
       
  In this definition, Account, Chattel Paper, PPS Lease and Commercial Consignment have the meanings given in the PPSA.
       

 

 
page 55

 

 

 

Schedule 2        Definitions

  

PPSA

the Personal Property Securities Act 2009 (Cth).

     
     

Properties

the Leasehold Properties.

     
     

Property Leases

the real estate leases listed in Schedule 9.

     
     

Purchase Price

the sum of:

     
  1 the Completion Payment;
     
  2 the Adjustment Amount (if any);
     
  3 the Deferred Consideration;
     
  4 the MoJ Payment (if any);
     
  5 the Earn-Out Consideration (if any); and
     
  6 any other adjustments made under this agreement.
     

Respective Proportion

in relation to a Seller, the percentage listed against the name of that Seller in column 3 of Schedule 3.

   

 

ROW Completion Accounts

the accounts prepared as at 10:00pm London time on the Completion Date in accordance with Schedule 7 and in the format set out in Part A of Schedule 8.

   
   

ROW Bonds and deposits for premises

deposits for leased premises and bonds with other parties (amounts are recognised at historical value with no discount).

   
   

ROW Group Companies

each of the Target Entities, excluding the Ingeus UK Group.

   

 

ROW Loan Facility

the loan facility provided under the “Fifth Amended and Restated Facilities Agreement’ dated 16 September 2013, between Ingeus Limited and HSBC Bank Australia Limited and any loan facility which replaces it.

   
   

ROW Reference Amount

$12,500,000.00.

   
   

Sale

the sale and purchase of the Sale Shares in accordance with clause 4.

   
   

Sale Shares

the shares in the capital of Ingeus Limited held by the Sellers as listed in Schedule 3.

   

 

Seller Representative or Adviser

1

any current or former director, officer, partner, or employee of any Seller, Deloitte LLP or any Target Entity; and

     

 

 
page 56

 

 

 

Schedule 2        Definitions

  

  2 any representative or adviser of any Seller, Deloitte LLP or any Target Entity (or any current or former director, officer, partner or employee of such representatives or advisers).
     

 

Seller Trustee

GK Ashmead Holdings Pty Limited, as trustee of the GK Ashmead Nominees Trust.

   
   

Side Deed

the side deed, attached hereto as Exhibit 6, to be entered into on or around the date of this agreement between the Buyer, Buyer’s Guarantor, the Sellers and Deloitte LLP which sets out certain obligations, indemnities and promises in favour of Deloitte LLP’s in relation to the sale of its 50% shareholding in Ingeus UK Limited.

   
   

Specified Executives

Thérèse Virginia Rein, Gregory Kenneth Ashmead and Michael Maurice Morris.

   
   

Specified Senior Executives

Dean James (CEO, Ingeus UK), Kevin Browne (Director of Emerging Markets and CEO, Saudi Arabia), Simon Bowe (Group Financial Controller), Bénédicte Guesne (CEO Ingeus SAS (France)), Marc Hanke (CEO Ingeus GmbH (Germany)), Anne Buckard (CEO Ingeus AB (Sweden)), Daniel Sieber (CEO Ingeus AG (Switzerland)), Anna Karaszewska (COO Ingeus Sp Z.o.o (Poland)), Jay Han (CEO Ingeus Co Ltd (Korea)), David Merritt (CFO, Ingeus UK), Paul Hobbs (CIO), Kate Connors (Chief Executive Officer – Assure Programs) and Anton Eckersley (Director International Relations).

   
   

Subsidiary Undertaking

has the meaning given in section 1162 of the Companies Acts.

   
   

Substantiated Claim

a claim in respect of which liability is admitted by the Seller, or which has been determined in accordance with clause 19.1 to the extent that Loss in respect of that Claim exceeds the W&I Policy Limit.

   
   

Systems

has the meaning given in Warranty 14.1.

   
   

Target Entities

Ingeus Limited and each of the entities listed in Schedule 11.

   
   

Tax

any tax, levy, charge, impost, fee, deduction, goods and services tax, compulsory loan or withholding, that is assessed, levied, imposed or collected by any Governmental Agency and includes any interest, fine, penalty, charge, fee or any other amount imposed on, or in respect of any of the above but excludes Duty.

   
   

Tax Claim

any claim, demand, legal proceedings or cause of action including any claim, demand, legal proceedings or cause of action arising from a breach of a Tax Warranty, or under the covenant in clause 8.4.

   

 

 
page 57

 

 

 

Schedule 2        Definitions

  

Tax Claim Cap

an amount equal to the Non-Title Claim Cap plus that amount of the Earn-Out Consideration equal to £5,000,000.

   

 

Tax Cost

all costs, and expenses incurred in:

     
  1 managing an inquiry; or
     
  2 conducting any Disputing Action
     
  in relation to a Tax Demand.
     
     

Tax Demand

1

a Demand or assessment from a Governmental Agency requiring the payment of any Tax or Duty;

     
  2 any document received from a Governmental Agency administering any Tax or Duty assessing, imposing, claiming or indicating an intention to claim any Tax or Duty; or
     
  3 lodgement of a tax return or a request for an amendment under a law about self-assessment of Tax,
     
  in all cases, for which the Warrantor may be liable under this agreement.
     

 

Tax Covenant

the covenant provided by the Warrantor in favour of the Buyer under clause 8.4 of this agreement.

   
   

Tax Invoice

includes any document or record treated by the Commissioner of Taxation as a tax invoice or as a document entitling a recipient to an input tax credit.

   
   

Tax Law

any law relating to either Tax or Duty as the context requires.

   
   

Tax Payor

is defined in clause 10.3.

   
   

Tax Relief

any relief, allowance, exemption, exclusion, set-off, deduction, loss, rebate, refund, right to repayment or credit granted or available in respect of a Tax or Duty under any law.

   
   

Tax Warranty

Warranty 21.

   
   

Third Party

any person or entity (including a Governmental Agency) other than a Seller, a Buyer Group Member or a Target Entity.

   
   

Third Party Claim

any claim, Demand, legal proceedings or cause of action made or brought by a Third Party, other than a Tax Demand.

   
   

Title Claim

a Claim under a Title Warranty.

   

 

 
page 58

 

 

 

Schedule 2        Definitions

  

Title Warranties

Warranties 1.1 and 2.1.

   
   

Total Gross Shares

856,322.

   
   

Total Net Shares<