CLIFFORD CHANCE LLP
Execution Version
VINE ACQUISITIONS LIMITED
and
HEINEKEN UK LIMITED
and
PUNCH TAVERNS PLC
CO-OPERATION AGREEMENT
RELATING TO THE PROPOSED ACQUISITION OF
PUNCH TAVERNS PLC
198589-4-6996-v6.0
- 1-
70-40630055
CONTENTS
Clause
Page
1.
Interpretation ..................................................................................................................... 1
2.
Publication of Press Announcement and Terms of the Acquisition .................................. 6
3.
The Disposal ...................................................................................................................... 6
4.
Undertakings to co-operate ............................................................................................... 6
5.
Undertakings in relation to Regulatory Filings ................................................................. 7
6.
Scheme Document ............................................................................................................. 9
7.
Qualifications .................................................................................................................... 9
8.
Implementation of the Acquisition .................................................................................. 10
9.
Switching to a Takeover Offer ........................................................................................ 10
10. Share Plans ...................................................................................................................... 11
11. Directors' and Officers' Insurance ................................................................................... 11
12. Code and the Listing Rules ............................................................................................. 12
13. Termination ..................................................................................................................... 12
14. Warranties and Undertakings .......................................................................................... 13
15. Notices ............................................................................................................................. 13
16. General ............................................................................................................................ 14
17. Governing Law and Jurisdiction ..................................................................................... 16
Schedule 1 Press Announcement ............................................................................................. 17
Schedule 2 Share Plans ............................................................................................................ 18
198589-4-6996-v6.0
- 1-
70-40630055
THIS AGREEMENT is made on 15
December 2016 between:
(1)
Vine Acquisitions Limited, a company whose registered office is at 54 Portland
Place, London, United Kingdom, W1B 1DY with registered number 10517393
("Bidco");
(2)
Heineken UK Limited, a company whose registered office is at 3-4 Broadway Park,
South Coyle Broadway, Edinburgh EH12 9JE with registered number SCO065527
("Heineken"); and
(3)
Punch Taverns plc, a company whose registered office is at Jubilee House, Second
Avenue, Burton Upon Trent, Staffordshire, DE14 2WF with registered number
03752645 ("Punch"),
together referred to as the "parties" and each as a "party" to this Agreement.
WHEREAS:
(A)
The parties have agreed to proceed with a recommended proposal for an acquisition
of the entire issued and to be issued ordinary share capital of Punch by Bidco on the
terms of and subject to the conditions referred to in the Press Announcement (the
"Acquisition") and the associated disposal of Punch Taverns Holdco (A) Limited and
the refinancing and transfer of the rights and benefits of the Punch Intercompany
Loans to Heineken (the "Disposal" and together with the Acquisition, the
"Transaction").
(B)
It is intended that the Acquisition will be effected by way of a scheme of arrangement
of Punch under Part 26 of the Companies Act 2006 but Bidco reserves the right to
elect to implement the Acquisition by way of an Offer on the terms of this Agreement.
(C)
The parties have agreed to take certain steps to effect completion of the Acquisition
and are entering into this Agreement to record their respective obligations relating to
such matters and to effect the Acquisition.
IT IS AGREED as follows:
1.
INTERPRETATION
1.1
In this Agreement:
"Acceptance Condition" means, if applicable, the acceptance condition to the Offer;
"Acquisition" has the meaning given to it in recital (A) to this Agreement;
"Business Day" means a day other than a Saturday or Sunday on which banks in the
City of London are generally open for business;
"Clearances" means any approvals, consents, clearances, permissions, confirmations,
comfort letters and waivers that may need to be obtained and waiting periods that may
need to have expired, from or under any of the laws, regulations or practices applied
by any Relevant Authority (or under any agreements of arrangements to which any
198589-4-6996-v6.0
- 1-
70-40630055
Relevant Authority is a party) in connection with the implementation of the
Transaction;
"CMA" means the UK Competition and Markets Authority;
"Code" means the UK Takeover Code as from time to time amended and interpreted
by the Panel;
"Collaboration Agreement" means the collaboration agreement entered into
between Bidco and Heineken dated _____
15 December 2016;
"Competition Condition" means the condition set out at Paragraph 3(a) of Appendix
1 of the Press Announcement;
"Competition Law" means Chapters I and II of the Competition Act 1998, Section
188 of the Enterprise Act 2002, Articles 101 and 102 of the Treaty on the Functioning
of the European Union, Council Regulation 1/2003/EC, Council Regulation
139/2004/EC and any other law or regulation in any jurisdiction relating to fair
competition, anti-trust, monopolies, merger control or similar matters;
"Conditions" means the conditions to implementation of the Acquisition set out in
Appendix 1 to the Press Announcement and any other conditions as may be required
by the Panel or agreed in writing by the parties;
"Confidentiality Agreements" means the agreement entered into by Patron Capital
Advisers LLP and Punch on 19 October 2016 and the agreement entered into by
Heineken and Punch on 16 February 2016;
"Court" means the High Court of Justice in England and Wales;
"Court Order" has the meaning given to it in the Press Announcement;
"Court Hearing" means the hearing of the Court to sanction the Scheme;
"Court Meeting" means the meeting of Punch Shareholders to be convened pursuant
to section 869 of the Companies Act 2006 for the purpose of considering, and if
thought fit, approving the Scheme and any adjournments thereof;
"Disposal Proceeds" has the meaning given to it in the Press Announcement;
"Effective" means in the context of the Acquisition: (i) if the Acquisition is
implemented by way of the Scheme, the Scheme having become effective pursuant to
its terms; or (ii) if the Acquisition is implemented by way of an Offer, the Offer
having been declared or having become unconditional in all respects in accordance
with the requirements of the Code;
"FCA" means the Financial Conduct Authority or its successor from time to time;
"FCA Handbook" means the FCA's Handbook of rules and guidance as amended
from time to time;
198589-4-6996-v6.0
- 2-
70-40630055
"Group" means, in relation to any person, its subsidiaries, subsidiary undertakings
and holding companies and the subsidiaries and subsidiary undertakings of any such
holding company and in the case of Bidco shall include all funds advised by Patron
Capital Advisers LLP, any portfolio companies of such funds and the subsidiaries and
subsidiary companies of any such portfolio company;
"Independent Competing Transaction" means:
(i)
any offer (including partial offer), possible offer, tender offer, merger,
acquisition, scheme of arrangement, dual listed company structure, business
combination or proposal from, or on behalf of, any Third Party, whether or
not subject to any pre-conditions and howsoever to be implemented, with a
view to such person, directly or indirectly acquiring (in one transaction or a
series of transactions), when aggregated with the shares already held by such
Third Party and any person acting in concert with such Third Party, more
than 30 per cent. of the issued share capital of Punch;
(ii) the acquisition (in one transaction or a series of transactions) by or on behalf
of, any Third Party of all or a significant proportion (being 30 per cent. or
more) of the business, assets and/or undertakings of the Punch Group and/or
its value taken as a whole;
(iii) a demerger, any material reorganisation and/or liquidation involving the
Punch Group or a significant portion (being 30 per cent. or more) of it taken
as a whole; or
(iv) any other transaction which would be alternative to, or inconsistent with, or
would be reasonably likely materially to preclude, impede, delay or prejudice
completion of the Acquisition;
"Law" means any applicable statutes, common law, rules, ordinances, regulations,
codes, orders, judgements, injunctions, writs, decrees, directives, governmental
guidelines or interpretations having the force of law, in each case, of a Relevant
Authority;
"Long Stop Date" has the meaning given to it in the Press Announcement;
"Offer" means a takeover offer (as defined in section 974 of the Act) governed by the
Code to be made if the Acquisition is implemented by way of a contractual takeover
offer;
"Panel" means the UK Panel on Takeovers and Mergers;
"Punch General Meeting" means the general meeting of Punch Shareholders to be
convened to consider and if thought fit pass, inter alia, the resolutions in relation to
the Transaction and any adjournments thereof;
"Punch Group" means Punch and its subsidiaries and subsidiary undertakings;
"Punch Intercompany Loans" has the meaning given to it in the Press
Announcement;
198589-4-6996-v6.0
- 3-
70-40630055
"Punch Shareholders" means the holders of Punch Shares;
"Punch Shares" means the shares of 0.9572 pence each in the capital of Punch from
time to time;
"Press Announcement" means the press announcement to be released by Bidco
pursuant to Rule 2.7 of the Code detailing the terms and conditions of the Acquisition,
in the form set out in Schedule 1;
"Regulatory Information Service" means a regulatory information service as
defined in the FCA Handbook;
"Relevant Authority" means any central bank, ministry, governmental, quasigovernmental, supranational (including the European Union), statutory, regulatory or
investigative body, authority or tribunal (including any national or supranational antitrust, competition or merger control authority, any sectoral ministry or regulator and
any foreign investment review body), national, state, municipal or local government
(including any subdivision, court, tribunal, administrative agency or commission or
other authority therefor), any entity owned or controlled by them, any private body
exercising any regulatory, taxing, importing or other authority, trade agency,
association, institution or professional or environmental body in any jurisdiction and
"Relevant Authorities" means all of them;
"Scheme" means a scheme of arrangement of Punch and, where relevant, certain
other members of the Punch Group under Part 26 of the Companies Act 2006;
"Scheme Document" means the circular to be despatched to, among others, Punch
Shareholders setting out, among other things, details of the Acquisition, the full terms
and conditions of the Scheme and the explanatory statement required pursuant to
Part 26 of the Companies Act 2006 and including any revised or supplementary
circular;
"Share Plans" has the meaning given to it in Schedule 2;
"SPA" means the sale and purchase agreement entered into between, among others,
Bidco and Heineken dated ____
15 December 2016; and
"Third Party" means a third party which is not a person who is, or is presumed to be,
acting in concert (as defined in the Code) with Bidco or Heineken.
1.2
Terms used but not defined expressly in this Agreement shall, unless the context
otherwise requires, have the meaning given to them in the Press Announcement. If
there is any inconsistency, the definitions in this Agreement prevail.
1.3
In this Agreement, references to:
1.3.1
this Agreement include any Recitals and Schedules to it and references to
Clauses and Schedules are to clauses of, and schedules to, this Agreement
unless the context requires otherwise;
1.3.2
the singular include the plural and vice versa;
198589-4-6996-v6.0
- 4-
70-40630055
1.3.3
a "person" includes any company, partnership or unincorporated association
(whether or not having separate legal personality);
1.3.4
a "company" shall include any company, corporation or any body corporate,
wherever incorporated or established;
1.3.5
a "subsidiary" or "holding company" is to be construed in accordance with
section 1159 (and Schedule 6) of the Companies Act 2006 and for the
purposes of this definition, a person shall be treated as a member of another
person if any of that person's subsidiaries is a member of that other person, or
if any shares in that other person are held by a person acting on behalf of it or
any of its subsidiaries;
1.3.6
a "subsidiary undertaking" or "parent undertaking" is to be construed in
accordance with section 1162 (and Schedule 7) of the Companies Act 2006,
and a subsidiary and a subsidiary undertaking shall include any person the shares or
ownership interests in which are subject to security and where the legal title to the
shares or ownership interests so secured are registered in the name of the secured
party or its nominee pursuant to such security;
1.3.7
to a statute or statutory provision include:
(a)
that statute or provision as from time to time modified, re-enacted
and/or consolidated whether before or after the date of this Agreement;
(b)
any past statute or statutory provision (as from time to time modified,
re-enacted and/or consolidated) which that statute or statutory
provision has directly or indirectly replaced; and
(c)
any subordinate legislation made from time to time under that statute
or statutory provision which is in force at the date of this Agreement,
except to the extent that any statute, statutory provision or subordinate
legislation made or enacted after the date of this Agreement would create or
increase a liability of the relevant party under this Agreement;
1.3.8
a time of day is a reference to the time in London, unless the context requires
otherwise; and
1.3.9
to any other document referred to in this Agreement is a reference to that
document as amended, replaced, novated or supplemented at any time unless
otherwise stated.
1.4
The headings in this Agreement do not affect its interpretation.
1.5
References to books, records, information or documents mean books, records,
information or documents in any form including paper, electronically stored data,
magnetic media, film and microfilm.
1.6
The ejusdem generis principle of construction shall not apply to this Agreement.
Accordingly, general words shall not be given a restrictive meaning by reason of their
198589-4-6996-v6.0
- 5-
70-40630055
being preceded or followed by words indicating a particular class of acts, matters or
things or by examples falling within the general words.
2.
PUBLICATION OF PRESS ANNOUNCEMENT AND TERMS OF THE
ACQUISITION
2.1
The obligations of the parties under this Agreement, other than Clause 1, this
Clause 2.1 and Clauses 12 to 17, shall be conditional on the release of the Press
Announcement via a Regulatory Information Service at or before 7:30 a.m. on the
date of this Agreement, or such other date and time as may be agreed by the parties
(and, where required by the Code, approved by the Panel). Clause 1, this Clause 2.1
and Clauses 12 to 17 shall take effect on and from execution of this Agreement.
2.2
The terms of the Acquisition shall be as set out in the Press Announcement, together
with such other terms as may be agreed by the parties in writing and, where required
by the Code, approved by the Panel. The terms of the Acquisition at the date of
posting of the Scheme Document shall be set out in the Scheme Document. If Bidco
elects to implement the Acquisition by way of an Offer in accordance with Clause 9,
the terms of the Acquisition shall be set out in an offer document.
2.3
The only conditions to the Acquisition shall be the Conditions.
3.
THE DISPOSAL
The Disposal shall be subject to the terms of the SPA and the only condition to the
Disposal shall be the Acquisition becoming Effective.
4.
UNDERTAKINGS TO CO-OPERATE
4.1
Bidco and Heineken undertake to Punch to co-operate with Punch and its advisers to
take all such steps as are reasonably necessary to implement the Transaction in
substantially the form contemplated by the Press Announcement.
4.2
Bidco and Heineken confirm that, as at the date of this Agreement, they are not aware
of any circumstances which would mean that any of the Conditions cannot be
satisfied. Nothing in this Clause 4.2 shall be construed as confirmation by or from
either Bidco or Heineken that any of the Conditions can be satisfied.
4.3
If either of Bidco or Heineken is or becomes aware of any matter, not already known
to Bidco or Heineken (as applicable), which might reasonably be considered to be
material in the context of the satisfaction or waiver, or to provide sufficient grounds
for Bidco or Heineken (as applicable) to be able to invoke any of the Conditions,
Bidco or Heineken (as applicable) will promptly make the substance of all such
matters known to Punch and provide such details and further information of which
Bidco or Heineken (as applicable) is aware and which Punch may reasonably request.
4.4
The parties agree that all information provided to them or their respective officers,
directors, employees or representatives in connection with this Agreement and the
Transaction shall be governed in accordance with the Confidentiality Agreements.
4.5
Bidco and Heineken undertake to consult with Punch before issuing any press release
or public statement relating to the Transaction
198589-4-6996-v6.0
- 6-
70-40630055
5.
UNDERTAKINGS IN RELATION TO REGULATORY FILINGS
5.1
Except where otherwise required by Law or a Relevant Authority, and subject to
Clauses 5.2 and 5.3, Bidco and Heineken shall:
5.2
5.3
5.1.1
determine the strategy to be pursued for obtaining any Clearances following
reasonable consultation with Punch; and
5.1.2
contact and correspond with any Relevant Authority in relation to obtaining
any Clearances.
Notwithstanding any other provision of this Agreement, Heineken shall use or cause
to be used reasonable endeavours in order to achieve the satisfaction of the
Competition Condition as soon as reasonably practicable after the date of this
Agreement and, in any event, by the Long Stop Date. In particular:
5.2.1
Heineken shall prepare and submit the necessary filings and pay the related
fees in connection with the Disposal as soon as reasonably practicable
following the date of this Agreement, subject to Clause 5.3;
5.2.2
Heineken shall accept the imposition of, or offer, any conditions, obligations,
undertakings, commitments, measures or modifications by or to the Relevant
Authority which are on terms that are reasonably satisfactory to Heineken to
the extent required in order to ensure satisfaction of the Competition
Condition; and
5.2.3
in relation to any necessary filing to the European Commission under the EU
Merger Regulation (No 139/2004), Heineken shall, subject to Clause 5.3 (and
to the extent not already prepared and/or submitted), prepare and submit a
draft of Form RS to the competent case team of the European Commission
within five Business Days of the date of this Agreement, and submit the Form
RS to the European Commission within two Business Days of the competent
case team of the European Commission informing Heineken that Form RS
may be submitted; and
5.2.4
until such time as the Competition Condition is satisfied, Heineken undertakes
not to effect or commit to effect any transaction which would be an alternative
to, or inconsistent with, or would be reasonably likely to preclude, impede, or
prejudice the satisfaction of the Competition Condition. Nothing in this
Clause 5.2.4 shall prevent Heineken from making a limited number of
transactions in the ordinary course of business of Star Pubs & Bars.
Without prejudice to Clause 5.2, and except to the extent that to do so is prohibited by
law, and subject to Clauses 5.4 and 7, each of the parties shall:
5.3.1
closely cooperate in the preparation of any filings necessary to the Relevant
Authorities in connection with the Clearances and in relation to the
preparation of any other submissions, material correspondence or material
communications to any Relevant Authority in connection with the Clearances;
5.3.2
promptly provide to the other parties all information available to it or them
that is necessary or reasonably desirable for the preparation of any filings or
198589-4-6996-v6.0
- 7-
70-40630055
submissions to, or responses to requests for information from, the European
Commission, the CMA and/or any other Relevant Authority (as the case may
be);
5.4
5.3.3
provide, or procure the provision of, draft copies of all filings, submissions,
material correspondence and material communications intended to be sent to
any Relevant Authority in relation to obtaining any Clearances to the other
parties and its legal advisers at such time as will allow the receiving party a
reasonable opportunity to provide comments on such filings, submissions,
correspondence and communications before they are submitted, sent or made
and each party shall provide the other parties with copies of all such filings,
submissions, material correspondence and material communications in the
form finally submitted or sent (including, in the case of non-written
communications, reasonably detailed summaries of material non-written
communications);
5.3.4
have regard in good faith to comments made in a timely manner by another
party on draft copies of filings, submissions, material correspondence and
material communications provided pursuant to Clause 5.3.3;
5.3.5
provide reasonable prior notice of (which shall, to the extent practicable,
include a copy of the agenda for), and shall permit another party and their
advisers to participate in, all scheduled meetings and scheduled material
telephone calls that a party or its advisers have with any Relevant Authority in
relation to obtaining any Clearance (unless the Relevant Authority requests
that a party should not participate in all or part of the meeting or telephone call
and that party is notified of such request). In relation to any meeting or
material telephone call with or involving any Relevant Authority in relation to
obtaining any Clearance at which a party or its advisers are not present, the
parties who are present shall promptly provide to a non-participating party a
fair summary of the matters discussed;
5.3.6
not withdraw a filing made to any Regulatory Authority without the other
parties’ prior approval; and
5.3.7
to the extent it falls to a particular party to do so, promptly submit any filings,
submissions and responses to information requests to the European
Commission, the CMA and/or any other Relevant Authority (as the case may
be) in connection with the Clearances.
To the extent that the parties provide each other with any information, assistance
and/or access to senior management for the purposes of preparing for submissions to a
Relevant Authority or strategic planning for the Punch Group (which the parties are
under no obligation pursuant to this Agreement to provide), or to the extent that it is
reasonably anticipated that competitively sensitive information will be discussed at a
scheduled meeting or scheduled material telephone call, or parts of any such meeting
or telephone call, with a Regulatory Authority, any competitively sensitive
information shall be provided or discussed on an outside counsel only basis to or with
external counsel of the other parties or pursuant to an appropriately established clean
team arrangement.
198589-4-6996-v6.0
- 8-
70-40630055
5.5
The parties shall keep each other informed of any progress in satisfying the
Conditions and obtaining any necessary Clearances, and notify the other parties
immediately when:
5.5.1
any Condition is satisfied and any necessary Clearance is obtained (together
with appropriate evidence); and
5.5.2
it becomes aware of any matter which is likely to prevent the Competition
Condition being satisfied or any necessary antitrust approval by the Long Stop
Date.
6.
SCHEME DOCUMENT
6.1
Bidco and Heineken agree:
6.1.1
to provide promptly to Punch all such information about itself, its Group and
its directors (including any information required under applicable law or the
Code regarding the intentions of Bidco and Heineken) as may be reasonably
requested and which is required by Punch (having regard to the Code and
applicable regulations) for the purpose of inclusion in the Scheme Document
and any other document required by applicable law or under the Code to be
published in connection with the Scheme (including all information that would
be required under the Code or applicable regulations);
6.1.2
to provide all other assistance and access which may be reasonably required
for the preparation of the Scheme Document and any other document required
by applicable law or under the Code to be published in connection with the
Scheme including reasonable access to, and ensuring that reasonable
assistance is provided by, the relevant professional advisers; and
6.1.3
to procure that the relevant persons accept responsibility, in the terms required
by the Code, for all information in the Scheme Document relating to Bidco or
Heineken, their Group and their directors, as applicable in each case.
7.
QUALIFICATIONS
7.1
Nothing in this Agreement shall require any party to provide or disclose to the other
parties any information which a party reasonably considers:
7.1.1
is commercially or competitively sensitive or confidential information related
to its business and/or any member of its Group which is not relevant to the
Transaction or any Clearance;
7.1.2
would result in the loss or waiver of any privilege that subsists in relation to
such information (including legal privilege); or
7.1.3
would result in that party being in breach of a legal, regulatory or material
contractual obligation,
save, in each case, in respect of information that is required by applicable law or
under the Code to be disclosed in the Scheme Document or any other document
198589-4-6996-v6.0
- 9-
70-40630055
required by applicable law or under the Code to be published in connection with the
Scheme.
7.2
Each party may redact such information from any documents shared with the other
parties and/or take reasonable steps to procure that such information is not shared
with the other parties, including, where relevant providing such information:
7.2.1
to the other parties' legal counsel and to the extent reasonably necessary, its
other advisers on an "external counsel only" basis;
7.2.2
directly to a Regulatory Authority (with a non-confidential version of any
relevant filing, submission or communication being provided to the other
parties); or
7.2.3
pursuant to additional procedures agreed between the parties to ensure
compliance with Competition Law,
save, in each case, in respect of information that is required by applicable law or
under the Code to be disclosed in the Scheme Document or any other document
required by applicable law or under the Code to be published in connection with the
Scheme.
8.
IMPLEMENTATION OF THE ACQUISITION
8.1
Where the Acquisition is being implemented by way of the Scheme, Bidco and
Heineken undertake to confirm in writing to Punch prior to the Court Hearing that it
has waived or treated as satisfied all Conditions (other than the Scheme Condition) or,
to the extent permitted by the Panel, invoked or treated as incapable of satisfaction
any Condition (or that it intends to do so).
8.2
Where the Acquisition is being implemented by way of the Scheme, Bidco and
Heineken shall instruct jointly counsel to appear on its behalf at the Court Hearing
and undertake to the Court to be bound by the terms of the Scheme in so far as it
relates to Bidco and Heineken (as applicable), to the extent that all of the Conditions
(other than the Scheme Condition) have been satisfied or waived on or prior to the
date of the Court Hearing.
8.3
Where the Acquisition is being implemented by way of the Scheme, Heineken shall
pay the Disposal Proceeds into the client account of DLA Piper UK LLP before the
Court hearing to sanction the Scheme and shall procure that DLA Piper UK LLP shall,
following the Scheme becoming Effective and upon completion of the Disposal,
instruct its bankers to transfer the Disposal Proceeds in accordance with the terms of
the SPA as soon as reasonably practicable in normal business hours.
8.4
For the avoidance of doubt, nothing in this Clause 8 shall require Heineken to waive
or treat as satisfied any Condition relating to any antitrust approval.
9.
SWITCHING TO A TAKEOVER OFFER
9.1
Bidco reserves the right, as set out in the Press Announcement, with the consent of the
Panel and Heineken, to elect to implement the Acquisition by way of an Offer rather
198589-4-6996-v6.0
- 10-
70-40630055
than the Scheme, on substantially the same terms and conditions as the Scheme,
subject to appropriate amendments (any such election being a "Switch") if:
9.1.1
Punch provides its prior written consent (an "Agreed Switch"), in which case
Clause 9.3 shall apply; or
9.1.2
a Third Party announces an Independent Competing Transaction that is
recommended by the board of directors of Punch.
9.2
In the event of any Switch, Clause 6 and Clause 8 shall cease to have any effect.
9.3
In the event of any Agreed Switch, unless otherwise agreed between Bidco, Heineken
and Punch or required by the Panel:
9.3.1
the Acceptance Condition shall be set at 90 per cent. of the Punch Shares to
which the Offer relates (or such lesser percentage as may be determined by
Bidco after, to the extent necessary, consultation with the Panel and Heineken,
being in any case more than 50 per cent. of the Punch Shares to which the
Offer relates);
9.3.2
Bidco shall keep Punch and Heineken informed, on a confidential basis and
within one Business Day following a written request by Punch or Heineken (as
applicable), of the number of Punch shareholders that have validly returned
their acceptance or withdrawal forms or incorrectly completed their
withdrawal or acceptance forms and the identity of such Punch shareholders;
and
9.3.3
all provisions of this Agreement shall continue to apply save as set out in this
Clause 9.
9.4
Without prejudice to the foregoing provisions of this Clause 9, the parties agree that
all provisions of this Agreement relating to the Scheme and its implementation shall
apply to the Offer or its implementation mutatis mutandis.
10.
SHARE PLANS
10.1
Bidco and Punch agree that the provisions of Schedule 2 (Share Plans) with respect to
the Share Plans shall be implemented in accordance with that schedule.
10.2
Punch and Bidco agree that if the Acquisition is implemented by way of the Scheme,
the timetable for its implementation shall be fixed so as to enable options and awards
under the Share Plans which provide for exercise and/or vesting upon the sanction of
the Scheme by the Court to be exercised or vest in sufficient time to enable the
resulting Punch Shares to be bound by the Scheme on the same terms as Punch Shares
held by Punch Shareholders.
11.
DIRECTORS' AND OFFICERS' INSURANCE
11.1
If and to the extent such obligations are permitted by law, for six years after the date
on which the Scheme becomes Effective, Bidco shall procure that the members of the
Punch Group honour and fulfil their respective obligations (if any) existing as at the
date of this Agreement to indemnify their respective directors and officers and to
198589-4-6996-v6.0
- 11-
70-40630055
advance expenses, in each case with respect to matters existing or occurring at or
prior to the date on which the Scheme becomes Effective.
11.2
Bidco acknowledges that Punch may purchase directors' and officers' liability
insurance cover for both current and former directors and officers of the Punch Group,
including directors and officers who retire or whose employment is terminated as a
result of the Acquisition, for acts and omissions up to and including the date on which
the Scheme becomes Effective, in the form of runoff cover for a period of six years
following the date on which the Scheme becomes Effective. Such insurance cover
shall be with reputable insurers and provide cover, in terms of amount and breadth, at
least as much as that provided under the Punch Group's directors' and officers'
liability insurance as at the date of this Agreement.
12.
CODE AND THE LISTING RULES
12.1
Nothing in this Agreement shall in any way limit the parties' obligations under the
Code, and any uncontested rulings of the Panel as to the application of the Code in
conflict with the terms of this Agreement shall take precedence over such terms.
12.2
Nothing in this Agreement shall oblige:
12.2.1
Punch to take any action which the Panel determines would not be permitted
by Rule 21.2 of the Code; or
12.2.2
Punch or the directors of Punch to recommend an Offer or a Scheme proposed
by Bidco or any member of the Bidco Group.
13.
TERMINATION
13.1
Subject to Clause 13.2, this Agreement shall be terminated with immediate effect and
all rights and obligations of the parties under this Agreement shall cease forthwith if
any of the following events occur:
13.1.1
termination is agreed in writing between the parties at any time prior to the
Scheme becoming Effective;
13.1.2
the Press Announcement is not released at or before 6.00 p.m. on the date of
this Agreement (unless, prior to that time, the parties have agreed another time
and date in accordance with Clause 2.1);
13.1.3
upon service of written notice by Bidco to Punch, in the event that:
198589-4-6996-v6.0
(a)
the board of directors of Punch publicly announces that it: (i) no longer
unconditionally and unanimously recommends (or intends to
recommend) or has adversely modified or qualified its
recommendation (or intention to recommend) of the Transaction (save
as set out in the Press Announcement); or (ii) recommends (or intends
to recommend) an Independent Competing Transaction;
(b)
an Independent Competing Transaction becomes effective, or becomes
or is declared unconditional in all respects or is completed;
- 12-
70-40630055
13.1.4
13.1.5
(c)
the Scheme is not approved by Punch Shareholders at the Court
Meeting or the Punch General Meeting or the Court refuses to sanction
the Scheme or grant the Court Order; or
(d)
any Condition (which has not been waived) is invoked (with
permission of the Panel) so as to cause the Acquisition to not proceed;
on the earlier to occur of:
(a)
the date on which the Acquisition (whether implemented by way of the
Scheme or, pursuant to Clause 9, the Offer) lapses, terminates or is
withdrawn in accordance with the Code (and the consent of the Panel if
required); and
(b)
the date on which the Scheme becomes Effective; or
if the Acquisition has not been implemented by the Long Stop Date.
13.2
Termination of this Agreement shall be without prejudice to the rights of any party
that may have arisen prior to termination. The whole of this Clause 13 and Clause 14
to 17 inclusive shall survive termination.
14.
WARRANTIES AND UNDERTAKINGS
14.1
Each of the parties warrants to the other on the date of this Agreement that:
14.1.1
it has the requisite power and authority to enter into and perform its
obligations under this Agreement;
14.1.2
this Agreement constitutes its legal, valid and binding obligations in
accordance with its terms; and
14.1.3
the execution and delivery of, and performance of its obligations under, this
Agreement shall not:
(a)
result in a breach of any provision of its constitutional documents;
(b)
result in a breach of, or constitute a default under, any instrument to
which it is a party or by which it is bound; or
(c)
result in a breach of any order, judgment or decree of any court or
governmental agency to which it is a party or by which it is bound.
15.
NOTICES
15.1
Any notice or other communication under or in connection with this Agreement (each,
a "Notice") shall be in writing in the English language and delivered by hand, e-mail,
pre-paid recorded delivery first class post (and air mail if overseas) to the party due to
receive the Notice to the contact details specified in Clause 15.2 or to another address,
person or email specified by that party by not less than seven days' written notice to
the other party received before the Notice was despatched.
198589-4-6996-v6.0
- 13-
70-40630055
15.2
The address referred to in Clause 15.1 is:
If to Bidco:
Attention:
Address:
Email:
Kendall Langford/Shane Law
54 Portland Place, London, W1B 1DY
[email protected]
[email protected]
If to Heineken:
Attention:
Address:
Email:
Ruth Hunter
Heineken UK Limited
3-4 Broadway Park
South Gyle Broadway
Edinburgh
EH12 9JZ
[email protected]
If to Punch:
Attention:
Address:
Email:
15.3
Ed Bashforth
Jubilee House, Second Avenue, Burton upon Trent
DE14 2WF
[email protected]
A Notice shall be effective upon receipt. Unless there is evidence that it was received
earlier, notice is deemed given:
15.3.1
if delivered by hand, when left at the address referred to in Clause 15.2:
15.3.2
if sent by post, except air mail, two business days after posting it;
15.3.3
if sent by air mail, six business days after posting it; and
15.3.4
if sent by email, when the email is sent, within one business day of sending the
email.
In this Clause "business day" means a day other than a Saturday or Sunday or a
public holiday in either the country where the Notice is posted or that to which it is
sent.
16.
GENERAL
16.1
A failure to exercise or delay in exercising a right or remedy provided by this
Agreement or by law does not impair or constitute a waiver of the right or remedy or
an impairment of or a waiver of other rights or remedies. No single or partial exercise
of a right or remedy provided by this Agreement or by law prevents further exercise
of the right or remedy or the exercise of another right or remedy.
16.2
The rights and remedies contained in this Agreement are cumulative and not exclusive
of rights or remedies provided by law.
198589-4-6996-v6.0
- 14-
70-40630055
16.3
Subject to Clause 16.2 and without prejudice to any other rights and remedies which
any party may have, each party acknowledges and agrees that damages may not be an
adequate remedy for any breach by any party of the provisions of this Agreement and
any party shall be entitled to seek the remedies of injunction, specific performance
and other equitable relief, for any threatened or actual breach of any such provision of
this Agreement by any party and no proof of special damages shall be necessary for
the proposed enforcement by any party of its rights under this Agreement.
16.4
If any provision in this Agreement shall be held to be illegal, invalid or unenforceable,
in whole or in part, the provision shall apply with whatever deletion or modification is
necessary so that the provision is legal, valid and enforceable and gives effect to the
commercial intention of the parties.
16.5
To the extent it is not possible to delete or modify the provision, in whole or in part,
under Clause 16.4, then such provision or part of it shall, to the extent that it is illegal,
invalid or unenforceable, be deemed not to form part of this Agreement and the
legality, validity and enforceability of the remainder of this Agreement shall, subject
to any deletion or modification made under Clause 16.4, not be affected.
16.6
Each party shall bear all costs incurred by it in connection with the preparation,
negotiation and entry into this Agreement.
16.7
This Agreement may be entered into in any number of counterparts, each of which is
an original and all of which taken together evidence the same agreement. Any party
may enter into this Agreement by executing any such counterpart and this Agreement
shall not take effect until each party has executed at least one counterpart.
16.8
No provision of this Agreement creates a partnership between any of the parties or
makes a party the agent of another party for any purpose. A party has no authority or
power to bind, to contract in the name of, or to create a liability for another party in
any way or for any purpose.
16.9
Each date, time or period referred to in this Agreement is of the essence. If the parties
agree in writing to vary a date, time or period, the varied date, time or period is of the
essence.
16.10 Each party shall, and shall use reasonable endeavours to procure that any necessary
members of its Group shall, from time to time, execute such documents and do such
acts and things as the requesting party may reasonably require for the purpose of
giving the full benefit of this Agreement to the requesting party.
16.11 Clause 11.1 is intended to confer benefits on and be enforceable by the third parties
referred to therein (the "Relevant Third Parties").
16.12 Subject to Clause 16.11, the parties do not intend that any term of this Agreement
should be enforceable, by virtue of the Contracts (Rights of Third Parties) Act 1999,
by any person who is not a party to this Agreement.
16.13 The parties may vary or amend this Agreement without the consent of any of the
Relevant Third Parties, except that any variation or amendment of Clause 11.1 shall
198589-4-6996-v6.0
- 15-
70-40630055
require the consent of each Relevant Third Party affected by the variation or
amendment.
16.14 No variation of this Agreement shall be effective unless in writing and signed by or
on behalf of each of Punch, Bidco and Heineken.
16.15 This Agreement, the Confidentiality Agreements, and, in the case of Bidco and
Heineken only, the Collaboration Agreement, contain the whole agreement between
the parties relating to the Acquisition at the date of this Agreement to the exclusion of
any terms implied by law which may be excluded by contract and supersedes any
previous written or oral agreement between the parties in relation to the matters dealt
with in this Agreement.
16.16 Each party acknowledges that, in agreeing to enter into this Agreement, it has not
relied on any representation, warranty, undertaking or other assurance (except those
set out in this Agreement) made by or on behalf of the other party at any time before
the signature of this Agreement and not expressly incorporated into it. Each of the
parties waives all rights and remedies which, but for this Clause, might otherwise be
available to it in respect of any such representation, warranty, undertaking or
assurance. Nothing in this Clause limits or excludes any liability for fraud or
fraudulent misrepresentation.
16.17 So far as is permitted by law and except in the case of fraud, each of Punch, Bidco
and Heineken agrees and acknowledges that its only right and remedy in relation to
any representation, warranty or undertaking made or given in connection with this
Agreement shall be for breach of the terms of this Agreement to the exclusion of all
other rights and remedies (including those in tort or arising under statute) in relation
to any such representation, warranty or undertaking.
16.18 Except as otherwise expressly provided in this Agreement, neither Punch, Bidco and
Heineken may assign, transfer or create any trust in respect of, or purport to assign,
transfer or create any trust in respect of, a right or obligation under this Agreement
without having first obtained the other party's written consent, which may not be
unreasonably withheld or delayed. Each party is entering into this Agreement for its
benefit and not for the benefit of another person.
17.
GOVERNING LAW AND JURISDICTION
17.1
This Agreement and all non-contractual or other obligations arising out of, or in
connection with, it is governed by, and construed in accordance with, English law.
17.2
Each of Punch, Bidco and Heineken irrevocably agrees that the courts of England
have exclusive jurisdiction to settle any dispute arising from or connected with this
Agreement (including a dispute regarding the existence, validity or termination of this
Agreement or relating to any non-contractual or other obligations arising out of, or in
connection with, this Agreement) or the consequences of its nullity. Each of Punch,
Bidco and Heineken irrevocably submits to the jurisdiction of such courts and waives
any objection to proceedings in any such court on the ground of venue or on the
ground that the proceedings have been brought in an inconvenient forum.
198589-4-6996-v6.0
- 16-
70-40630055
SCHEDULE 1
PRESS ANNOUNCEMENT
198589-4-6996-v6.0
- 17-
70-40630055
SCHEDULE 2
SHARE PLANS
Provisions of general application
1.
Bidco and Punch agree that the following arrangements will, where appropriate, apply
to the Punch Long-Term Incentive Plan 2008 ("LTIP"), the Punch Sharesave Scheme
2016 ("SAYE"), the Punch Share Bonus Plan ("SBP") and the Punch Share Incentive
Plan ("SIP") (together the "Share Plans") as detailed below.
2.
In the event of an Agreed Switch, references to the date on which the Scheme is
sanctioned by the court ("Court Sanction Date") will be read as if they referred to
the date on which the Offer becomes or is declared unconditional in all respects, and
references to the date on which the Scheme becomes Effective will be read as if they
referred to the date on which the Offer becomes or is declared unconditional in all
respects.
3.
Bidco and Punch agree that:
3.1
Bidco will acquire the Punch Shares acquired by participants in the Share Plans on the
same terms and for the same consideration as is available to other Punch Shareholders
under the Acquisition;
3.2
Punch may arrange the sale of a sufficient number of Punch Shares that are acquired
by participants on exercise or vesting of outstanding options and awards under the
Share Plans ("Awards") to enable income tax and employee’s social security
contributions which arise and are payable at or around the point of exercise or vesting
to be paid by Punch to the extent not deducted from the proceeds payable to the
participants under the Acquisition;
3.3
Bidco and Punch shall co-operate to write to participants in the Share Plans on, or as
soon as practicable after, the posting of the Scheme Document to inform them of the
impact of the Scheme on their Awards and the extent to which their Awards will vest
and/or become exercisable as a result of the Scheme. Such communications will be
agreed between Bidco and Punch before they are despatched; and
3.4
in the event that there is no Agreed Switch, the articles of association of Punch will be
amended, subject to the approval of Punch Shareholders, so that any Punch Shares
issued or transferred after the Scheme becomes Effective will be automatically
transferred to, or to the order of, Bidco in exchange for the provision by Bidco of the
same consideration payable per Punch Share under the Scheme (or such other
consideration as may be agreed between Bidco and Punch and disclosed in the
Scheme Document).
SAYE
4.
Bidco acknowledges that options granted under the SAYE which would not otherwise
have been exercisable prior to the Acquisition will (in consequence of the Acquisition
and in accordance with participants’ contractual rights under the SAYE) be
exercisable to the extent permitted under the SAYE rules on and from the Court
Sanction Date and until the date falling 20 days after the Scheme becoming Effective.
198589-4-6996-v6.0
- 18-
70-40630055
5.
Bidco agrees that it will make (or procure that Punch will make), on the normal
payroll date for the month following the date of exercise, a one-off cash payment to
the holders of options under the SAYE who exercise those options prior to the
twentieth day following the date on which the Acquisition becomes Effective of an
amount equal to the additional profit which the participants would have received
(ignoring any tax they would have incurred on exercise) had they been able to
exercise their options over the additional number of Punch Shares which would
otherwise have been available had the participants continued to save for a further 12
months of their savings contracts and had then been able to exercise their options and
accept the Scheme or Offer (as the case may be) in respect of that additional number
of Punch Shares. For the avoidance of doubt, any such cash payment would be
grossed up to reflect tax and social security contributions due on that payment (at the
individual’s marginal rate of tax). That gross payment would be subject to deductions
for income tax and employee’s social security contributions.
6.
Bidco acknowledges that Punch may decide to grant options under the SAYE prior to
the Court Sanction Date, if the Court Sanction Date has not occurred by 20 May 2017,
in accordance with its historic practice.
LTIP
7.
Bidco acknowledges that options granted under the LTIP which would not otherwise
have been exercisable prior to the Acquisition will (in consequence of the Acquisition
and in accordance with participants’ contractual rights under the LTIP) be exercisable
to the extent permitted under the LTIP rules in the two months from the Court
Sanction Date.
8.
The Punch remuneration committee ("Remuneration Committee") will
the extent to which options under the LTIP vest by applying the time
formula set out in the LTIP rules and taking into account the extent to
Remuneration Committee, in its absolute discretion, determines that
performance conditions have been achieved during a foreshortened period.
determine
pro-rating
which the
applicable
SBP
9.
Bidco and Punch acknowledge and agree that the Punch Shares held in the SBP trust
on behalf of the SBP participant in accordance with the rules of the SBP will
participate in the Scheme (on the same terms as for other Punch Shareholders).
SIP
10.
Bidco and Punch acknowledge and agree that Punch Shares held in the SIP trust on
behalf of the SIP participants ("SIP Shares") will participate in the Scheme (on the
same terms as for other Punch Shareholders) and the SIP Shares will remain in the
SIP trust under the rules of the SIP.
11.
Bidco acknowledges that no further Awards are intended to be made under the SIP
but that the SIP will remain in existence.
12.
Bidco and Punch also agree that the unallocated Punch Shares held in the SIP trust
will participate in the Scheme.
198589-4-6996-v6.0
- 19-
70-40630055
Employee Benefit Trust
13.
As at the date of this Agreement, the Punch Employee Benefit Trust ("Trust") holds
approximately £5,000 in cash (the "Cash Amount") and 1,012,118 Punch Shares.
Bidco and Punch agree that the trustee of the Trust will to the extent the trustee of
such Trust is permitted and without (i) requiring or requesting such trustee to satisfy
any Awards in any jurisdiction in which it is not permitted by any law or regulation to
do so or in which there may be any regulatory, reporting or taxation issues if it did so;
or (ii) prejudicing the interests of the Trust or any beneficiary or subjecting it to
additional reporting requirements, regulation or taxation, be requested to use the
Punch Shares that it holds to satisfy outstanding Awards as far as possible. To the
extent there are insufficient Punch Shares in the Trust to satisfy outstanding Awards,
Punch will request the trustee to use the Cash Amount to the extent necessary to
subscribe for new Punch Shares in order to satisfy outstanding Awards. Bidco
acknowledges that to the extent there are insufficient Punch Shares in the Trust to
satisfy outstanding Awards, Punch may issue new Punch Shares in order to satisfy
such Awards.
Acknowledgements
14.
Bidco’s acknowledgements in paragraphs 6 and 11 of this Schedule 2 do not impose
any contractual restrictions or obligations on Punch or its boards of directors.
198589-4-6996-v6.0
- 20-
70-40630055
Stephen Green
Signed by (print name). ^
for and on behalf of
PUNCH TAVERNS PLC
Signature
Signature page to Co-operation Agreement