“For the purposes of the present case, I think that the principles in the cases can be summarised as follows. (1) The power of the court to grant declaratory relief is discretionary. (2) There must, in general, be a real and present dispute between the parties before the court as to the existence or extent of a legal right between them. However, the claimant does not need to have a present cause of action against the defendant. (3) Each party must, in general, be affected by the court’s determination of the issues concerning the legal right in question. (4) The fact that the claimant is not a party to the relevant contract in respect of which a declaration is sought is not fatal to an application for a declaration, provided that it is directly affected by the issue; ... (5) The court will be prepared to give declaratory relief in respect of a “friendly action” or where there is an “academic question” if all parties so wish, even on “private law” issues. This may particularly be so if it is a “test case”, or it may affect a significant number of other cases, and it is in the public interest to decide the issue concerned. (6) However, the court must be satisfied that all sides of the argument will be fully and properly put. It must therefore ensure that all those affected are either before it or will have their arguments put before the court. (7) In all cases, assuming that the other tests are satisfied, the court must ask: is this the most effective way of resolving the issues raised? In answering that question it must consider the other options of resolving this issue.”
“2. On the proper construction of paragraph 3 of Schedule 1 of the SHA, what is the basis on which the Call Option Fair Market Value is to be determined? In particular: a. Is it to be determined on the basis of: i. Viva’s actual position prior to and absent any sale of JPM’s or WRL’s shares, without regard to the value of Viva to any particular prospective purchaser (whether that be JPM, WRL or a hypothetical third party); and/or ii. Viva’s actual financial performance and its projected financial performance based on the current Business Plan (as approved by JPM and WRL in accordance with clause 9.1 of the SHA)? b. Are the Valuation Experts required to disregard any obligations, restrictions, and/or limitations under Regulation K, Regulation Y or the BHC Act that are in fact applicable to WRL, JPM or Viva by reason of JPM having a shareholding in Viva?”
“the Call Option Fair Market Value is to be determined on the basis of Viva’s current approved Business Plan (including, for the purposes of paragraph 3.7(b)(vi) of Schedule 1 of the SHA, financial projections based on the current approved Business Plan insofar as they are not already contained in that Business Plan) and not by reference to any revised Business Plan or alternative financial projections that might be prepared and adopted by Viva unless any such revised Business Plan or alternative financial projections have been approved by both WRL and JPM in accordance with clause 9 of the SHA and/or pursuant to paragraph 3.7(b)(vi) of Schedule 1 of the SHA (as the case may be).”
“3. Are any fresh financial projections permitted and/or required for the purposes of valuing Viva in accordance with paragraph 3 of Schedule 1 to the SHA? If so: a. Is JPM precluded from refusing to approve any financial projections prepared by Viva for the purposes of paragraph 3.7(b)(vi) of Schedule 1 on account of the fact that any of the activities addressed in those projections are or may currently be limited or excluded by reason of obligations under or provisions of Regulation K, Regulation Y or the BHC Act that apply or may apply to WRL, JPM or Viva by reason of JPM having a shareholding in Viva? b. Is JPM subject to an obligation to act reasonably in determining whether to give or withhold its consent to any financial projections prepared by Viva for the purposes of paragraph 3.7(b)(vi) of Schedule 1? If so, what is the meaning and effect of that obligation? c. Are the Valuation Experts permitted or required to take into account any financial projections prepared by Viva for the purposes of paragraph 3.7(b)(vi) if they have not been approved by JPM?”
“3.6 Each Valuation Expert shall exercise its independent professional judgment in arriving at a determination of the Call Option Fair Market Value (which shall be expressed in Euro) of the Shares by: (a) assessing the historical and projected financial performance of the Group; (b) applying generally accepted methodologies for valuing the Group, including discounted cash flow analysis, comparisons with any similar companies whose shares are traded on any stock exchange and comparisons with any publicly disclosed sales of similar companies or significant pools of similar assets; and/or (c) such other valuation methods as the Valuation Expert shall consider to be appropriate in the circumstances. 3.7 Each Valuation Expert shall determine the Call Option Fair Market Value of the Shares on the following basis: (a) by valuing the Group on a going concern basis for an arm’s length sale between a willing buyer and a willing seller and on the assumption that the WRL Company Shares or JPM Company Shares (as applicable) are being sold in an open market; (b) by valuing the Shares by reference to: (i) the value of the Group as a whole (and therefore without regard to the size of any relevant holding such that no premium shall apply to any majority or controlling stake and no discount shall apply to any minority stake); (ii) the Group’s current and reasonably expected operational capabilities under the ownership of WRL and JPM; (iii) any investments which JPM is required to make in accordance with the terms of this Agreement, any other investments in the Company which JPM agrees to make and subsequently funds, and the financial impact of any such investment; (iv) any partnerships between the Company and third parties which, at the relevant time, either already exist or are reasonably expected to occur; (v) International Financial Reporting Standards, excluding any management adjustment items; (vi) financial projections to be prepared by the Company, approved by the Board and Shareholders, and provided to the Valuation Expert, which shall include but not be limited to: (A) the Group’s actual financial performance in the then-current calendar year on a quarterly basis and projected financial performance in the subsequent three full calendar years; (B) the year-to-date actual financial performance of the Group for the then-current period; (C) the Group’s financial performance in the prior three full calendar years; (D) detailed income statements, balance sheets and cash flow statements for the time periods listed in sub-paragraphs (A), (B) and (C), specifically including all financial detail required for the Valuation Expert to prepare an unlevered discounted cash flow analysis; (E) detailed revenue projections by country and by segment (Micro, Small, Medium, Large), including but not limited to: (I) projections of revenue by revenue type and by country, including at least the following revenue type categories: Acquiring; Issuing; Merchant lending / Cash advance; Instant settlement; POS devices; and Other; and (II) key assumptions supporting the projected revenue detail, including the assumed number of merchants, volume and headcount by country and by segment; (F) details of expenses including but not limited to: (I) headcount expenses and the key assumptions supporting headcount expenses, including headcount detail broken out by function and corporate title; (II) marketing expenses and the key assumptions used to derive marketing expenses; and (III) other expense items, including infrastructure and occupancy (including but not limited to detailed projections of depreciation, amortisation, interest expense, cash taxes, changes in net working capital, capital expenditures); (G) other financial deliverables to be prepared by the Company and provided to the Valuation Expert, together with the financial projections, including but not limited to: (I) a qualitative summary of the Group’s current capabilities, including but not limited to: (1) a detailed summary of the Group’s footprint by country and operational capabilities in each country, including the status of the connection to local clearing and payment systems and the acceptance of local and alternate methods of payments; and (2) a detailed summary of the status of the Group’s value added services and capabilities, including Cash Advance, Instant Settlement, Expense Management, Tap on Device; and (II) three years’ audited financial statements for each Group Member; (c) making no allowances for and disregarding any financial impact that may be expected to be realised or derived as a result of WRL or JPM exercising any Call Option (or otherwise acquiring the WRL Company Shares or JPM Company Shares (as applicable)) in accordance with the terms of this Agreement; (d) making no allowances for and disregarding any financial impact or any financial synergy that may be expected to be realised or derived as a result of JPM acquiring a majority stake in the Company; 3.8 The Call Option Fair Market Value of the Shares may also reflect any other factors suggested by a Shareholder or the Group which either Valuation Expert reasonably believes should be taken into account. 3.9 The Parties shall procure that both Valuation Experts shall have access to all financial and accounting records or other relevant documents of the Group (together with such information as either Shareholder may wish to provide to them) which either Valuation Expert may reasonably request for the purposes of its determination (such information to be provided on a confidential basis) provided that if any party provides any information to one of the Valuation Experts pursuant to this paragraph 3, it shall, at the same time: (a) notify the other Valuation Expert and each Shareholder and the Company in writing that it has provided such information to the Valuation Expert; and (b) provide the other Valuation Expert and each Shareholder and the Company with copies of such information, as provided to the Valuation Expert.”
“10.5 Prior to the Effective Date, the Company has adopted the Existing Business Plan and the Existing Annual Budget. The Existing Business Plan and the Existing Annual Budget shall continue to be applied by the Company following the Effective Date. 10.6 To the extent that either JPM or WRL believe that any changes may need to be made to the Existing Business Plan and/or the Existing Annual Budget with effect from the Effective Date, JPM and WRL shall discuss in good faith and agree such proposed changes before the Effective Date. Neither JPM nor WRL shall unreasonably condition or delay its consent to any changes. If JPM and WRL are unable to agree such proposed changes, then JPM and WRL shall continue discussing in good faith and, if the parties have been unable to agree by the date that is 10 Business Days before the Effective Date, each Shareholder and the Company shall procure that the Group shall continue to adopt and comply with the Existing Business Plan and/or the Existing Annual Budget after the Effective Date until such time as the proposed changes are agreed. JPM and WRL further acknowledge and agree that: (a) the Strategy Framework shall be amended following the date of this Agreement and accordingly JPM and WRL undertake to discuss in good faith and agree such proposed changes as soon as reasonably practicable (with such changes taking effect from the date on which they are agreed provided that such date shall not be earlier than the Effective Date); and (b) to the extent there is any conflict between the provisions of the Strategy Framework and the terms of this Agreement (disregarding the Strategy Framework), and/or the Strategy Framework is inconsistent with or incremental to the terms of this Agreement (disregarding the Strategy Framework), the relevant terms of this Agreement shall at all times prevail, supersede and override the Strategy Framework. 10.7 No later than: (a) 90 Business Days before the expiry of the first Financial Year following the Effective Date, and, in the case of any subsequent Financial Years, 90 Business Days before the expiry of that subsequent Financial Year, a draft update to the Existing Business Plan (in substantially the same form as the Existing Business Plan) relating to the following Financial Year and the two subsequent Financial Years (a Subsequent Business Plan) and a draft annual budget for the Group (in substantially the same form as the Existing Annual Budget) relating to the following Financial Year (a Subsequent Annual Budget) shall be prepared by the Company and circulated to the Board and the Shareholders; and (b) 15 Business Days after the circulation of such Subsequent Business Plan and Subsequent Annual Budget (or on such other date prior to the end of the then current Financial Year as all of the Directors may agree), the Board shall meet to consider and, if thought fit, approve the Subsequent Business Plan and Subsequent Annual Budget. 10.8 The Board shall review: (a) the Business Plan at least once every three months; and (b) the Annual Budget at least once every three months against the actual incurred costs and expenses for the previous quarter as shown in the management accounts of the Group. 10.9 The Business Plan and the Annual Budget may be amended at any time if Requisite Approvals have been obtained in respect of such amendment in accordance with Clause 9 (but, for the avoidance of doubt, may not otherwise be amended).”
“Annual Budget means the Existing Annual Budget or any Subsequent Annual Budget (as the case may be); Business Plan means the Existing Business Plan or any Subsequent Business Plan (as the case may be); Existing Annual Budget means the annual budget for the Group for financial year 2022 in the Agreed Form; Existing Business Plan means the business plan for the Group being document 2261 of the Data Room and the Strategy Framework, provided that references to the Business Plan in rows 6, 8, 12, 16 and 20 of Schedule 5 shall not include the Strategy Framework until such time as any changes to the Strategy Framework are agreed between JPM and WRL in accordance with Clause 10.6(a); Subsequent Annual Budget has the meaning given in Clause 10.7(a); Subsequent Business Plan has the meaning given in Clause 10.7(a).”
“29. The relevant general principles are authoritatively explained by Lord Hodge in his judgment in Wood v Capita Insurance Services Ltd[2017] UKSC 24 ,[2017] AC 1173 at paras 10 to 15.”
“10. The court’s task is to ascertain the objective meaning of the language which the parties have chosen to express their agreement. It has long been accepted that this is not a literalist exercise focused solely on a parsing of the wording of the particular clause but that the court must consider the contract as a whole and, depending on the nature, formality and quality of drafting of the contract, give more or less weight to elements of the wider context in reaching its view as to that objective meaning. In Prenn v Simmonds[1971] 1 WLR 1381 (1383H-1385D) and in Reardon Smith Line Ltd v Yngvar Hansen-Tangen[1976] 1 WLR 989 (997) , Lord Wilberforce affirmed the potential relevance to the task of interpreting the parties’ contract of the factual background known to the parties at or before the date of the contract, excluding evidence of the prior negotiations. When in his celebrated judgment in Investors Compensation Scheme Ltd v West Bromwich Building Society[1998] 1 WLR 896 Lord Hoffmann (pp 912-913) reformulated the principles of contractual interpretation, some saw his second principle, which allowed consideration of the whole relevant factual background available to the parties at the time of the contract, as signalling a break with the past. But Lord Bingham in an extra-judicial writing, A new thing under the sun? The interpretation of contracts and the ICS decision Edin LR Vol 12, 374-390, persuasively demonstrated that the idea of the court putting itself in the shoes of the contracting parties had a long pedigree. 11. Lord Clarke elegantly summarised the approach to construction in Rainy Sky at para 21f. In Arnold all of the judgments confirmed the approach in Rainy Sky (Lord Neuberger paras 13-14; Lord Hodge para 76; and Lord Carnwath para 108). Interpretation is, as Lord Clarke stated in Rainy Sky (para 21), a unitary exercise; where there are rival meanings, the court can give weight to the implications of rival constructions by reaching a view as to which construction is more consistent with business common sense. But, in striking a balance between the indications given by the language and the implications of the competing constructions the court must consider the quality of drafting of the clause ( Rainy Sky para 26, citing Mance LJ in Gan Insurance Co Ltd v Tai Ping Insurance Co Ltd (No 2) [2001] 2 All ER (Comm) 299 paras 13 and 16); and it must also be alive to the possibility that one side may have agreed to something which with hindsight did not serve his interest: Arnold (paras 20 and 77). Similarly, the court must not lose sight of the possibility that a provision may be a negotiated compromise or that the negotiators were not able to agree more precise terms. 12. This unitary exercise involves an iterative process by which each suggested interpretation is checked against the provisions of the contract and its commercial consequences are investigated: Arnold para 77 citing In re Sigma Finance Corpn[2010] 1 All ER 571 , para 10 per Lord Mance. To my mind once one has read the language in dispute and the relevant parts of the contract that provide its context, it does not matter whether the more detailed analysis commences with the factual background and the implications of rival constructions or a close examination of the relevant language in the contract, so long as the court balances the indications given by each. 13. Textualism and contextualism are not conflicting paradigms in a battle for exclusive occupation of the field of contractual interpretation. Rather, the lawyer and the judge, when interpreting any contract, can use them as tools to ascertain the objective meaning of the language which the parties have chosen to express their agreement. The extent to which each tool will assist the court in its task will vary according to the circumstances of the particular agreement or agreements. Some agreements may be successfully interpreted principally by textual analysis, for example because of their sophistication and complexity and because they have been negotiated and prepared with the assistance of skilled professionals. The correct interpretation of other contracts may be achieved by a greater emphasis on the factual matrix, for example because of their informality, brevity or the absence of skilled professional assistance. But negotiators of complex formal contracts may often not achieve a logical and coherent text because of, for example, the conflicting aims of the parties, failures of communication, differing drafting practices, or deadlines which require the parties to compromise in order to reach agreement. There may often therefore be provisions in a detailed professionally drawn contract which lack clarity and the lawyer or judge in interpreting such provisions may be particularly helped by considering the factual matrix and the purpose of similar provisions in contracts of the same type. The iterative process, of which Lord Mance spoke in Sigma Finance Corpn (above), assists the lawyer or judge to ascertain the objective meaning of disputed provisions.”
“Some agreements may be successfully interpreted principally by textual analysis, for example because of their sophistication and complexity and because they have been negotiated and prepared with the assistance of skilled professionals.”
“where there are rival meanings, the court can give weight to the implications of rival constructions by reaching a view as to which construction is more consistent with business common sense.”
“… there is nothing in the SHA that requires the preparation by Viva of financial projections on this hypothetical basis, just for this limited purpose and independent of the Business Plan, nor any requirement that JPM (or WRL) must approve any such projections prepared by Viva. Furthermore, any such requirement would create a recipe for disputes as to the grounds on which JPM could (reasonably) withhold its consent to hypothetical projections prepared by Viva that include revenues for (untried, untested and unexplored) activities that Viva cannot at present lawfully carry out.”
“…if fresh projections are required, are [JPM] precluded from approving them because they include activities which are covered by Reg K? We say [JPM are] not so precluded.”
“To be clear, JPM does not suggest that it would be entitled to withhold consent to any amendments to the business plan for reasons that are irrational, arbitrary or capricious or in bad faith, provided, of course, that the same obligations apply to WRL, they would be under an equivalent restriction in their ability to refuse to approve business plans. JPM also says that when considering whether to approve amendments it would be entitled to have regard to its own commercial interests.”
“Viva’s activities and investments are constrained by the requirements of Regulation K on the basis that Viva is (for the purposes of Regulation K) a subsidiary of an Edge Corporation (i.e. JPM), and such requirements include but are not limited to: (a) The US Activity Restrictions under Section 211.6 of Regulation K (as set out in paragraph 26.1 above); and (b) The Non-US Activity Restrictions under Section 211.8 of Regulation K (as set out in paragraph 26.2 above).”
“The conclusion I reach having considered these cases is that, as a matter of principle, it is wrong for an English court to make a declaration solely for the purpose of influencing a decision by a foreign court on an issue governed by the law of the foreign court. It is not the function of the courts of England and Wales to provide advisory opinions to foreign courts seised of issues which fall to be determined in accordance with their own laws. The English courts have no special competence to determine such issues. If anything, it is likely that they have less competence than the local courts. It makes no difference that the English court and the foreign court are applying the same basic law. Furthermore, comity requires restraint on the part of the English courts, not (to adopt Floyd LJ’s graphic phrase) jurisdictional imperialism. Otherwise the English courts would be enabling forum shopping.”
“…Where the foreign law is in the form of a provision in a code, statute or other written source, the task of the court remains one of determining how the foreign courts would interpret and apply it, based on the evidence of the expert witnesses. Generally speaking the court’s task is not to address how it would itself interpret and apply the provision; the wording of the provision is to be considered only as part of the evidence and as a help to decide between conflicting expert testimony.”
“There is a qualification to this general principle, recognised in Macmillan Inc v Bishopsgate Investment Trust (No 4), and applicable to a first instance court as well as on appeal, where the nature of the foreign law issue means that the English Court’s expertise approaches that of any foreign law expert, for example where the foreign law is written in the English language and involves concepts similar to English law and familiar to English judges.”
“must be satisfied that all sides of the argument will be fully and properly put. It must therefore ensure that all those affected are either before it or will have their arguments put before the court.”
“Q. … Your opinion on these issues and in particular on the issue of control is founded upon your experience of your time in the law specialising in these areas as a matter of abstract or hypothetical as opposed to being based on anything solid, by which I mean a particular case or cases or series of cases. A. … I have advised a number of clients on questions of control and how to assess control, and I have at my time at the Federal Reserve been involved in specific assessments of control under the BHCA control framework, so again I do think that there is, you know, a solid grounding in terms of how I approach this issue.”
“(w) Subsidiary means an organization that has more than 50 percent of its voting shares held directly or indirectly, or that otherwise is controlled or capable of being controlled, by the investor or an affiliate of the investor under any authority. Among other circumstances, an investor is considered to control an organization if: (1) The investor or an affiliate is a general partner of the organization; or (2) The investor and its affiliates directly or indirectly own or control more than 50 percent of the equity of the organization.”
“A. …To my mind “considered” is a key word here because the Fed would consider the circumstances. Q. It doesn’t mean “considered” in that sense, Professor Awrey. It means “is deemed”, “is regarded”
“WHEREAS, the Board of Governors of the Federal Reserve System (the “Board of Governors”) is the appropriate federal banking agency supervisor of JPMC and JPMSAP”
“So it’s clear from that third recital, isn’t it, that the Fed regards itself as having supervisory jurisdiction over JPMSAP, the subsidiary of an Edge corporation?”
“1. What is the test for a “subsidiary”, a “joint venture”, or a “portfolio investment” for the purposes of Regulation K? 2. Is Viva a “subsidiary” of JPMIFL for the purposes of Regulation K?”
“It is clear that on any view, the equity limb of the control test was satisfied. This follows from the express terms of the Regulation K definitions of “equity” and “subsidiary”
“(h) Equity means an ownership interest in an organization, whether through: (1) Voting or nonvoting shares; (2) General or limited partnership interests; (3) Any other form of interest conferring ownership rights, including warrants, debt, or any other interests that are convertible into shares or other ownership rights in the organization; or (4) Loans that provide rights to participate in the profits of an organization, unless the investor receives a determination that such loans should not be considered equity in the circumstances of the particular investment.”
“6. … In paragraphs 32 and 35-46 of my Expert Report, I describe the standard under Regulation K for determining whether Viva is a “subsidiary” of JPMIFL and set out the basis of my view that Viva is a subsidiary of JPMIFL because (i) JPMIFL holds more than 50% of Viva’s voting shares, appropriately taking into account JPMIFL’ s contractual right to purchase all remaining voting shares of Viva pursuant to the terms of the shareholders’ agreement between JPMIFL and WRL (the JPMIFL Call Option), (ii) JPMIFL owns or controls more than 50% of the equity of Viva, again appropriately taking into account the additional equity of Viva that JPMIFL may acquire under the JPMIFL Call Option, and (iii) Viva is otherwise “controlled or capable of being controlled” by JPMIFL as result of JPMIFL’s current outright ownership of Viva’s shares, the JPMIFL Call Option, and other indicia of control. For the avoidance of any doubt, I clarify here that it is my view that, under the text of Regulation K, these are separate and distinct lines of analysis, and that if JPMIFL’s relationship with Viva meets any one of these prongs of Regulation K’s definition of “subsidiary,” it would be a “subsidiary” of JPMIFL regardless of the outcome under the other lines of analysis. 7. … In terms of the issues that are relevant to each line of analysis, for the avoidance of any doubt, I clarify here that, as explained in paragraphs 36-40 of my Expert Report, the first and second line of analysis on this point (that is, assessing whether (i) JPMIFL holds, directly or indirectly, more than 50% of Viva’s voting shares and/or (ii) JPMIFL owns or controls more than 50% of the equity of Viva) depend only on the question of whether the additional shares of Viva that JPMIFL may acquire under the JPMIFL Call Option should be taken into account when calculating the relevant thresholds, and do not require consideration of other potential indicia of control of Viva by JPMIFL.”
“…there are two routes to answer the question as to whether an entity is a subsidiary in that the use of the disjunctive “or” followed by the “otherwise” in this definition creates two separate bases upon which an organisation may be deemed to be a subsidiary of another…”
“…So certainly the first two core prongs of the “subsidiary” definition are first , as you’ve referenced what I will probably refer to today consistently as the voting shares test , and the second is the otherwise is controlled or capable of being controlled aspect of the test .The Federal Reserve has also in the subsidiary definition provided two specific, although not exclusive circumstances, where it would view a party as being otherwise controlled or capable of being controlled. One is based on owning or controlling 50% or more of the equity of a company and the other is based on being the general partner of an organisation, and so at least for my own analytical perspective when I view this definition I distil it down to four paths that one might take to being a subsidiary. The first is holding more than 50% of the voting shares. The second is being the general partner of an organisation. The third is owning or controlling more than 50% of the equity of an organisation, and then the fourth, sort of as a residual matter, is otherwise being controlled or capable of being controlled, and so indeed, for that reason, that’s the approach that I’ve taken in my own analysis, you have those four particular paths, the general partner path is not relevant because Viva is not a partnership, but the other three are.”
“Q. …if the Fed had wanted the test to be read across as it does under HOLA and Regulation LL, it could have said, either here or somewhere else, “and that test now applies under Reg K”, couldn’t it? A. It could have, but it need not have. Q. Yes, but the trouble is, if it need not have and it hasn’t, it leaves us in a very uncertain position, doesn’t it, Mr Newell? A. Uncertain if one is reading the plain text of Regulation K, I would say as a practitioner in this space I don’t feel that it is particularly uncertain as to how the Fed would look to and be guided by again the substantive concepts of control under the BHCA when assessing questions of control under Regulation K..”
“If Viva is a “subsidiary” for the purpose of Regulation K: a. Is Viva required by US law and regulation to comply with Regulation K? b. Do Sections 211.6, 211.8 and 211.10 apply directly or at all to Viva?”
“If (which is not admitted), Viva is a “subsidiary” of JPM for the purposes of Regulation K, then it is admitted (insofar as it is alleged): (a) that the US Activity Restrictions as set out under section 211.6 of Regulation K and the Non-US Activity Restrictions as set out under section 211.8 of Regulation K would apply to JPM’s activities, directly or indirectly; (b) for the purposes of Regulation K, JPM indirectly engages in Viva’s activities; (c) by reason of paragraph 3 of Part B to Schedule 15 of the SHA, Viva would owe a contractual obligation to JPM not to engage in activities that JPM has notified Viva are not permissible for JPM pursuant to the US Activity Restrictions and Non-US Activity Restrictions but this obligation would be owed only insofar as those activities were, as a matter of US law, not so permissible. Any references in this Defence to Regulation K “applying” to Viva is a reference to that putative contractual obligation owed to JPM.”
“4. What if any restrictions and exceptions are applicable to the US activities of joint ventures in which Edge corporations or their subsidiaries invest? 5. What if any restrictions and exceptions are applicable to the US and/or non US activities of portfolio investments of Edge corporations or subsidiaries of Edge corporations?”
“Q. …you accept, don’t you, that under 211.8(e)(1)(ii)…unless the Fed authorises retention, an investor will be required to divest its investment in a joint venture if the joint venture engages directly or indirectly in business in the United States that is not permitted to an Edge corporation? A. I agree, yes. Q. So by that route the restrictions in section 211.6 are brought to bear upon the joint venture; correct? A. Possibly, unless, if we go to the chapeau to subsection(e) there, unless the board authorises retention.”
“Where an investment is made in a subsidiary under Section 211.8(c)(1) of Regulation K, there is a requirement that the existing activities of a going concern (that are not otherwise permissible) account for no more than 5% of either the consolidated assets or consolidated revenues of the acquired organisation. How is this requirement assessed? More particularly, is it assessed by reference to: a. the top-tier subsidiary and also at the level of each individual direct and indirect subsidiary of that top-tier subsidiary; or b. only the top-tier acquired subsidiary on a consolidated basis?”
“…when one steps back and look at the structure of 211.8(c), and it comes from the basic premise that in the context of acquiring a group entity, so let’s say a subsidiary that has beneath it various indirect subsidiaries that could be joint ventures, that could be portfolio investments, these eligible investment standards apply to both direct and indirect investments, and so in context of the acquisition of a group, there are in fact a series of separate investments in the top tier entity , in the indirect subsidiary, in any joint venture portfolio investment that might sit beneath it, and basic sort of −− straightforward facial application of 211.8(c) requires that you apply the relevant eligible investment standards for the relevant type of entity to each entity that one is investing in in the context of a group investment, and so I certainly don’t disagree at all that with respect to a top tier subsidiary it needs to meet the test enumerated in (c)(1) which refers to, you know, a reference to 5% of its consolidated assets and revenues. The point I’ve tried to make in my initial report and supplemental report is if there is as well an indirect subsidiary, you need to apply again the eligible investment standard of 211.8(c)(1) to that indirect subsidiary as well and see if it satisfies the test. That test again is then measured on the basis of the consolidated assets and consolidated revenues of the indirect subsidiary, and to the extent that there is as well in the corporate group structure indirect joint venture investments or indirect portfolio investments, one also needs to confirm that each of those meet the relevant eligible investment standard that’s set out in 211.8(c) for that particular type of entity.”
“As regards section 211.8(e) (“Divestiture”): a. Does section 211.8(e)(1)(ii) provide “exceptions” for engaging in activities in the United States beyond what is permitted under section 211.6(a)? If so, are these the only exceptions and to which entities are they relevant? b. In what circumstances may authorisation be sought and given by the FRB for the retention of an investment in a company under Section 211.8(e) where a divestiture would otherwise be required under that Section?”
“Section 211.8(e) requires that an Edge corporation dispose of an investment promptly if, inter alia, the organization in which the Edge corporation has invested “[e]ngages directly or indirectly in other business in the United States that is not permitted to an Edge corporation in the United States. There are only two exceptions to the divestiture requirement as concerns such investments, the effect of which is to permit the retention of investments that engage in activities beyond what is permitted under section 211.6(a) in certain limited, specific circumstances. First, section 211.8(e)(1)(ii)(A) permits an Edge corporation to “[r]etain portfolio investments in companies that derive no more than 10 percent of their total revenue from activities in the United States…”
“…Because this exception only applies to investments in an organization of which an Edge corporation holds, either directly or through its direct or indirect subsidiaries, fewer than 5% of the shares, it is principally relevant only to portfolio companies, as subsidiaries and joint ventures are generally defined by reference to shareholding levels that are significantly higher than this 5% threshold (i.e., 50% and 20%, respectively). It is theoretically possible that an Edge corporation could hold fewer than 5% of the shares of an organization but otherwise control or be capable of controlling the organization by other means, such that it meets the definition of “subsidiary.”
“Section 211.8(e)(1)(ii) does not provide any “exceptions” for engaging in activities in the United States beyond what is permitted under section 211.6(a). Section 211.8(e)(1)(ii) identifies one of the circumstances in which an Investor may be required to divest its investment in an organization. In contrast, section 211.6 identifies the range of activities in which an Edge or agreement corporation may, directly or indirectly, engage in the United States. While the circumstance requiring potential divestment is framed with reference to whether an organization engages directly or indirectly in other business in the United States that is not permitted to an Edge corporation, sections 211.8(e)(1)(ii) and 211.6(a) are otherwise completely separate and wholly independent provisions: one dealing with an Investor’s potential divestment, the other with the permissible activities of Edge or agreement corporations.”
“Is JPM contractually estopped from: a. contending that Schedule 1 of the SHA requires that Viva be valued on the basis of financial projections that do not take account of activities that Viva might carry out inside of the US and activities that Viva might undertake (or investments it might make) outside of the US if Viva was not a subsidiary of JPM for the purposes of Regulation K; b. contending that fresh financial projections are not required for the purposes of valuing Viva under paragraph 3 of Schedule 1 so as to take account of such potential activities or potential investments, or alternatively such investments or activities as Viva may lawfully undertake in the US or Europe under its current shareholding structure; or c. seeking declarations it requests as to the basis on which the Call Option Market Value is to be determined?”
“47. It is now firmly established at this level in the judicial hierarchy that parties can bind themselves by contract to accept a particular state of affairs even if they know that state of affairs to be untrue. This is a particular form of estoppel which has been given the label “contractual estoppel”
“If A and B enter into a contract then, unless there is some principle of law or statute to the contrary, they are entitled to agree what they like. Unless Lowe v Lombank is authority to the contrary, there is no legal principle that states that parties cannot agree to assume that a certain state of affairs is the case at the time the contract is concluded or has been so in the past, even if that is not the case, so that the contract is made upon the basis that the present or past facts are as stated and agreed by the parties.” 94. Like Moore-Bick LJ in Peekay at [57], I can see no reason in principle why it should not be possible for parties to an agreement to give up any right to assert that they were induced to enter into it by misrepresentation, provided that they make their intention clear. But I question whether a clause, such as clause 5.8 of the lease in this case, which says simply that A “acknowledges” that it has not entered into the contract in reliance on any representation made by B, clearly expresses such an intention. It seems to me that such wording is more naturally understood as stating a fact which may or may not be true. That, indeed, is how a similarly worded clause was understood by the Court of Appeal in Watford Electronics Ltd v Sanderson CFL Ltd[2001] EWCA Civ 317 , [2001] 1 All ER (Comm) 696. If what the parties wish to agree is that A will not assert in any future dispute that it relied on a representation made by B even if A did in fact rely on such a representation, then it seems to me that this is what the clause ought to say. However, a different view was taken by the Court of Appeal in Springwell at [170]. No doubt for that reason the tenant did not dispute in the present case that clause 5.8 of the lease has that meaning, and I shall therefore assume that it does. 95. It is important, nonetheless, not to be misled by the use of the word ‘basis’. To say that a clause giving rise to a contractual estoppel establishes the ‘basis’ of the contract could be taken to suggest that the clause is of fundamental or foundational importance to the parties’ bargain. That in turn might encourage the thought that a ‘basis’ clause is entitled to particular respect in order not to interfere with freedom of contract and is different in nature from a common or garden exclusion clause. Such a line of thought, however, is fallacious, as it turns on an ambiguity in the word ‘basis’. There is nothing in the terms of the lease in this case, for example, to suggest that clause 5.8 is intended to have a special foundational or fundamental importance as a term of the parties’ contract. The same is true of other clauses which have been considered in the case law to give rise to a contractual estoppel. Those clauses have no more been agreed to form the basis of the contract in this sense than any other term of the contract. The statements in Peekay and subsequent cases that the parties have agreed that a particular state of affairs is to form the ‘basis’ on which they are contracting use the word in a different sense to mean an assumption that is agreed for the purpose of the transaction. Such statements are just another way of saying that the parties have agreed to assume that the relevant state of affairs is true, whether or not it is in fact true. It would be conducive to clarity if the use of the expression ‘basis clause’ were to be avoided.”
“11. WRL agrees that during the period from the Effective Date to the earlier of (i) the completion of the transfer of the WRL Company Shares to JPM following exercise of a JPM Call Option in accordance with Schedule 1 (the WRL Exit Date) and (ii) the date on which the Option Exercise Period starting on the Fourth Option Exercise Date expires (such period being the WRL Restricted Period), without the prior written consent of JPM, it shall not (whether alone or jointly with another and whether directly or indirectly) be interested economically in any Competing Business in: (a) Europe (including, for the avoidance of doubt, the United Kingdom); (b) the United States of America (the Parties acknowledging that: (A) the Group intends to offer and provide certain products and services in the United States of America following the Effective Date; and (B) the Group has prior to the Effective Date already made plans to prepare to do so); … “20.5 Without prejudice to Clause 20.4, each of the parties acknowledges and agrees that: (a) the Shareholders have a common commercial objective and interest, being the successful promotion and development of the Group and the Business, and that this is dependent on: (i) mutual trust, confidence and co-operation between the Shareholders and between the Directors that they appoint; and (ii) the Group and the Business being operated and managed in accordance with this Agreement, the Business Plan and Annual Budget; (b) a Material Default is likely to substantially affect and damage the commercial objectives and interests of the Shareholders; (c) Clauses 20.3(a) and 20.3(b) are common provisions in agreements of this nature and are reasonable and proportionate in order to secure performance of this Agreement by the Shareholders, deter any breach of this Agreement by the Shareholders; and (d) each of the Shareholders is a sophisticated commercial company which has engaged professional advisers to advise it in relation to this Agreement. 39.1 So far as it is legally able, each Shareholder, acknowledging its commitment to the success of the Business as a whole, shall procure that: (a) its rights as a holder of Shareholder Instruments; and (b) the rights of the Directors nominated by it (subject to Law and the Directors’ duties and obligations thereunder), are exercised in a manner, and that it and they shall act, so as to ensure that: (i) the provisions of this Agreement are completely and punctually fulfilled, observed and performed by it; and (ii) the Directors nominated by it do not act inconsistently with this Agreement.”
“the Shareholders have a common commercial objective and interest, being the successful promotion and development of the Group and the Business”
“… the Group and the Business being operated and managed in accordance with this Agreement, the Business Plan”
“What, if any, conditions precedent apply to the appointment of a Third Valuation Expert under paragraph 3.10 of Schedule 1 of the SHA?’ In particular, is it a condition precedent to the appointment of a Third Valuation Expert by the ICC that: a. The Valuation Experts have produced determinations of the Call Option Fair Market Value that are more than 15% apart? b. The determinations of both of the Valuation Experts are not subject to any manifest error and/or any unresolved allegation of manifest error?”
“3 10 If the Call Option Fair Market Value of the Shares as determined by one Valuation Expert is: (a) within 15% of the value determined by the other Valuation Expert (with the lower of the two valuations provided by the Valuation Experts being the base for these purposes), then the Call Option Fair Market Value of the Shares shall be the average of the value determined by both Valuation Experts; and (b) more than 15% apart from the value determined by the other Valuation Expert (with the lower of the two valuations provided by the Valuation Experts being the base for these purposes), then the parties shall appoint: (i) any one of the firms of accountants listed in paragraph 3.2 as the Shareholders may agree (provided that the Shareholders shall not appoint any firm already appointed by any Shareholder for the purposes of and in accordance with this Schedule 1); or (ii) if agreement is not reached pursuant to subparagraph (i) within 10 Business Days of the Effective Date, such internationally recognised firm of accountants, independent of the Shareholders, as the International Centre for Expertise of the International Chamber of Commerce shall appoint at the request of either Shareholder, (in either case, the Third Valuation Expert) and the Third Valuation Expert shall be requested to determine the Call Option Fair Market Value of the Shares within 15 days of its appointment and follow the process as set out in this paragraph 3. 3 11 If paragraph 3.10(b) applies, then the Call Option Fair Market Value of the Shares shall be the average of the value determined by the Third Valuation Expert and the value of such Valuation Expert as is nearest the value of the Third Valuation Expert.”
“If the Call Option Fair Market Value of the Shares as determined by one Valuation Expert is: … (b) more than 15% apart from the value determined by the other Valuation Expert …, then the parties shall appoint: (i) any one of the firms of accountants listed in paragraph 3.2 as the Shareholders may agree…; or (ii) if agreement is not reached pursuant to subparagraph (i) within 10 Business Days of the Effective Date, such internationally recognised firm of accountants… as the International Centre for Expertise of the International Chamber of Commerce shall appoint …, (in either case, the Third Valuation Expert) and the Third Valuation Expert shall be requested to determine the Call Option Fair Market Value of the Shares within 15 days of its appointment…”
“…some agreements may be successfully interpreted principally by textual analysis, for example because of their sophistication and complexity and because they have been negotiated and prepared with the assistance of skilled professionals. The correct interpretation of other contracts may be achieved by a greater emphasis on the factual matrix, for example because of their informality, brevity or the absence of skilled professional assistance. But negotiators of complex formal contracts may often not achieve a logical and coherent text because of, for example, the conflicting aims of the parties, failures of communication, differing drafting practices, or deadlines which require the parties to compromise in order to reach agreement.”
“where there are rival meanings, the court can give weight to the implications of rival constructions by reaching a view as to which construction is more consistent with business common sense.”
“Each Shareholder shall appoint one expert with effect from Closing who shall be one of: (a) Duff and Phelps; (b) Houlihan Lokey; (c) Deloitte; (d) KPMG; (e) Ernst & Young; or (f) Grant Thornton, or, if any Shareholder is unable to appoint any of the firms listed above for any reason, such internationally recognised firm of accountants, independent of the Shareholders, as the International Centre for Expertise of the International Chamber of Commerce shall appoint at the request of the relevant Shareholder (in each case, the Valuation Expert and together the Valuation Experts), provided that in any case no Shareholder shall appoint the same Valuation Expert. Each Shareholder shall maintain the appointment of any Valuation Expert appointed by it until as the earlier of: (i) that Valuation Expert informing that Shareholder that it is unable to continue to act for or on behalf of that Shareholder; and (ii) any Call Option being exercised and any Option Completion subsequently occurring in accordance with the terms of this Agreement. If any Valuation Expert informs a Shareholder after being so appointed that it is unable to continue to act for or on behalf of that Shareholder, that Shareholder shall appoint another Valuation Expert in accordance with the terms of this paragraph 3.2.”
“Is it a condition precedent to the appointment of a Third Valuation Expert by the ICC that the determinations of both of the Valuation Experts are not subject to any manifest error and/or any unresolved allegation of manifest error?”
“Each Valuation Expert shall act as an expert and not as an arbitrator. Neither Valuation Expert’s decision shall be subject to appeal to any court or tribunal on any basis whatsoever, and, save in the case of fraud or manifest error, its decision shall be final and binding on the Shareholders and the Parties who must proceed with the Valuation Experts’ decisions.”
“save in the case of fraud or manifest error, its decision shall be final and binding on the Shareholders and the Parties who must proceed with the Valuation Experts’ decisions.”
“Does the ICC have authority under paragraph 3.10 of Schedule 1 of the SHA now to appoint a Third Valuation Expert?”
“If the ICC were now to appoint a Third Valuation Expert, would such appointment be valid and effective for all future Option Exercise Periods?”
“Are the parties under an obligation under Schedule 1 to the SHA (on its proper construction and / or pursuant to an implied term): a. to refrain, without justification, from taking any steps to obstruct, disrupt, hinder or delay the appointment of the Third Valuation Expert or its determination of Call Option Fair Market Value; and b. to procure that the Third Valuation Expert has access to all financial and accounting records or other relevant documents of Viva (and of the Viva group) which the Third Valuation Expert may reasonably request so as to enable it to determine its valuation of Viva within the 15 day period set out in paragraph 3.10(b)?”
“So far as it is legally able, each Shareholder, acknowledging its commitment to the success of the Business as a whole, shall procure that: “(a) its rights as a holder of Shareholder Instruments... are exercised in a manner, and that it … shall act so as to ensure that (i) the provisions of this Agreement are completely and punctual fulfilled, observed and performed by it ...”
“18 In the Privy Council case BP Refinery (Westernport) Pty Ltd v Shire of Hastings(1977) 180 CLR 266 , 283, Lord Simon of Glaisdale (speaking for the majority, which included Viscount Dilhorne and Lord Keith of Kinkel) said that: “for a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that “it goes without saying”; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.”
“Is WRL in breach of the SHA by failing to appoint or agree to the appointment of the Third Valuation Expert and/or by objecting to the appointment of the Third Valuation Expert by the ICC?”
“In the event that the Third Valuation Expert does not determine the Call Option Fair Market Value within 15 days as required under paragraph 3.10(b), is the JPM Option Exercise Period extended by the number of days in excess of that 15 days that the Third Valuation Expert takes to determine the Call Option Fair Market Value in accordance with paragraph 3.10(b) of Schedule 1 to the SHA?”
“a term should not be implied into a detailed commercial contract merely because it appears fair or merely because one considers that the parties would have agreed it if it had been suggested to them.”
“…necessity for business efficacy involves a value judgment. It is rightly common ground on this appeal that the test is not one of “absolute necessity”, not least because the necessity is judged by reference to business efficacy. It may well be that a more helpful way of putting Lord Simon’s second requirement is… a term can only be implied if, without the term, the contract would lack commercial or practical coherence.”
“In Philips Electronique Grand Public SA v British Sky Broadcasting Ltd [1995] EMLR 472, 481, Bingham MR set out Lord Simon’s formulation, and described it as a summary which “distil[led] the essence of much learning on implied terms” but whose “simplicity could be almost misleading.”
“In the event that the appointment of the Third Valuation Expert is delayed by a breach of WRL of its obligations: a. Is the JPM Option Exercise Period extended for a reasonable period after the Third Valuation Expert has determined the Call Option Fair Market Value? b. Alternatively, is JPM entitled to exercise the JPM Call Option on the basis of the valuation determined by JPM’s Valuation Expert without regard to the valuation determined by WRL’ s Valuation Expert?”
“…the court comes to the task of implication with the benefit of hindsight, and it is tempting for the court then to fashion a term which will reflect the merits of the situation as they then appear. Tempting, but wrong… it is not enough to show that had the parties foreseen the eventuality which in fact occurred they would have wished to make provision for it, unless it can also be shown either that there was only one contractual solution or that one of several possible solutions would without doubt have been preferred…”
“In circumstances where it is common ground that the Term Sheet is non-binding and of no contractual effect, are the Valuation Experts entitled to take into account the Term Sheet in valuing Viva pursuant to paragraph 3 of Schedule 1 of the SHA?”
“The Call Option Fair Market Value of the Shares may also reflect any other factors suggested by a Shareholder or the Group which either Valuation Expert reasonably believes should be taken into account.”
“the Term Sheet provides important context so as to understand the parties’ intention and understanding to carry out activities in the US. It is a matter which WRL is entitled to refer to the Valuation Experts and they are entitled to take into account.”
“JPM may elect to exercise the JPM Call Option at the following times by sending the JPM Exercise Notice in accordance with paragraph 2.12 below: (a) during the Option Exercise Period commencing on the JPM First Option Exercise Date; or (b) during the Option Exercise Period commencing on the JPM Second Option Exercise Date, provided neither the JPM Call Option nor the WRL Call Option has been previously exercised in accordance with this Schedule 1; or (c) during the Option Exercise Period commencing on the JPM Third Option Exercise Date, provided neither the JPM Call Option nor the WRL Call Option has been previously exercised in accordance with this Schedule 1; (d) during the Option Exercise Period commencing on the JPM Fourth Option Exercise Date, provided neither the JPM Call Option nor the WRL Call Option has been previously exercised in accordance with this Schedule 1; or (e) during the Option Exercise Period commencing on the JPM Discretionary Option Exercise Date, provided neither the JPM Call Option nor the WRL Call Option has been previously exercised in accordance with this Schedule 1.”
“2.5 The date of exercise of the JPM Call Option is the date on which the JPM Exercise Notice is sent in accordance with paragraphs 2.3 and 2.12. … 2.12 The JPM Call Option shall be exercised by JPM sending WRL an irrevocable written exercise notice in accordance with Clause 29, which shall include: (a) the date on which the notice is given; (b) a statement to the effect that JPM is exercising the JPM Call Option; (c) JPM’s reasonable and good faith estimate of the Exit Proceeds due to WRL (including any amounts to be set-off against the Exit Proceeds in accordance with Clause 22); and (d) a signature by or on behalf of JPM, (the JPM Exercise Notice).”
“2.6 Save with respect to any JPM Exercise Notice served after the JPM Fourth Option Exercise Date in accordance with paragraph 2.3(d) for which paragraph 2.7 applies, if the JPM Call Option Price during the applicable Option Exercise Period during which a JPM Exercise Notice is sent is: (a) less than the Reference Valuation, then WRL shall not be required to (but may at its discretion) accept the JPM Call Option and sell the WRL Company Shares to JPM (provided that, unless WRL rejects the JPM Call Option by written notice to JPM within 10 Business Days of receipt of the JPM Exercise Notice, WRL shall be deemed to have accepted the JPM Call Option and shall be required to sell the WRL Company Shares to JPM for the Exit Proceeds on the terms set out in this Schedule 1, and, for the avoidance of doubt, if WRL issues such notice to JPM, the Parties shall proceed to the next Option Exercise Date); or (b) equal to or greater than the Reference Valuation, then WRL shall be automatically deemed to accept the JPM Call Option and shall be required to sell the WRL Company Shares to JPM for the Exit Proceeds on the terms set out in this Schedule 1.” “4.2 Subject to paragraph 4.3, if either the JPM Call Option or WRL Call Option is exercised (and, if applicable, accepted) in accordance with this Schedule 1, each Party shall use all reasonable endeavours to: (i) enter into the Transfer Agreement as soon as reasonably practicable and in any event no later than 10 Business Days following the date on which the JPM Exercise Notice or WRL Exercise Notice (as applicable) is delivered by JPM or WRL (as applicable); and (ii) complete the Transfer as soon as reasonably practicable. Following the satisfaction of any Mandatory Consents required for the Transfer (the Unconditional Date), the following shall apply:(a) WRL, where the JPM Call Option has been exercised, and JPM, where the WRL Call Option has been exercised, may (but is not obliged to) elect (within a period of five Business Days of the Unconditional Date) to require the Valuation Experts to prepare updated valuation reports in order to determine an updated Call Option Fair Market Value (Updated Valuation Process) in which case: (i) the Updated Valuation Process shall be carried out in accordance with the provisions of paragraph 3 of this Schedule 1; and (ii) the price payable by JPM for the WRL Company Shares or by WRL for the JPM Company Shares (as applicable) shall be the lower of: (A) the updated Call Option Fair Market Value as determined following the Updated Valuation Process; and (B) the Call Option Fair Market Value multiplied by 1.2; (the Alternative Exit Proceeds); and (iii) … (b)….”
“2.9 WRL may elect to exercise the WRL Call Option during the Option Exercise Period commencing on the relevant WRL Option Exercise Date by sending the WRL Exercise Notice in accordance with paragraph 2.13 below. WRL may only exercise the WRL Call Option if JPM has not already exercised the JPM Call Option in the relevant Option Exercise Period. 2.10 If the WRL Call Option is not exercised during the Option Exercise Period following the last applicable WRL Option Exercise Date, it shall lapse. 2.11 The date of exercise of the WRL Call Option is the date on which the WRL Exercise Notice is sent in accordance with paragraphs 2.9 and 2.13.”
“As an illustrative example of the manner in which the Call Options are intended to work, the Parties have prepared the diagram set out in Part B below.”
“Call Option Fair Market Value established by Valuation Experts at each Measurement Date”
“Prior To Fourth Measurement Date and JPM has a call option remaining?”
“10. The court’s task is to ascertain the objective meaning of the language which the parties have chosen to express their agreement. It has long been accepted that this is not a literalist exercise focused solely on a parsing of the wording of the particular clause but that the court must consider the contract as a whole and, depending on the nature, formality and quality of drafting of the contract, give more or less weight to elements of the wider context in reaching its view as to that objective meaning... … 12. …once one has read the language in dispute and the relevant parts of the contract that provide its context, it does not matter whether the more detailed analysis commences with the factual background and the implications of rival constructions or a close examination of the relevant language in the contract, so long as the court balances the indications given by each.”
“In consideration of the grant by JPM of the option in paragraph 2.2 below, WRL grants to JPM an option to purchase the WRL Company Shares for the Exit Proceeds on the terms set out in this Schedule 1.”
“In consideration of the grant by WRL of the option in paragraph 2.1 above, JPM grants to WRL an option to purchase the JPM Company Shares for the Exit Proceeds on the terms set out in this Schedule 1.”
“If the JPM Call Option is not exercised during an Option Exercise Period set out in paragraph 2.3, it shall lapse until the next Option Exercise Period, unless WRL exercises the WRL Call Option in accordance with paragraph 2.9 in which case it shall terminate.
“The date of exercise of the JPM Call Option is the date on which the JPM Exercise Notice is sent in accordance with paragraphs 2.3 and 2.12.”
“(a) less than the Reference Valuation, then WRL shall not be required to (but may at its discretion) accept the JPM Call Option … (provided that, unless WRL rejects the JPM Call Option by written notice to JPM within 10 Business Days of receipt of the JPM Exercise Notice, WRL shall be deemed to have accepted the JPM Call Option … and, for the avoidance of doubt, if WRL issues such notice to JPM, the Parties shall proceed to the next Option Exercise Date)…”
“The JPM Call Option shall be exercised by JPM sending WRL an irrevocable written exercise notice in accordance with Clause 29, which shall include: (a) the date on which the notice is given; (b) a statement to the effect that JPM is exercising the JPM Call Option; (c) JPM’s reasonable and good faith estimate of the Exit Proceeds due to WRL (including any amounts to be set-off against the Exit Proceeds in accordance with Clause 22); and (d) a signature by or on behalf of JPM, (the JPM Exercise Notice).”
“284. …There is in my view no reason why illustrations or examples should be construed differently than any other term in a contract. It could be said in the context of lengthy contracts in financial transactions with much boiler plate that illustrations or examples deserve particular attention as something to which the parties particularly turned their minds. 285. Ultimately, it depends on the terms of the illustration read in context…”
“The diagram provides that it is necessary to ask (amongst other questions) whether “… JPM has a call option remaining?”
“Prior to Fourth Measurement Date and JPM has a call option remaining?”
“Between the date of this Agreement and the Effective Date, the parties shall discuss in good faith and agree the exact terms of the New Share Option Plan in line with the following principles: … (c) participants in the New Share Option Plan shall only be able to exercise their options in the event of an Exit or exercise of the JPM Call Option, or on a longstop date specified in the New Share Option Plan rules; (d) the New Share Option Plan shall include a power that on an Exit all options shall vest, lapse, or roll over into replacement options (as agreed between WRL and JPM); and (e) the New Share Option Plan shall include a power that on exercise of the JPM Call Option, all options shall vest, lapse, or roll over into replacement options (as determined by JPM acting fairly and reasonably).”