Document:

EXHIBIT
        10.20

    

    
 

    REGISTRATION
      RIGHTS AGREEMENT,
      dated
      as of March 28, 2007 (the “Agreement”)
      among
NEXTWAVE
      WIRELESS INC.,
      a
      Delaware corporation (including any successor thereto, whether by merger,
      consolidation, conversion or otherwise, the “Company”)
      and
      the Purchasers party hereto.

     

    The
      Purchasers have the right to acquire shares of common stock, par value $0.001
      per share, of the Company (“Common
      Stock”)
      upon
      conversion of shares of Preferred Stock (as hereinafter defined) of the Company,
      purchased pursuant to the Purchase Agreement (as hereinafter defined). The
      Company and the Purchasers deem it to be in their respective best interests
      to
      set forth their rights in connection with public offerings and sales of shares
      of Common Stock and are entering into this Registration Rights Agreement as
      a
      condition to and in connection with the Purchasers entering into the Purchase
      Agreement.

     

    NOW,
      THEREFORE,
      in
      consideration of the premises and mutual covenants and obligations hereinafter
      set forth, the Company and the Investors hereby agree as follows:

     

    Section
      1.  Certain
      Definitions.
      For
      purposes of this Registration Rights Agreement, the following terms shall have
      the following respective meanings: 

     

    “Commission”
      shall
      mean the United States Securities and Exchange Commission, or any other federal
      agency at the time administering the Exchange Act or the Securities Act,
      whichever is the relevant statute for the particular purpose. 

     

    “Effective
      Time,”
      means
      the time and date as of which the Commission declares the Shelf Registration
      Statement effective or as of which the Shelf Registration Statement otherwise
      becomes effective.

     

    “Electing
      Holder”
shall
      mean each Purchaser and any holder of Registrable Securities that has returned
      a
      completed and signed Notice and Questionnaire to the Company in accordance
      with
      Section 3(a)(ii) or 3(a)(iii) hereof and the instructions set forth on the
      Notice and Questionnaire. 

     

    “Exchange
      Act”
      shall
      mean the Securities Exchange Act of 1934, or any successor thereto, as the
      same
      shall be amended from time to time. 

     

    The
      term
“holder”
      shall
      mean each of the Purchasers and other persons who acquire Registrable Securities
      from time to time (including any successors or assigns), in each case for so
      long as such person owns any Registrable Securities.

     

    “Investment
      Amount”
means,
      with respect to each Purchaser, the investment amount indicated opposite such
      Purchaser’s name on Schedule
      1
      of the
      Purchase Agreement. 

     

    “Notice
      and Questionnaire”
means
      a
      Notice of Registration Statement and Selling Securityholder Questionnaire
      substantially in the form of Exhibit
      A
      hereto.

     

    The
      term
“person”
      shall
      mean a corporation, association, partnership, organization, limited liability
      company, limited partnership, limited liability partnership, or other similar
      entity, individual, government or political subdivision thereof or governmental
      agency. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Purchase
      Agreement”
      means
      that certain Securities Purchase Agreement, dated as of the date hereof, among
      the Company and the Purchasers, as may be amended, modified or supplemented
      from
      time to time.

     

    “Purchasers”
      shall
      mean the Purchasers named in Schedule 1 to the Purchase Agreement, other than
      Navation, Inc. and Manchester Financial Group, L.P.

     

    “Preferred
      Stock”
      shall
      mean the Company’s Series A Convertible Preferred Stock, par value $0.001 per
      share.

     

    “Registrable
      Securities”
      shall
      mean the Securities; provided,
      however,
      that a
      Security shall cease to be a Registrable Security upon the earliest to occur
      of
      the following: (i) a Shelf Registration Statement registering such Security
      under the Securities Act has been declared or becomes effective and such
      Security has been sold or otherwise transferred by the holder thereof pursuant
      to and in a manner contemplated by such effective Shelf Registration Statement;
      (ii) such Security is sold pursuant to Rule 144 under circumstances in which
      any
      legend borne by such Security relating to restrictions on transferability
      thereof, under the Securities Act or otherwise, is removed by the Company;
      (iii)
      such Security is eligible to be sold pursuant to paragraph (k) of Rule 144;
      or
      (iv) such Security shall cease to be outstanding. 

     

    “Registration
      Expenses”
      shall
      have the meaning assigned thereto in Section 4 hereof. 

     

    “Rule
      144,”
      “Rule
      405”
and
      “Rule
      415”
shall
      mean, in each case, such rule promulgated under the Securities Act (or any
      successor provision), as the same shall be amended from time to time.

     

    “Securities”
means
      (i) the shares of Preferred Stock issued to the Purchasers pursuant to the
      Purchase Agreement and (ii) the shares of Common Stock of the Company issued
      or
      issuable upon conversion of the shares of Preferred Stock issued to the
      Purchasers pursuant to the Purchase Agreement, and any other capital stock
      of
      the Company into which such shares of Preferred Stock or Common Stock may be
      converted or which is issued or issuable upon conversion of such shares of
      Preferred Stock, in each case as a result of any stock split, stock dividend,
      recapitalization, exchange or similar event.

     

    “Securities
      Act”
shall
      mean the Securities Act of 1933, or any successor thereto, as the same shall
      be
      amended from time to time. 

     

    “Shelf
      Registration”
shall
      have the meaning assigned thereto in Section 2(a) hereof. 

     

    “Shelf
      Registration Statement”
shall
      have the meaning assigned thereto in Section 2(a) hereof. 

     

    Unless
      the context otherwise requires, any reference herein to a “Section” or “clause”
refers to a Section or clause, as the case may be, of this Registration Rights
      Agreement, and the words “herein,” “hereof” and “hereunder” and other words of
      similar import refer to this Registration Rights Agreement as a whole and not
      to
      any particular Section or other subdivision. Capitalized terms used herein
      but
      not defined herein shall have the meaning assigned to such terms in the Purchase
      Agreement.

     

    
      
        
        

      

      
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    Section
      2.  Registration
      Under the Securities Act.
      

     

    (a)  The
      Company shall file under the Securities Act, as soon as practicable upon
      becoming eligible to use a Form S-3 Registration Statement, but in no event
      later than July 31, 2007, a “shelf” registration statement providing for the
      registration of, and the sale on a continuous or delayed basis by the holders
      of, all of the Registrable Securities, pursuant to Rule 415 or any similar
      rule
      that may be adopted by the Commission (such filing, the “Shelf
      Registration”
and
      such registration statement, the “Shelf
      Registration Statement”).
      The
      Company agrees to use its reasonable best efforts (x) to cause the Shelf
      Registration Statement to become or be declared effective no later than 60
      days
      after the applicable Shelf Registration Statement filing deadline described
      above and, subject to Section 3(d), to keep such Shelf Registration Statement
      continuously effective for a period ending on the earlier of the second
      anniversary of the Effective Time or such time as there are no longer any
      Registrable Securities outstanding, provided,
      however,
      that no
      holder shall be entitled to be named as a selling securityholder in the Shelf
      Registration Statement or to use the prospectus forming a part thereof for
      resales of Registrable Securities unless such holder is an Electing Holder,
      and
      (y) after the Effective Time of the Shelf Registration Statement, promptly
      upon
      the request of any holder of Registrable Securities that is not then an Electing
      Holder, to take any action reasonably necessary to enable such holder to use
      the
      prospectus forming a part thereof for resales of Registrable Securities,
      including, without limitation, any action necessary to identify such holder
      as a
      selling securityholder in the Shelf Registration Statement, provided,
      however,
      that
      nothing in this Clause (y) shall relieve any such holder of the obligation
      to
      return a completed and signed Notice and Questionnaire to the Company in
      accordance with Section 3(a)(iii) hereof; provided
      further
      that
      each holder shall promptly furnish additional information required to be
      disclosed in order to make information previously furnished to the Company
      by
      such holder not misleading. The Company further agrees to supplement or make
      amendments to the Shelf Registration Statement, including without limitation,
      any post effective amendments, as and when required by the rules, regulations
      or
      instructions applicable to the registration form used by the Company for such
      Shelf Registration Statement or by the Securities Act or rules and regulations
      thereunder for shelf registration. To the extent the Company is required to
      file
      a prospectus under Rule 424(b) of the Securities Act, it shall file such
      prospectus on the third business day following the Effective Time. In the event
      that the Company and one or more of the Purchasers agree that it would be
      advisable to delay the registration of a portion of the Securities, the Company
      shall file a subsequent Shelf Registration Statement covering such portion
      of
      the Securities at a time which shall be mutually agreed by the Company and
      such
      Purchasers. Such Shelf Registration Statement shall be subject to all of the
      terms and provisions of this Registration Rights Agreement, except for the
      initial filing deadline described above. 

     

    (b)  The
      Company shall use all reasonable best efforts to take all actions necessary
      or
      advisable to be taken by it to ensure that the transactions contemplated herein
      are effected as so contemplated in Section 2(a) hereof, and to submit to the
      Commission, within two business days after the Company learns that no review
      of
      the Shelf Registration Statement will be made by the staff of the Commission
      or
      that the staff has no further comments on the Shelf Registration Statement,
      as
      the case may be, a request for acceleration of effectiveness (or post effective
      amendment, if applicable) of the Shelf Registration Statement to a time and
      date
      not later than 48 hours after the submission of such request. 

     

    
      
        
        

      

      
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    (c)  Any
      reference herein to a registration statement or prospectus as of any time shall
      be deemed to include any document incorporated, or deemed to be incorporated,
      therein by reference as of such time and any reference herein to any
      post-effective amendment to a registration statement as of any time shall be
      deemed to include any document incorporated, or deemed to be incorporated,
      therein by reference as of such time. Any reference to a prospectus as of any
      time shall include any supplement thereto, preliminary prospectus, or any free
      writing prospectus in respect thereof.

     

    Section
      3.  Registration
      Procedures.
      

     

    The
      following provisions shall apply to the filing of the Shelf Registration
      Statement: 

     

    (a)  The
      Company shall: 

     

    (i)  prepare
      and file with the Commission, as soon as practicable but in any case within
      the
      time periods specified in Section 2(a), a Shelf Registration Statement on any
      form which may then be utilized by the Company and which shall register all
      of
      the Registrable Securities for resale by the holders thereof in accordance
      with
      such method or methods of disposition as may be specified by such of the holders
      as, from time to time, may be Electing Holders and use all reasonable best
      efforts to cause such Shelf Registration Statement to become effective as soon
      as practicable but in any case within the time periods specified in Section
      2(a); 

     

    (ii)  not
      less
      than 30 calendar days prior to the Effective Time of the Shelf Registration
      Statement, or, if the Shelf Registration Statement is not reviewed by the staff
      of the Commission, as promptly as practicable after the Company learns that
      no
      such review is pending, mail the Notice and Questionnaire to the holders of
      Registrable Securities; no holder shall be entitled to be named as a selling
      securityholder in the Shelf Registration Statement as of the Effective Time,
      and
      no holder shall be entitled to use the prospectus forming a part thereof for
      resales of Registrable Securities at any time, unless such holder has returned
      a
      completed and signed Notice and Questionnaire to the Company by the deadline
      for
      response set forth therein; provided,
      however,
      holders
      of Registrable Securities shall have at least 20 calendar days from the date
      on
      which the Notice and Questionnaire is first mailed to such holders to return
      a
      completed and signed Notice and Questionnaire to the Company; 

     

    (iii)  after
      the
      Effective Time of the Shelf Registration Statement, upon the request of any
      holder of Registrable Securities that is not then an Electing Holder, promptly
      send a Notice and Questionnaire to such holder; provided
      that the
      Company shall not be required to take any action to name such holder as a
      selling securityholder in the Shelf Registration Statement or to enable such
      holder to use the prospectus forming a part thereof for resales of Registrable
      Securities until such holder has returned a completed and signed Notice and
      Questionnaire to the Company; 

     

    (iv)  as
      soon
      as practicable prepare and file with the Commission such amendments and
      supplements to such Shelf Registration Statement (including without limitation,
      any required post effective amendments) and the prospectus included therein
      as
      may be necessary to effect and maintain the effectiveness of such Shelf
      Registration Statement for the period specified in Section 2(a) hereof and
      as
      may be required by the applicable rules and regulations of the Commission and
      the instructions applicable to the form of such Shelf Registration Statement,
      including without limitation, to include any Electing Holder to be named as
      a
      selling security holder therein; 

     

    
      
        
        

      

      
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    (v)  comply
      with the provisions of the Securities Act with respect to the disposition of
      all
      of the Registrable Securities covered by such Shelf Registration Statement
      in
      accordance with the intended methods of disposition by the Electing Holders
      provided for in such Shelf Registration Statement; 

     

    (vi)  provide
      (A) one representative of the Electing Holders and (B) not more than one counsel
      for all the Electing Holders the opportunity to participate in the preparation
      of such Shelf Registration Statement, each prospectus included therein or filed
      with the Commission and each amendment or supplement thereto, in each case
      subject to customary confidentiality restrictions; 

     

    (vii)  for
      a
      reasonable period prior to the filing of such Shelf Registration Statement,
      and
      throughout the period specified in Section 2(a), make available at reasonable
      times at the Company’s principal place of business or such other reasonable
      place for inspection by the persons referred to in Section 3(a)(vi) who shall
      certify to the Company that they have a current intention to sell the
      Registrable Securities pursuant to the Shelf Registration such financial and
      other information and books and records of the Company, and cause the officers,
      employees, counsel and independent certified public accountants of the Company
      to be available to respond to such inquiries, as shall be reasonably necessary,
      in the judgment of the respective counsel referred to in such Section, to
      conduct a reasonable investigation within the meaning of Section 11 of the
      Securities Act, and in connection therewith, the Company shall use its
      reasonable best efforts to cooperate with such persons in obtaining from the
      Company’s independent auditors, and counsel to the Company, such comfort letters
      and opinions and statements as shall be appropriate to be delivered to and
      for
      the benefit of any such person in the relevant circumstances, and the Company
      shall pay any fees and expenses of its independent certified public accountants
      and counsel in connection therewith; provided,
      however,
      that
      each such party shall be required to maintain in confidence and not to disclose
      to any other person any information or records reasonably designated by the
      Company as being confidential, until such time as (A) such information becomes
      a
      matter of public record (whether by virtue of its inclusion in such registration
      statement or otherwise), or (B) such person shall be required so to disclose
      such information pursuant to a subpoena or order of any court or other
      governmental agency or body having jurisdiction over the matter (provided such
      person agrees that it will give notice to the Company and allow the Company,
      at
      its expense, to promptly undertake appropriate action and to prevent disclosure
      of such information deemed confidential), or (C) such information is required
      to
      be set forth in such Shelf Registration Statement or the prospectus included
      therein or in an amendment to such Shelf Registration Statement or an amendment
      or supplement to such prospectus in order that such Shelf Registration
      Statement, prospectus, amendment or supplement, as the case may be, complies
      with applicable requirements of the federal securities laws and the rules and
      regulations of the Commission and does not contain an untrue statement of a
      material fact or omit to state therein a material fact required to be stated
      therein or necessary to make the statements therein not misleading in light
      of
      the circumstances then existing; 

     

    
      
        
        

      

      
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    (viii)  promptly
      notify each of the Electing Holders, and if requested by any such Electing
      Holder, confirm such advice in writing, (A) when such Shelf Registration
      Statement or the prospectus included therein or any prospectus amendment or
      supplement or post-effective amendment has been filed, and, with respect to
      such
      Shelf Registration Statement or any post-effective amendment, when the same
      has
      become effective, (B) of any comments by the Commission and by the blue sky
      or
      securities commissioner or regulator of any state with respect thereto or any
      request by the Commission for amendments or supplements to such Shelf
      Registration Statement or prospectus or for additional information, (C) of
      the
      issuance by the Commission of any stop order suspending the effectiveness of
      such Shelf Registration Statement or the initiation or threatening of any
      proceedings for that purpose, (D) if at any time the representations and
      warranties of the Company contemplated by Section 5 cease to be true and correct
      in all material respects, (E) of the receipt by the Company of any notification
      with respect to the suspension of the qualification of the Registrable
      Securities for sale in any jurisdiction or the initiation or threatening of
      any
      proceeding for such purpose, or (F) that such Shelf Registration Statement,
      prospectus, prospectus amendment or supplement or post-effective amendment
      does
      not conform in all material respects to the applicable requirements of the
      Securities Act and the rules and regulations of the Commission thereunder or
      contains an untrue statement of a material fact or omits to state any material
      fact required to be stated therein or necessary to make the statements therein
      not misleading in light of the circumstances then existing; 

     

    (ix)  use
      all
      reasonable best efforts to obtain the withdrawal of any order suspending the
      effectiveness of such registration statement or any post-effective amendment
      thereto at the earliest practicable date; 

     

    (x)  if
      requested by any Electing Holder, promptly incorporate in a prospectus
      supplement or post-effective amendment such information as is required by the
      applicable rules and regulations of the Commission and as such Electing Holder
      specifies should be included therein relating to the terms of the sale of such
      Registrable Securities, including information with respect to the amount of
      Registrable Securities being sold by such Electing Holder , the name and
      description of such Electing Holder the offering price of such Registrable
      Securities and any compensation payable in respect thereof, and make all
      required filings of such prospectus supplement or post-effective amendment
      promptly after notification of the matters to be incorporated in such prospectus
      supplement or post-effective amendment; 

     

    (xi)  furnish
      to each Electing Holder and the respective counsel referred to in Section
      3(a)(vi) a conformed copy of such Shelf Registration Statement, each such
      amendment and supplement thereto (in each case including all exhibits thereto
      (in the case of an Electing Holder of Registrable Securities, upon request)
      and
      documents incorporated by reference therein) and such number of copies of such
      Shelf Registration Statement (excluding exhibits thereto and documents
      incorporated by reference therein unless specifically so requested by such
      Electing Holder) and of the prospectus included in such Shelf Registration
      Statement, in conformity in all material respects with the applicable
      requirements of the Securities Act and the rules and regulations of the
      Commission thereunder, and such other documents, as such Electing Holder may
      reasonably request in order to facilitate the offering and disposition of the
      Registrable Securities owned by such Electing Holder and to permit such Electing
      Holder to satisfy the prospectus delivery requirements of the Securities Act;
      and subject to Section 3(b) below, the Company hereby consents to the use of
      such prospectus and any amendment or supplement thereto by each such Electing
      Holder , in each case in the form most recently provided to such person by
      the
      Company, in connection with the offering and sale of the Registrable Securities
      covered by the prospectus or any supplement or amendment thereto;
 

     

    
      
        
        

      

      
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    (xii)  use
      all
      reasonable best efforts to (A) register or qualify the Registrable Securities
      to
      be included in such Shelf Registration Statement under such securities laws
      or
      blue sky laws of such jurisdictions as any Electing Holder thereof shall
      reasonably request, (B) keep such registrations or qualifications in effect
      and
      comply with such laws so as to permit the continuance of offers, sales and
      dealings therein in such jurisdictions during the period the Shelf Registration
      is required to remain effective under Section 2(b) above and for so long as
      may
      be necessary to enable any such Electing Holder to complete its distribution
      of
      Securities pursuant to such Shelf Registration Statement and (C) take any and
      all other actions as may be reasonably necessary to enable each such Electing
      Holder to consummate the disposition in such jurisdictions of such Registrable
      Securities; provided,
      however,
      that the
      Company shall not be required for any such purpose to (1) qualify as a foreign
      corporation in any jurisdiction wherein it would not otherwise be required
      to
      qualify but for the requirements of this Section 3(a)(xii), (2) consent to
      general service of process in any such jurisdiction or become subject to
      taxation in any such jurisdiction or (3) make any changes to its certificate
      of
      incorporation or by-laws or other governing documents or any agreement between
      it and its stockholders; 

     

    (xiii)  use
      all
      reasonable best efforts to obtain the consent or approval of each governmental
      agency or authority, whether federal, state or local, which may be required
      to
      effect the Shelf Registration or the offering or sale in connection therewith
      or
      to enable the selling holder or holders to offer, or to consummate the
      disposition of, their Registrable Securities; 

     

    (xiv)  unless
      any Registrable Securities shall be in book-entry only form, cooperate with
      the
      Electing Holders to facilitate the timely preparation and delivery of
      certificates representing Registrable Securities to be sold, which certificates,
      if so required by any securities exchange upon which any Registrable Securities
      are listed, shall be penned, lithographed or engraved, or produced by any
      combination of such methods, on steel engraved borders, and which certificates
      shall not bear any restrictive legends; 

     

    (xv)  notify
      in
      writing each holder of Registrable Securities of any proposal by the Company
      to
      amend or waive any provision of this Registration Rights Agreement pursuant
      to
      Section 8(i) hereof and of any amendment or waiver effected pursuant thereto,
      each of which notices shall contain the text of the amendment or waiver proposed
      or effected, as the case may be; and

     

    (xvi)  comply
      with all applicable rules and regulations of the Commission, and make generally
      available to its securityholders as soon as practicable but in any event not
      later than eighteen months after the effective date of such Shelf Registration
      Statement, an earning statement of the Company and its subsidiaries complying
      with Section 11(a) of the Securities Act (including, at the option of the
      Company, Rule 158 thereunder).

     

    
      
        
        

      

      
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    (b)  In
      the
      event that the Company would be required, pursuant to Section 3(a)(viii)(F)
      above, to notify the Electing Holders the Company shall promptly prepare and
      furnish to each of the Electing Holders a reasonable number of copies of a
      prospectus supplemented or amended so that, as thereafter delivered to
      purchasers of Registrable Securities, such prospectus shall conform in all
      material respects to the applicable requirements of the Securities Act and
      the
      rules and regulations of the Commission thereunder and shall not contain an
      untrue statement of a material fact or omit to state a material fact required
      to
      be stated therein or necessary to make the statements therein not misleading
      in
      light of the circumstances then existing. Each Electing Holder agrees that
      upon
      receipt of any notice from the Company pursuant to Section 3(a)(viii)(F) hereof,
      such Electing Holder shall forthwith discontinue the disposition of Registrable
      Securities pursuant to the Shelf Registration Statement applicable to such
      Registrable Securities until such Electing Holder shall have received copies
      of
      such amended or supplemented prospectus, and if so directed by the Company,
      such
      Electing Holder shall deliver to the Company (at the Company’s expense) all
      copies, other than permanent file copies, then in such Electing Holder’s
      possession of the prospectus covering such Registrable Securities at the time
      of
      receipt of such notice. 

     

    (c)  In
      the
      event of a Shelf Registration, in addition to the information required to be
      provided by each Electing Holder in its Notice and Questionnaire, the Company
      may require such Electing Holder to furnish to the Company such additional
      information regarding such Electing Holder and such Electing Holder’s intended
      method of distribution of Registrable Securities as may be required in order
      to
      comply with the Securities Act. Each such Electing Holder agrees to notify
      the
      Company as promptly as practicable of any inaccuracy or change in information
      previously furnished by such Electing Holder to the Company or of the occurrence
      of any event in either case as a result of which any prospectus relating to
      such
      Shelf Registration contains or would contain an untrue statement of a material
      fact regarding such Electing Holder or such Electing Holder’s intended method of
      disposition of such Registrable Securities or omits to state any material fact
      regarding such Electing Holder or such Electing Holder’s intended method of
      disposition of such Registrable Securities required to be stated therein or
      necessary to make the statements therein not misleading in light of the
      circumstances then existing, and promptly to furnish to the Company any
      additional information required to correct and update any previously furnished
      information or required so that such prospectus shall not contain, with respect
      to such Electing Holder or the disposition of such Registrable Securities,
      an
      untrue statement of a material fact or omit to state a material fact required to
      be stated therein or necessary to make the statements therein not misleading
      in
      light of the circumstances then existing.

     

    (d)  Notwithstanding
      any other provision of this Agreement, the Company may for valid business
      reasons (other than avoidance of its obligations hereunder), including without
      limitation, a potential material acquisition, divestiture of assets or other
      material corporate transaction, notify holders of Registrable Securities in
      writing that the Shelf Registration Statement is no longer effective or the
      prospectus included therein is no longer usable for offers and sales of
      Securities for a period not to exceed: (i) 30 consecutive days at any one time,
      (ii) 45 days in any three month period or (iii) 90 days in the aggregate during
      any twelve-month period; provided, that the Company promptly thereafter complies
      with the requirements of Section 2(b) hereof, if applicable, and provided
      further that, if a post effective amendment is required by applicable law to
      be
      filed with the Commission to cause a Holder to be named as a selling security
      holder in the Shelf Registration Statement, the period of time between the
      filing and the effectiveness of any such post effective amendment shall be
      not
      deemed to be a Suspension Period hereunder. The first day of any Suspension
      Period must be at least two trading days after the last day of any prior
      Suspension Period. Each holder agrees that upon receipt of any notice from
      the
      Company pursuant to this Section 3(d), it will discontinue use of the prospectus
      contained in the Shelf Registration Statement until receipt of copies of the
      supplemented or amended prospectus relating thereto or until advised in writing
      by the Company that the use of the prospectus contained in the Shelf
      Registration Statement may be resumed (any such period, a “Suspension
      Period”).

     

    
      
        
        

      

      
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    (e)  The
      Company shall provide to each affected Electing Holder any comments or
      notifications of the Commission or any other applicable regulatory authority
      that bears on the status of or disclosure with respect to any such Electing
      Holder, or if applicable, the Electing Holders as a class, and in the event
      requested by any Electing Holder, withdraw information relating to such Electing
      Holder as a selling shareholder from such Shelf Registration Statement and
      any
      other related offering materials. In the event such Electing Holder withdraws
      from such Shelf Registration Statement, such Electing Holder shall be eligible
      to participate in any subsequent Shelf Registration Statement filed by the
      Company as contemplated by Section 2(a), and the Company shall have no liability
      relating to the decision of such Electing Holder to withdraw from such Shelf
      Registration Statement and shall not be deemed to have defaulted in its
      obligations under this Registration Rights Agreement in any
      respect.

     

    (f)  The
      Company shall use its reasonable best efforts to secure designation and
      quotation of all of the Registrable Securities covered by a Registration
      Statement on The NASDAQ Global Market.

     

    Section
      4.  Registration
      Expenses.
      

     

    The
      Company agrees to bear and to pay or cause to be paid promptly all expenses
      incident to the Company’s performance of or compliance with this Registration
      Rights Agreement, including (a) all Commission and any NASD registration, filing
      and review fees and expenses (b) all fees and expenses in connection with the
      qualification of the Securities for offering and sale under the State securities
      and blue sky laws referred to in Section 3(a)(xii) hereof and determination
      of
      their eligibility for investment under the laws of such jurisdictions as or
      the
      Electing Holders may designate, including reasonable fees and disbursements
      of
      not more than one counsel for the Electing Holders in connection with such
      qualification and determination, (c) all expenses relating to the preparation,
      printing, production, distribution and reproduction of each registration
      statement required to be filed hereunder, each prospectus included therein
      or
      prepared for distribution pursuant hereto, each amendment or supplement to
      the
      foregoing, the expenses of preparing the Securities for delivery and the
      expenses of printing or producing blue sky memoranda and all other documents
      in
      connection with the offering, sale or delivery of Securities to be disposed
      of
      (including certificates representing the Securities), (d) messenger, telephone
      and delivery expenses relating to the offering, sale or delivery of Securities
      and the preparation of documents referred in clause (c) above, (e) internal
      expenses (including all salaries and expenses of the Company’s officers and
      employees performing legal or accounting duties), (f) fees, disbursements and
      expenses of counsel and independent certified public accountants of the Company
      (including the expenses of any opinions or “cold comfort” letters required by or
      incident to such performance and compliance), (g) reasonable fees, disbursements
      and expenses of one counsel for the Electing Holders retained in connection
      with
      a Shelf Registration, as selected by the Electing Holders of at least a majority
      in aggregate principal amount of the Registrable Securities held by Electing
      Holders (which counsel shall be reasonably satisfactory to the Company), and
      (h)
      fees, expenses and disbursements of any other persons, including special
      experts, retained by the Company in connection with such registration
      (collectively, the “Registration
      Expenses”).
      To
      the extent that any Registration Expenses are incurred, assumed or paid by
      any
      holder of Registrable Securities or any placement or sales agent therefor or
      underwriter thereof, the Company shall reimburse such person for the full amount
      of the Registration Expenses so incurred, assumed or paid promptly after receipt
      of a request therefor. Notwithstanding the foregoing, the holders of the
      Registrable Securities being registered shall pay all agency fees and
      commissions and underwriting discounts and commissions attributable to the
      sale
      of such Registrable Securities and the fees and disbursements of any counsel
      or
      other advisors or experts retained by such holders (severally or jointly),
      other
      than the counsel and experts specifically referred to above. 

     

    
      
        
        

      

      
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    Section
      5.  Representations
      and Warranties.
      

     

    The
      Company represents and warrants to, and agrees with, each Purchaser and each
      of
      the holders from time to time of Registrable Securities that: 

     

    (a)  Each
      registration statement covering Registrable Securities and each prospectus
      (including any preliminary or summary prospectus) contained therein or furnished
      pursuant to Section 3(c) or Section 3(d) hereof and any further amendments
      or
      supplements to any such registration statement or prospectus, when it becomes
      effective or is filed with the Commission, as the case may be, will conform
      in
      all material respects to the requirements of the Securities Act and the rules
      and regulations of the Commission thereunder and will not contain an untrue
      statement of a material fact or omit to state a material fact required to be
      stated therein or necessary to make the statements therein not misleading;
      and
      at all times subsequent to the Effective Time when a prospectus would be
      required to be delivered under the Securities Act, other than from (i) such
      time
      as a notice has been given to holders of Registrable Securities pursuant to
      Section 3(a)(viii)(F) hereof until (ii) such time as the Company furnishes
      an
      amended or supplemented prospectus pursuant to Section 3(b) hereof, each such
      registration statement, and each prospectus contained therein or furnished
      pursuant to Section 3(a) hereof, as then amended or supplemented, will conform
      in all material respects to the requirements of the Securities Act and the
      rules
      and regulations of the Commission thereunder and will not contain an untrue
      statement of a material fact or omit to state a material fact required to be
      stated therein or necessary to make the statements therein not misleading in
      the
      light of the circumstances then existing; provided,
      however,
      that
      this representation and warranty shall not apply to any statements or omissions
      made in reliance upon and in conformity with information furnished in writing
      to
      the Company by a holder of Registrable Securities expressly for use therein.
      

     

    (b)  Any
      documents incorporated by reference in any prospectus referred to in Section
      5(a) hereof, when they become or became effective or are or were filed with
      the
      Commission, as the case may be, will conform or conformed in all material
      respects to the requirements of the Securities Act or the Exchange Act, as
      applicable, and none of such documents will contain or contained an untrue
      statement of a material fact or will omit or omitted to state a material fact
      required to be stated therein or necessary to make the statements therein not
      misleading; provided,
      however,
      that
      this representation and warranty shall not apply to any statements or omissions
      made in reliance upon and in conformity with information furnished in writing
      to
      the Company by a holder of Registrable Securities expressly for use therein.
      

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (c)  The
      compliance by the Company with all of the provisions of this Registration Rights
      Agreement and the consummation of the transactions herein contemplated will
      not
      (i) conflict with or result in a breach or violation of any of the terms or
      provisions of, or constitute a default under, any indenture, mortgage, deed
      of
      trust, loan agreement or other agreement or instrument to which the Company
      or
      any Significant Subsidiary (as defined in Rule 1-02 of Regulation S-X) is a
      party or by which the Company or any Significant Subsidiary is bound or to
      which
      any of the property or assets of the Company or any Subsidiary is subject,
      (ii)
      result in any violation of the provisions of the certificate of incorporation
      or
      organization or the by-laws or other governing documents, as applicable, of
      the
      Company or (iii) result in any violation of any statute or any order, rule
      or
      regulation of any court or governmental agency or body having jurisdiction
      over
      the Company or any Significant Subsidiary or any of their properties except,
      in
      the case of clauses (i) and (iii), for such conflicts, breaches, violations
      or
      defaults as would not individually, or in the aggregate, have a material adverse
      effect on the consolidated financial position, stockholders’ equity or results
      of operations of the Company and its subsidiaries, taken as a whole; and no
      consent, approval, authorization, order, registration or qualification of or
      with any such court or governmental agency or body is required for the
      consummation by the Company of the transactions contemplated by this
      Registration Rights Agreement, except (i) the registration under the Securities
      Act of the Securities, (ii) such consents, approvals, authorizations,
      registrations or qualifications as may be required under state securities or
      blue sky laws in connection with the offering and distribution of the
      Securities, (iii) the filing of a notification form with the Nasdaq Stock Market
      within five days after the Closing Date (as defined in the Purchase Agreement),
      (iv) such additional post-Closing filings as may be required to comply with
      applicable state and federal securities laws and the listing requirements of
      the
      Nasdaq National Market and (v) such consents, approvals, authorizations,
      registrations or qualifications that have been obtained and are in full force
      and effect as of the date hereof. 

     

    (d)  This
      Registration Rights Agreement has been duly authorized, executed and delivered
      by the Company. 

     

    Section
      6.  Indemnification.
      

     

    (a)  Indemnification
      by the Company.
      The
      Company will indemnify and hold harmless each of the Electing Holders of
      Registrable Securities included in a Shelf Registration Statement and the
      directors, officers, members, partners, employees, agents, representatives
      of,
      and each Person against any losses, claims, damages or liabilities, joint or
      several, incurred in investigating, preparing or defending any action, claim,
      suit, inquiry, proceeding, investigation or appeal taken from the foregoing
      by
      or before any court or governmental, administrative or other regulatory agency,
      body or the Commission, whether pending or threatened, whether or not an
      indemnified party is or may be a party thereto, to which such holder may become
      subject under the Securities Act, the Exchange Act or any other law, including
      without limitation, any state securities law, or any rule or regulation
      thereunder relating to the offer or sale of the Registrable Securities pursuant
      to a Shelf Registration Statement, insofar as such losses, claims, damages
      or
      liabilities (or actions in respect thereof) arise out of or are based upon
      an
      untrue statement or alleged untrue statement of a material fact contained in
      any
      Shelf Registration Statement under which such Registrable Securities were
      registered under the Securities Act, or any preliminary, final or free writing
      prospectus contained therein or furnished by the Company to any such Electing
      Holder or any amendment or supplement thereto, or arise out of or are based
      upon
      the omission or alleged omission to state therein a material fact required
      to be
      stated therein or necessary to make the statements therein not misleading,
      and
      will reimburse such holder, such Electing Holder for any legal or other expenses
      reasonably incurred by them in connection with investigating or defending any
      such action or claim as such expenses are incurred;
      provided, however,
      that
      the Company shall not be liable to any such person in any such case to the
      extent that any such loss, claim, damage or liability (x) arises out of or
      is
      based upon an untrue statement or alleged untrue statement or omission or
      alleged omission made in such registration statement, or preliminary, final
      or
      free writing prospectus, or amendment or supplement thereto, in reliance upon
      and in conformity with written information furnished to the Company by any
      such
      person expressly for use therein, (y) arises from such person’s use of the Shelf
      Registration Statement or prospectus or any amendments or supplements thereto
      during a Suspension Period. 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (b)  Indemnification
      by the Holders.
      Each
      Electing Holder agrees, severally and not jointly, to (i) indemnify and hold
      harmless the Company and all other holders of Registrable Securities, against
      any losses, claims, damages or liabilities to which the Company or such other
      holders of Registrable Securities may become subject, under the Securities
      Act
      or otherwise, insofar as such losses, claims, damages or liabilities (or actions
      in respect thereof) arise out of or are based upon an untrue statement or
      alleged untrue statement of a material fact contained in such registration
      statement, or any preliminary, final or free writing prospectus contained
      therein or furnished by the Company to any such Electing Holder, or any
      amendment or supplement thereto, or arise out of or are based upon the omission
      or alleged omission to state therein a material fact required to be stated
      therein or necessary to make the statements therein not misleading, in each
      case
      to the extent, but only to the extent, that such untrue statement or alleged
      untrue statement or omission or alleged omission was made in reliance upon
      and
      in conformity with written information furnished to the Company by such Electing
      Holder expressly for use therein, and (ii) reimburse the Company for any legal
      or other expenses reasonably incurred by the Company in connection with
      investigating or defending any such action or claim as such expenses are
      incurred; provided,
      however,
      that no
      such Electing Holder shall be required to undertake liability to any person
      under this Section 6(b) for any amounts in excess of the dollar amount of the
      net proceeds to be received by such Electing Holder from the sale of such
      Electing Holder’s Registrable Securities pursuant to such registration.

     

    (c)  Notices
      of Claims, Etc.
      Promptly
      after receipt by an indemnified party under subsection (a) or (b) above of
      written notice of the commencement of any action, such indemnified party shall,
      if a claim in respect thereof is to be made against an indemnifying party
      pursuant to the indemnification provisions of or contemplated by this Section
      6,
      notify such indemnifying party in writing of the commencement of such action;
      but the omission so to notify the indemnifying party shall not relieve it from
      any liability which it may have to any indemnified party otherwise than under
      the indemnification provisions of or contemplated by Section 6(a) or 6(b) hereof
      to the extent the indemnifying party is not materially prejudiced by such
      omission. In case any such action shall be brought against any indemnified
      party
      and it shall notify an indemnifying party of the commencement thereof, such
      indemnifying party shall be entitled to participate therein and, to the extent
      that it shall wish, jointly with any other indemnifying party similarly
      notified, to assume the defense thereof, with counsel reasonably satisfactory
      to
      such indemnified party (who shall not, except with the consent of the
      indemnified party, be counsel to the indemnifying party), and, after notice
      from
      the indemnifying party to such indemnified party of its election so to assume
      the defense thereof, such indemnifying party shall not be liable to such
      indemnified party for any legal expenses of other counsel or any other expenses,
      in each case subsequently incurred by such indemnified party, in connection
      with
      the defense thereof other than reasonable costs of investigation; provided,
      however,
      that
      such indemnified party shall have the right to retain its own counsel with
      the
      fees and expenses of not more than one counsel for such indemnified party to
      be
      paid by the Company, if, in the reasonable opinion of such indemnified party
      the
      representation by such counsel of such indemnified party and the Company would
      be inappropriate due to actual or potential differing interests between such
      indemnified party and any other party represented by such counsel in such
      proceeding, and provided,
      further,
      that
      the indemnifying party shall not be required to pay for more than one such
      separate counsel for all similarly situated indemnified parties in connection
      with any indemnification claim. No indemnifying party shall, without the written
      consent of the indemnified party, effect the settlement or compromise of, or
      consent to the entry of any judgment with respect to, any pending or threatened
      action or claim in respect of which indemnification or contribution may be
      sought hereunder (whether or not the indemnified party is an actual or potential
      party to such action or claim) unless such settlement, compromise or judgment
      (i) includes an unconditional release of the indemnified party from all
      liability arising out of such action or claim and (ii) does not include a
      statement as to or an admission of fault, culpability or a failure to act by
      or
      on behalf of any indemnified party. 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (d)  Contribution.
      If for
      any reason the indemnification provisions contemplated by Section 6(a) or
      Section 6(b) are unavailable to or insufficient to hold harmless an indemnified
      party in respect of any losses, claims, damages or liabilities (or actions
      in
      respect thereof) referred to therein, then each indemnifying party shall
      contribute to the amount paid or payable by such indemnified party as a result
      of such losses, claims, damages or liabilities (or actions in respect thereof)
      in such proportion as is appropriate to reflect the relative fault of the
      indemnifying party and the indemnified party in connection with the statements
      or omissions which resulted in such losses, claims, damages or liabilities
      (or
      actions in respect thereof), as well as any other relevant equitable
      considerations. The relative fault of such indemnifying party and indemnified
      party shall be determined by reference to, among other things, whether the
      untrue or alleged untrue statement of a material fact or omission or alleged
      omission to state a material fact relates to information supplied by such
      indemnifying party or by such indemnified party, and the parties’ relative
      intent, knowledge, access to information and opportunity to correct or prevent
      such statement or omission. The parties hereto agree that it would not be just
      and equitable if contributions pursuant to this Section 6(d) were determined
      by
      pro rata allocation (even if the holders were treated as one entity for such
      purpose) or by any other method of allocation which does not take account of
      the
      equitable considerations referred to in this Section 6(d). The amount paid
      or
      payable by an indemnified party as a result of the losses, claims, damages,
      or
      liabilities (or actions in respect thereof) referred to above shall be deemed
      to
      include any legal or other fees or expenses reasonably incurred by such
      indemnified party in connection with investigating or defending any such action
      or claim. Notwithstanding the provisions of this Section 6(d), no holder shall
      be required to contribute any amount in excess of the amount by which the dollar
      amount of the proceeds received by such holder from the sale of any Registrable
      Securities (after deducting any fees, discounts and commissions applicable
      thereto) exceeds the amount of any damages which such holder has otherwise
      been
      required to pay by reason of such untrue or alleged untrue statement or omission
      or alleged omission. No person guilty of fraudulent misrepresentation (within
      the meaning of Section 11(f) of the Securities Act) shall be entitled to
      contribution from any person who was not guilty of such fraudulent
      misrepresentation. The holders’ obligations in this Section 6(d) to contribute
      shall be several in proportion to the principal amount of Registrable Securities
      registered by them and not joint. 

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (e)  The
      obligations of the Company under this Section 6 shall be in addition to any
      liability which the Company may otherwise have and shall extend, upon the same
      terms and conditions, to each officer, director and partner of each holder
      and
      each person, if any, who controls any holder within the meaning of the
      Securities Act; and the obligations of the holders contemplated by this Section
      6 shall be in addition to any liability which the respective holder may
      otherwise have and shall extend, upon the same terms and conditions, to each
      officer and director of the Company (including any person who, with his consent,
      is named in any registration statement as about to become a director of the
      Company) and to each person, if any, who controls the Company within the meaning
      of the Securities Act. 

     

    Section
      7.  Rule
      144.
      

     

    The
      Company covenants to the holders of Registrable Securities that to the extent
      it
      shall be required to do so under the Exchange Act, the Company shall timely
      file
      the reports required to be filed by it under the Exchange Act or the Securities
      Act (including the reports under Section 13 and 15(d) of the Exchange Act
      referred to in subparagraph (c)(1) of Rule 144) and the rules and regulations
      adopted by the Commission thereunder, and shall take such further action as
      any
      holder of Registrable Securities may reasonably request, all to the extent
      required from time to time to enable such holder to sell Registrable Securities
      without registration under the Securities Act within the limitations of the
      exemption provided by Rule 144, as such Rule may be amended from time to time,
      or any similar or successor rule or regulation hereafter adopted by the
      Commission. Upon the request of any holder of Registrable Securities in
      connection with that holder’s sale pursuant to Rule 144, the Company shall
      deliver to such holder a written statement as to whether it has complied with
      such requirements. 

     

    Section
      8.  Miscellaneous.
      

     

    (a)  No
      Inconsistent Agreements.
      The
      Company represents, warrants, covenants and agrees that it has not granted,
      and
      shall not grant, registration rights with respect to Registrable Securities
      or
      any other securities which would be inconsistent with the terms contained in
      this Registration Rights Agreement.

     

    (b)  Specific
      Performance.
      The
      parties hereto acknowledge that there would be no adequate remedy at law if
      the
      Company fails to perform any of its obligations hereunder and that the
      Purchasers and the holders from time to time of the Registrable Securities
      may
      be irreparably harmed by any such failure, and accordingly agree that the
      Purchasers and such holders, in addition to any other remedy to which they
      may
      be entitled at law or in equity, shall be entitled to compel specific
      performance of the obligations of the Company under this Registration Rights
      Agreement in accordance with the terms and conditions of this Registration
      Rights Agreement, in any court of the United States or any State thereof having
      jurisdiction.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (c)  Notices.
      All
      notices, requests, claims, demands, waivers and other communications hereunder
      shall be in writing and shall be deemed to have been duly given when delivered
      by hand, if delivered personally, by facsimile or by courier, or three days
      after being deposited in the mail (registered or certified mail, postage
      prepaid, return receipt requested) as follows: If to the Company, to it at
      Nextwave Wireless, Inc., 12670 High Bluff Drive, San Diego, California 92130,
      Attention: Frank Cassou, Esq. with a copy to Weil, Gotshal & Manges LLP, 767
      Fifth Avenue, New York , New York 10153, Attention: Marita A. Makinen, Esq.,
      and
      if to a holder, to the address of such holder set forth in the security register
      or other records of the Company, or to such other address as the Company or
      any
      such holder may have furnished to the other in writing in accordance herewith,
      except that notices of change of address shall be effective only upon receipt.
      

     

    (d)  Parties
      in Interest.
      All the
      terms and provisions of this Registration Rights Agreement shall be binding
      upon, shall inure to the benefit of and shall be enforceable by the parties
      hereto and the holders from time to time of the Registrable Securities and
      the
      respective successors and assigns of the parties hereto and such holders. In
      the
      event that any transferee of any holder of Registrable Securities shall acquire
      Registrable Securities, in any manner, whether by gift, bequest, purchase,
      operation of law or otherwise, such transferee shall, without any further
      writing or action of any kind, be deemed a beneficiary hereof for all purposes
      and such Registrable Securiteis shall be held subject to all of the terms of
      this Registration Rights Agreement, and by taking and holding such Registrable
      Securities such transferee shall be entitled to receive the benefits of, and
      be
      conclusively deemed to have agreed to be bound by all of the applicable terms
      and provisions of, this Registration Rights Agreement. If the Company shall
      so
      request, any such successor, assign or transferee shall agree in writing to
      acquire and hold the Registrable Securities subject to all of the applicable
      terms hereof.

     

    (e)  
      Survival.
      The
      respective indemnities, agreements, representations, warranties and each other
      provision set forth in this Registration Rights Agreement or made pursuant
      hereto shall remain in full force and effect regardless of any investigation
      (or
      statement as to the results thereof) made by or on behalf of any holder of
      Registrable Securities, any director, officer or partner of such holder or
      any
      director, officer or partner thereof, or any controlling person of any of the
      foregoing, and shall survive delivery of and payment for the Registrable
      Securities pursuant to the Purchase Agreement and the transfer and registration
      of Registrable Securities by such holder and the consummation of the
      transactions contemplated herein.

     

    (f)  Governing
      Law.
      This
      Registration Rights Agreement shall be governed by and construed in accordance
      with the laws of the State of New York. 

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (g)  EACH
      PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO SUBMIT TO THE EXCLUSIVE
      JURISDICTION OF COURTS OF UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT
      OF NEW YORK, OR THE STATE OF NEW YORK, AND ANY APPELLATE COURT THEREFROM, FOR
      THE RESOLUTION OF ANY AND ALL DISPUTES, CONTROVERSIES, CONFLICTS, LITIGATION
      OR
      ACTIONS ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE SUBJECT MATTER
      HEREOF AND AGREES NOT TO COMMENCE ANY LITIGATION OR ACTIONS ARISING OUT OF
      OR
      RELATING TO THIS AGREEMENT AND THE SUBJECT MATTER HEREOF IN ANY OTHER
      COURT.

     

    (h)  Headings.
      The
      descriptive headings of the several Sections and paragraphs of this Registration
      Rights Agreement are inserted for convenience only, do not constitute a part
      of
      this Registration Rights Agreement and shall not affect in any way the meaning
      or interpretation of this Registration Rights Agreement. 

     

    (i)  Entire
      Agreement; Amendments.
      This
      Registration Rights Agreement and the other writings referred to herein or
      delivered pursuant hereto which form a part hereof contain the entire
      understanding of the parties with respect to its subject matter. This
      Registration Rights Agreement supersedes all prior agreements and understandings
      between the parties with respect to its subject matter. This Registration Rights
      Agreement may be amended and the observance of any term of this Registration
      Rights Agreement may be waived (either generally or in a particular instance
      and
      either retroactively or prospectively) only by a written instrument duly
      executed by the Company and the holders of at least a majority of the
      Registrable Securities at the time outstanding. Each holder of any Registrable
      Securities at the time or thereafter outstanding shall be bound by any amendment
      or waiver effected pursuant to this Section 8(i), whether or not any notice,
      writing or marking indicating such amendment or waiver appears on such
      Registrable Securities or is delivered to such holder. 

     

    (j)  Inspection.
      For so
      long as this Registration Rights Agreement shall be in effect, this Registration
      Rights Agreement and a complete list of the names and addresses of all the
      holders of Registrable Securities shall be made available for inspection and
      copying on any business day by any holder of Registrable Securities for proper
      purposes only (which shall include any purpose related to the rights of the
      holders of Registrable Securities under the Securities and this Agreement)
      at
      the offices of the Company at the address thereof set forth in Section 8(c)
      above. 

     

    (k)  Counterparts.
      This
      Registration Rights Agreement may be executed by the parties in counterparts,
      each of which shall be deemed to be an original, but all such respective
      counterparts shall together constitute one and the same instrument. If the
      foregoing is in accordance with your understanding, please sign and return
      to us
      counterparts hereof, and upon the acceptance hereof by you, on behalf of each
      of
      the Purchasers, this letter and such acceptance hereof shall constitute a
      binding agreement among the Purchasers and the Company. 

     

    
      
        
        

      

      
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    Very
      truly yours,

    
      	 	 	 
	 	NEXTWAVE
              WIRELESS INC.
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
              
Name:
              Frank Cassou
	 	Title:
              Executive Vice President

    

     

    
      
        
        

      

      
        S-1

        
          

        

      

      
        
        

      

       

    

    Accepted
      as of the date hereof:

     

    KINGS
      ROAD INVESTMENTS LTD.

     

     /s/

      
        

      

    

    Name:

    Title:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    YORK
      CAPITAL MANAGEMENT, L.P.

     

    
      
        	By:	/s/
	 	Name:
	 	Title: 

      

    

      

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    YORK
      INVESTMENT LIMITED

     

    
      	By:	/s/
	 	Name:
	 	Title: 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    YORK
      CREDIT OPPORTUNITIES FUND, L.P.

     

    
      	By:	/s/
	 	Name:
	 	Title: 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    YORK
      SELECT, L.P.

    

    
      	By:	/s/ 
	 	Name:
	 	Title: 

 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    YORK
      SELECT UNIT TRUST

    

    
      	By:	/s/ 
	 	Name:
	 	Title: 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    YORK
      GLOBAL VALUE PARTNERS, L.P.

    

    
      	By:	/s/ 
	 	Name:
	 	Title: 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    YORK
      ENHANCED STRATEGIES FUND, LLC

     

    
      	By:	/s/ 
	 	Name:
	 	Title: 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    D.E.
      SHAW
      LAMINAR PORTFOLIOS, L.L.C.

     

    
      	By:	/s/ 
	 	Name:
	 	Title: 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    D.E.
      SHAW
      VALENCE PORTFOLIOS, L.L.C.

    

    

    
      	By:	/s/ 
	 	Name:
	 	Title: 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    STANFIELD
      OFFSHORE LEVERAGED ASSETS, LTD.

     

    
      	By:	/s/ 
	 	Name:
	 	Title: 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    HIGHBRIDGE
      INTERNATIONAL LLC

    By:
      HIGHBRIDGE CAPITAL MANAGEMENT LLC

    

    
      	By:	/s/ 
	 	Name:
	 	Title: 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    INVESTCORP
      INTERLACHEN MULTI-STRATEGY MASTER FUND LIMITED

    

    
      	By:	/s/ 
	 	Name:
	 	Title: 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    AVENUE
      ENTITIES SIGNATURES TO BE PROVIDED BY OMM 

     

    
      	By:	/s/ 
	 	Name:
	 	Title: 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      A 

     

    NEXTWAVE
      WIRELESS INC.

     

    INSTRUCTION
      TO DTC PARTICIPANTS

     

    (Date
      of Mailing) 

     

    URGENT
      - IMMEDIATE ATTENTION REQUESTED 

     

    DEADLINE
      FOR RESPONSE: [DATE] * 

     

    The
      Company is in the process of registering the Securities under the Securities
      Act
      of 1933 for resale by the beneficial owners thereof. In order to have their
      Securities included in the registration statement, beneficial owners must
      complete and return the enclosed Notice of Registration Statement and Selling
      Securityholder Questionnaire. 

     

    
      

    

    
      	
              *

            	
              Not
                less than 20 calendar days from date of mailing.
                

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    NEXTWAVE
      WIRELESS INC.

     

    Notice
      of
      Registration Statement 

     

    and
      

     

    Selling
      Securityholder Questionnaire 

     

     

    (Date)
      

     

    Reference
      is hereby made to the Registration Rights Agreement (the “Registration
      Rights Agreement”)
      among
      NEXTWAVE WIRELESS INC. (the “Company”),
      and
      the Purchasers named therein. Pursuant to the Registration Rights Agreement,
      the
      Company has filed with the United States Securities and Exchange Commission
      (the
“Commission”)
      a
      registration statement on Form             
      (the
“Shelf
      Registration Statement”)
      for
      the registration and resale under Rule 415 of the Securities Act of 1933, as
      amended (the “Securities
      Act”),
      of
      the Company’s Common Stock (the
      “Securities”).
      A
      copy of the Registration Rights Agreement is attached hereto. All capitalized
      terms not otherwise defined herein shall have the meanings ascribed thereto
      in
      the Registration Rights Agreement. 

     

    Each
      beneficial owner of Registrable Securities (as defined below) is entitled to
      have the Registrable Securities beneficially owned by it included in the Shelf
      Registration Statement. In order to have Registrable Securities included in
      the
      Shelf Registration Statement, this Notice of Registration Statement and Selling
      Securityholder Questionnaire (“Notice
      and Questionnaire”)
      must
      be completed, executed and delivered to the Company’s counsel at the address set
      forth herein for receipt ON OR BEFORE [Deadline
      For Response].
      Beneficial owners of Registrable Securities who do not complete, execute and
      return this Notice and Questionnaire by such date (i) will not be named as
      selling securityholders in the Shelf Registration Statement and (ii) may not
      use
      the Prospectus forming a part thereof for resales of Registrable Securities.
      

     

    Certain
      legal consequences arise from being named as a selling securityholder in the
      Shelf Registration Statement and related Prospectus. Accordingly, holders and
      beneficial owners of Registrable Securities are advised to consult their own
      securities law counsel regarding the consequences of being named or not being
      named as a selling securityholder in the Shelf Registration Statement and
      related Prospectus. 

     

    The
      term
“Registrable
      Securities”
is
      defined in the Registration Rights Agreement. 

     

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

    

    ELECTION

     

    The
      undersigned holder (the “Selling
      Securityholder”)
      of
      Registrable Securities hereby elects to include in the Shelf Registration
      Statement the Registrable Securities beneficially owned by it and listed below
      in Item (3). The undersigned, by signing and returning this Notice and
      Questionnaire, agrees to be bound with respect to such Registrable Securities
      by
      the terms and conditions of this Notice and Questionnaire and the Registration
      Rights Agreement, including, without limitation, Section 6 of the Registration
      Rights Agreement, as if the undersigned Selling Securityholder were an original
      party thereto. 

     

    The
      Selling Securityholder hereby provides the following information to the Company
      and represents and warrants that such information is accurate and complete:
      

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

    

    QUESTIONNAIRE

     

    
      	
              (1)

            	
              (a)
                Full Legal Name of Selling Securityholder:

            

    

     

    
      	
               

            	
              (b)

            	
              Full
                Legal Name of Registered Holder (if not the same as in (a) above)
                of
                Registrable Securities Listed in Item (3) below:
                

            

    

     

    
      	
               

            	
              (c)

            	
              Full
                Legal Name of DTC Participant (if applicable and if not the same
                as (b)
                above) Through Which Registrable Securities Listed in Item (3) below
                are
                Held: 

            

    

     

    
      	
              (2)

            	
              Address
                for Notices to Selling Securityholder:

            

    

     

    
      	 	 	 	 	 
	
               

            	
               

            	
               

            	
               

            	
               

            
	 	 	 
	
               

            	
               

            	
               

            	
               

            	
               

            
	 	 	 
	
               

            	
               

            	
               

            	
               

            	
               

            
	 	 	 
	
              Telephone:

            	
               

            	
               

            	
               

            	
               

            
	 	 	 
	
              Fax:

            	
               

            	
               

            	
               

            	
               

            
	 	 	 
	
              Contact Person:

            	
               

            	
               

            	
               

            	
               

            

    

     

    
      	
              (3)

            	
              Beneficial
                Ownership of Securities: 

            

    

     

    Except
      as set forth below in this Item (3), the undersigned does not beneficially
      own
      any Securities. 

     

    
      	
               

            	
              (a)

            	
              Number
                of shares of Registrable Securities beneficially owned:                                        
                                                                                                       

            

    

     

    
      	
               

            	
              (b)

            	
              Number
                of shares of Securities other than Registrable Securities beneficially
                owned: 

                                                    
                                                        
                                                        
                                   

            

    

     

    
      	
               

            	
              (c)

            	
              Number
                of shares of Registrable Securities which the undersigned wishes
                to be
                included in the Shelf Registration Statement:                      
                                                        
                                   

            

    

     

    
      	
              (4)

            	
              Beneficial
                Ownership of Other Securities of the Company:

            

    

     

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

     

    Except
      as set forth below in this Item (4), the undersigned Selling Securityholder
      is
      not the beneficial or registered owner of any other securities of the Company,
      other than the Securities listed above in Item (3). 

     

    State
      any
      exceptions here: 

     

    
      	
              (5)

            	
              Relationships
                with the Company: 

            

    

     

    Except
      as set forth below, neither the Selling Securityholder nor any of its
      affiliates, officers, directors or principal equity holders (5% or more) has
      held any position or office or has had any other material relationship with
      the
      Company (or its predecessors or affiliates) during the past three
      years. 

     

    State
      any
      exceptions here: 

     

    
      	
              (6)

            	
              Plan
                of Distribution: 

            

    

     

    Except
      as set forth below, the undersigned Selling Securityholder intends to distribute
      the Registrable Securities listed above in Item (3) only as follows (if at
      all):
      Such Registrable Securities may be sold from time to time directly by the
      undersigned Selling Securityholder or, alternatively, through broker-dealers
      or
      agents. Such Registrable Securities may be sold in one or more transactions
      at
      fixed prices, at prevailing market prices at the time of sale, at varying prices
      determined at the time of sale, or at negotiated prices. Such sales may be
      effected in transactions (which may involve crosses or block transactions)
      (i)
      on any national securities exchange or quotation service on which the Registered
      Securities may be listed or quoted at the time of sale, (ii) in the
      over-the-counter market, (iii) in transactions otherwise than on such exchanges
      or services or in the over-the-counter market, or (iv) through the writing
      of
      options. In connection with sales of the Registrable Securities or otherwise,
      the Selling Securityholder may enter into hedging transactions with
      broker-dealers, which may in turn engage in short sales of the Registrable
      Securities in the course of hedging the positions they assume. The Selling
      Securityholder may also sell Registrable Securities short and deliver
      Registrable Securities to close out such short positions, or loan or pledge
      Registrable Securities to broker-dealers that in turn may sell such securities.
      

     

    State
      any
      exceptions here: 

     

    By
      signing below, the Selling Securityholder acknowledges that it understands
      its
      obligation to comply, and agrees that it will comply, with the provisions of
      the
      Exchange Act and the rules and regulations thereunder, particularly Regulation
      M. 

     

    
      
        
        

      

      
        A-5

        
          

        

      

      
        
        

      

    

     

    In
      the
      event that the Selling Securityholder transfers all or any portion of the
      Registrable Securities listed in Item (3) above after the date on which such
      information is provided to the Company, the Selling Securityholder agrees to
      notify the transferee(s) at the time of the transfer of its rights and
      obligations under this Notice and Questionnaire and the Registration Rights
      Agreement. 

     

    By
      signing below, the Selling Securityholder consents to the disclosure of the
      information contained herein in its answers to Items (1) through (6) above
      and
      the inclusion of such information in the Shelf Registration Statement and
      related Prospectus. The Selling Securityholder understands that such information
      will be relied upon by the Company in connection with the preparation of the
      Shelf Registration Statement and related Prospectus. 

     

    In
      accordance with the Selling Securityholder’s obligation under Section 3(d) of
      the Registration Rights Agreement to provide such information as may be required
      by law for inclusion in the Shelf Registration Statement, the Selling
      Securityholder agrees to promptly notify the Company of any inaccuracies or
      changes in the information provided herein which may occur subsequent to the
      date hereof at any time while the Shelf Registration Statement remains in
      effect. All notices hereunder and pursuant to the Registration Rights Agreement
      shall be made in writing, by hand-delivery, first-class mail, or air courier
      guaranteeing overnight delivery as follows: 

     

    
      	
              (i)     To
                the Company:

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
              NEXTWAVE
                WIRELESS INC.

            	
               

            	
               

            
	 	 	
              12670
                High Bluff Drive

            	 	 
	 	 	
              San
                Diego, CA 92130

            	 	 
	
               

            	
               

            	
              Attention:
                General Counsel

            
	 	 	 
	
              (ii)    With
                a copy to:

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
              Weil,
                Gotshal & Manges LLP

            
	
               

            	
               

            	
              767
                Fifth Avenue

            
	
               

            	
               

            	
              New
                York, NY 10153

            
	
               

            	
               

            	
              Attention:
                Marita A. Makinen

            
	
               

            	
               

            	 

    

     

    
      
        
        

      

      
        A-6

        
          

        

      

      
        
        

      

    

     

    Once
      this
      Notice and Questionnaire is executed by the Selling Securityholder and received
      by the Company’s counsel, the terms of this Notice and Questionnaire, and the
      representations and warranties contained herein, shall be binding on, shall
      inure to the benefit of and shall be enforceable by the respective successors,
      heirs, personal representatives, and assigns of the Company and the Selling
      Securityholder (with respect to the Registrable Securities beneficially owned
      by
      such Selling Securityholder and listed in Item (3) above). This Agreement shall
      be governed in all respects by the laws of the State of New York. 

     

    
      
        
        

      

      
        A-7

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the undersigned, by authority duly given, has caused this
      Notice and Questionnaire to be executed and delivered either in person or by
      its
      duly authorized agent. 

     

     

    Dated:
      ____________ 

     

                          
                                               

    Selling
      Securityholder 

    (Print/type
      full legal name of beneficial owner of Registrable Securities) 

     

    
      	
               

            	
              
                By:

              

            	 
	
               

            	
              
                Name:

              

            
	
               

            	
              
                Title:

              

            

    

     

    PLEASE
      RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON OR
      BEFORE [DEADLINE
      FOR RESPONSE]
      TO THE
      COMPANY’S COUNSEL AT: 

     

    
      	
              Weil,
                Gotshal & Manges LLP

            
	
              767
                Fifth Avenue

            
	
              New
                York, NY 10153

            
	
              Attention:
                Marita A. Makinen

            

    

     

    
      
        
        

      

      
        A-8EX-4.B.VI

 

Exhibit 4 (b)(vi)

CONFORMED COPY

	 	 	 
	DATED

	 	8 September 2005

BHR Holdings BV

— and —

DABICAM SAS

— and —

Six Continents Limited 

Agreement as amended by a Letter dated 7 October 2005 and a Deed of

Amendment dated 27 October 2005

 — RELATING TO —

the sale and purchase of the entire share capital of

Hotel
Inter-Continental Paris SAS

P1999.00024

Ref: C3/NPLR/1551393.3

 

 

Contents

	 	 	 	 	 	 	 
	Clause	 	Page no
	 
	 	 	 	 	 	 
	1.

	 	Interpretation
	 	 	1	 
	2.

	 	Sale and Purchase of Shares
	 	 	12	 
	3.

	 	Consideration
	 	 	13	 
	4.

	 	Pre-Completion Matters
	 	 	13	 
	5.

	 	Completion
	 	 	19	 
	6.

	 	Net Current Assets Amount
	 	 	23	 
	7.

	 	Post Completion Undertakings
	 	 	24	 
	8.

	 	Warranties
	 	 	25	 
	9.

	 	Limitation on Claims
	 	 	28	 
	10.

	 	Indemnities
	 	 	35	 
	11.

	 	Insurance
	 	 	39	 
	12.

	 	Purchaser Warranties
	 	 	39	 
	13.

	 	Seller’s Intellectual Property
	 	 	40	 
	14.

	 	Non-Solicitation
	 	 	41	 
	15.

	 	Purchaser’s Rights to Terminate
	 	 	43	 
	16.

	 	Announcements and Confidential Information
	 	 	44	 
	17.

	 	Effect of Termination
	 	 	45	 
	18.

	 	Interest and Payments
	 	 	45	 
	19.

	 	Costs
	 	 	47	 
	20.

	 	Notices
	 	 	47	 
	21.

	 	Severability
	 	 	49	 
	22.

	 	Entire Agreement
	 	 	49	 
	23.

	 	Variation
	 	 	49	 
	24.

	 	Remedies and Waivers
	 	 	50	 
	25.

	 	Successors and Assignment
	 	 	50	 
	26.

	 	Guarantee
	 	 	51	 
	27.

	 	Counterparts
	 	 	53	 
	28.

	 	Invalidity
	 	 	53	 
	29.

	 	Further Assurance
	 	 	53	 
	30.

	 	Rights of Third Parties
	 	 	53	 
	31.

	 	Purchaser’s Rights and Remedies
	 	 	53	 
	32.

	 	Rate of Exchange
	 	 	54	 
	33.

	 	Governing Law and Jurisdiction
	 	 	54	 
	Schedule 1	 	 	56	 
	 

	 	Part A — The Company
	 	 	56	 
	 

	 	Part B — The Subsidiaries
	 	 	57	 
	Schedule 2	 	 	59	 
	 

	 	Part A — The Property
	 	 	59	 

 

 

ii

	 	 	 	 	 	 	 
	Clause	 	Page no
	 
	 

	 	Part B — Fiche D’immeuble
	 	 	60	 
	 

	 	Part C — The Leases
	 	 	61	 
	Schedule 3 — Warranties	 	 	62	 
	Schedule 4 — Purchaser’s Warranties	 	 	94	 
	Schedule 5	 	 	95	 
	 

	 	Part 1 — Determination and Confirmation of Net Current Assets
Amount, Long Term Liabilities and Provisions
	 	 	95	 
	 

	 	Part 2 — Accounting Policies to be Adopted in the Net Current
Assets Statement
	 	 	99	 
	 

	 	Part 3 — Pro Forma Net Current Asset Statement in respect of
the Net Current Assets Amount
	 	 	103	 
	Schedule 6 — Tax Covenant	 	 	104	 

 

 

CONFORMED COPY

This Agreement is made the 8th day of September 2005

Between:

	(1)	 	BHR Holdings BV, a company registered in The Netherlands, under number 3322083, whose
registered office is at Professor Tulpplein 1, 1018 GX Amsterdam (the “Seller”);
	 
	(2)	 	DABICAM SAS, a French simplified joint-stock company (société anonyme simplifiée) registered in
France with the Commercial Court Registry of Paris (with a provisional registration number
noo 2005B15946), with a share capital of €100,000 whose registered office is at 95 rue
de la Boétie 75008 Paris (the “Purchaser”); and
	 
	(3)	 	Six Continents Limited, a company registered in England, under number 00913450, whose
registered office is at 67 Alma Road, Windsor, Berkshire SL4 3HD (the “Guarantor”).

Recitals:

	(A)	 	Hôtel Inter-Continental Paris SAS is a limited liability company registered in France under
number 652 029 125 RCS Paris, whose registered office is at 3 rue de Castiglione, 75001 Paris,
France (the “Company”). Particulars of the Company are set out in schedule 1.
	 
	(B)	 	The Seller is the owner of and is entitled to transfer the title to the Shares.
	 
	(C)	 	The Seller has agreed to sell and the Purchaser has agreed to purchase all of the Shares on and
subject to the terms of this Agreement.

It Is Agreed:

	1.	 	Interpretation
	 
	1.1	 	In this Agreement:

“Accounts” means the audited balance sheet, profit and loss account and related notes to the
financial statements of each Group Member as at and for the 12 month period ended on the Accounts
Date;

“Accounts Date” means 31 December 2004;

“Accruals” means the monetary value of goods and services received by a Group Member before the
Completion Date which have not been paid for by that Group Member as at the
Completion Date, including an amount for accrued Retirement Indemnities, social charges, 13th and
14th month payments, bonus payments and any wages and employee participation and intéressement and
other contractual and statutory payments

 

-2-

to or in respect of employees, holiday pay and overtime,
all of which will be apportioned on a pro-rata basis for the year in question;

“Accrued Income” means the monetary value of goods and services provided by a Group Member before
the Completion Date for which no invoice has been issued by that Group Member as at the Completion
Date;

“Agreement” means this agreement;

“Business” means the business of the Group at the date of this Agreement;

“Business Day” means any day (except any Saturday or Sunday) on which banks in Paris are open for
business;

“Carry-back Receivable” means the receivable of €3,637,069 as at 31 December 2004 owed by the
French Treasury to the Company under article 220 Quinquies of the French Tax Code;

“Carry-back Receivable Proceeds” means the net cash proceeds of sale of the Carry-back Receivable
pursuant to the Carry-back Receivable Sale Contract;

“Carry-back Receivable Sale Contract” means a contract between the Company and Société Générale for
the sale and purchase of the Carry-back Receivable in the agreed form
to be executed on or after
the date of this Agreement;

“Cash” means balances in the cash books of Group Members including cash at the Property but
excludes the Carry-back Receivable Proceeds amount of the asset required to be included in the
Net Current Assets Statement in respect of the Carry-back Receivable;

“Claim” means any General Claim, Indemnity Claim or Tax Claim;

“Condition” means the condition set out in clause 5.2(a);

“Companies Act” means the Companies Act 1985;

“Company” has the meaning given in Recital (A);

“Company Systems” means the computer and data processing systems, information and communication
technologies solely used in or solely for the Business, which systems include the property
management system and yield management systems, including hardware, Software, networks, data
storage devices, printers, firmware, dedicated power supplies, cabling, peripherals and associated
documentation, but excluding the Holidex System, the payroll systems and software and the
PeopleSoft systems and software and any other proprietary systems or proprietary Software of the
Seller or the Seller’s Group;

 

-3-

“Completion” means completion of the sale and purchase of the Shares (including transfer of
ownership of the Shares) on the Completion Date pursuant to clause 5 of this Agreement in
accordance with its terms;

“Completion Date” means 11.00 am on 11 October 2005 and the date which is 7 Business Days after the
date on which the Condition is satisfied, or on such other date as may be determined pursuant to
clause 5.8(a)(i) means 1 November 2005 or such date as may be agreed between the parties or
determined pursuant to clause 5.8(a)(i);

“Confidential Information” means Know-How, trade secrets and other information of a confidential
nature (including, without limitation, all proprietary technical and commercial information and
techniques in whatever form held, such as paper, electronically stored data, magnetic media film
and microfilm or orally which solely relates to a Group Member);

“Consideration” means the sum of the Initial Consideration and the Net Current Assets Amount;

“Creditors” means all indebtedness of the Group as at the Completion Date including, without
limitation, creditors, provisions pour risques et charges as determined under French GAAP as at the
Completion Date, overdrafts, monies held on account, bills of exchange, Accruals and Deferred
Income, Indebtedness (to the extent not already included in this definition), but excluding Tax and
Deferred Tax;

“Current Guest Accounts” means uninvoiced accounts of guests staying at the Hotel as at Completion
who are booked to remain at the Hotel after Completion, and uninvoiced or invoiced but unpaid
accounts of corporate clients in respect of guests who have stayed at the Hotel prior to
Completion;

“Current Guest Deposits” means advance deposits and receipts of guests who will be staying at or
using the services provided at the Hotel following the Completion Date and any sums credited to
corporate client accounts in respect of guests who will be staying at or using the services
provided at the Hotel following the Completion Date;

“Data Room” means the data room in the agreed form, a copy of which is held in escrow by Maître
Frédéric Martin, Notaire in Paris (25 avenue George V, 75008 Paris), pursuant to and in accordance
with the terms of an escrow agreement subject to French law entered on or around the date hereof
between Maître Frédéric Martin, the Seller and the Purchaser;

“Deferred Income” means any payments received by a Group Member before the Completion Date relating
to a service to be provided by a Group Member after the Completion Date including any Current Guest
Deposits;

 

-4-

“Deferred Tax” means a provision which deals with the timing differences in the accounting for and
tax treatment of any allowable deductions and/or payment of Tax;

“Disclosed” means fully, fairly, accurately and clearly disclosed by the Disclosure Letter with
sufficient details to enable the Purchaser to have a reasonable understanding of the nature
and scope of the matters disclosed and “Disclosure” and “Disclose” shall be construed accordingly;

“Disclosure Letter” means the letter of the same date as this Agreement from the Seller to the
Purchaser in the agreed form;

“Employee Loans” means any loan made to an employee, consultant or officer of a Group Member or any
other person who provides services to a Group Member by any Group Member;

“Employees” means the employees of the Group Members as at the Completion Date;

“Employment Warranties” means those Warranties set out in paragraphs M and N of schedule 3;

“Encumbrance” means a charge, debenture, mortgage, pledge, lien, hypothecation, security interest,
title retention, assignment, restriction or any other agreement or arrangement the effect of which
is the creation of security, or any other interest, equity or other right of any person (including
any right of first refusal, right of control, option, right of pre-emption) or other third party
right or interest of any kind, whether granted for the purpose of security or not, or any agreement
or arrangement to create any of the same and “Unencumbered” and “Encumber” shall be construed
accordingly;

“Environment” means all organisms (including man), ecosystems, property and the following media:
air (including the air within buildings and the air within other natural or man-made structures,
whether above or below ground); water (including water under or within land or in drains or sewers
and coastal and in-land waters); and land (including land under water);

“Environmental Laws” means any and all laws in force in France at the date of this Agreement,
whether civil or criminal applicable to the Property and/or the conduct of the Business and/or the
Group and which have as a purpose or effect the protection of the Environment, including: European
Community or European Union regulations, directives and decisions; statutes and subordinate
legislation; regulations, orders and ordinances; Codes of Practice having the force of law;
common-law, local laws and by-laws; and judgments, notices, orders, directions, instructions or
awards of any Competent Authority;

“Environmental Matters” means any and all matters affecting the status, condition or quality of the
Environment, at, on, under or about the Property;

 

-5-

“EONIA” means Euro Over-Night Index Average;

“Excluded Assets” means those assets, contracts and rights (including any assets on loan and assets
bearing Protected Names and Protected Badges) which are referred to in paragraph H of the
Disclosure Letter and generally any other assets bearing Protected Names and Protected Badges;

“French Corporate Income Tax” (Impôt sur les sociétés) means corporate income tax as defined in
articles 205 and seq. of the French Tax Code;

“French GAAP” means the French accounting principles generally applied for the preparation of
statutory accounts;

“French Tax Code” has the meaning set out in the Tax Covenant;

“French Tax Group” has the meaning set out in the Tax Covenant;

“General Claim” means any claim made under the General Warranties;

“General Warranties” means those Warranties set out in schedule 3 other than the Tax Warranties;

“Group” means the Company and the Subsidiaries, and “Group Member” shall be construed accordingly;

“Group Scheme” means each retirement plan, saving plan, mandatory or voluntary profit sharing
agreement, incentive agreement or other collective scheme granting financial benefits to existing
or previous employees of any Group Member;

“Group Undertaking” has the meaning set out in section 259 of the Companies Act;

“Hazardous Matter” means any substance, material, liquid, solid, gas or other matter of whatsoever
nature, which is an actual or likely cause of, or is otherwise capable of causing significant harm
or damage to the Environment or is regulated under Environmental Laws;

“Health & Safety Legislation” means applicable French legislation concerning health and safety
matters and conditions of work and all and any regulations or orders made or issued under such
legislation and any relevant codes of practice guidance notes and the like issued by government
agencies having force of law;

“Holidex System” means the global reservation system used by the Seller’s Group (and, prior to
Completion, the Company and its subsidiaries) for reservations;

“Hotel” means the hotel situated on the Property;

 

-6-

“Hôtel Inter-Continental London (Holdings) SAS” means the subsidiary undertaking in respect of
which the Company is a parent undertaking, particulars of which are set out in schedule 1 part B;

“Indebtedness” means, in respect of any company or other entity, any borrowing or indebtedness in
the nature of borrowing (including any indebtedness for monies borrowed or raised under any bank or
third party guarantee, acceptance credit, bond, note, bill of exchange or commercial paper, letter
of credit, finance lease, hire purchase agreement,
forward sale or purchase agreement or conditional sale agreement or other transaction having the
commercial effect of a borrowing and all finance, loan and other obligations of a kind required to
be included in the balance sheet of a company or other entity but excluding (1) any trade creditor
liabilities (including inter-company trading liabilities) incurred in the ordinary and usual course
of business and reflected in the Net Current Asset Statement; and (2) the Revolving Facility Loan);

“Indemnities” means the indemnities in clause 10;

“Indemnity Claim” means any claim pursuant to the Indemnities and any claim pursuant to clause
11.3, which, for the avoidance of doubt, shall not include Claims under the Tax Covenant;

“Initial Consideration” means €315,000,000;

“Insurance Policies” means each current insurance and indemnity policy in respect of which each
Group Member has an interest (including any active historic policies which provide cover on a
losses occurring basis);

“Intellectual Property” means rights in and in relation to: Know-How, trade marks, service marks,
trade and business names, logos, get up, (including any and all goodwill associated with or
attached to the same), domain names, patents, inventions (whether or not patentable), registered
designs, design rights, copyrights (including, without limitation, rights in software) and moral
rights, database rights, semi-conductor topography rights, utility models and all rights or forms
of protection having an equivalent or similar nature or effect anywhere in the world, whether
enforceable, registered, unregistered or registrable (including all renewals, extensions and
applications for registration); and the right to sue for damages for past and current infringement
(including passing off and unfair competition) in respect of the same;

“Interim Accounts” means the unaudited balance sheet and profit and loss account of the Company for
the seven months ended 31 July 2005;

“Know-How” means all know-how, expertise, technical or other information developed or acquired by
the Group including, without limitation, all related ideas, concepts, methods,

 

-7-

inventions,
discoveries, data, formulae, processes, methods,
techniques and specifications which solely relates
to a Group Member;

“Licence” means any licence, consent, approval, permit or other authorisation held by a Group
Member as at the date of Completion relating to the operation of the Business;

“Licences In” means the licences of Intellectual Property which have been granted to a Group
Member;

“Licences Out” means the licences of Intellectual Property which have been granted by a Group
Member to third parties;

“Long Term Liabilities” means any long-term liabilities of any Group Member as at Completion (as
determined in accordance with French GAAP as at the Completion Date);

“Losses” includes, in respect of any matter, event or circumstance, all demands, claims, actions,
proceedings, damages, payments, fines, penalties, losses, costs (including reasonable legal costs),
reasonable expenses (including taxation), reasonable disbursements or other liabilities, in each
case whether direct or indirect;

“Material Effect” means in the context of clause 15, any fact, matter, circumstance or event which
results in or is likely to result in, a cost to the Company or a loss to the Purchaser of at least
€35.0 million after accounting for insurance proceeds, if any;

“Net Current Assets Amount” means the sum, on an aggregated basis for the Group, representing the
value of Stock, Trade Debtors, 50% of the Carry-back Receivable Proceeds the amount of the
asset required to be included in the Net Current Assets Statement in respect of the Carry-back
Receivable and Cash minus Creditors, Tax, Long Term Liabilities and Provisions as at the
Completion Date as set out in the Net Current Assets Statement;

“Net Current Assets Estimate” means the sum of €550,000 being a realistic estimate of Stock, Trade
Debtors, 50% of the Carry-back Receivable Proceeds the amount of the asset required to be
included in the Net Current Asset Statement in respect of the Carry-back Receivable and Cash
minus Creditors, Tax, Long Term Liabilities and Provisions as at the Completion Date;

“Net Current Assets Statement” means the statement setting out the calculation of the Net Current
Assets Amount prepared in accordance with schedule 5;

“Pension Plan” means the supplementary defined benefit pension scheme established by SNC de L’Hôtel
Inter-Continental Paris for staff between 1995 and 1999 and managed by Zurich Assurance
(retraite-chapeau);

 

-8-

“Powers of Attorney” means the powers of attorney granted by Mrs Marie-Béatrice Lallemand and Mr
Laurent Turping, acting respectively as chairman of the board of directors of the Company and as
chief executive officer of the Company, in favour of InterContinental Hotels Group Plc enabling it
to conduct, on behalf of the Company, the claims against the Commissioners of Inland Revenue
brought in the High Court of England and Wales with claim numbers HC03C00857 and HC03C03431, or any
other claim arising out of substantially the same facts or matters, whether commenced in the High
Court of England and Wales or made to, or determinable by, any Tax Authority of the United Kingdom;

“Pre-sale Reorganisation” means the corporate restructuring which occurred in December 2004
comprising (i) the sale of the entire issued share capital of Hôtel InterContinental London Limited
by Hôtel InterContinental London (Holdings) SAS and (ii) the Revolving Facility Loan;

“Prepayments” means all prepayments made by a Group Member before the Completion Date which relate
to a supply to a Group Member of goods and/or services to be provided after the Completion Date;

“Property” means the property brief particulars of which are set out in schedule 2;

“Protected Badges” means the Protected Names or any reference to the name of or any logo mark or
symbol incorporating or using any of the Protected Names used by the Seller or the Company or any
member of the Seller’s Group as at the Completion Date in relation to the Property;

“Protected Names” means the names “Posthouse”, “Holiday Inn”, “Express by Holiday Inn”, “Crowne
Plaza”, “InterContinental”, “Indigo”, “Spirit”, “Staybridge Suites”, “Prestige Reservations” and
“Candlewood Suites” or any other trade name(s) or trade or service mark (a) owned by or exclusively
licensed to any of the Seller’s Group or any member thereof or (b) associated with or at any time
used in connection with the “Posthouse”, “Holiday Inn”, “Express by Holiday Inn”, “Crowne Plaza”,
“InterContinental”, “Indigo”, “Spirit”, “Staybridge Suites”, “Prestige Reservations” and
“Candlewood Suites” brands or any combination or colourable imitation thereof in either case in all
cases as registered or used at the Completion Date;

“Provisions” means any provision of a Group Member which is required to be made at Completion in
accordance with the policies set out in Part 2 of schedule 5;

“Purchaser’s Group” means the Purchaser and its Group Undertakings from time to time and
“Purchaser’s Group Member” shall be construed accordingly;

 

-9-

“Purchaser’s Solicitors” means Baker & McKenzie of 32 Avenue Kléber, BP 2112, 75771 Paris Cedex 16;

“Purchaser’s Warranties” means the warranties set out in schedule 4;

“Real Estate Company” has the meaning set out in the Tax Covenant;

“Relief” has the meaning set out in the Tax Covenant;

“Retained Employees” means Dagmar Woodward and each president (président), managing director
(directeurs généraux) and SNC Manager who resigns pursuant to clause 5.4(c) including, for the
avoidance of doubt, Mr. Gill and Ms. Maillot;

“Retirement Indemnities” means all rights, whether statutory or contractual, of employees to
receive a lump sum payment upon retirement;

“Revolving Facility Loan” means the revolving facility loan amounting up to €315,000,000 advanced
by Hôtel InterContinental London (Holdings) SAS to the Company;

“Seller’s Group” means the Seller and its Group Undertakings from time to time, excluding the
Company and the Subsidiaries;

“Seller’s Solicitors” means Lovells of Atlantic House, Holborn Viaduct, London, EC1A 2FG;

“Service Agreements” means:

	 	(a)	 	a service agreement between SNC de l’Hôtel Inter-Continental Paris and
Inter-Continental Hotels Corporation, dated 2 January 1992, concerning reservation, financial and
accounting, legal, insurance, recruitment and system services;
	 
	 	(b)	 	a regional services agreement between SNC de l’Hôtel Inter-Continental
Paris, among others, and Société des Hôtels Inter-Continental France, dated 15 January 1993,
concerning supervision and coordination of the operational decisions and their implementation,
coordination of all local financial aspects, fiscal and tax matters, and supervision and
coordination of all sales and marketing efforts;
	 
	 	(c)	 	a centralised services agreement between SNC de l’Hôtel
Inter-Continental Paris and Société des Hôtels Inter-Continental France, dated 15 January 1993,
concerning paralegal, software, French accounting and Asian commercial representation services;
	 
	 	(d)	 	the trademark license agreement between SNC de l’Hôtel
Inter-Continental Paris and InterContinental Hotel Corporation, dated 2 January 1992; and

 

-10-

	 	(e)	 	a domiciliation agreement between Societe Nouvelle du Grand Hotel and
Hotel Inter-Continental London (Holdings), dated 5 September 2001;

“Shares” means entire issued and paid up share capital of the Company;

“SNC de l’Hôtel Inter-Continental Paris” means the subsidiary undertaking in respect of which the
Company is a parent undertaking, brief particulars of which are set out in schedule 1 part B;

“SNC Manager” means a manager of SNC de l’Hôtel Inter-Continental Paris as set out in Schedule 1,
Part B;

“Software” means all forms of computer program, including without limitation, the applications and
operating systems and in each case, whether in source, object or machine form, used by any Group
Member in the carrying on of the Business;

“Stock” means all stock of unconsumed beers, wines, spirits and other alcohol and tobacco products
which are unused, owned beneficially by a Group Member and held at the Property in connection with
the Business as at the Completion Date;

“Subsidiaries” means Hôtel Inter-Continental London (Holdings) SAS and SNC de l’Hôtel
Inter-Continental Paris;

“Tax” or “Taxation” has the meaning set out in the Tax Covenant;

“Tax Authority” has the meaning set out in the Tax Covenant;

“Tax Claim” means any claim under the Tax Warranties or the Tax Covenant;

“Tax Covenant” means the tax covenant set out in schedule 6;

“Tax Warranties” means those Warranties set out in paragraph O of schedule 3;

“Termination Event” has the meaning contained in clause 15.1;

“Trade Debtors” means all receivables arising out of or attributable to the operations of the Group
as at the Completion Date including Accrued Income, Employee Loans, Prepayments and the right to
receive payment for services rendered before Completion but not invoiced before such date which
shall include that portion of Current Guest Accounts relating to the period prior to Completion but
excluding Deferred Tax;

“Transfer Tax” has the meaning set out in the Tax Covenant;

“Transfer Tax Demand” has the meaning set out in the Tax Covenant; and

“Warranties” means the warranties set out in schedule 3.

 

-11-

	1.2	 	In this Agreement, unless the context otherwise requires:

	 	(a)	 	references to “this Agreement” or any other document include this
Agreement or such other document as varied, modified or supplemented in any manner from time to
time;
	 
	 	(b)	 	references to recitals, clauses and schedules and sub-divisions of
them are references to the recitals and clauses of, and schedules to, this Agreement and
sub-divisions of them respectively;
	 
	 	(c)	 	references to any enactment include references to such enactment as
re-enacted, amended or extended on or before the date of this Agreement and any subordinate
legislation made from time to time under it;
	 
	 	(d)	 	references to a “person” include any individual, company, corporation,
firm, partnership, joint venture, association, organisation, institution, trust or agency, whether
or not having a separate legal personality;
	 
	 	(e)	 	headings are inserted for convenience only and shall be ignored in
construing this Agreement;
	 
	 	(f)	 	general words shall not be given a restrictive meaning by reason of
their being preceded or followed by words indicating a particular class or examples of acts matters
or things;
	 
	 	(g)	 	the word “material” shall mean material in the context of the Group as
a whole;
	 
	 	(h)	 	a reference to a time of day is to Paris time;
	 
	 	(i)	 	references to the singular shall include the plural and vice versa;
	 
	 	(j)	 	any reference to “writing” or “written” includes any method of
reproducing words or text in a legible and non-transitory form but, for the avoidance of doubt,
shall not include e-mail; and
	 
	 	(k)	 	references to “indemnify” and to “indemnifying” any person against any
Losses by reference to any matter, event or circumstance includes indemnifying and keeping that
person indemnified against all Losses from time to time made, suffered or incurred as a consequence
of or which would not have arisen but for that matter, event or circumstance.

	1.3	 	The recitals and schedules to this Agreement form part of it.
	 
	1.4	 	In this Agreement “subsidiary undertakings” and “parent undertakings”
have the meanings set out respectively in section 258 of the Companies Act 1985

 

-12-

	1.5	 	Any reference in this Agreement to a document being “in the agreed
terms” or “in the agreed form” is to a document being in the terms agreed between the parties and
for identification purposes only signed or initialled by them or on their behalf on, before or
after the date of this Agreement.
	 
	1.6	 	References to any English legal term for any action, remedy, method of
judicial proceeding, regulation, rule, legal document, legal status, court, official or any other
legal concept shall, in respect of any jurisdiction other than England, be deemed to include the
legal concept which most nearly approximates in that jurisdiction to the English legal term and to
any English statute shall be construed so as to include equivalent or analogous laws of any other
jurisdiction, provided that where reference is expressly made to any French legal term then such
term shall prevail and shall be construed in accordance with the laws of France.
	 
	2.	 	Sale and Purchase of Shares
	 
	2.1	 	In accordance with this Agreement, with effect at Completion the Seller
agrees to sell and the Purchaser agrees to purchase the entire legal and beneficial title in the
Shares, free from all Encumbrances and together with all rights attaching to the Shares on or after
Completion, including all rights to any dividend or other distribution declared, made or paid after
the date of this Agreement.
	 
	2.2	 	The Seller covenants with the Purchaser that at Completion it shall
have full power and the right to sell and transfer the Shares on the terms set out in this
Agreement.
	 
	2.3	 	The Seller irrevocably waives, and undertakes to procure on or before
Completion the waiver of, any restrictions on transfer (including rights of pre-emption) which may
exist in relation to the Shares, whether under the articles of association of the Company or
otherwise.
	 
	2.4	 	The Purchaser shall not be obliged to complete the purchase of any of
the Shares unless the purchase of all the Shares is completed simultaneously.
	 
	2.5	 	The Seller covenants with the Purchaser that at Completion:

	 	(a)	 	the Company will be the sole legal and beneficial owner of the entire
issued and paid up share capital in Hotel Inter Continental London (Holdings) SAS free from all
Encumbrances; and
	 
	 	(b)	 	the Company and Hotel Inter Continental London (Holdings) SAS will be
the sole legal and beneficial owners of the entire issued and paid up share capital in SNC de
L’Hotel Inter-Continental Paris free from all Encumbrances.

 

-13-

	3.	 	Consideration
	 
	3.1	 	The Purchaser will pay the Consideration to the Seller for the purchase
of the Shares in accordance with this Agreement.
	 
	3.2	 	The Initial Consideration and the Net Current Assets Estimate shall be
payable on Completion pursuant to clause 5.
	 
	4.	 	Pre-Completion Matters
	 
	4.1	 	As from the date of this Agreement until Completion, the Seller
(without prejudice to the operation of paragraph 10 of the Tax
Covenant or to the Carry-back
Receivable Sale Contract) shall procure that:

	 	(a)	 	the businesses of each Group Member will be carried on as going
concerns in the ordinary and usual course as carried on over the 12 months prior to the date of
this Agreement including payment of Taxes and management of Tax affairs in compliance in all
material respects with all applicable legal and regulatory provisions and without material
interruption or alteration in the nature, scope or manner of such businesses but only to the extent
that avoiding such interruption or alteration is within the control of the Seller and is not as a
result of a fact, matter, circumstance or event affecting similar businesses in Paris;
	 
	 	(b)	 	as soon as reasonably practicable the Seller shall notify the
Purchaser of all material matters relating to businesses, assets and affairs of each Group Member
(having regard to the Purchaser’s interest as the prospective owner of each Group Member) and
provide to the Purchaser reasonable details of any material change in the Business or the Company
or Group’s financial position or assets;
	 
	 	(c)	 	each Group Member will enforce, or procure to be enforced the
obligations of employees and directors under their respective employment contracts and of other
employees under their terms of employment with a Group Member;
	 
	 	(d)	 	each Group Member will keep proper accounting records of all dealings
and transactions in relation to its and their businesses and will afford to the Purchaser and any
representative of the Purchaser full access thereto;
	 
	 	(e)	 	the Purchaser, and such employees, agents, sub-contractors,
representatives (including representatives of the proposed post-Completion operator of the Hotel)
or advisers as the Purchaser reasonably requests, will be afforded reasonable access reasonably
required by the Purchaser for the purposes of planning for the operation of the Business after
Completion which shall include access to: (i) the Property (including, with the Seller’s prior
consent (not to be unreasonably withheld or delayed), for the purpose of planning repair, safety or
replacement

 

-14-

	 	 	 	works or planning the installation of replacement fixtures, fittings or equipment at
the Property); (ii) the Company Systems; (iii) all documents, books and records held or maintained
by or on behalf of each Group Member or held or maintained by or on behalf of the Seller or any of
its advisers relating thereto; (iv) the directors, officers (mandataires sociaux) executives and
advisers of each Group Member; and (v) the General Manager and all department heads (including
Finance, Human Resources, Revenue, Sales and Marketing, Engineering and Purchasing) of the Hotel;
	 
	 	(f)	 	it maintains in force policies of insurance for full reinstatement
value but otherwise with limits of indemnity at least equal to, and otherwise on terms no less
favourable than, those policies of insurance currently maintained by it and not do anything to
permit any of its insurances to lapse or do anything which would make any policy of insurance void
or voidable and any insurance proceeds that are received by any Group Member in relation to any
damage or loss affecting the assets of any Group Member shall be paid to such Group Member as soon
as practicable;
	 
	 	(g)	 	the Seller’s Group removes from the Property none of the physical
assets (other than the Excluded Assets which are to be removed from the Property prior to
Completion), fixtures, fittings and equipment and operating supplies and equipment used in the
Business or otherwise dispose of any such physical assets, fixtures, fittings and equipment and
operating supplies and equipment save in the ordinary and usual course of business and continues to
take such steps as are currently taken to endeavour to prevent the hotel staff and guests removing
any such physical assets, fixtures, fittings and equipment and operating supplies and equipment;
	 
	 	(h)	 	there is no material change in the manner or time of payment of
creditors, or the issue of invoices or collection of debts, or policy of reserving for debtors or
in the amount of stock bought or agreed to be bought (subject to clause 4.2(z)) or in stock which,
taking the net effect of all such changes, would have a material adverse effect on the business of
the Group;
	 
	 	(i)	 	no transaction is entered into between the Company or any other
Group Member and the Seller or any member of the Seller’s Group which would continue in effect or
take effect on or after Completion save for transactions in the ordinary and usual course of
business which are recognised in the Net Current Assets Statement; and

 

-15-

	 	(j)	 	procure that no member of the Seller’s Group (including any officers, employees or
contractors thereof):

	 	(i)	 	changes the manner in which reservations have been taken for the Hotel
in the previous 12 months such that either: (A) the rates for
accommodation offered by the Seller’s Group for the Hotel for the period
following Completion are materially below the average room rate for the
previous 12 months; or (B) the number of Priority Club® Reward redemption
bookings or any other loyalty scheme or discounted staff
bookings for the Hotel in any given month following Completion is
materially higher than the average number of such bookings per month
over the previous 12 months;
	 
	 	(ii)	 	instructs any member of its reservation centre to deflect bookings for the
Hotel to any other hotel property; or
	 
	 	(iii)	 	effects any change to the manner in which proposal requests sent to
paris.sales@ichotelsgroup.com, paris.reservations@ichotelsgroup.com
and paris.prestigee@ichotelsgroup.com are currently handled, including
enabling the marketing departments of both the Hotel and the Inter-
Continental Le Grand Hôtel to receive a copy of the request and provide
the requestor with a proposal; and

	 	(k)	 	as soon as reasonably practicable, the Seller shall prepare and provide the
Purchaser with an asbestos technical file for the Property (dossier technique
amiante) which complies with article R.1334-26 of the French Public Health Code
(Code de la Santé Publique).

	4.2	 	Without prejudice to clause 4.1, or paragraph 10 of the Tax Covenant, or the Carry -back
Receivable Sale Contract, pending Completion, the Seller shall procure that none of the
following matters will occur or be undertaken without the prior written consent of the
Purchaser:

	 	(a)	 	the modification of any of the rights attached to any shares in a Group Member
(including the Shares), the allotment or issue of or agreement to allot or issue any shares (parts sociales ou valeurs mobilières) or loan capital of a Group Member,
the grant or agreement to grant any option or right over any shares (parts sociales
ou valeurs mobilières) or loan capital of a Group Member, the issue of any
obligations convertible into shares of a Group Member, the repayment in whole or
in part of any loan, loan capital or preference capital of any Group Member or the
issue of any profit sharing bonds or grant of any rights to third parties to share in

 

-16-

	 	 	 	the past, present or future income or profits, reserves or liquidation surpluses of
any Group Member;

	 	(b)	 	the capitalisation or repayment of any amount standing to the credit of any reserve
of a Group Member or the redemption or purchase of any shares or any other
reorganisation of the share capital of a Group Member;
	 
	 	(c)	 	the transfer (under any form) or approval of the transfer to any third party of any shares of a Group Member (including the Shares);
	 
	 	(d)	 	whether in the ordinary and usual course of business or otherwise:

	 	(i)	 	the sale or disposal of, or the grant or termination of any rights in respect
of, any part of the undertaking or the assets of a Group Member having a
value in excess of €50,000 per transaction or €200,000 in aggregate; or
	 
	 	(ii)	 	the acquisition of, or the agreement to acquire, any business or any asset
having a value in excess of €50,000 per transaction or €200,000 in
aggregate, or the receipt of any service otherwise than at market value;

	 	(e)	 	the entry into any leasing, hire purchase or other agreement or arrangement for
payment on deferred terms;
	 
	 	(f)	 	the effecting of any material change in the practices of ordering supplies and raw
materials, invoicing customers or collecting debts from those practices adopted at
the date of this Agreement;
	 
	 	(g)	 	the declaration, payment or other making by a Group Member of any dividend or
other distribution;
	 
	 	(h)	 	the passing of any resolution or decision by the shareholders of a Group Member,
(including any alteration to the Articles of Association of a Group Member), except
for the purpose of the sale and purchase of the Shares as contemplated herein;
	 
	 	(i)	 	the giving by a Group Member of any guarantee, indemnity or surety;
	 
	 	(j)	 	the increase or extension of the liability of a Group Member under any intra-group
guarantees existing at the date of this Agreement or the entry into any new intra-
group guarantees;
	 
	 	(k)	 	the acquisition by a Group Member of any shares of any other company, or the
acquisition of the whole or any substantial part of the undertaking, assets or
business of any other company or any firm or person, or the participation by a
Group Member in any partnership, consortium, association or joint venture;

 

-17-

	 	(l)	 	the borrowing of any money or acceptance of any financial facility by a Group Member
or the making, granting, accepting or incurring of any loan, financial
facility, material or unusual undertakings or liabilities (actual or contingent)
including any off-balance sheet commitments;
	 
	 	(m)	 	the creation or issue or allowing to come into being of any Encumbrance upon or
over any part of the property or assets or uncalled capital of a Group Member or
the creation or issue of any debenture or debenture stock or the obtaining of any
advance or credit in any form, other than normal trade credit;
	 
	 	(n)	 	the appointment of, or the issue of an offer of employment to, any new director or
officer (mandataire social ) of a Group Member or any employees or consultants of a
Group Member who would receive an annual remuneration of €60,000 or more
(whether under fixed-term or indefinite term employment contracts);
	 
	 	(o)	 	save as contemplated by this Agreement, the entry into or modification of any
agreement, arrangement or understanding with any trade union, works council, staff
association or other employee representative body which would be binding
upon the Purchaser post-Completion, save that the Purchaser shall have 3 Business
Days from receipt of written notification from the Seller that an issue has
arisen for which it requires the Purchaser’s consent under this clause 4.2(o) in
order to provide its consent, such consent not to be unreasonably withheld. In the
event that the Purchaser fails to respond within the 3 Business Day period the
Purchaser shall be deemed to have consented to the matter for which consent was
requested;
	 
	 	(p)	 	the making of, or announcing any proposal to make, any change or addition
(whether immediate, conditional or prospective) to any terms and conditions of or
in respect of employment of its directors or employees or to any arrangement with
any consultants other than those required by law and which are set out in the
Disclosure Letter which could increase the total staff costs of the Company or the
Group (including any change or addition affecting former directors, employees or
consultants or their dependants) by more than €200,000 per annum or the
remuneration of any one director or employee by more than €10,000 per annum or
dismiss except for good cause any of its directors, employees or consultants or
induce any such directors, employees or consultants to terminate their employment;
	 
	 	(q)	 	the making of, or announcing any proposal to make, any material change (whether
immediate, conditional or prospective) to any, or grant or create any
additional, retirement, health insurance, death or disability benefits scheme
(including any change or addition affecting former directors, employees or

 

-18-

	 	 	 	consultants or their dependants) other than those required by law and which are set
out in the Disclosure Letter or take or fail to take any action or allow any action
to be taken in relation to any such scheme other than in the ordinary and usual
course of administering any such scheme or which is necessary or prudent for the
proper operation of any such scheme; 

	 	(r)	 	the incurring or payment of any management charges or other payments to the
Seller or any other member of the Seller’s Group in the period prior to Completion,
save for any inter-company trading liabilities incurred in the ordinary and usual
course of business and reflected in the Net Current Asset Statement;
	 
	 	(s)	 	the entry into, termination, amendment, variation or assignment of any material
contract, transactions or arrangements (including finance leases) by a Group
Member to which it is a party, whether or not legally binding, or the assumption of
any liability otherwise than in the ordinary and usual course of business, or
having
a value of or involving expenditure in excess of €50,000 per event or €200,000 in
aggregate or which is of a long term, onerous or unusual nature or which could
involve an obligation of a material nature or which may result in any material
change in the nature or scope of its operations;
	 
	 	(t)	 	the commencement of any litigation by a Group Member other than for the collection of
debts not exceeding €15,000;
	 
	 	(u)	 	the authorising of capital expenditure by a Group Member exceeding €50,000 in
the aggregate other than in an emergency;
	 
	 	(v)	 	the alteration of any of the Group Members insurance policies from their current form;
	 
	 	(w)	 	the performance of any act or the entry into any transaction or arrangement which may
result in the Company or any other Group Member being resident for Tax
purposes in a jurisdiction other than its country of incorporation or subject to
Tax in such jurisdiction;
	 
	 	(x)	 	the amendment, variation or withdrawal of an existing VAT registration or the
election to waive any exemption from VAT;
	 
	 	(y)	 	the acquisition or disposal of, or agreement to acquire or dispose of, any freehold
or leasehold property or the grant of any lease or third party right or providing
or granting any consent, including any consent concerning the duration of a tenancy
referred to in Schedule 2 or the rental payments for such tenancy but excluding
day to day consents given under the terms of such tenancies;

 

-19-

	 	(z)	 	the purchase of any items branded with the Protected Badges which are not reasonably
likely to be utilised or required for the Hotel in the ordinary and usual
course of business prior to Completion; or
	 
	 	(aa)	 	agree, conditionally or otherwise, to do any of the foregoing.

	4.3	 	On or before Completion the Seller shall procure that:

	 	(a)	 	all loans due from the Group Members to any of the Seller’s Group shall be repaid;
	 
	 	(b)	 	each member of the Seller’s Group shall irrevocably waive, with effect from
Completion, any liabilities owed by any Group Member to any member of the Seller’s
Group, save for any inter-company trading liabilities incurred in the
ordinary and usual course of business and reflected in the Net Current Asset
Statement, by execution of a document in the agreed form;
	 
	 	(c)	 	all loans due from the Seller’s Group to any Group Member shall be repaid;
	 
	 	(d)	 	the agency relationship between the Company and InterContinental Hôtels
Corporation for the purposes of French value added tax is terminated;
	 
	 	(e)	 	each Group Member is released from all guarantees and indemnities given by that Group
Member in respect of any liability or obligation of the Seller or any other
member of the Seller’s Group;
	 
	 	(f)	 	it provides to the Purchaser an inventory of the operating equipment (being
glassware, silverware, china and uniforms) in the Hotel as at Completion; and
	 
	 	(g)	 	at the Purchaser’s request it provides the Purchaser with access to an electronic
copy of PeopleSoft so as to permit the Purchaser to transfer the information
contained on PeopleSoft relating to the Hotel and/or the Group to the Purchaser’s
(or it’s nominee’s) systems.

	4.4	 	As from the date of this Agreement until Completion, the Seller and the Purchaser
undertake to cooperate to ensure a smooth transition of the change of control of the
Company.

5. COMPLETION

	5.1	 	Completion shall take place at the Paris office of the Seller’s Solicitors on the Completion
Date or at such other place and/or on such other date as may be agreed between the parties.

 

-20-

	5.2	 	(a) Completion is conditional upon the passing at an extraordinary general meeting of
InterContinental Hotels Group PLC of a resolution to approve the transaction
contemplated by this Agreement.

	 	(b)	 	The Seller will use all reasonable endeavours to ensure the satisfaction of the
Condition on or before 5.00 p.m. on 30 November 2005.
	 
	 	(c)	 	The Seller may at any time before 5.00 p.m. on 30 November 2005 waive the
Condition by notice in writing to the Purchaser.
	 
	 	(d)	 	If the Condition has not been satisfied or waived by 5.00 p.m. on 30 November 2005,
this Agreement automatically terminates and each party’s rights and
obligations under this Agreement cease immediately on termination except that
termination of this Agreement does not affect a party’s right to claim for breach of
any other party’s obligations in relation to this Agreement if that breach occurred
before termination and each party must continue to comply with each provision of
this Agreement necessary for a party to enforce such a right.

	5.3	 	On Completion, the Seller shall deliver to the Purchaser a duly executed share transfer
form for the Shares (ordre de mouvement) in favour of the Purchaser, and the related
executed CERFA declaration.
	 
	5.4	 	On Completion, the Seller shall deliver to the Purchaser:

	 	(a)	 	the updated shareholder registers (registres des mouvements de titres and comptes
d’actionnaires) of the Company and Hôtel Inter-Continental London
(Holdings) SAS and the updated Articles of Association of SNC de l’Hôtel Inter-
Continental Paris;
	 
	 	(b)	 	the shareholders’ meeting registers of each Group Member and the board meeting
registers for the Company and Hôtel Inter-Continental London (Holdings) SAS, in
each case updated to Completion;
	 
	 	(c)	 	written resignations of the president and managing directors (président et directeurs
généraux) of the Company and Hôtel Inter -Continental London (Holdings) SAS and of the SNC
Managers, each in the agreed form, duly executed;
	 
	 	(d)	 	written instructions from the president of the Company to the Company’s bankers
amending, or if not possible, revoking all existing instructions, mandates and
authorities;
	 
	 	(e)	 	documents in the agreed form (i) evidencing the withdrawal of the Company and
SNC de l’Hôtel Inter-Continental Paris, prior to or on the Completion Date, from

 

-21-

	 	 	 	the intra-group cash management agreement dated 2 December 1996 (as amended) and
the “Sogecash Pooling” centralised management of group cash
positions service agreement dated 2 December 1996 (as amended), (ii) certifying
that all sums due by or owed to, the Company and SNC de l’Hôtel Inter-
Continental Paris thereunder have been duly paid on or prior to the Completion Date
and (iii) releasing all Group Members from all liabilities arising under such
agreements save only for those liabilities incurred in the ordinary and usual
course of business and reflected in the Net Current Assets Statement;

	 	(f)	 	documents from the relevant contractors in the agreed form (i) evidencing the
termination of the Service Agreements, (ii) certifying that all sums due by or owed
to, the Group Members under the Service Agreements have been duly paid on or prior
to the Completion Date and (iii) releasing all Group Members from all
liabilities arising under such agreements save only for those liabilities incurred
in the ordinary and usual course of business and reflected in the Net Current
Assets Statement;
	 
	 	(g)	 	written revocation in the agreed form of the Powers of Attorney by the Company and
InterContinental Hotels Group Plc;
	 
	 	(h)	 	all original deeds and documents of title relating to the Property listed in schedule
2, and will make available at the Property fire and health and safety
compliance certificates, Licences and any documents required by law to be
maintained at the Property;
	 
	 	(i)	 	copies of all existing bank mandates and statements of the balances of any bank
accounts in the name of the Company, as at the close of business on the second
Business Day before the Completion Date;
	 
	 	(j)	 	evidence satisfactory to the Purchaser that the relevant Group Member has, on
the Business Day following the date of this Agreement, issued a letter in the
agreed form on that Group Member’s letterhead notifying the Global Distribution
System that with effect from the Completion Date, or such later date as may be
notified by the Seller, the Hotel will change from being branded as an
“InterContinental” hotel to a “Westin” hotel; and
	 
	 	(k)	 	vacant possession of the spa centre at the Hotel which was immediately prior to
the date hereof, or continues to be at the date hereof, operated by JJJ Marignan.

	5.5	 	On Completion, the Seller shall:

	 	(a)	 	cause shareholder’s decisions of the Company and Hôtel Inter-Continental
London (Holdings) SAS whereby such persons as may be nominated by the

 

-22-

	 	 	 	Purchaser shall be appointed president and/or managing directors of the Company
and Hôtel Inter-Continental London (Holdings) SAS (within the
maximum number, if any, permitted under their respective Articles of Association);

	 	(b)	 	cause a shareholders’ meeting of SNC de l’Hôtel Inter-Continental Paris to be duly
convened and held at which such persons as may be nominated by the Purchaser
shall be appointed managers of SNC de l’Hôtel Inter-Continental Paris (within the
maximum number, if any, permitted under its Articles of Association);
	 
	 	(c)	 	cause shareholders’ meetings of the Group Members to be duly convened for the purpose
of the decisions to be procured by the Purchaser pursuant to clauses
5.6(b), (c) and (d) below; and
	 
	 	(d)	 	ensure that all Licences and Company Systems are at the Property and all
reservations on the books as at Completion are recorded on the Company Systems
with sufficient details so as to permit an incoming operator to manage
those reservations.

	5.6	 	On Completion, the Purchaser shall:

	 	(a)	 	pay the sum of €315,550,000 being the Initial Consideration plus the Net Current Assets
Estimate in accordance with clause 3.1 on account of the Consideration by
telegraphic transfer into the account notified by the Seller to the Purchaser not
less than two Business Days prior to Completion and the transfer shall be treated
as received only when credited thereto;
	 
	 	(b)	 	procure shareholder’s decisions of the Company to change its company name to a
name not including the Protected Names or any word confusingly similar thereto;
	 
	 	(c)	 	procure shareholder’s decisions of Hôtel Inter -Continental London (Holdings) SAS to:

	 	(i)	 	change its company name to a name not including the Protected Names or any word
confusingly similar thereto; and
	 
	 	(ii)	 	transfer its registered office;

	 
	 	(d)	 	procure a shareholders’ meeting of SNC de l’Hôtel Inter-Continental Paris to
change its company name to a name not including the Protected Names or any word
confusingly similar thereto; and
	 
	 	(e)	 	procure an updated certificate of incorporation (KBis) of the Purchaser with
definitive number of incorporation.

	5.7	 	The Tax Covenant shall take effect from Completion.

 

-23-

	5.8	 	Without prejudice to any other remedies available to the Purchaser:

	 	(a)	 	if the provisions of clauses 5.3 or 5.4(a) are not complied with in any respect on the
Completion Date, the Purchaser shall not be obliged to complete the purchase
of the Shares or pay any sum to the Seller and may in its absolute discretion (in
addition and without prejudice to any other rights or remedies available to it) by
written notice to the Seller:

	 	(i)	 	defer Completion by a period of not more than 28 days to such other date
as it may specify in such notice (and so that the provisions of this
clause 5.8 shall apply to Completion as so deferred);
	 
	 	(ii)	 	waive all or any of the requirements contained or referred to in clause 5.3 at
its discretion (and without prejudice to its rights under this Agreement)
proceed to Completion so far as practicable; or
	 
	 	(iii)	 	terminate this Agreement without liability on its part; and

	 	(b)	 	without limiting the Purchaser’s rights pursuant to clause 5.8(a) in respect of
non-compliance with clause 5.3 or 5.4(a), if the provisions of clause 5.4 or 5.5 are not
complied with in any respect on the Completion Date (or such other date to which
Completion may be deferred pursuant to clause 5.8(a)(i)) the Seller shall be
required to provide to the Purchaser on the Completion Date (or such other date to
which Completion may be deferred pursuant to clause 5.8(a)(i)):

	 	(i)	 	a written undertaking, in a form reasonably acceptable to the Purchaser, to
take all steps required post -Completion to comply with such provision and provide
the Purchaser with evidence of such compliance; and
	 
	 	(ii)	 	in addition to the requirement in clause 5.8(b)(i), a written indemnity, in
a form reasonably acceptable to the Purchaser, in relation to all Losses
	 
	 	 	 	incurred by the Purchaser, the Purchaser’s Group or a Group Member as a
result of the Seller failing to comply with clause 5.4 or 5.5.

6. NET CURRENT ASSETS AMOUNT

	6.1	 	The Net Current Assets Statement setting out the calculation of the Net Current Assets
Amount shall be prepared in accordance with schedule 5.
	 
	6.2	 	If the Net Current Assets Amount as shown in the Net Current Assets Statement exceeds
the Net Current Assets Estimate, the Purchaser shall, subject to schedule 5, part 2,
paragraph 2.7, pay to the Seller within five Business Days of the date of agreement or
deemed acceptance (in accordance with part 1 of schedule 5) by the Purchaser of the Net

 

-24-

	 	 	Current Assets Statement in cleared funds the difference between the Net Current Assets
Amount and the Net Current Assets Estimate.

	6.3	 	If the Net Current Assets Amount as shown in the Net Current Assets Statement is less
than the Net Current Assets Estimate, the Seller shall, subject to schedule 5, part 2,
paragraph 2.7, refund to the Purchaser within five Business Days of agreement or
deemed acceptance (in accordance with part 1 of schedule 5) by the Purchaser of the Net
Current Assets Statement the difference between the Net Current Assets Estimate and the
Net Current Assets Amount.

7. POST COMPLETION UNDERTAKINGS

	7.1	 	The Purchaser undertakes, without prejudice to the provisions of the Tax Covenant, to procure
(or, in the case of any information to be provided by the auditors of any Group
Member, to use its reasonable endeavours to procure) that, following Completion, the
Seller, and its respective duly authorised agents are provided with any financial
information of each Group Member relating to the period prior to Completion as it or they
may reasonably require to enable the Seller and/or any member of the Seller’s Group:

	 	(a)	 	to prepare their respective statutory or management accounts; or
	 
	 	(b)	 	for any other accounting or taxation purpose required by applicable law or court of
competent jurisdiction, recognised stock exchange, or regulatory authority to
whose rules the Seller (or, as the case may be, other member of the same group
of companies as the Seller) is subject.

	7.2	 	The Purchaser shall as soon as reasonably practicable after Completion register the
change of company name of each Group Member to be made pursuant to clause 5.6 with the
companies’ registry of Paris and deliver to the Seller an original Extrait K-bis for each
Group Member evidencing such change so as to eliminate any reference to the Seller’s Group
Trademarks.
	 
	7.3	 	For:

	 	(a)	 	a period of six months following Completion, the Seller shall, give such reasonable
assistance as can be provided by the Seller as the Purchaser reasonably requires
to answer such queries concerning the Business or the Property or the Company as
the Purchaser may reasonably request that cannot be answered by any other
means reasonably available to the Purchaser or the Company; and
	 
	 	(b)	 	a period of two months following Completion, the Seller shall, at the Purchaser’s
request, procure that payroll services in relation to the Employees are provided to each
Group Member for a fee of €8,000 per month, plus a further fee of approximately €4,000 per
month in respect of services provided by ADP (it being

 

-25-

	 	 	 	specified that this amount may vary monthly depending on the number of pay slips
issued by ADP), both of which will be payable by the relevant Group member, (the
“Payroll Services”) provided however that:

	 	(i)	 	the Payroll Services shall be provided according to those standards provided
before Completion; and
	 
	 	(ii)	 	the Purchaser shall indemnify and keep indemnified all members of the
Seller’s Group against any Losses by any third parties (including the
Group Members) which they may incur in connection with the provision of
the Payroll Services to the Group Members but excluding Losses arising
from the negligence of any members of the Seller’s Group.

	7.4	 	In the event that the Purchaser is unable, or it is not possible, to transfer any Licence
which is in the name of a Retained Employee, into the name of a nominee of the Purchaser
or a Group Member prior to the Completion Date, the Seller shall provide and
procure that there is provided to the Purchaser or the Group at the cost of the Purchaser
or the relevant Group Member, all such assistance as is reasonably required to maintain
such Licence in full force and effect until such time as the Purchaser, acting in a timely
manner, has effected the transfer.
	 
	7.5	 	If pursuant to paragraph 2.7 of Part 2 of Schedule 5 this clause is applied then:

	 	(a)	 	the Purchaser shall be free to deal with the Carry-back Receivable as it sees fit;
and
	 
	 	(b)	 	if the Purchaser, a Group Member or any member of the Purchaser’s Group
obtains an ascertained benefit from utilisation or sale of the Carry -back
Receivable,

then the Purchaser shall pay to the Seller a sum equal to 50% of each benefit obtained
within 30 Business Days of receipt of such benefit, by way of increased consideration for
the sale and purchase of the Shares pursuant to this Agreement.

For the avoidance of doubt, the Purchaser shall (without prejudice to the Seller’s rights
under the Tax Covenant) be free to deal with the Carry-back Receivable as it sees fit and
shall not be required to account to the Seller for any benefit received by any member of
the Purchaser’s Group from the utilisation or sale of the carry-back Receivable.

8. WARRANTIES

	8.1	 	The Seller hereby warrants to the Purchaser:

	 	(a)	 	as at the date of this Agreement in the terms of the Warranties;

 

-26-

	 	(b)	 	as at the Completion Date by reference to the facts and circumstances existing at the
relevant time in the terms of Warranties B.1(a), C.1, C.2, C.3, C.5, C.8, D.1,
D.2, D.3, D.10, E.3, E.4, F.1(b), F.3, F.6, G.1, G.2, G.3, G.6 (but excluding from
“and the Seller has not received notice” onwards), G.12 (first sentence only),
G.14(a), G.15, G.16(a), G.16(c), G.16(d), G.16(g), G.16(h), H.2(a), J.2, K.4, K.5,
K.8, K.10, L.1(a)(i) (but excluding from “and copies of all such licences”
onwards),
L.1(b), L.2, M.4(a) (but excluding from “and so far as the Seller is aware”),
M.4(b), M.6(c), M.7, M.8, M.10 (commencing from “and other than the Group
Schemes”),
M.11, M.13, M.18, M.19, N.2, N.4, N.5, N.6, O.1(b), O.1(d), O.1(f), O.2, P.1, P.7,
S.1, S.2, T.1, T.2 and U.1,

except as Disclosed.

	8.2	 	No letter, document or other communication (whether or not in writing) shall be deemed to
constitute a Disclosure against a Warranty unless it is expressly incorporated in the
Disclosure Letter.
	 
	8.3	 	Without limiting clause 22.2(a), the Purchaser confirms that it has not relied on, has not
been induced to enter into this Agreement by, and will make no claim against the Seller or
any other person whatsoever in respect of any budget, forecast or other projection of any
nature made or supplied by or on behalf of the Seller including those which are Disclosed.
The Seller acknowledges that the Purchaser has entered into this Agreement on the basis
of and in reliance upon the Warranties and the Tax Covenant and has been induced by
them to enter into this Agreement.
	 
	8.4	 	Each of the Warranties shall be separate and independent and, save as expressly provided to
the contrary in this Agreement, shall not be limited by reference to or
inference from any other Warranty or by anything in this Agreement or in the Tax Covenant.
	 
	8.5	 	Where any Warranty or any statement in the Disclosure Letter is qualified by the expression
“to the best of the Seller’s knowledge, information and belief” or any similar
expression, such statement shall, unless otherwise stated, be deemed to refer to the
actual knowledge of those persons set out below whose position is stated in column (2)
below opposite his or her name, such persons having made all reasonable and careful
enquiries, in each case in relation to those Warranties set out against each such person’s
name in column (3) below:

	 	 	 	 	 
	Name 	 	Position	 	Warranties
	Marten Foxon

	 	SVP Transactions
	 	General Warranties

 

-27-

	 	 	 	 	 
	Name 	 	Position	 	Warranties
	Denise Grant

	 	Director Transactions & Asset

Management
	 	General Warranties
	Jean-Charles Denis

	 	Finance Director — France
	 	General Warranties
	Gilles Goic

	 	Regional Human Resource Director
	 	General Warranties
	Mark Hanlon

	 	VP Engineering — Europe
	 	General Warranties
	Dagmar Woodward

	 	General Manager
	 	General Warranties
	Colin Garwood

	 	VP Tax
	 	Tax Warranties

	8.6	 	The Seller undertakes to the Purchaser:

	 	(a)	 	not to initiate or pursue proceedings of any kind against any Group Member or (except
in the case of fraud or criminal offence) any present or former director,
officer or partner of any Group Member arising out of a claim under this Agreement
in respect of any conduct, default, omission or negligence of any such
person or in respect of any warranty, any representation or statement made to the
Purchaser (or any member of the Purchaser’s Group) or any Group Member, or in
relation to the Disclosure Letter or howsoever otherwise in connection with the
transactions contemplated by this Agreement; and
	 
	 	(b)	 	in the event that the Seller initiates or pursues proceedings of any kind against
any present or former employee of any Group Member for fraud or criminal offence
or any adviser of a member of the Purchaser’s Group arising out of a
claim under this Agreement in respect of any conduct, default, omission or
negligence of any such person or in respect of any warranty, any representation or
statement made to the Purchaser (or any member of the Purchaser’s Group or
any of their respective advisers) or any Group Member, or in relation to the
Disclosure Letter or howsoever otherwise in connection with the transactions
contemplated by this Agreement, the Seller shall indemnify the Purchaser and the
Purchaser’s Group against any Losses incurred by any member of the
Purchaser’s Group arising from such proceedings.

	8.7	 	The Seller will not be entitled to raise as a defence to a claim by the Purchaser under this
Agreement that it had relied on information provided to it by the Company or a Group
Member, or any of their officers, employees or advisors. For the avoidance of doubt this
clause will not prevent any information which is Disclosed qualifying the Warranties.

 

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	8.8	 	The Seller agrees to disclose promptly to the Purchaser in writing as soon as practicable
upon becoming aware of the same, any matter, event or circumstance (including any
omission to act) which may arise or become known to it after the date of this Agreement and
before Completion which:

	 	(a)	 	constitutes a breach of any of the Warranties; or
	 
	 	(b)	 	has, or is likely to have, a material adverse effect on the financial position of the
Company or any other Group Member.

9. LIMITATION ON CLAIMS

	9.1	 	The Seller shall have no liability in respect of any breach or non-fulfilment of:

	 	(a)	 	any of the General Warranties (save for Employment Warranties) unless the Purchaser
has served on the Seller a written notice of such Claim on or before the
date falling 18 months after the Completion Date; or
	 
	 	(b)	 	any of the Employment Warranties unless the Purchaser has served on the Seller a
written notice of such Claim on or before the date falling 36 months after the Completion
Date;

	 	 	giving such details of such General Claim as the Purchaser then has including the
Purchaser’s reasonable estimate at that time of the amount of the liability of the Seller
in respect thereof but any failure to satisfy its obligations as to the content of the
notice shall not limit its ability to bring a claim nor shall it reduce the Seller’s liability for such
claim (if any) in any way whatsoever save to the extent that such failure results in an
increase in the Seller’s liability for such claim.
	 
	9.2	 	Any General Claim shall (if it has not previously been satisfied, settled or withdrawn) be
deemed to have been withdrawn unless applicable contractual, legal or formal (judiciaires
ou extra-judiciaires) proceedings or actions in respect of the matter referred to in any
relevant notification given under clause 9.1 have been commenced within six months of
notification to the Seller pursuant to clause 9.1.
	 
	9.3	 	The Seller shall have no liability in respect of any General Claim unless:

	 	(a)	 	subject to the provision below, the aggregate liability of the Seller to the Purchaser
in respect of such General Claim exceeds €125,000 (including interest, costs and
expenses), it being understood that damages or losses having one and the same
source or of the same nature would be considered at their aggregate amount as one
General Claim; and

 

-29-

	 	(b)	 	the aggregate amount of all such General Claims which exceed €125,000 is equal to or
greater than €1,750,000, in which event the Seller’s liability should be for the
whole of such aggregate amount and not just the excess,

	 	 	provided that once the aggregate amount of all General Claims which exceed €125,000
(including interest, costs and expenses) is equal to or greater than €1,750,000 then the
Seller shall be liable for all General Claims, irrespective of the amount, save that where a
General Claim is equal to or less than €125,000 (including interest, costs and expenses)
(“De Minimus General Claim”), the Seller shall only be liable in relation to such De
Minimus General Claim where the aggregate amount of De Minimus General Claims is in excess
of €500,000, in which event the Seller’s liability for De Minimus General Claims
shall be for the excess over €500,000.
	 
	9.4	 	Without prejudice to any other provisions of this Agreement, the total aggregate liability of
the Seller in respect of all General Claims and Indemnity Claims shall:

	 	(a)	 	in respect of General Claims relating to title to the Shares and Indebtedness, be
unlimited;
	 
	 	(b)	 	in respect of General Claims and Indemnity Claims other than those to which clauses
9.4(a) and 9.4(c) apply, not exceed €100,000,000; and
	 
	 	(c)	 	in respect of General Claims relating to title to the Property, not exceed the
Consideration, save that such amount shall be deemed to be reduced by the
amount successfully claimed by the Purchaser from the Seller in respect of the
General Claims and Indemnity Claims referred to in clause 9.4(b).

	9.5	 	For the avoidance of doubt, amounts for which the Seller has no liability, or by which the
Seller’s liability is reduced due to the provisions of this Agreement, shall not be capable of
being aggregated as a claim or part thereof with other claims for the purpose of clause 9.3.
	 
	9.6	 	If the Purchaser becomes aware of any fact, matter or circumstance which gives rise or is
reasonably likely to give rise to a General Claim and the Purchaser is aware that it gives
rise to a General Claim, the Purchaser shall, within 30 Business Days of becoming so
aware give notice to the Seller of that fact, matter or circumstance (including reasonable
details thereof, the due date for any payment and so far as practicable the amount in
respect of which such Claim may be made), provided that failure to notify or to satisfy its
obligations as to the content of the notice shall not limit its ability to bring a claim
nor shall it reduce the Seller’s liability for such claim (if any) in any way whatsoever
save to the extent that such failure to notify within the 30 Business Day period results in an increase
in the Seller’s liability for such claim.

 

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	9.7	 	Subject to the Seller not having rejected any Claim notified by the Purchaser to the Seller in
accordance with clause 9.6, the Seller shall be entitled, by a notice in writing addressed
to the Purchaser and acting reasonably, to require the Purchaser to take or to procure that
any and each Group Member takes all such steps and proceedings as the Seller may
consider necessary in order to prevent a claim arising or to obtain any payment or relief
in respect of or in connection with any matter giving rise to any General Claim or an
Indemnity Claim, subject to the Purchaser and the relevant Group Member being indemnified
against Losses incurred by them as a result of so acting and save that neither
the Purchaser, a member of the Purchaser’s Group nor a Group Member is obliged to take any
action to commence proceedings unless the Seller furnishes the Purchaser with
the written opinion of a leading counsel, being a Q.C. and a recognised expert in relation
to the subject matter of the Claim, to the effect that commencing proceedings in respect of
the subject matter of the Claim against the person nominated by the Seller will, on the
balance of probabilities, be won, provided however that neither the Purchaser, a member
of the Purchaser’s Group nor a Group Member is obliged to take any steps or commence any
proceedings if, in the opinion of the Purchaser (acting reasonably), to do so might be
prejudicial to it, the Purchaser’s Group or the Group. Without limiting clause 9.13, the
Seller may thereafter, acting reasonably, require any and each Group Member or the
Purchaser to take all such steps or proceedings as it may consider necessary in order to
remedy a breach or to mitigate any loss giving rise to any General Claim and the
Purchaser undertakes to procure that each Group Member shall so act, subject to the
Purchaser and the relevant Group Member being indemnified against Losses incurred by
them as a result of so acting and save that neither the Purchaser, a member of the
Purchaser’s Group nor a Group Member is obliged to take any action to commence
proceedings unless the Seller furnishes the Purchaser with the written opinion of a leading
counsel, being a Q.C. and a recognised expert in relation to the subject matter of
the Claim, to the effect that commencing proceedings in respect of the subject matter of
the Claim against the person nominated by the Seller will, on the balance of probabilities,
be won, provided however that neither the Purchaser, a member of the Purchaser’s Group nor
a Group Member is obliged to take any steps or commence any proceedings if,
in the opinion of the Purchaser (acting reasonably), to do so might be prejudicial to it,
the Purchaser’s Group or the Group. For the purpose of enabling the Seller to exercise
its rights under this clause 9.7, the Purchaser shall:

	 	(a)	 	upon reasonable notice, make or procure to be made available to the Seller, and
(if so requested by the Seller) provide copies of, all relevant books of account,
records and correspondence of any Group Member in respect of the period up to
Completion reasonably requested by the Seller and permit the Seller and its
representatives and advisers to ascertain or extract any relevant information
reasonably requested therefrom in respect of the period up to Completion, save

 

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	 	 	 	that the Purchaser shall not be required to provide to the Seller any information
which is subject to legal professional privilege; and

	 	(b)	 	not admit any liability or agree or compromise any claim and shall procure that no
Group Member admits any liability or agrees or compromises any claim which may
give rise or has given rise to a General Claim without the prior written
consent of the Seller not to be unreasonably withheld or delayed (taking into
account only the interests of the Purchaser’s Group or the Group).

	9.8	 	The Seller shall not be liable in respect of a General Claim to the extent of:

	 	(a)	 	any amount which is included as a liability in, or is otherwise allowed, accrued or
provided for in the Net Current Assets Amount in respect of such Claim; or
	 
	 	(b)	 	any amount by which the valuation of any asset has been reduced in the Net
Current Assets Amount to take account of such Claim.

	9.9	 	The Seller shall not have any liability in respect of any General Claim to the extent that
such Claim is attributable to, or arises, or is increased by:

	 	(a)	 	anything expressly provided to be done or omitted to be done pursuant to this
Agreement or any document referred to herein; or
	 
	 	(b)	 	any change in law, regulation or rule (or change in the interpretation of law,
regulation or rule) or in administrative practice or doctrine of any government,
governmental department, agency or regulated body or any judgment delivered or
occurring after the date of this Agreement (whether or not retrospective);
	 
	 	(c)	 	any change after Completion in the accounting bases, policies, practices or methods
applied in preparing any accounts or valuing any assets of the Group
from those used in preparing the Accounts unless such change aims at complying, in
respect of the period preceding this Agreement, with French GAAP; or
	 
	 	(d)	 	the winding-up of any Group Member or any winding -up or cessation after Completion of
any trade or business carried on by any Group Member.

	9.10	 	If any General Claim is made by the Purchaser, then, for the purpose of determining the
amount for which the Seller is liable in respect of such Claim, there shall be taken into
account and credit given for the amount by which at the date of such Claim any direct
corresponding Taxation savings or net quantifiable Taxation benefit is received or realised
by the Purchaser, any Group member or any company controlled by the Purchaser by reason of
any of the matters giving rise to such Claim, provided that such matters have
not been taken into account under paragraph 9 of the Tax Covenant and relate directly to
the matters giving rise to such Claim.

 

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	9.11	 	Except as set out in this Agreement:

	 	(a)	 	the sole remedy of the Purchaser for any breach of Warranties or other provision of
this Agreement shall be an action for damages and proceedings for injunctive relief; and
	 
	 	(b)	 	the Purchaser shall not be entitled to rescind or repudiate this Agreement before, at
or after Completion or to recover damages in tort or for misrepresentation (other than
fraudulent misrepresentation).

	9.12	 	Where the Purchaser or any Group Member is or may be entitled (whether by reason of insurance
payment, discount, relief or otherwise) to recover from some other person any
sum in respect of any liability, loss or damage the subject of a General Claim against the
Seller or which is reasonably likely to give rise to a General Claim (and whether before or
after the Seller has made payment hereunder), the Purchaser shall within 30 Business Days
notify the Seller and provide such information as it may reasonably require relating
to such entitlement and the steps taken or to be taken by the Purchaser or the Group
Member in connection with it and, if so required by the Seller, and, provided first that
the Seller shall not have rejected liability in relation to the Claim the Purchaser shall, and
shall procure that Group Member shall, take all reasonable steps (whether by way of a claim
against its insurers or otherwise) including, but without limitation, such proceedings as
the Seller may reasonably require to enforce such recovery and shall keep the Seller
informed of the progress of any action taken, subject to the Purchaser and the relevant
Group Member being indemnified against Losses incurred by them as a result of so acting
and save that neither the Purchaser, a member of the Purchaser’s Group nor a Group Member
is obliged to take any action to commence proceedings unless the Seller
furnishes the Purchaser with the written opinion of a leading counsel, being a Q.C. and a
recognised expert in relation to the subject matter of the Claim, to the effect that
commencing proceedings in respect of the subject matter of the Claim against the person
nominated by the Seller will, on the balance of probabilities, be won, provided however
that neither the Purchaser, a member of the Purchaser’s Group nor a Group Member is obliged
to take any steps or commence any proceedings if, in the opinion of the
Purchaser (acting reasonably), to do so might be prejudicial to it, the Purchaser’s Group
or the Group. Thereafter, any claim against the Seller shall be limited (in addition to
the limitations on the liability of the Seller referred to in this clause 9.12) to the amount
by which the loss or damage suffered by the Purchaser as a result of such breach shall
exceed the amount so recovered net of any irrecoverable Tax and costs. If the Seller
pays to the Purchaser an amount in full discharge of a General Claim and the Purchaser or
any Group Member subsequently recovers (whether by payment, discount, credit, relief
or otherwise) from a third party (including any Tax Authority) a sum which would have
reduced the relevant Claim, the Purchaser shall (or, as appropriate, shall procure that

 

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	 	 	such Group Member shall) forthwith repay to the Seller an amount equal to the sum recovered
from the third party net of irrecoverable Tax and costs, or, if less, the amount
paid by the Seller.

	9.13	 	The Seller shall not be liable to make any payment in respect of any General Claim unless
and until the Purchaser or any Group Member (as the case may be) has suffered
the damage or loss or has become liable to make payment in respect of any
corresponding liability. Unless otherwise stated, all sums for which the Seller has become
so liable shall be payable within five Business Days following the receipt of a request for
payment by the Purchaser.
	 
	9.14	 	If the Seller pays any sum in respect of any Claim the amount of the Consideration shall be
reduced by the amount of any such payment.
	 
	9.15	 	The Seller shall not be liable in respect of any Claim which arises in respect of any breach
of Warranty which is capable of remedy except to the extent that the relevant breach
remains unremedied and except to the extent of any Loss suffered by the Purchaser or
relevant Group Member in respect of matters prior to remediation after the expiry of 30
days following receipt by the Seller of a written notice pursuant to clause 9.1 or 9.6.
	 
	9.16	 	Nothing in this Agreement shall affect the application of the common law rules on
mitigation in respect of any Claim.
	 
	9.17	 	If the Purchaser makes any Claim or gives notice of any Claim to the Seller the Purchaser
shall, and shall procure that any Group Member shall, subject to providing a confidentiality
undertaking reasonably acceptable to the Purchaser and providing the Seller shall not
have rejected liability in relation to the Claim solely for the purpose of enabling the
Seller to assess the Claim or potential Claim:

	 	(a)	 	make available to the Seller and its representatives or advisers such reasonable
access to the personnel of any relevant Group Member and to any relevant
records and information relating to the period prior to Completion as the Seller
may reasonably request in connection with such Claim or potential Claim, save
that the Purchaser shall not be required to provide to the Seller any information
which is subject to legal professional privilege; and
	 
	 	(b)	 	use reasonable endeavours to procure (but without being required to provide any
undertakings or indemnities) that the auditors (past and present) of any relevant
Group Member make available their audit working papers in respect of audits of
the relevant Group Member’s accounts for any relevant accounting period in
connection with such Claim or potential Claim.

 

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	9.18	 	The Purchaser undertakes to the Seller that it will effect and maintain insurance for the
Property and the Business in accordance with normal commercial practice.
	 
	9.19	 	The Purchaser shall not be entitled to recover damages or obtain payment,
reimbursement, restitution or indemnity more than once for the same Loss.
	 
	9.20	 	No liability shall attach to the Seller in respect of any Claim to the extent that the Claim
is based upon a liability which is contingent only or is otherwise not capable of being quantified
unless and until such liability ceases to be contingent and becomes an actual
liability or becomes capable of being quantified, as the case may be, provided that this
paragraph shall not operate to avoid a Claim made in respect of a contingent or
unquantifiable liability within the applicable time limits specified in clause 9.1 or 9.2
if the notice of such claim has been served before the expiry of the relevant period (even
if such
liability does not become an actual or quantifiable liability, as the case may be, until
after the expiry of such period).
	 
	9.21	 	Subject to the terms of any applicable insurance policy which may prohibit the waiver of
rights to which the insurers may otherwise be subrogated, if, in respect of any matter
which would otherwise give rise to a breach of this Agreement, one of the Group Members or
the Purchaser is entitled to claim under any policy of insurance, the amount
of insurance monies received by the Purchaser or that Group Member pursuant to any such
insurance claim shall reduce pro tanto or extinguish the Claim for breach of this
Agreement.
	 
	9.22	 	None of the limitations on the liability of the Seller set out in this clause 9 (whether as to
the quantum of the claim, the time limit for notification of the claim, the procedures or
requirements for making a claim or otherwise) shall apply to any Claim to the extent that
the liability of the Seller in respect of that Claim arises from fraud, wilful misconduct
or criminal offence on the part of the Seller.
	 
	9.23	 	The Seller shall have no liability for a breach of either of the warranties appearing at
paragraphs O.1 (g) and O.1 (h) of Schedule 3 except to the extent that the breach of
those warranties or either of them has resulted in a successful claim for Transfer Tax by
the relevant Tax Authority (after all available appeals have been exhausted) on the basis
that the Company is at Completion or has during the twelve months preceding Completion been
a Real Estate Company.
	 
	9.24	 	Save as set out in clauses 9.11, 9.14, 9.15, 9.16, 9.17, 9.19, 9.20, 9.21, 9.22 and 9.23, the
provisions of this clause 9 do not apply to claims under the Tax Covenant or the Tax
Warranties.

 

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	10.	 	Indemnities

	10.1	 	The Seller shall indemnify and keep indemnified the Purchaser and each Group Member on
demand from and against any Losses which they may incur in connection with:

	 	(a)	 	any claim by any person in relation to any change, attempt to change or failure to
change such person’s terms of employment to the effect that such person’s
employment activities relate solely to the business of the Hotel or solely to the
Inter-Continental Le Grand Hôtel or any other business of the Seller’s Group
excluding any change to such terms proposed by the Purchaser;
	 
	 	(b)	 	any claim by a Retained Employee (excluding Pierre-Olivier Lauriol);
	 
	 	(c)	 	the Pre-sale Reorganisation to the extent that the Losses do not relate to Tax;
	 
	 	(d)	 	the litigation involving the Company and four other members of the Seller’s Group
(including Société Nouvelle du Grand Hôtel SA SNGH) in which judgment was rendered
on 29 April 2004 by the Tribunal de Grande Instance de Paris;
	 
	 	(e)	 	the litigation involving the Company concerning Société Immobilière de l’Industrie
Hôtelière de Paris (SIIHP) in which judgment was delivered by the Court of Appeal
of Paris on 26 June 2001;
	 
	 	(f)	 	any Indebtedness of any Group Member at Completion which is not provided for in the
Net Current Assets Statement;
	 
	 	(g)	 	a claim by any person, other than an employee first engaged after Completion, to be
entitled to a lump sum payment upon retirement under the “Hotel (chains)”
collective bargaining agreement in addition to such person’s entitlement under the
agreement concluded on 15 June 1994 between the trade union delegates and
the Group;
	 
	 	(h)	 	any claim by any person who claims to have contracted legionella at the Property
in the period prior to Completion;
	 
	 	(i)	 	any underfunding of the Pension Plan;
	 
	 	(j)	 	the failure of the retail unit at the Hotel currently rented to Stern to meet the fire
protection requirements of the applicable regulatory authority;
	 
	 	(k)	 	any requirement by a regulatory authority or insurance provider that the entry
doors to the rooms of the Hotel be fire rated and/or fully self-closing (€575,790);

 

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	 	(l)	 	any requirement by a regulatory authority or insurance provider that, on the basis of
a maximum occupancy level of 2,500, additional escape stairs and additional
fire exits be installed at the Hotel (€175,000);
	 
	 	(m)	 	any amount required to be paid by any Group Member as a result of the ongoing audit
by, or the failure to disclose something in connection with the ongoing audit
by, the French Social Security Authority (URSSAF) to the extent not recovered
under the Tax Covenant;
	 
	 	(n)	 	the litigation relating to the claim filed by JJJ Marignan to re-characterize the
4-year renewable “business sub-lease” agreement (contrat de sous-location
gérance) entered into by SNC de l’Hôtel Inter-Continental Paris and JJJ Marignan
for the operation of the spa centre at the hotel into a commercial lease and the
claim for early termination of the business sub -lease by SNC de l’Hôtel
InterContinental Paris on the grounds of breach by JJJ Marignan and any Loss
suffered by a Group Member arising from a claim by any member of staff of JJJ
Marignan to be reintegrated with the staff at the Hotel,;
	 
	 	(o)	 	the pending (as at the date of this Agreement) employment -related dispute relating to
the following persons:

	 	(i)	 	Ms. Suzanne Gryner;
	 
	 	(ii)	 	Ms.
Gisèle Clauzet;
	 
	 	(iii)	 	Mr. José Noll;
	 
	 	(iv)	 	Mr. François Thaveau;
	 
	 	(v)	 	Mr.
Jean-Pierre Garat;
	 
	 	(vi)	 	Mr. Adel
Bouthegmes;
	 
	 	(vii)	 	Ms. Beatrice
Ceppini;
	 
	 	(viii)	 	Mr. Bratislav
Milutinovic; and
	 
	 	(ix)	 	Ms. Lolita
Lepine.

	 	(p)	 	any claim for underpaid or unpaid overtime, non compliance with working time
legislation, concealment of labour (travail dissimulé), illegal lending of labour
(prêt de main d’oeuvre illicit / délit de marchandage), discrimination of staff or
that a
Group Member is considered a joint employer of any employees of the Seller’s Group;
and

 

-37-

	 	(q)	 	any claim by the General Manager, any member of the Hotel’s management committee or any
member of the Hotel’s sales department to be entitled to receive
a payment under their short term incentive plan, notwithstanding that they have
failed to achieve the required objectives on the basis that the incentive schemes
are drafted in English and therefore the objectives are not binding on them; and
	 
	 	(r)	 	any claim by Pierre-Olivier Lauriol against a Group Member relating to the period
prior to Completion.

	10.2	 	The Purchaser acknowledges that the common law rules on mitigation shall apply to any Losses
to which an indemnity in this clause 10 relates.
	 
	10.3	 	The maximum amount recoverable under each of the indemnities in clause 10.1(k) and (l ) is
the amount set out in brackets in each such clause.
	 
	10.4	 	The Purchaser acknowledges that the Seller shall have no liability in relation to an
Indemnity Claim pursuant to clause 10.1(k) or clause 10.1(l) in the event that the
Indemnity Claim arises as a result of:

	 	(a)	 	in relation to clause 10.1(k) only, any visit by fire, health or safety authorities at
the specific request of the Purchaser or any Group Member for the purpose of
considering the entry doors or the Hotel generally, where such authority
subsequently serves notice on the Purchaser that it is in breach of the requirement
that the entry doors to the rooms of the Hotel be fire rated and/or fully
self-closing;
	 
	 	(b)	 	in relation to clause 10.1(l) only, the Purchaser filing an application to increase the
capacity of the Property, where such application results in the relevant authority
serving notice on the Purchaser that it is in breach of the maximum occupancy
level of 2,500, and as a result, additional escape stairs and additional fire
exits must be installed at the Hotel; or
	 
	 	(c)	 	in relation to clause 10.1(l) only, any breach of the maximum occupancy level of
2,500, which breach results in the relevant authority serving notice on the Purchaser that
it is in breach of the maximum occupancy level of 2,500, and as a
result, additional escape stairs and additional fire exits must be installed at
the Hotel.

	10.5	 	The Seller shall have no liability in relation to an Indemnity Claim:

	 	(a)	 	unless the Purchaser has served on the Seller a written notice on or before the date
listed in the table below (save as provided in clause 10.4) giving such details of the
Indemnity Claim as the Purchaser then has including the Purchaser’s reasonable estimate at
that time of the amount of the liability of the Seller in

 

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	 	 	 	respect thereof, but any failure to satisfy its obligations as to the content of
the notice shall not limit its ability to bring a claim nor shall it reduce the
Seller’s
liability for such claim (if any) in any way whatsoever save to the extent that
such failure results in an increase in the Seller’s liability for such claim:

	 	 	 
	Indemnity	 	Relevant Date
	10.1(a)

	 	7 years after the Completion Date
	10.1(b)

	 	3 years after the Completion Date
	10.1(c)

	 	3 years after the Completion Date
	10.1(d)

	 	3 years after the Completion Date
	10.1(e)

	 	3 years after the Completion Date
	10.1(f)

	 	18 months after the Completion Date
	10.1(g)

	 	7 years after the Completion Date
	10.1(h)

	 	12 months after the Completion Date
	10.1(i)

	 	25 years after the Completion Date
	10.1(j)

	 	3 years after the Completion Date
	10.1(k)

	 	5 years after the Completion Date
	10.1(l)

	 	5 years after the Completion Date
	10.1(m)

	 	3 years after the Completion Date
	10.1(n)

	 	3 years after the Completion Date
	10.1(o)

	 	(i) — 5 years after 31 March 2006;
	 

	 	(ii) — 5 years after 30 April 2005;
	 

	 	(iii) — 8 years after 30 November 2005;
	 

	 	(iv) — 8 years after 30 September 2005
	 

	 	(v) — 8 years after 31 October 2005;
	 

	 	(vi) — 8 years after 30 September 2005;
	 

	 	(vii) — 13 years after 30 September 2005;
	 

	 	(viii) — 8 years after 31 October 2005;
	 

	 	and
	 

	 	(ix) — 8 years after 30 November 2005.
	10.1(p)

	 	3 years after the Completion Date
	10.1(q)

	 	7 years after the Completion Date
	10.1(r)

	 	3 years after the Completion Date

          ; and

	 	(b)	 	to the extent of:

	 	(i)	 	any amount which is included as a liability in, or is otherwise allowed,
accrued or provided for in the Net Current Assets Amount in respect of
such Indemnity Claim; or

 

-39-

	 
	 	(ii)	 	any amount by which the valuation of any asset has been reduced in the Net
Current Assets Amount to take account of such Indemnity Claim.

	10.6	 	For the purpose of determining the amount for which the Seller is liable in respect of any
Indemnity Claim, the provisions of clause 9.10 shall apply.
	 
	10.7	 	None of the limitations on the liability of the Seller set out in clauses 9 and 10 (whether
as to the quantum of the claim, the time limit for notification of the claim, the procedures or
requirements for making a claim or otherwise) shall apply to any Indemnity Claim to the
extent that the liability of the Seller in respect of that Indemnity Claim arises from
fraud, wilful misconduct or criminal offence on the part of the Seller.

11. Insurance

	11.1	 	The risk of loss or damage to the assets of the Company or any member of the Group
remains with the Group Member or the Seller (as appropriate) prior to Completion.
	 
	11.2	 	The Seller shall ensure, or shall procure, that any event or circumstance which gives rise
to an insurance claim under any policy of insurance providing cover for the Company or any
member of the Group or any of their assets and which occurs at any time prior to
Completion is the subject of a claim prior to Completion, or is permitted to be the subject
of a claim after Completion, and is otherwise dealt with in a timely manner and the Seller
shall account to the Company or other relevant member of the Group, as the case may be in
full for the proceeds of any claim which should properly be received by the Company or
other relevant member of the Group, as the case may be as soon as reasonably
practicable after receipt less any costs of recovery.
	 
	11.3	 	The Seller undertakes to the Purchaser to keep the Company or other relevant member of the
Group, as the case may be indemnified and held harmless from and against any part
of any such claim as is referred to in clause 11.2 which is not paid by the insurer to the
extent that the insurer would have been liable to pay such claim had it not been entitled
to avoid the claim as a result of an act or omission by or on behalf of the Company or any
member of the Group or any other member of the Seller’s Group prior to Completion.

12. Purchaser Warranties

	12.1	 	The Purchaser hereby warrants to the Seller:

	 	(a)	 	as at the date of this Agreement in the terms of the Purchaser Warranties; and
	 
	 	(b)	 	as at the Completion Date by reference to the facts and circumstances existing at the
relevant time in the terms of paragraphs 1 and 2 of the Purchaser Warranties.

 

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	12.2	 	Each of the Purchaser Warranties shall be separate and independent and shall continue in
full force and effect notwithstanding Completion.
	 
	12.3	 	The Purchaser acknowledges that the Seller has entered into this Agreement on the basis
of the Purchaser Warranties and in reliance on them, and liability under the Purchaser
Warranties or otherwise under this Agreement shall not in any way be modified or
discharged by Completion.

13. Seller’s Intellectual Property

	13.1	 	Subject to clause 13.2, the Purchaser hereby covenants with the Seller (and also separately
covenants with each and every member of the Seller’s Group for the time
being and from time to time) that (save with the prior written consent of the Seller and to
the extent permitted by the Seller who shall in its absolute discretion determine whether
or
not consent may be given) the Purchaser will not by itself or with any other person and
shall procure that no other person shall, following the expiration of the period of 90 days
from the Completion Date in the cases of clauses 13(a), 13(b), 13(d) and 13(e) below and,
from the Completion Date in the case of clauses 13(c) below:

	 	(a)	 	save to the extent embedded within the fabric of the Property such that it is not
feasible to cover or remove such Protected Name, use or permit the use of any of
the Protected Names or any abbreviation thereof or any word colourably resembling
or likely to be confused or associated with any of the same (including
without limitation permitting the same to appear on any signage, invoice, label,
correspondence, bill or advertisement or on any other document or paper or on any
glassware, crockery or cutlery or any similar item);
	 
	 	(b)	 	save to the extent embedded within the fabric of the Property such that it is not
feasible to cover or remove such Protected Name, use or permit the use of any of
the Protected Badges or any logo colourably resembling the same or likely to be
confused or associated with the same (including without limitation permitting the
same to appear or any signage, invoice, label, correspondence, bill or
advertisement or any other document or paper or on any glassware, crockery or
cutlery or any similar item);
	 
	 	(c)	 	pass off or attempt to pass off any goods or business not being the goods or business
of the Seller or any other member of the Seller’s Group as or for the
goods or business of or connected with the Seller or any other member of the
Seller’s Group;
	 
	 	(d)	 	erect, display or use any sign which it is reasonable to anticipate is likely to be
taken as associated with or confused with the Seller or any other member of the
Seller’s Group or any business carried on by any of them; or

 

-41-

	 	(e)	 	knowingly cause, enable or assist any of the aforementioned acts,

	 	 	 	and the aforesaid covenants shall apply to the Purchaser acting for itself or through its
servants, agents or otherwise or through any person, firm or company in which at any time
and in any way howsoever it may interested whether such person, firm or company is acting
itself or through its servants, agents or otherwise and provided further that all
references in such covenants to the Seller and any other member of the Seller’s Group and
to the Purchaser shall, to the fullest extent permitted by law, include their respective
successors in title.

	13.2	 	The Purchaser hereby undertakes to the Seller within 30 Business Days following the
Completion Date:

	 	(a)	 	to cause all advertisements, brochures, advertising material, business
stationery and websites issued or caused to be issued by or in relation to the Company,
the Subsidiaries, the Hotel, or the Property after the Completion Date to be worded so
as to eliminate any reference to the Protected Names or any name or word confusingly
similar thereto; and
	 
	 	(b)	 	to change, remove or cover up all internal and external facia and signage on or
over the Property which includes reference to the Protected Names, other than any
Protected Names that are embedded within the fabric of the Property which are addressed
in clauses 13.1(a) and (b).

	13.3	 	The Purchaser further undertakes that it shall not, and that with effect from Completion
any Group Member shall not, hold itself out in such a way that a person might believe that
there is an association or connection between the Purchaser or any Group Member and
the Seller’s Group.

	14.	 	Non-Solicitation

	14.1	 	The Seller hereby undertakes to the Purchaser for itself and each Group Member:

	 	(a)	 	for a period of 18 months after Completion it will not, and will procure that
the Seller’s Group will not, either alone or jointly with others, whether as principal
or agent or in any other capacity, directly or indirectly solicit or entice away or
knowingly encourage any of the Group Member’s senior management team earning in excess
of €60,000 per annum to leave the employment of the Company and or any Group Member
save that this clause 14.1(a) shall not apply to the soliciting, enticing or
encouraging of any person who responds to a general advertisement placed by or on
behalf of the Sellers Group;
	 
	 	(b)	 	on and from the date of this Agreement and for a period of 24 months following
the Completion Date, no member of the Seller’s Group will, either on its own

 

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	 	 	 	account or in conjunction with or on behalf of any other person solicit, approach or
induce any person who, at the date of this Agreement, has a reservation at the Hotel
(whether for accommodation or a conference or otherwise) to cancel such reservation
and/or make an alternative reservation at other properties of any member of the
Seller’s Group;

	 	(c)	 	it will not at any time hereafter make use of or disclose or divulge to any
person (other than to officers or employees of any Group Member whose province it is to
know the same) any Confidential Information (other than any information properly
available to the public (otherwise than, directly or indirectly, as a result of a
breach of this clause 14.1(c)) or disclosed or divulged pursuant to an order of a court
of competent jurisdiction) relating to a Group Member.

	14.2	 	The Purchaser hereby undertakes to the Seller that for a period of 18 months after Completion
it will not, and will procure that any Group Member and any other member of the Purchaser’s
Group will not, either alone or jointly with others, whether as principal or agent or in any
other capacity, directly or indirectly solicit or entice away or knowingly encourage any
member of the senior management team employed at the InterContinental Le Grand Hôtel Paris
earning in excess of €60,000 per annum to leave the employment of such hotel save that this
clause 14.2 shall not apply to the soliciting, enticing or encouraging of any person who
responds to a general advertisement placed by or on behalf of the Purchaser’s Group or a Group
Member.
	 
	14.3	 	Each of the restrictions contained in clauses 14.1(a) to 14.1(c) is separate and severable
and in the event of any such restriction being determined to be unenforceable in whole or in
part for any reason, that unenforceability shall not affect the enforceability of the
remaining restrictions or (in the case of restrictions unenforceable in part) the remainder of
that restriction.
	 
	14.4	 	While the restrictions contained in this clause 14 are considered by the parties to be
reasonable in all the circumstances, it is recognised that restrictions of the nature in
question may fail for technical reasons and accordingly it is hereby agreed and declared that
if any of such restrictions are judged by an independent third party to be void as going
beyond what is reasonable in all the circumstances for the protection of the interests of the
Purchaser but would be valid if part of the wording thereof were deleted or the periods
thereof reduced or the range of activities or area dealt with thereby reduced in scope, the
said restriction shall apply with such modifications as may be necessary to make it valid and
effective.
	 
	14.5	 	The Seller shall procure that each member of the Seller’s Group shall be bound by and observe
the provisions of this clause 14 as if they were parties covenanting with the Purchaser in the
same terms.

 

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	15.	 	Purchaser‘s Rights to Terminate

	15.1	 	Subject to clause 15.2, the Purchaser may by written notice given to the Seller at
Completion or any time prior to Completion terminate this Agreement if:

	 	(a)	 	the Hotel is destroyed or damaged such that the Hotel is not able to be operated, or there is a
complete closure of the Hotel due to a fact, matter, circumstances or event affecting only the
Hotel and not affecting similar businesses in Paris in a similar way; or
	 
	 	(b)	 	any fact, matter or event (whether existing or occurring on or before the date of this Agreement or
arising or occurring afterwards) comes to the notice of the Purchaser at Completion or any time
prior to Completion which has a Material Effect and which:

	 	(i)	 	constitutes a breach by the Seller or a member of the Seller’s Group of clause 2, clause
4.1(a), 4.1(f), 4.1(g) or 4.1(i), or clause 4.2(a), 4.2(b), 4.2(c), 4.2(d), 4.2(g), 4.2(h), 4.2(i),
4.2(j), 4.2(k), 4.2(l), 4.2(m), 4.2(o), 4.2(p), 4.2(q), 4.2(s), 4.2(y) or 4.2(aa) (to the extent
that it applies to any of the foregoing provisions of clause 4.2) of this Agreement; or
	 
	 	(ii)	 	would constitute a breach of any of the following Warranties: B.1(f) (to the extent that there is
an operating agreement relating to the Hotel), C.1, C.3, C.6 (to the extent that a third party has
rights to share in past, present or future income or profits, reserves or liquidation surpluses of
the Company), C.7, C.8, D.1, D.3, D.9, D.10, E.2, E.3, E.4, G.2, G.3, G.14(a), G.16(a) (excluding
last sentence), S, T and U (to the extent that the description of the Shares in Schedule 1 Part A
is incorrect or the description of the Property in Schedule 2 Part A is incorrect), in which case:

	 	(1)	 	the Purchaser shall issue a written notice to the Seller (which notice shall only be issued
on one occasion) stating that Completion shall be deferred by a period of not less than 30
days to such other date as the Purchaser may specify in such notice (“Deferred Date”) and that
the Seller shall have a period expiring on the Deferred Date within which to remedy such
breach(es) of Warranty or provide a substitute contracting party reasonably acceptable to the
Purchaser (as appropriate); and

	 	(2)	 	in the event that the Seller is unable to remedy such breach(es) of Warranty or provide a
substitute contracting party reasonably acceptable to the Purchaser (as appropriate) by the
Deferred Date, the Purchaser shall be entitled to terminate the Agreement;

 

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(each of the events referred to in clauses 15.1(a), 15.1(b)(i) and 15.1(b)(ii) being a
“Termination Event”).

	15.2	 	If the Seller becomes aware of a Termination Event, it shall as soon as reasonably
practicable and in any event prior to the Completion Date give written notice to the
Purchaser giving such details concerning such fact, matter, circumstance, event or breach
as it has available to it.

	15.3	 	If, notwithstanding the occurrence of any fact, matter or event which would otherwise give
rise to a right to terminate this Agreement under this clause 15, the Purchaser proceeds to
Completion, the fact that the Purchaser has proceeded to Completion shall not constitute a
waiver of any right or entitlement of the Purchaser to make any claim under this Agreement.

	16.	 	Announcements and Confidential Information

	16.1	 	No announcement or statement about this Agreement or the subject matter of, or any matter
referred to in, this Agreement shall be made or issued before, on or after Completion by or
on behalf of any of the parties without the prior written approval of the Seller and the
Purchaser provided that nothing shall restrict the making by any party (even in the absence
of agreement by the other parties) of any statement or disclosure:

	 	(a)	 	which may be required by law or called for by the requirements of any Stock
Exchange or regulatory authority;
	 
	 	(b)	 	of information on a need-to-know basis by a party to a member of the same
group of companies as that party or such party’s or member’s directors, officers,
employees, partners or professionals or other advisers;
	 
	 	(c)	 	of information to any Tax Authority for registration of this Agreement or to
the extent reasonably required for the purposes of the tax affairs of the party
concerned or of any member of the same group of companies as that party, in the case
of the Seller, of any person who directly or indirectly has an interest in the
Seller;
	 
	 	(d)	 	information that is or comes within the public domain through no fault of
that party; or
	 
	 	(e)	 	any announcement or disclosure made or issued by or on behalf of any of the
parties with the prior written approval of the Purchaser and the Seller as
applicable (such approval not to be unreasonably withheld or delayed).

 

-45-

	16.2	 	Nothing in this Agreement will prohibit the Purchaser from making or sending after Completion
any announcement to a customer, client or supplier of any Group Member informing it that the
Purchaser has purchased the Shares.
	 
	16.3	 	Each of the Seller and the Purchaser undertakes to the other that it shall treat as strictly
confidential all Confidential Information about the other received or obtained by it or its
employees, agents or advisers as a result of entering into or performing this Agreement
including information relating to the provisions of this Agreement, the negotiations leading
up to this Agreement, the subject matter of this Agreement and the business or affairs of the
other Party and subject to the provisions of clause 16.4 or as otherwise permitted under this
Agreement that it will not at any time hereafter make use of or disclose or divulge to any
person any such information.
	 
	16.4	 	The restrictions contained in clause 16.3 shall not apply so as to prevent a party from
making any disclosure, announcement or communication which is permitted by clause 16.1, or
from making any disclosure to (i) any professional adviser for the purposes of obtaining
advice (provided always that the provisions of this clause 16 shall apply to and the relevant
party shall use reasonable endeavours to procure that they apply to, and are observed in
relation to, the use or disclosure by such professional adviser of the information provided to
him) or (ii) any party to whom a party assigns or intends to assign its rights under this
Agreement pursuant to clause 25.
	 
	17.	 	Effect of Termination

	 	 	 	 If the Purchaser terminates this Agreement pursuant to clause 5.8(c) or clause 15.1 then:

	 	(a)	 	this Agreement shall terminate and have no further effect (subject only to
clause 16 (Announcements and Confidential Information), 19 (Costs) and 33 (Governing
Law and Jurisdiction) which shall continue in force); and
	 
	 	(b)	 	the parties shall be released from all liabilities and obligations hereunder.

	18.	 	Interest and Payments

	18.1	 	If any amount required to be paid under this Agreement is not paid when it is due, such
amount shall bear interest at the rate of 2% per annum over the base lending rate of EONIA
from time to time, calculated on a daily basis for the period from and including the relevant
due date for payment to (but excluding) the date of actual payment, as well after as before
any judgement.

	18.2	 	Unless expressly provided otherwise, where any payment is required under the terms of this
Agreement to be made by the Purchaser to the Seller, such payment shall be made by
telegraphic transfer into the account notified by the Seller to the Purchaser not less than
two Business Days prior to the date that such payment is due, and payment of the

 

-46-

	 	 	relevant amount so made shall constitute a good and absolute discharge for the Purchaser
of the relevant obligation, and the Purchaser shall not be concerned to see to the
application of such funds thereafter.

	18.3	 	Unless expressly provided otherwise, where any payment is required under the terms of this
Agreement to be made by the Seller to the Purchaser, such payment shall be made to the bank
account of the Purchaser, as notified to the Seller seven Business Days prior to the date
the payment is to be made, and payment of the relevant amount so made shall constitute a
good and absolute discharge for the Seller of the relevant obligation, and the Seller shall
not be concerned to see to the application of such funds thereafter.

	18.4	 	Subject to clause 18.7, all sums payable by any party under this Agreement shall be paid
free of and without any rights of counterclaim or set off, and without deduction or
withholding on any ground whatsoever, save only as may be required by law. Subject to
clause 18.7, if any such deduction or withholding is required by law, the payer shall (i)
provide such evidence of the relevant withholding as the payee may reasonably require and
(ii) be obliged to pay to the payee such amount as will ensure that, after any such
deduction or withholding has been made, the payee shall have received a sum equal to the
amount that the payee would otherwise have received in the absence of any such deduction or
withholding.

	18.5	 	To the extent that any deduction or withholding in respect of which an additional amount
has been paid under clause 18.4 results in the payee obtaining a Relief, the payee shall
pay to the payer, within ten Business Days of the use or set off of the Relief, an amount
equal to the lesser of the Tax saved as a result of such use or set off and the additional
sum paid under clause 18.4 provided that the payee shall not be obliged to pay to the payer
an amount in excess of the amount which will leave it (after that payment) in the same
after Tax position as it would have been in had there been no payment under this Agreement
in respect of which such deduction or withholding arose.

	18.6	 	If any competent authority for Tax purposes charges to Tax any sum paid pursuant to a
claim (the “original payment”) to the payee under this Agreement the payer shall be obliged
to pay to the payee such additional amount (the “additional payment”) as will ensure that,
after the payment of the Tax so charged on the original payment and any Tax chargeable on
the additional payment, there shall remain a net sum equal to the amount of the original
payment, such additional payment to be paid three Business Days after the payee has served
notice that Tax on the original payment has become due and payable, or would have become
due and payable but for the availability of, in the case of a payment by the Seller, a
Purchaser’s Relief or, in the case of a payment by the Purchaser, any Relief.

 

-47-

	18.7	 	No payer for the purposes of clauses 18.4, 18.5 or 18.6 shall be liable to make any payment
under these clauses to the extent that the payment exceeds that which would have been payable
if the payee were the original Seller or Purchaser (as applicable) as at Completion.

	18.8	 	Clauses 18.4 to 18.6 above shall not apply to any payments made by the Purchaser to the
Seller pursuant to paragraph 8.2 of the Tax Covenant.

	19.	 	Costs

	19.1	 	Except as otherwise provided in this Agreement, each party shall pay its own costs and
expenses in relation to the negotiation, preparation, and implementation of this Agreement
(and the documents referred to herein), including the fees and disbursements of their
respective legal, accountancy and other advisers.

	19.2	 	All Transfer Tax shall be borne by the Purchaser.

	19.3	 	The Purchaser shall, promptly after Completion, apply for registration of the Shares and pay
all Transfer Tax. For this purpose, the Seller and the Purchaser will execute on Completion a
short agreement in agreed form and in French for French registration purposes. This agreement
will describe the purpose of the transaction, the Consideration and the amount of Transfer Tax
to be paid.

	20.	 	Notices

	20.1	 	Any notice or other communication to be given under this Agreement shall be in writing
and shall be deemed to have been duly served on, given to or made in relation to a party
if it is left at the authorised address of that party or posted by registered post addressed
to that party at such address or by fax to that party’s authorised fax number and shall if:

	 	(a)	 	personally delivered, be deemed to have been received at the time of delivery; or
	 
	 	(b)	 	posted to an inland address in the United Kingdom, be deemed to have been
received on the second Business Day after the date of posting and if posted to an
overseas address, be deemed to have been received on the fifth Business Day after the
date of posting; or
	 
	 	(c)	 	faxed, be deemed to have been delivered, at the time of transmission;
	 
	 	 	 	provided that where, in the case of delivery by hand or by fax delivery or transmission
occurs after 6 pm on a Business Day or on a day which is not a Business Day, receipt shall
be deemed to occur at 9 am on the next following Business Day.

	20.2	 	For the purposes of this clause 20 the authorised address and fax number of the parties
are as follows:

 

-48-

	 	 	 	 	 	 	 
	 

	 	(a)
	 	Seller:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	BHR Holdings BV c/o Nauta Dutilh
	 
	 	 	 	 	 	 
	 

	 	 	 	Address:
	 	Strawinskylaan 1999
	 

	 	 	 	 	 	1077 XV Amsterdam
	 

	 	 	 	 	 	PO Box 7113
	 

	 	 	 	 	 	1007 JC Amsterdam
	 

	 	 	 	 	 	The Netherlands
	 
	 	 	 	 	 	 
	 

	 	 	 	Fax:
	 	31 20 71 71 111
	 
	 	 	 	 	 	 
	 

	 	 	 	For the attention of:
	 	Wijnand Bossenbroek
	 
	 	 	 	 	 	 
	 

	 	 	 	With a copy to the Guarantor as detailed below.
	 
	 	 	 	 	 	 
	

	 	(b)
	 	Purchaser:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	DABICAM SAS
	 
	 	 	 	 	 	 
	 

	 	 	 	Address:
	 	95 rue de la Boetie
	 

	 	 	 	 	 	75008 Paris
	 
	 	 	 	 	 	 
	 

	 	 	 	Fax:
	 	+44 20 7495 4041
	 
	 	 	 	 	 	 
	 

	 	 	 	For the attention of:
	 	The President
	 
	 	 	 	 	 	 
	 

	 	 	 	With a copy to:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	GIC Real Estate Pte Limited
	 

	 	 	 	 	 	C/o Government of Singapore Investment Corporation
	 

	 	 	 	 	 	(London Office Pte Ltd)
	 
	 	 	 	 	 	 
	 

	 	 	 	Address:
	 	3rd Floor, 105 Wigmore Street
	 

	 	 	 	 	 	London W1U 1QY
	 
	 	 	 	 	 	 
	 

	 	 	 	Fax:
	 	+44 20 7495 4041
	 
	 	 	 	 	 	 
	 

	 	 	 	For the attention of:
	 	Andy Fish
	 
	 	 	 	 	 	 
	

	 	(c)
	 	Guarantor:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Six Continents Limited
	 
	 	 	 	 	 	 
	 

	 	 	 	Address:
	 	67 Alma Road
	 

	 	 	 	 	 	Windsor

 

-49-

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Berkshire SL4 3HD
	 

	 	 	 	 	 	United Kingdom
	 
	 	 	 	 	 	 
	 

	 	 	 	Fax:
	 	+44 207 355 31 33
	 
	 

	 	 	 	For the attention of:
	 	Head of Legal Services

	21.	 	Severability

	 	 	If any provision of this Agreement (or of any document referred to herein) is held to be
illegal, invalid or unenforceable in whole or in part in any relevant jurisdiction the
legality, validity and enforceability of the remaining provisions of this Agreement (or
such document) shall not in any way be affected or impaired thereby.

	22.	 	Entire Agreement

	22.1	 	This Agreement and any documents executed in accordance with this Agreement and documents
in the agreed form contain the entire agreement and understanding of the parties and
supersede all prior agreements, understandings or arrangements (both oral and written)
relating to the subject matter of this Agreement (and any such document).

	22.2	 	Each of the parties acknowledges and agrees that:

	 	(a)	 	it does not enter into this Agreement or the documents referred to herein on
the basis of and does not rely, and has not relied, upon any statement or
representation (whether negligent or innocent) or warranty or other provision (in
any case whether oral, written, express or implied) made, given or agreed to by any
person (whether a party to this agreement or not) except those expressly set out or
referred to in this Agreement and the documents referred to herein (as being in the
agreed form) and, subject to clause 22.2(b), will make no claim in respect of any
such representation, warranty or undertaking made or supplied by or on behalf of the
Seller or any other person whatsoever; and

	 	(b)	 	clause 22.2(a) shall not apply to any statement, representation, warranty or
undertaking made fraudulently or as a result of wilful misconduct or to any
provision of this Agreement which was induced by, or otherwise entered into as a
result of fraud or wilful misconduct for which the remedies shall be all those
available under the law governing this Agreement.

	23.	 	Variation

	 	 	No variation, amendment, supplement, deletion or replacement of or from this Agreement or
any of its terms shall be effective unless made in writing and signed by or on behalf of
each party.

 

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	24.	 	Remedies and Waivers

	24.1	 	No delay or omission on the part of any party to this Agreement in exercising any right,
power or remedy provided under this Agreement or any other documents referred to in it
shall impair such right, power or remedy or operate as a waiver thereof.
	 
	24.2	 	The single or partial exercise of any right, power or remedy provided under this Agreement
shall not preclude any other or further exercise thereof or the exercise of any other
right, power or remedy.
	 
	25.	 	Successors and Assignment
	 
	25.1	 	This Agreement shall be binding upon and continue for the benefit of each party’s personal
representatives and successors in title and save as provided in clause 25.2 or with the
prior written consent of the other party (being either the Purchaser or the Seller) shall
not be assignable by the Seller or the Purchaser and the Seller shall not be required to
transfer the Shares to any person other than the Purchaser for the Consideration.
	 
	25.2	 	Either the Seller or the Purchaser may assign all or any of its rights under this
Agreement (including, without limitation, in respect of the Warranties) and
(notwithstanding any other provisions contained in this Agreement) such rights may be
assigned or transferred by that party to, or made the subject of a trust created in favour
of:

	 	(a)	 	any other member of the Seller’s Group or Purchaser’s Group, as appropriate
(or by any such member to or in favour of any other member of the Seller’s Group or
Purchaser’s Group, as appropriate) provided that if such assignee company
leaves the Seller’s Group or Purchaser’s Group, as appropriate, such rights are
assigned or transferred to or made the subject of a trust in favour of another
member of the Seller’s Group or Purchaser’s Group, as appropriate; and/or
	 
	 	(b)	 	by the Seller, to any person by way of security for borrowings of the Seller’s Group;
and/or
	 
	 	(c)	 	by the Purchaser, to the first lead funder providing funding to the
Purchaser’s Group for the purposes of the transaction contemplated by this Agreement by way
of security for borrowings of the Purchaser’s Group.

	25.3	 	In the case of any assignment of rights under this clause 25 in each such case:

	 	(a)	 	the assignor shall remain liable for its obligations under this Agreement; and
	 
	 	(b)	 	the liability of the parties under this Agreement shall be no greater than
such liabilities would have been had any such assignment not occurred.

 

-51-

	26.	 	Guarantee
	 
	26.1	 	In consideration of the Purchaser entering into this Agreement with the Seller at the
request of the Guarantor, the Guarantor irrevocably and unconditionally:

	 	(a)	 	guarantees to the Purchaser the full, prompt and complete performance by the
Seller of all its obligations under this Agreement and the due and punctual payment
on demand of all sums now or subsequently due and payable by the Seller to the
Purchaser under or pursuant to this Agreement so that the same benefits are
conferred on the Purchaser as it would have received if such obligation had been
performed and satisfied by the Seller; and

	 	(b)	 	agrees as primary obligor to indemnify the Purchaser on demand from and
against any Losses incurred by the Purchaser as a result of the Seller’s failure to
perform any of its obligations under this Agreement or any of the obligations of the
Seller under or pursuant to this Agreement being or becoming void, voidable,
unenforceable or ineffective as against the Seller for any reason whatsoever,
whether or not known to the Purchaser, the amount of such Loss being the amount
which the Purchaser would otherwise have been entitled to recover from the Seller.

	26.2	 	The guarantee contained in this clause is a continuing guarantee and shall remain in force
until all the obligations of the Seller under this Agreement have been fully performed and
all sums payable by the Seller have been fully paid. It is independent of every other
security which the Purchaser may at any time hold for the obligations of the Seller under
this Agreement.

	26.3	 	If any payment by the Seller or any discharge given by the Purchaser (whether in respect
of the obligations of the Seller or any security for those obligations or otherwise) is
avoided or reduced as a result of insolvency or any similar event:

	 	(a)	 	the liability of the Guarantor shall continue as if the avoidance or
reduction had not occurred;

	 	(b)	 	the Purchaser shall be entitled to recover the value or amount of that
security or payment from the Guarantor, as if the payment or discharge had not
occurred to the extent that it has been avoided or reduced.

	26.4	 	The obligations of the Guarantor shall not be affected by any act, omission, matter or
thing which, but for this provision, might operate to release or otherwise exonerate the
Guarantor from its obligations or affect such obligations, including without limitation
and whether or not known to the Guarantor:

 

-52-

	 	(a)	 	any variation or amendment or restatement or replacement of this Agreement
or any time, indulgence, waiver or consent at any time given to the Seller or any
other person;
	 
	 	(b)	 	any compromise or release of, or abstention from obtaining, perfecting or
enforcing any security or other right or remedy whatsoever from or against, the
Seller or any other person;
	 
	 	(c)	 	any legal limitation, disability, incapacity or other circumstance relating
to the Seller or any other person;
	 
	 	(d)	 	any irregularity, unenforceability or invalidity of any obligations of the
Seller under this Agreement; or
	 
	 	(e)	 	the dissolution, amalgamation, reconstruction or insolvency of the Seller.

	26.5	 	The obligations of the Guarantor under this clause 26 will remain binding upon it
notwithstanding any change in the constitution of any of the Seller, the Purchaser or the
Guarantor or their absorption in, amalgamation with or merger into, or the acquisition of
all or part of its or their undertaking by any other person.

	26.6	 	This guarantee may be enforced by the Purchaser without the Purchaser first taking any
steps or proceedings against the Seller. This waiver applies irrespective of any law or any
provision of the Agreement to the contrary.

	26.7	 	The Guarantor agrees that until the obligations of the Seller under this Agreement have
been fully and completely performed and all sums payable by the Seller to the Purchaser
under or pursuant to this Agreement have been paid, it shall not exercise any rights which
it might have by reason of the performance of its obligations under this guarantee:

	 	(a)	 	to be indemnified by the Seller; and/or
	 
	 	(b)	 	to claim any contribution from any other guarantor of the Seller’s
obligations under this Agreement; and/or
	 
	 	(c)	 	to take the benefit (in whole or in part and whether by way of subrogation
or otherwise) of any rights of the Purchaser under this Agreement or any other
security taken by the Purchaser pursuant to, or in connection with, this Agreement.

	26.8	 	The Guarantor shall be entitled to transfer its obligations under this clause 26 to
another
Group Undertaking with the prior written consent of the Purchaser, which consent may be
withheld in the Purchaser’s absolute discretion.

 

-53-

	27.	 	Counterparts

	 	 	This Agreement may be executed in the form of one or more counterparts in like form each of
which shall be deemed to be an original when taken together and shall constitute one and
the same document.

	28.	 	Invalidity
	 
		 	
If at any time any provision of this Agreement is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction that shall not affect or
impair:

	 	(a)	 	the legality, validity or enforceability in that jurisdiction of any other
provision of this Agreement; or

	 	(b)	 	the legality, validity or enforceability under the law of any other
jurisdiction of that or any other provision of this Agreement.

	29.	 	Further Assurance

The Seller agrees (at its own cost) to perform (or procure the performance of) all further
acts and things, and execute and deliver (or procure the execution and delivery of) such
further documents, as may be required by law or as the Purchaser may reasonably require,
whether on or after Completion, for the purpose of vesting in the Purchaser the full
benefit of the assets, rights and benefits to be transferred to the Purchaser under or
pursuant to this Agreement including, without limitation, the legal and beneficial
ownership of the Shares.

	30.	 	Rights of Third Parties

	30.1	 	A person who is not a party to this Agreement shall have no right under the Contracts (Rights
of Third Parties) Act 1999 to enforce any term of it except that each of clauses 8.6, 9.7,
9.13, 10, 11 and 14.1 confers a benefit on each Group Member or any present and former
director, officer, employee and partner of any Group Member, as appropriate, and each of
clauses 8.6, 9.7 and 9.13 confers a benefit on each member of the Purchaser’s Group, and such
clauses are intended to be enforceable by them.

	30.2	 	Without prejudice to clause 21, the parties to this Agreement may, together, amend the terms
of this Agreement without the consent of any other person.

	31.	 	Purchaser‘s Rights and Remedies

The rights and remedies of the Purchaser under this Agreement shall not be affected, and
the Seller’s liabilities under this Agreement shall not be released, discharged or
impaired, by:

 

-54-

	 	(a)	 	Completion;
	 
	 	(b)	 	any investigation made or to be made by or on behalf of the Purchaser into
the affairs of the Group save in relation to the Warranties as to matters Disclosed;
	 
	 	(c)	 	the failure to terminate this Agreement where it has the right to do so;
	 
	 	(d)	 	any event or matter whatsoever which otherwise might have affected such
rights and remedies other than a specific written waiver or release by the
Purchaser; or
	 
	 	(e)	 	any information relating to any Group Member of which the Purchaser has
knowledge (actual, imputed or constructive) (other than, in respect only of the
Warranties, by reason of it being Disclosed) and no such information shall prejudice
any claim which the Purchaser shall be entitled to bring or shall operate to reduce
any amount recoverable by the Purchaser under this Agreement.

	32.	 	Rate of Exchange

For the purpose of converting amounts specified in one currency into another currency
where required, the rate of exchange to be used in converting amounts specified in one
currency into another currency shall be the closing mid-point rate for exchanges between
those currencies quoted in the Financial Times (London edition) for the nearest Business
Day for which that rate is so quoted on or prior to the date of the conversion.

	33.	 	Governing Law and Jurisdiction
	 
	33.1	 	This Agreement (together with all documents to be entered into pursuant to it which are
not expressed to be governed by another law) shall be governed by, construed and take
effect in accordance with English law.
	 
	33.2	 	The courts of England shall have non-exclusive jurisdiction to settle any claim, dispute
or matter or difference which may arise out of or in connection with this Agreement
(including without limitation claims for set-off or counterclaim) or the legal
relationships established by this Agreement.
	 
	33.3	 	Each of the parties hereto agrees that in the event of any action between any of the
parties hereto being commenced in respect of this Agreement or any matters arising under
it, the process by which it is commenced, (where consistent with the applicable court
rules) may be served on them in accordance with clause 20.

As Witness the hands of the parties or their duly authorised representatives the day and
year first above written.

 

-55-

	 	 	 
	 
	 	 
	Executed by the parties:
	 
	 
	 	 
	Signed by

	/s/ Corinne Knopp	 
	 

	 	 
	 
	 	 
	For and on behalf of
	 
	 
	 	 
	BHR Holdings BV
	 
	 
	 	 
	Signed by

	/s/ Chris Morrish	 
	 

	 	 
	 
	 	 
	For and on behalf of
	 
	 
	 	 
	DABICAM SAS
	 
	 
	 	 
	Signed by

	/s/ Marten Foxon	 
	 

	 	 
	 
	Marten Foxon	 
	 
	 	 
	For and on behalf of 
	 
	 
	 	 
	Six
Continents Limited
	 

 

-56-

Schedule 1

Part
A

The Company

HÔtel Inter-Continental Paris SAS

	 	 	 	 	 
	 
	 	 	 	 
	1.
	 	Date of incorporation:	 	22 June 1955
	 
	 	 	 	 
	2.
	 	Place of incorporation:	 	Paris, France
	 
	 	 	 	 
	3.
	 	Registered number:	 	652 029 125 RCS Paris
	 
	 	 	 	 
	4.
	 	Registered office:	 	3 rue de Castiglione, 75001 Paris, France
	 
	 	 	 	 
	5.
	 	President:	 	Dagmar Frank
	 
	 	 	 	 
	6.
	 	Managing directors:	 	Andrew Gill, Pierre-Olivier Lauriol
	 
	 	 	 	 
	7.
	 	Issued share capital:	 	€3,614,400 divided into 150,600 ordinary
	 
	 	 	 	shares of €24 each
	 
	 	 	 	 
	8.
	 	Accounting reference date:	 	31 December
	 
	 	 	 	 
	9.
	 	Auditors:	 	Ernst & Young SA (principal auditor)
	 
	 	 	 	Thierry Aymonier (deputy auditor)
	 
	 	 	 	 
	10.
	 	Shareholder:	 	BHR Holdings BV
	 
	 	 	 	 
	11.
	 	Issued loan capital:	 	Nil
	 
	 	 	 	 
	12.
	 	Charges:	 	None

 

-57-

Schedule 1

Part B

The Subsidiaries

HÔtel Inter Continental London (Holdings)
SAS

	 	 	 	 	 
	 
	 	 	 	 
	1.
	 	Date of incorporation:	 	21 September 2001
	 
	 	 	 	 
	2.
	 	Place of incorporation:	 	Paris, France
	 
	 	 	 	 
	3.
	 	Registered number:	 	439 278 938 RCS Paris
	 
	 	 	 	 
	4.
	 	Registered office:	 	5 place de l’Opéra, 75009 Paris
	 
	 	 	 	 
	5.
	 	President:	 	Andrew Gill
	 
	 	 	 	 
	6.
	 	Managing directors:	 	Pierre-Olivier Lauriol, Gisèle Maillot
	 
	 	 	 	 
	7.
	 	Issued share capital:	 	€100,000 divided into 100,000 ordinary shares
	 
	 	 	 	of €1 each
	 
	 	 	 	 
	8.
	 	Accounting reference date:	 	31 December
	 
	 	 	 	 
	9.
	 	Auditors:	 	Ernst & Young Audit SA (principal auditor)
	 
	 	 	 	Patrick Lhomme (deputy auditor)
	 
	 	 	 	 
	10.
	 	Shareholder:	 	The Company
	 
	 	 	 	 
	11.
	 	Issued loan capital:	 	Nil
	 
	 	 	 	 
	12.
	 	Charges:	 	None

 

-58-

Snc De L’hotel Inter-Continental Paris

	 	 	 	 	 
	 
	 	 	 	 
	1.
	 	Date of incorporation:	 	20 January 1988
	 
	 	 	 	 
	2.
	 	Place of incorporation:	 	Paris, France
	 
	 	 	 	 
	3.
	 	Registered number:	 	343 485 116 RCS Paris
	 
	 	 	 	 
	4.
	 	Registered office:	 	3 rue de Castiglione, 75001, Paris
	 
	 	 	 	 
	5.
	 	Managers:	 	Dagmar Frank, Pierre-Olivier Lauriol, Arie van der Spek
	 
	 	 	 	 
	6.
	 	Issued share capital:	 	€8,000 divided into 500 ordinary shares of €16 each
	 
	 	 	 	 
	7.
	 	Accounting reference date:	 	31 December
	 
	 	 	 	 
	8.
	 	Auditors:	 	Ernst & Young Audit SA (principal auditor) Thierry
	 
	 	 	 	Aymonier (deputy auditor)
	 
	 	 	 	 
	9.
	 	Shareholders:	 	The Company (498 shares)
	 
	 	 	 	Hôtel Inter-Continental London (Holdings) SAS (2 shares)
	 
	 	 	 	 
	10.
	 	Issued loan capital:	 	Nil
	 
	 	 	 	 
	11.
	 	Charges:	 	None

 

-59-

Schedule 2

Part A

The Property

Property means the real estate property erected onto the parcels of land of a cadastral surface of
approximately 6,162 sqm (cadastral sections BD n° 56 and 37), located 1 and 3 rue
de
Castiglione, 75001 Paris.

The Property was acquired under the terms of two deeds respectively of 30 January 1884 (rue de
Castiglione n°3 rue de Rivoli n°236 et 238, rue Rouget de l’Isle n°2 et 4 et rue du Mont Thabor
n°19) and 17 June 1964 (rue de Castiglione n°1 et rue de Rivoli n°234).

 

-60-

Schedule 2

Part B

Fiche D’immeuble

 

-61-

Schedule 2

Part C

The Leases

	 	 	 	 	 	 	 	 	 	 	 
	Shop Name	 	Company Name	 	Shop Address	 	Type of Shop	 	Lot No
	STERN

	 	STERN
	 	3 rue de
Castiglione,
 75001
Paris
	 	Jewellery and
watches
	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 
	STERN

	 	STERN
	 	3 rue de
Castiglione,
 75001
Paris
	 	Jewellery, watches
and precious stones
	 	 	2	 
	 
	 	 	 	 	 	 	 	 	 	 
	LE MINOTAURE

	 	Promotion d’Oeuvres
Modernes
	 	3 rue de
Castiglione,
 75001
Paris
	 	Art gallery
	 	 	4	 
	 
	 	 	 	 	 	 	 	 	 	 
	LIBRAIRIE 

INTERCONTINENTAL

	 	LIBRAIRIE

INTERCONTINENTAL
	 	3 rue de
Castiglione,
 75001
Paris
	 	Bookshop
	 	 	5	 
	 
	 	 	 	 	 	 	 	 	 	 
	CYRENE

	 	CYRENE
	 	1 rue de
Castiglione,
 75001
Paris
	 	Crystal and
porcelain goods
	 	 	10	 
	 
	 	 	 	 	 	 	 	 	 	 
	CYRENE

	 	CYRENE
	 	1 rue de
Castiglione,
 75001
Paris
	 	Crystal and
porcelain goods
	 	 	11	 
	 

	 	 	 	 	 		 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	SELECTION PRIVEE

	 	SELECTION PRIVEE
	 	234 rue de Rivoli,

75001 Paris
	 	Ready to wear clothes, perfumes,

leather goods
	 	 	15	 
	 
	 	 	 	 	 	 	 	 	 	 
	INDIAMO (ART ATTACK)

	 	INDIAMO
	 	238 rue de Rivoli,

75001 Paris
	 	Clothes
	 	 	16	 
	 
	 	 	 	 	 	 	 	 	 	 
	DJULA

	 	DJULA
	 	234 rue de Rivoli,

75001 Paris
	 	Jewellery, leather

goods
	 	 	17	 
	 
	 	 	 	 	 	 	 	 	 	 
	SODICOFI

	 	SODICOFI
	 	234 rue de Rivoli,

75001 Paris
	 	Chocolate shop
	 	 	18	 
	 
	 	 	 	 	 	 	 	 	 	 
	Mme RAILLARD

	 	 	 	238 rue de Rivoli,

75001 Paris
	 	Fine jewellery,

perfumes
	 	 	23	 
	 
	 	 	 	 	 	 	 	 	 	 
	WOLFONI’S

	 	WOLFONI’S
	 	238 rue de Rivoli,

75001 Paris
	 	Shoes
	 	 	26	 
	 
	 	 	 	 	 	 	 	 	 	 
	ISANIC

	 	ISANIC
	 	238 rue de Rivoli,

75001 Paris
	 	Ready to wear
clothes, cosmetics
	 	 	19, 20, 21 
&
 22	 
	 
	 	 	 	 	 	 	 	 	 	 
	LA VIE EN ROSE

	 	TETE DANS LES

ETOILES
	 	238 rue de Rivoli,

75001 Paris
	 	Art gallery
	 	 	24 & 25	 
	 
	 	 	 	 	 	 	 	 	 	 
	CASTY

	 	CASTY DELPHES
	 	3 rue de
Castiglione,
 75001
Paris
	 	Watches, jewellery,

leather goods,

cosmetics
	 	6, 7, 8 & 9 
(single lot)

 

-62-

Schedule 3

Warranties

	A.	 	The Accounts

	A.1 	 	The copy of the Accounts annexed to the Disclosure Letter is a true and complete copy.
The Accounts:

	 	(a)	 	give a true and fair view (image sincère et fidèle) of the financial position
and state of affairs of each Group Member as at the Accounts Date and of its profit or
loss for the financial year ended on the Accounts Date;
	 
	 	(b)	 	have been prepared in accordance with the French accounting principles,
standards and practices generally applied for the preparation of statutory accounts at
the Accounts Date;
	 
	 	(c)	 	disclose and make adequate and proper provision or reserve in accordance with
(and to the extent required by) French GAAP for (or note in accordance with France
GAAP) all contingent, unquantified or disputed liabilities, all capital commitments
and deferred Tax;
	 
	 	(d)	 	have been prepared, unless otherwise expressly stated therein, on a basis
consistent with the basis applied in preparing the corresponding accounts for each of
the three financial years preceding the financial year ended on the Accounts Date; and
	 
	 	(e)	 	dealt with the state of affairs and results only of the Company and the Group
and did not deal with the state of affairs or results of any other undertaking.

	A.2 	 	In respect of each Group Member, for each of the financial year ended on the Accounts
Date and the two financial years preceding the financial year ended on the Accounts Date:

	 	(a)	 	the audited accounts have been prepared in accordance with French GAAP;
	 
	 	(b)	 	the profits for such three year period as shown by the audited accounts and
the Accounts and the trend of profits thereby shown have not been affected to a
material extent by any extraordinary, exceptional or non-recurring item, by
inconsistencies of accounting practices, by the inclusion of non-recurring items of
income or expenditure or by transactions entered into otherwise than on normal
commercial terms; and
	 
	 	(c)	 	the audited accounts have been prepared under the historical cost convention
and no changes in the bases or policies of accounting have been made to those audited
accounts.

 

-63-

	A.3 	 	No Group Member is or has, during the three years prior to the Accounts Date, been a party
to any agreement, arrangement or transaction pursuant to which that Group Member is or was
entitled to receive a financial advantage or is or was obliged to incur or bear any costs,
liabilities (whether contingent or otherwise) risks or other expenditure of any nature
(including, but not limited to, any “off-balance sheet” financing arrangements), which is not
reflected in the Accounts.

	A.4 	 	The Interim Accounts have been diligently prepared and properly extracted from accounting
records in accordance with the accounting policies of the Company and the Group and on a
basis consistent with each other and that adopted in the Accounts and in a format that
corresponds to the Accounts’ format (excluding however any notes to the financial statements)
and give a reasonable view in all material respects of the assets and liabilities, and
profits and losses, of the Group Member for the period to which they relate.

	A.5 	 	No Group Member has incurred or will incur any cost or liability in connection with its
shareholding, prior to Completion, in Société Immobilière de l’Industrie Hôtelière de Paris
or with the ownership, prior to Completion, of shares, securities or participating interest
in any other company or entity.

	A.6 	 	Debts

The Accounts make provision for doubtful debts in accordance with French GAAP and bad debts
have been written off in accordance with French GAAP.

	B.	 	Business since the Accounts Date
	 
	B.1 	 	Since the Accounts Date:

	 	(a)	 	there has been no material adverse change in the financial or trading position
of the Group, save to the extent that the same would be likely to affect to a similar
extent generally all companies carrying on the same businesses in Paris, and so far as
the Seller is aware there is no event, fact or matter has occurred which will give
rise to such a change, and there has been no damage, destruction or loss (whether or
not covered by insurance) affecting the same;
	 
	 	(b)	 	the Group has carried on its businesses in the ordinary and usual course so as
to maintain them as a going concern and without any material interruption or material
alteration in the nature, scope or manner of the Group’s businesses which businesses
have been carried on lawfully in all material respects;
	 
	 	(c)	 	no Group Member has, otherwise than in the ordinary and usual course of its
business, acquired, sold, transferred or otherwise disposed of, or agreed to acquire,
sell, transfer or otherwise dispose of, any assets of whatsoever nature or assumed
or incurred or agreed to assume or incur any material liabilities

 

-64-

	 	 	 	(including contingent liabilities) otherwise than in the ordinary and usual
course of its business and (in the case of a disposal of the assets) for an
amount which is lower than book value or an open market arm’s length value
whichever is the higher;
	 
	 	(d)	 	there have been no material changes to the current assets or the long term
and current liabilities (including contingent liabilities) of the Group other than
in the case of current assets and current liabilities in the ordinary and usual
course of business;
	 
	 	(e)	 	there has been no material change in the manner or time of payment of
creditors, or the issue of invoices or collection of debts, or policy of reserving
for debtors or in the amount of stock bought or agreed to be bought or in stock
which, taking the net effect of all such changes, would have a material adverse
effect on the business of the Group;
	 
	 	(f)	 	no Group Member has entered into, or agreed to enter into, any commitments,
including finance leases (according to French GAAP for consolidated accounts),
involving capital expenditure which when aggregated with existing commitments for
capital expenditure would exceed €200,000 in the aggregate nor entered into, or
agreed to enter into, any operating agreement which could not be terminated before
the expiry date without indemnity, involving a total commitment which when
aggregated with existing commitments for operating agreements would exceed €500,000
in the aggregate;
	 
	 	(g)	 	no Group Member has engaged or dismissed any employee earning a rate of
remuneration, including benefits and bonuses, in excess of €60,000 per annum and no
Group Member is under any contractual or other obligation to change the terms of
service of any director, executive or employee;
	 
	 	(h)	 	no sum or benefit has been paid or granted or agreed to be paid or granted to any
executive director or employee of any Group Member by way of remuneration, bonus,
incentive or otherwise in excess of the amounts paid or granted to them by the
relevant Group Member at the Accounts Date so as to increase their total
emoluments;
	 
	 	(i)	 	except for any dividends provided for in the Accounts, no dividends, bonuses or
other distributions (including any repayment of capital or other distribution of
reserves or capital or profit) have been declared, paid or made by any Group
Member and no resolution has been passed to declare, pay or make such dividend,
bonus or other distribution;

 

-65-

	 	(j)	 	other than creditors and trade debtors (including intra group creditors and debtors),
no Group Member has borrowed or lent or agreed to borrow or lend any money and no
share or loan capital of any Group Member has been allotted or issued or agreed
to be allotted or issued nor has any option or right thereover been granted and
no loan or loan capital or preference capital of any Group Member has been repaid
in whole or part or has become liable to be repaid;
	 
	 	(k)	 	no Group Member has undergone any capital reorganisation or change in its
capital structure, capitalisation or repayment of any amount standing to the
credit of any reserve of a Group Member or the redemption or purchase of any
shares or any other reorganisation of the share capital of a Group Member and,
without limiting the foregoing, the Company has taken no steps to reduce its
distributable reserves to a level below that shown in the Accounts;
	 
	 	(l)	 	no resolution of the members of any Group Company has been passed (whether
in general meeting or otherwise);
	 
	 	(m)	 	no Group Member has written up any stocks;
	 
	 	(n)	 	there have been no capital injections from or forgiveness of debt by the Seller or
any member of the Seller’s Group;
	 
	 	(o)	 	no substantial supplier to or customer of the Group (being a supplier or customer
accounting for more than 10% of the Group’s purchases or sales in the 12 months
immediately prior to Completion (as the case may be)) has ceased or substantially
reduced its trade with any Group Member and no unusual trade discounts have been
incorporated in any contract entered into by a Group Member which will continue
in effect after Completion; and
	 
	 	(p)	 	no Group Member has incurred any off-balance sheet commitments, as
determined under French GAAP.

	C.	 	The Company

	C.1 	 	The Company is a French société par actions simplifiée whose registered office is located
at 3 rue de Castiglione 75001 Paris, France, is properly incorporated and validly existing
under the laws of France and is duly registered with the companies’ registry of Paris,
under number 652 029 125 RCS Paris.

	C.2 	 	The Company has full power and authority, and has obtained or satisfied, in all material
respects, all applicable governmental, statutory, regulatory or other consents, licences,
waivers or exemptions required to empower it to carry on the Business.

 

-66-

	C.3 	 	The Company is not insolvent, has not been dissolved or declared insolvent. So far as the
Seller is aware, no action or request is pending to declare the Company insolvent and the
Company has not filed a request for, nor has been granted, a moratorium or a suspension of
payments, or is not subject to any bankruptcy proceedings under French law or similar
procedures nor, so far as the Seller is aware, is under threat of such proceedings.

	C.4 	 	Articles of Association:

	 	(a)	 	Attached to the Disclosure Letter is a true copy of the current articles of
association of the Company, which copy has attached to it copies of all resolutions
and agreements which are required to be so attached.
	 
	 	(b)	 	During the last six years, the Company has complied with its articles of
association in all material respects and none of the activities, agreements,
commitments or rights of the Company is ultra vires or unauthorised.

	C.5 	 	The Shares as described in Schedule 1 Part A:

	 	(a)	 	comprise all the issued and outstanding share capital of the Company;

	 
	 	(b)	 	are duly authorised;
	 
	 	(c)	 	have been properly issued;

	 
	 	(d)	 	are fully paid;
	 
	 	(e)	 	are free and clear of any Encumbrances and there is no arrangement or
obligation binding the Company that could result in the creation of any Encumbrance
affecting any of the Shares, including without limitation any share options, warrants
or convertible debentures.

	C.6 	 	The Company has not issued any profit sharing bonds or otherwise attributed rights to third
parties to share in past, present or future income or profits, reserves or liquidation
surpluses of the Company.

	C.7 	 	No person has or claims to have:

	 	(a)	 	the right (actual or contingent) to require the issue, transfer, conversion
or redemption, of any:

	 	(i)	 	share of the Company; or
	 
	 	(ii)	 	other securities giving rise to a right over the share capital of the Company;
or

 

-67-

	 	(b)	 	any other rights relating to any of the:

	 	(i)	 	Shares; or
	 
	 	(ii)	 	rights attaching to the Shares; or
	 
	 	(iii)	 	profits of the Company;

and there is no arrangement or obligation binding on the Company to create any rights of the
type mentioned in paragraph C.7(a) or C.7(b).

	C.8   	(a)  	No resolution has been passed in relation to the Company;

	 	(b)	 	no step has been taken by the Seller in relation to the Company; and
	 
	 	(c)	 	so far as the Seller is aware, no legal proceedings have been started, or
threatened, against the Company,

for its winding up or dissolution, or for the appointment of a liquidator, administrator
(administrateur judiciare), or a mandataire ad hoc.

	C.9 	 	The Company is not party to a merger, spin off or share-for-share exchange.

	C.10 	 	The Company does not exercise any duties as legal representative of a company (“mandataire
social”) or any other legal entity and is not likely to be qualified as a de facto manager
of another company or legal entity.

	D.	 	The Subsidiaries

	D.1 	 	Subsidiaries

	 	(a)	 	Hôtel Inter-Continental London (Holdings) SAS is a French société par actions
simplifiée whose registered office is located at 5 place de l’Opéra, 75009 Paris,
France, is properly incorporated and validly existing under the laws of France and is
duly registered with the companies’ registry of Paris, under number 439 278 938 RCS
Paris;
	 
	 	(b)	 	SNC de l’Hôtel Inter-Continental Paris is a French société en nom collectif
whose registered office is located at 3 rue de Castiglione, 75001 Paris, France, is
properly incorporated and validly existing under the laws of France and is duly
registered with the companies’ registry of Paris, under number 343 485 116 RCS Paris.

	D.2 	 	Each Subsidiary has full power and authority, and has obtained or satisfied in all material
respects all applicable governmental, statutory, regulatory or other consents, licences,
waivers or exemptions required to empower it to carry on the Business.

 

-68-

	D.3 	 	The Subsidiaries are not insolvent, have not been dissolved or declared insolvent. No
action or request is pending to declare a Subsidiary insolvent and the Subsidiaries have
not filed a request for, nor have been granted, a moratorium or a suspension of payments
and are not subject to any bankruptcy proceedings under French law or similar procedures
nor, so far as the Seller is aware, are under threat of such proceedings.

	D.4 	 	Articles of Association

	 	(a)	 	Attached to the Disclosure Letter is a true copy of the articles of
association of each of the Subsidiaries, and each copy has attached to it copies of
all resolutions and agreements which are required to be so attached.
	 
	 	(b)	 	During the last six years each Subsidiary has complied with its articles of
association in all material respects and none of the activities, agreements,
commitments or rights of either Subsidiary is ultra vires or unauthorised.

	D.5 	 	Neither Subsidiary exercises any duties as legal representative of a company (mandataire
socia”) or any other legal entity and is not likely to be qualified as de facto managers of
another company or legal entity.

	D.6 	 	The shares of each Subsidiary have been duly authorised, properly issued and fully paid
up.

	D.7 	 	The shares in each Subsidiary are not affected by any Encumbrances and there is no
arrangement or obligation binding on a Subsidiary that could result in the creation of any
Encumbrance affecting any of the shares in a Subsidiary or any future shares in the capital
of the Subsidiary, including without limitation any share options, warrants or convertible
debentures.

	D.8 	 	Neither Subsidiary has issued any profit sharing bonds or otherwise attributed rights to
third parties to share in past, present or future income or profits, reserves or
liquidation surpluses of that Subsidiary.

	D.9 	 	No person has or claims to have:

	 	(a)	 	the right (actual or contingent) to require the issue, transfer, conversion,
or redemption, of:

	 	(i)	 	any share of a Subsidiary; or
	 
	 	(ii)	 	other securities giving rise to a right over the share capital of a Subsidiary;
or

 

-69-

	 	(b)	 	any other rights relating to any of the:

	 	(i)	 	shares in the capital of a Subsidiary;
	 
	 	(ii)	 	rights attaching to those shares; or
	 
	 	(iii)	 	profits of a Subsidiary;

and there is no arrangement or obligation binding on a Subsidiary or to create any rights of
the type mentioned in paragraph D.9(a) or D.9(b).

	D.10 	(a)	No resolution has been passed in relation to a Subsidiary;

	 	(b)	 	no step has been taken by the Seller or the Company in relation to a
Subsidiary; or
	 
	 	(c)	 	so far as the Seller is aware, no legal proceedings have been started, or
threatened, against a Subsidiary,

for its winding up or dissolution, or for the appointment of a liquidator, administrator
(administrateur judiciare), or a mandataire ad hoc.

	D.11 	 	Neither Subsidiary is party to a merger, spin off or share-for-share-exchange.

	E.	 	Other investments and associated businesses

	E.1 	 	Except for the shares in the Subsidiaries, no Group Member is the legal owner of any
shares or securities issued by any person and is not obliged to acquire any shares or
other securities in any person.

	E.2 	 	No Group Member is or has agreed to become:

	 	(a)	 	a member of, or a party to, any joint venture, consortium, partnership,
association or agency or any licensing, marketing, distributorship, purchasing or
manufacturing agreement or arrangement (other than a recognised trade association in
relation to which the Group Company has no liability or obligation except for the
payment of annual subscription or membership fees); or
	 
	 	(b)	 	a party to any profit or loss sharing arrangement.

	E.3 	 	No Group Member has a branch, agency, place of business (whether or not amounting to a
permanent establishment under a relevant double taxation treaty) or assets outside of its
jurisdiction of incorporation.

	E.4 	 	No Group Member is under any obligation to purchase a fonds de commerce.

 

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	E.5 	 	No Group Member is a party to any shareholders’ agreement or similar arrangement or
agreement which purports to regulate, control or otherwise affect the voting or
disposition of its shares.

	F.	 	Records and registration matters

	F.1  	(a) 	Each Group Member has properly kept and maintained each shareholder register,
minute book and other record, account, ledger, other financial record and report
that it is required by law to keep and each of them is in all material respects
up-to-date and contains an accurate record of the matters to which it relates as
required by French Corporate law;

	 	(b)	 	All registers of members, minute books and other statutory books, records,
accounts, ledgers, financial records and reports referred to in paragraph F.1(a) and
all other records, deeds and documents relating to each Group Member’s affairs and
assets (including title deeds relating to the Property, executed originals of all
material agreements to which a Group Member is a party and all the accounts, ledgers
and other records of each Group Member) are in the possession of the Group Members
or the Group Members have the right to call for such documents; and
	 
	 	(c)	 	No person has sought rectification of a register kept by a Group Member or
made an allegation that a register kept by a Group Member is incorrect.

	F.2 	 	Since 1 April 1998, each filing, return, resolution and other document required by law to
be delivered on behalf of a Group Member to the competent company register (registre du
commerce et des sociétés) has been properly made and delivered and no Group Member is
liable to pay any fine for breach of that requirement.

	F.3	 	The Company System:

	 	(a)	 	contains the records and information required for the existing property
management function and existing yield management function of the Hotel, such
records and information being in the form of data files including the Fidelio
property management system and a hard copy of the PeopleSoft accounting records
maintained by the relevant Group Member; and
	 
	 	(b)	 	is in the possession of and under the exclusive ownership and direct
control of the Group.

	F.4 	 	The Schedule of Priority Club® Rewards redemption bookings or any other redemption
bookings Disclosed is complete and accurate as at the date it was provided and prior to
Completion such bookings shall continue to be taken in the ordinary and usual course.

 

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	F.5 	 	All Encumbrances granted to a Group Member have (if appropriate) been registered in
accordance with the applicable law or complied with all necessary formalities as to
registration or otherwise in any foreign jurisdiction.

	F.6 	 	The only presidents, managing directors or managers (as appropriate) of each Group
Member are the persons listed as such in that part of schedule 1 that relates to the
relevant Group Member and no person is a shadow, alternate or de facto president, managing
director or manager.

	G.	 	Property

	G.1 	 	The Property comprises all the land and premises owned leased or occupied or otherwise
used by the Group in the conduct of the Business. No Group Member has any other interest in
any other land or buildings other than the Property and no Group Member has entered into
any legally binding agreement for the purchase of any such interest.

	G.2 	 	The Company has full and valid (valide) title to the Property as described in schedule 2.
The deeds of acquisition concerned are listed in schedule 2 and there is no contractual
document which modifies the provisions set out in these deeds of acquisition. There is no
pending dispute or proceedings relating to the ownership of the Property by the Company.

The Company is under no obligation to purchase any other real -estate assets or lease
rights.

	G.3 	 	The Company has not granted any pre-emption right, preference agreement, option or any
other right to acquire all or part of the Property in favour of any third party.

	G.4 	 	The Property is located within the perimeter of protection of historical monuments
(périmètre de protection des monuments historiques).

	G.5 	 	The Property has been used (i) as retail premises for the part of Property currently let
by the Company as indicated in the Disclosure Letter and, (ii) as hotel for the other part
of the Property since the acquisition of the Company by the Seller’s Group in 1998 and to
the Seller’s knowledge the Property has been used as hotel since at least 1936 (other than
during the Second World War). The Hotel is classified as tourist hotel in a 4 star category
and the relevant classification decision has been duly obtained.

	G.6 	 	Save for the areas occupied pursuant to the leases listed in Schedule 2 the Property
complies with French fire, health and safety regulations with respect to the different
activities carried out therein as well as with the French regulations relating to
buildings receiving the public (établissement recevant du public) and the French
commercial town planning regulations and the Seller has not received notice that:

 

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	 	(a)	 	nor is aware that any necessary authorisations to operate the business in any
part of the Property have not been obtained;
	 
	 	(b)	 	the Property does not comply with French fire, health and safety regulations
with respect to the different activities carried out in the Property;
	 
	 	(c)	 	the Property does not comply with the French regulations relating to buildings
receiving the public (établissement recevant du public) and the French commercial town
planning regulations; and
	 
	 	(d)	 	nor is aware that the 4 star category classification has been withdrawn.

	G.7 	 	Since 1995 the Company has carried out all measures and verifications that it was required
to carry out by the sous-commission technique de sécurité de la Préfecture de Police de
Paris.

	G.8 	 	The Company has never received any dangerous structure notice (arrêté de péril) from the
relevant authorities with respect to the Property under Articles L.511-1 and seq. of the
French construction and dwelling code, nor any related document or letter and, so far as the
Seller is aware, there is no reason to think that any such notice may be given.

	G.9 	 	So far as the Seller is aware, the Property has not been, is not, and is not expected to be
subject to any expropriation or similar procedure.

	G.10 	 	The Seller is not aware of the Company or any other Group Member having in relation to the
Property received any written notice from any statutory authority not referred to in
paragraphs G.6 and G.7 alleging any material non-compliance with any statutes, regulations or
bye-laws, including any such relating to fire precautions, means of escape in case of fire
and any fire certificate held by the Company or any other Group Member, in respect of which
works and/or actions remain to be carried out by the Company or any other Group Member to
remedy such non-compliance.

	G.11 	 	The Company is not subject to an order to perform any works in connection with health, fire
and security requirements imposed by any relevant authority which could have a material
effect on the Property and its use as an Hotel of the star category set out in paragraph G.5
above and for the part of the Property let by the Company as retail premises.

	G.12 	 	The Seller complies with the provisions of the French public health code (code de la santé
publique) regarding the preparation and sale of food and beverages, and the liquor licence
(licence de débit de boisson à consommer sur place de 4ème catégorie n° 2339) has been duly
obtained. The Company has not received notice from any competent authorities that any
obligations resulting from the French public health code (code de la santé publique) have not
been duly fulfilled regarding the preparation and sale of food and

 

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beverages or that the liquor licence is or has been subject to any withdrawal or third
party recourse and so far as the Seller is aware there is no reason why such notice should
be given nor will the liquor licence be withdrawn or subject to third party recourse.

	G.13 	 	Construction

	 	(a)	 	No work requiring planning permission, fitting-out permits (permis
d’aménagement) or compulsory construction works insurance policy have been carried out
over the last ten years except for the works carried out for the renovation of the
Property and its technical installations between 1994 and 1998 and the works carried
out at the spa at the Property as Disclosed. All demolition permits, planning
permissions, fitting -out permits (permis d’aménagement) and/or and other requisite
declarations, authorisations and approvals and any related transfer orders and/or
modifying permits have been filed, obtained and displayed as regards the works carried
out for the renovation of the Property and its technical installations between 1994 and
1998 and the works carried out at the spa at the Property as Disclosed. The Company has
made the corresponding declarations of opening of the site and of completion of works
within the applicable time periods.
	 
	 	(b)	 	There has never been nor is there any pending dispute, litigation, withdrawal
of permits or legal action pertaining to these works and/or the above mentioned
permits.
	 
	 	(c)	 	The Company has not carried out any extension or transformation of hotel
facilities which require authorization as provided for in article L.720-5 7°) of the
French commercial code without such prior authorization.

	G.14 	 	Encumbrances

	 	(a)	 	There is no Encumbrance over the Property and there is no obligation binding
on the Company or any other Group Member to create any Encumbrance over the Property.
	 
	 	(b)	 	So far as the Seller is aware, there are no disputes, notices or complaints
which affect or might in the future affect the Property for the purposes for which it
is now used and which would prevent or impede the Company or any other Group Member
from operating and carrying on the business currently carried out at the Property.

	G.15 	 	Easements

The Company has not granted any easement over the Property to the benefit of a third party
and, to the Seller’s knowledge, the Property is not subject to any easement other than
those arising from its natural position and from planning rules, environmental rules

 

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and/or rules applying thereto and those which are set out in the deeds listed in schedule 2.
The designated legal use (destination) and the allocation (affectation) of the Property
comply with such easements.

	G.16	 	Leasehold Status

	 	(a)	 	The Company and the SNC de l’Hôtel Inter-Continental Paris have only granted
titles to occupation over the Property pursuant to the leases listed in schedule 2
true, complete and accurate copies of which have been Disclosed. There are no other
agreements for lease, leases, tenancies, licences, management agreements or other
similar documents to which the Property is currently subject other than those set
out in schedule 2 and there are no agreements or arrangements granting to a third
party the right to conduct property management activities on behalf of a Group
Member in respect of all or part of the Property. The Company and SNC de l’Hôtel
Inter-Continental Paris have complied with all material obligations under such
leases.
	 
	 	(b)	 	The lessees have complied in due time with any and all of their obligations
in all material respects under the leases set out in schedule 2 and neither the
Company nor SNC de l’Hôtel Inter -Continental Paris has served upon any tenant,
licensee or occupier pursuant to any such leases any written notice of any alleged
breach of any covenants, obligations, terms, conditions and restrictions therein nor
is the Seller aware of the same.
	 
	 	(c)	 	There is no housing allowance granted by the Company or any other Group
Member to any of its employees.
	 
	 	(d)	 	Any occupation rights relating to the services provided by external
suppliers have been granted on a precarious basis, and other than such occupancy
rights, neither the Company nor any other Group Member has granted any occupation
rights on a precarious basis to contractors or third parties, and all occupation
rights granted on a precarious basis have been Disclosed.
	 
	 	(e)	 	The spa located at the Property is run by JJJ Marignan under a sub
-operating agreement (sous -location-gérance) granted by SNC de l’Hôtel
Inter-Continental Paris a true, complete and accurate copy of which has been
Disclosed.
	 
	 	(f)	 	Except as Disclosed, there are no pending disputes or complaints concerning
any of the leases set out in schedule 2 and/or sub-operating agreements and neither
the Company nor any other Group Member has received from any tenant, licensee or
occupier any written notice of any alleged breach of its obligations as landlord or
licensor.

 

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	 	(g)	 	The rents paid under the leases set out in schedule 2 and any occupancy rights referred to in paragraph G.16(d) are not the subject of any Encumbrance and, so
far as the Seller is aware, no rents have been commuted or waived and there are
no outstanding negotiations for the review of any receivable rents or licence
fees.
	 
	 	(h)	 	The rental deposits relating to the leases set out in schedule 2 have been duly received by and are in the possession of the Company, have been duly indexed
pursuant to the terms and conditions of these leases and have not been drawn and
there are no rent deposits other than as Disclosed.
	 
	 	(i)	 	Neither the Seller nor any Group Member has received any written notice that any of the tenants under the leases set out in schedule 2 are not in compliance with
any applicable laws or regulations in respect of the part of the Property
occupied them nor is it aware of any such non-compliance.

	H.	 	Assets

	H.1	 	 Each Group Member is the absolute owner of all the assets it uses in the course of its
business (including without limitation fixtures and fittings, articles of personal
property and standard operating equipment):

	 	(a)	 	free and clear of all Encumbrances save for any assets held under lease or
hire purchase agreements which are Disclosed; and
	 
	 	(b)	 	all such assets, together with the facilities and services to which the
Group has a contractual right, include all rights, properties, assets, facilities
and services used in the carrying on of the business of the Group in the manner in
which it is currently carried on, save for the Excluded Assets.

	H.2	 	Possession

	 	(a)	 	All of the assets owned by the Group, or in respect of which the Group has
a right of use, are in the possession or under the control of the Group.
	 
	 	(b)	 	Where any assets are used but not owned by the Group or any facilities or
services are provided to the Group by any third party, so far as the Seller is
aware there has not occurred any event of default or any other event or
circumstance which may entitle any third party to terminate any agreement or
licence in respect of the provision of such facilities or services (or any event or
circumstance which with the giving of notice and/or the lapse of time and/or a
relevant determination would constitute such an event or circumstance).

 

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	H.3	 	Of the plant, machinery, equipment and vehicles included in the Accounts or acquired by the
Group since the Accounts Date none has been sold or disposed of other than on open market
arm’s length terms.

	I.	 	Environmental

	I.1	 	 No Group Member has received any notice from any relevant authority to the effect that it is
in breach of any Environmental Laws.

	I.2	 	 No Group Member has received any notice from any relevant authority to the effect that it is
in breach of any law relating to pollution or the protection of the environment.

	I.3	 	 So far as the Seller is aware it has Disclosed to the Purchaser and/or its professional
advisers all written reports in the possession, custody or control of the Group or its agents
or advisers or the Seller or any member of the Seller’s Group or their respective agents or
advisers relating to compliance or non-compliance with Environmental Laws, the state and
condition of the Environment at or about the Property and which were prepared for the Group
or the Seller or any member of the Seller’s Group in the last six years and the Seller is not
aware of any material issue in respect of Environmental Matters other than any such issues
referred to in such reports..

	I.4	 	 So far as the Seller is aware no Group Member is in a state of, nor has received any written
notice, claim, demand or other communication from any relevant regulatory body alleging any
non-compliance by any Group Member of Health & Safety Legislation, in respect of which works
and/or actions remain to be carried out by the relevant Group Member to remedy such
non-compliance.

	I.5	 	 The Seller has Disclosed all reports which have been provided in the last six years to a
Group Member, the Seller or a member of the Seller’s Group relating to asbestos at or around
the Property and so far as the Seller is aware none of the Group Members, the Seller or a
member of the Seller’s Group has in its possession any other such report made prior to that
period. In the last six years, so far as the Seller is aware, each Group Member has complied
in all material respects with all legal and regulatory requirements applicable to that Group
Member in connection with asbestos at the Property and the Seller is not aware of any
material issue in respect of asbestos in or around the Property other than any such issues
referred to in such reports.

	I.6	 	 In the last six years, so far as the Seller is aware, each Group Member has conducted its
business and corporate affairs in all material respects in compliance with Environmental
Laws.

	I.7	 	 The Property, its fittings and equipment have never been subject to legislation relating to
classified installations.

 

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	I.8	 	 No claim has been made against any Group Member by any person regarding Hazardous Materials.

	J.	 	Insurance

	J.1	 	 All assets of the Group of an insurable nature have at all times in the last three years
been and are insured in amounts equal to the full replacement value of those assets against
such risks as are in accordance with good commercial practice normally insured against. Each
Group Member has insured against such other risks as are in accordance with good commercial
practice normally insured against. All premiums due in respect of the Insurance Policies have
been paid and the representations made and information furnished at the time of the taking
out or the renewal of the Insurance Policies were correct, full and accurate and any change
in the information required to be given was correctly given. No action has been undertaken
by any of the Group Members and, so far as the Seller is aware, there exists no event or
situation which could lead to the putting into issue of the coverage provided by these
policies and no premium has been increased during the last three years due to a particular
claim. In the last three years no Group Member has made any insurance claims, suffered any
uninsured losses, waived any rights of material or substantial value or allowed any
insurances to lapse.

	J.2	 	 No Group Member is in default under any Insurance Policy and, so far as the Seller is aware,
each Insurance Policy is in full force and effect.

	J.3 	 	The Company and all building contractors, architects and technical advisers (within the
meaning of article 1792 of the French civil code) employed by it for the works carried out
for the renovation of the Property and its technical installations in 1995/1998 as Disclosed
have respected their obligations to take out insurance policies in relation to such works in
accordance with articles L.241-1 and L.242-1 of the French insurance code. These policies are
in force (all premiums having been duly paid and the obligations to notify the relevant
insurance companies of the delivery dates of the said works having been duly complied with).
The delivery dates (dates de réception) of these works constituting the commencement date of
the legal guarantees are set out in the Disclosure Letter.

	J.4	 	 There is no insurance policy with respect to structural damage to construction (Dommage
ouvrages) in connection with the works carried out at the spa at the Property. The insurance
policies taken out by the building contractor, architect and the subcontractors are set out
in the Disclosure Letter.

	J.5 	 	Any event which has occurred and which could constitute a claim covered by any of the
insurance policies referred to in paragraph J.1 has been duly declared to the insurance
companies. There is no pending claim under the Insurance Policies and the Seller is not aware
of anything that may lead to a claim.

 

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	K.	 	Commercial agreements and arrangements

	K.1	 	 The execution of and compliance with the terms of this Agreement will not:

	 	(a)	 	conflict with or result in a breach of the terms of any subsisting
agreement, arrangement or instrument binding on any Group Member;
	 
	 	(b)	 	cause any Group member to lose the benefit of any right, licence or
privilege it enjoys at present;
	 
	 	(c)	 	relieve any person of any contractual obligation to any Group Member or
enable any person to determine such obligation or any right or benefit enjoyed by
any Group Member or to exercise any right whether under an agreement with or
otherwise in respect of that Group Member; or
	 
	 	(d)	 	result in any liability of any Group Member being created or increased,
including by way of a contribution under a Group Scheme.

	K.2 	 	No Group Company is a party to or subject to any contract, transaction, arrangement,
understanding or obligation (other than in relation to any contract of employment) which is
material to the business of the Group and which:

	 	(a)	 	is not in the ordinary and usual course of business of the Group;
	 
	 	(b)	 	is not on an arm’s length basis;
	 
	 	(c)	 	is of a long-term nature, that is unlikely to have been fully performed, in
accordance with its terms, more than 12 months after the date on which it was
entered into or undertaken;
	 
	 	(d)	 	is of an onerous nature or cannot be duly performed by the relevant Group
Member without an unusual commitment of money or resources in the context of the
business of the Group;
	 
	 	(e)	 	is one pursuant to which a Group Member has sold or otherwise disposed of
any company or business in circumstances such that it remains subject to any
liability (whether contingent or otherwise);
	 
	 	(f)	 	is a currency and/or interest rate swap agreement, asset swap, future rate
or forward rate agreement, interest cap, collar and/or floor agreement or other
exchange or rate protection transaction or combination thereof or any option with
respect to any such transaction or any other similar transaction to which a Group
Member is a party;

 

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	 	(g)	 	is any other agreement or arrangement having or likely to have a material adverse effect on the financial or trading position of the Group;
	 
	 	(h)	 	is a bid, tender, proposal or offer which, if accepted, would result in a Group Member becoming a party to any agreement or arrangement of a kind described in any
of paragraphs (a) to (g) above and (i) below; or
	 
	 	(i)	 	may only be terminated upon six months notice or more whether or
not compensation is payable;

(the “Material Contracts”).

	K.3	 	 With respect to each Material Contract:

	 	(a)	 	it was entered into by the relevant Group Member in the ordinary and usual
course of its business;
	 
	 	(b)	 	the Group Member that is party to the Material Contract has not received any
notice of any claim for material breach in relation to it which remains outstanding;
and
	 
	 	(c)	 	so far as the Seller is aware, neither the Group Member that is party to the
Material Contract nor the other parties thereto is in material breach of the Material
Contract or, so far as the Seller is aware, is likely to become in material default
thereunder.

	K.4 	 	Offers and Tenders

No tender, quotation or offer issued by any Group Member and which is still outstanding and
is not in the ordinary and usual course of business is or will be capable of giving rise to
a contract merely by an order, acceptance or other action by another party.

	K.5 	 	No Group Member is a party to any arrangement or agreement or has given any covenants
pursuant to which a Group Member’s freedom of action in relation to its normal business
activities (including its freedom to purchase and supply goods and services from and to any
person) and/or freedom to complete in any area or field with any other person is in any way
affected or restricted.

	K.6 	 	The Disclosure Letter contains full details of each Group Member’s obligations with respect
to the offer or grant to any of its customers otherwise in the ordinary and usual course of
business of discounts, overrides, rebates, allowances, reductions, incentives and other
special terms or similar arrangements.

	K.7 	 	No Group Member nor so far as the Seller is aware, any other party to any agreement or
arrangement with any Group Member is in default to any material extent thereunder.

 

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	K.8 	 	There are in force no powers of attorney given by any Group Member and no person is entitled
or authorised (whether as agent or otherwise) to bind or commit any Group Member to any
obligations outside the ordinary course of business.

	K.9 	 	There are no contracts between any Group Member and any member of the Seller’s Group other
than the Service Agreements which will be terminated on Completion.

     Compliance with Contracts

	K.10 	 	The terms of all Material Contracts have been complied with in all material respects by the
relevant Group Companies.

	K.11 	 	As at the date hereof, no notice of termination or of intention to terminate has been
received in respect of any Material Contract and, so far as the Seller is aware, there are no
grounds for termination, recession, avoidance or repudiation of any such contract.

	K.12 	 	There have been no acquisitions or disposals of business or undertakings or shares by any
Group Company in the last three years.

     Agreements with Connected Parties

	K.13 	 	There are no existing contracts or arrangements material to the business of the Group
between, on the one hand, any Group Company and, on the other hand, any Seller or any other
member of the Seller’s Group other than on normal commercial terms in the ordinary course of
business.

	K.14 	 	No Group Company is party to any contract nor is there any outstanding indebtedness (actual
or contingent) material to the business of the Group with any current or former employee or
current or former director or officer of any such Group Company or any person connected
(within the meaning of section 839 of the Income and Corporation Taxes Act 1988) with any of
such persons, or in which any such person as aforesaid is interested (whether directly or
indirectly), other than on normal commercial terms in the ordinary course of business.

	L.	 	Compliance and litigation

	L.1 	 	Compliance

	 	(a)	 	Licences

	 	(i)	 	Each Group Member has obtained and is in possession of all licences, permissions, authorisations and consents required for carrying on its
business in the places and in the manner in which such business is now
carried on and copies of all such licences, permissions, authorisations and
consents have been Disclosed.

 

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	 	(ii)	 	The licences, permissions, authorisations and consents referred to in paragraph L.1(a)(i) are in full force and effect, are not subject to any
unusual or onerous conditions save as stated in such documents, each Group
Member conducts its business in compliance with all such licences,
permissions, authorisations and consents and so far as the Seller is aware,
all such licenses, permits, authorisations and consents have been complied
with in all material respects. So far as the Seller is aware, there are no
circumstances which indicate that any of such licenses, permits,
authorisations or consents referred to in paragraph L.1(a)(i) will or is
likely to be suspended, cancelled or revoked or not renewed.

	 	(b)	 	Compliance with laws

	 	(i)	 	In the last six years, the Group has conducted its business and corporate affairs in all material respects in compliance with all applicable laws and
regulations of France.
	 
	 	(ii)	 	In the last six years, no Group Member has been in breach of any order, decree or judgement of any court or any governmental or regulatory authority
of France.
	 
	 	(iii)	 	So far as the Seller is aware, in the last six years no
commissions, discounts, rebates or other inducements, whether of cash or in
kind, have been given by any Group Member or its officers or employees where
the same are capable of forming the basis of criminal prosecution of, or civil
action against a Group Member or any of its officers or employees.

	L.2 	 	Litigation

No Group Member is engaged, either on its own account or vicariously, in any suit, action,
litigation, arbitration or tribunal proceedings or any governmental investigations and no
injunction has been granted against any Group Member and no Group Member has given any such
undertaking to any court or to any third party arising out of any legal proceedings. In
addition, so far as the Seller is aware, no such suit, action, litigation, arbitration,
tribunal proceedings, governmental investigations or injunctions are pending or threatened,
by or against any Group Member, nor is the Seller aware of any circumstances likely to lead
to any such suit, action, litigation, arbitration, tribunal proceeding, governmental
investigations or injunction.

	M.	 	Employees

	M.1 	 	The basis of the remuneration payable to Employees and officers (mandataires sociaux) of
the Group Members at the date of this Agreement is the same as that in force at the

 

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Accounts Date and the Group Members are not under any contractual or other obligation
(other than any legal obligation, in particular regarding annual salary negotiations) to
increase the rates of remuneration of or make any bonus or incentive or other similar
payments to any of its Employees at any future date.

	M.2 	 	There are no Employees whose termination would require payment of an amount exceeding
that provided by law or by the National collective bargaining agreement.

	M.3 	 	Accurate particulars of the terms of the contracts of all Employees earning in excess of
€75,000 per annum have been disclosed to the Purchaser; a list of such Employees is set out
in the Disclosure Letter.

	M.4 	 	Disputes and litigation

	 	(a)	 	The Group Members are not engaged or involved in any current labour or union
dispute or litigation (whether individual or collective) arising out of, affected by
or otherwise relating to the provisions of any employment legislation or employment
contract with an Employee and so far as the Seller is aware, the Group Members have
not received written notice of any circumstances which could reasonably be expected
to give rise to any such dispute.
	 
	 	(b)	 	No Employee or former employee of a Group Member has a claim for unfair
dismissal or breach of contract.

	M.5 	 	There has not during the past two years been any actual or threatened strike, work stoppage, work
to rule, lock out or overtime ban which has materially disrupted the business of a Group Member.
	 
	M.6	 	 (a) Since 2002-2003, the Group Members and the Inter -Continental Le Grand Hôtel
have shared services which have involved 121 staff in the following areas:
commercial relations (public relations, reservations, banquets, external sales,
sales for receptions, seminars), financial duties (accounting, pay), personnel
(training, recruitment) administration (purchasing, security, revenues,
management).

	 	(b)	 	62 employees are on the pay roll of SNC de l’Hôtel Inter-Continental Paris
and 59 employees are on the pay roll of the Inter-Continental Le Grand Hôtel. All
Employees have accepted in writing a modification of their employment terms such
that they are employees only of SNC de l’Hôtel Inter -Continental Paris or another
Group Member.
	 
	 	(c)	 	No other persons have been put at the disposal of the Group Members or the
Inter-Continental Le Grand Hôtel at any time prior to Completion such that they

 

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may be regarded as employees or have any employment-related claim against any Group
Member.

	M.7 	 	Since 1 April 1998, each Group Member has complied with all applicable laws, regulations
(including in respect of personnel representation, immigration law and working time),
collective bargaining agreements, customary practices, unilateral commitments and contracts
of employment with respect to the Employees and to former employees employed by the Group
Members since 1 April 1998.

	M.8 	 	No services provider, the agreement of which has expired or been terminated or is currently
in force, may claim to be an employee of a Group Member or request to be integrated as an
employee in a Group Member.

	M.9	 	The works council of SNC de l’Hôtel Inter-Continental Paris has been duly informed and
consulted in connection with the transaction contemplated herein in accordance with
applicable law. A copy of the minutes of the works council meeting, in which it has rendered
its opinion with respect to this transaction, is provided in the Disclosure Letter.

	M.10 	 	The transaction contemplated in this Agreement will not modify the rights of the Employees
under the Group Schemes and other than the Group Schemes Disclosed, there is no scheme,
arrangement or agreement to which any Group Member is a party or by which it is bound or
under which it has an obligation or liability (whether actual, contingent or prospective) to
contribute or to provide funding for the provision of life assurance, retirement, death,
disability or other like benefits (in the form of a pension, lump sum, gratuity or otherwise)
in respect of any person.

	M.11 	 	There are no Employees who benefit from a “protected” status.

	M.12	 	 There are no on-going negotiations or discussions or commitments with Employees and/or works
council or trade union or any employee representative body of a material or unusual nature.

	M.13 	 	There is currently no fixed-term or part -time employment contract or temporary contract
under which any Employee could validly allege that it could be converted into an employment
of indefinite duration or full-time status.

	M.14 	 	Any minutes of the visits or investigations carried out by the labour inspection having
jurisdiction over the Group Members during the last two years, and the letters before action
(mise en demeure within the meaning of the French labour code), sent by such labour
inspection during the last two years have been Disclosed.

	M.15	 	There is no collective redundancy or social plan (plan de sauvegarde de l’emploi) in the
Group Members and there have been no collective redundancies during the previous twenty four
months.

 

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	M.16 	 	The Group Members have not undertaken to pay a bonus or remuneration of any nature to any
Employee or officer (mandataire social) of a Group Member (or former employee or officer
of a Group Member) which is linked to the sale of the Shares taking place.

	M.17 	 	The Seller has Disclosed:

	 	(a)	 	a true and complete list of all permanent Employees as at 30 June 2005
showing, for each Employee, the following: name, job title, position, date of
birth, length of service, present rate of compensation paid and part-time and/or
fixed term status; and
	 
	 	(b)	 	true and complete copies of all collective employment agreements and all
agreements including without limitation any agreement with trade unions or other
bodies representing such employees, and of all pension or retirement benefit plans,
bonus plans, additional insurance, health insurance plan, supplemental sickness or
disability benefit plan, profit or growth sharing plans, stock purchase or stock
option plans, company saving plans or employee funds or other employee benefits
applicable to the Employees.

	M.18	 	 There are no agreements or arrangements binding upon a Group Member which could,
following Completion, increase the total cost to the Group of salaries, benefits or any
other social charges.

	M.19	 	 Each Group Company has paid all contributions due to the State Authority (AGEFIPH) in
relation to the requirement that at least 6% of each Group Member’s workforce (where a
Group Member has at least 20 employees) must be disabled persons.

	M.20 	 	No officer of any Group Member receives or is entitled to receive from a Group Member any
remuneration, compensation, retirement benefit, private insurance or other benefit in
kind.

	M.21 	 	All Employee Loans have been Disclosed.

	N.	 	Pensions, Group Schemes and Social Security

	N.1 	 	Material and accurate particulars of all Group Schemes have been Disclosed, including
(without limitation) true copies or particulars of the following:

	 	(a)	 	all rules relating to the Group Schemes containing provisions applicable to
its employees or the benefits payable to or in respect of any of them;
	 
	 	(b)	 	all explanatory booklets and announcements currently in force;

 

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	 	(c)	 	any benefit improvement or other amendment which at the date of this
Agreement is either treated as in force or is proposed or under consideration but
is not incorporated by the Group Schemes; and
	 
	 	(d)	 	a list of those of the Employees and officers of the SNC de l’Hôtel
InterContinental Paris who are members of or have any rights to benefits under the
Group Schemes.

	N.2 	 	All returns with the social security and related organisations and authorities have been
duly and timely filed by the Group Members. All payments of social security contributions
and contributions to the various social security authority, the unemployment authority and
retirement and related organisations relating to the amounts indicated on such returns have
been duly and timely made by the Group Members.

	N.3	 	The SNC de l’Hôtel Inter-Continental Paris has fully complied with its obligations, in
particular regarding the actual reduction of working time, in order to benefit, between 1
March 1998 and 28 February 2005, from the reductions of social security contributions
provided for by the laws n° 96-502 dated 11 June 1996, n° 98-461 dated June 13, 1998 and n°
2000-37 dated January 19, 2000. No notice has been received by the Seller that SNC de
l’Hôtel Inter-Continental Paris has not at all times complied with its obligations, in
particular as regards the actual reduction of working time, in order to benefit from such
reductions.

	N.4 	 	Each Group Member and any persons having legal ownership of the Pension Plan and the
Group Schemes have complied with their respective obligations under the governing
documentation of the relevant Pension Plan and Group Schemes. The Pension Plan and the
Group Schemes comply with and have at all times complied with the provisions of the
relevant legislation and tax requirements governing or applicable to that Group Scheme and
Pension Plan.

	N.5 	 	No Group Member is nor is the Pension Plan a party to any mediation, litigation or
arbitration proceedings in respect of the Pension Plan or the Group Schemes or benefits
provided under the Pension Plan or Group Schemes and no such ombudsman, litigation or
arbitration proceedings are pending or threatened by or against any Group Member or the
Pension Plan and, so far as the Seller is aware, there are no facts likely to give rise to
any mediation, litigation or arbitration proceedings in respect of any of the Employees
with respect to the Pension Plan or Group Schemes.

	N.6 	 	Each of the Group Schemes which are pre-funded (whether by means of a book reserve or
otherwise) have been funded to the extent recommended by the relevant actuarial person
appointed in respect of the Group Scheme and all amounts due to or payable in

 

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respect of each of the Group Schemes or to any insurance company or other relevant third
party in connection with each of the Group Schemes have been paid.

	N.7 	 	No plan, proposal or intention to amend or discontinue (in whole or in part) any of the
Group Schemes has been communicated to any Employee nor has any act or event occurred
which could give rise to a full or partial discontinuance of any of the Group Schemes
under applicable law.

	N.8	 	 There is no voluntary profit sharing (intéressement) paid or payable by any Group Member
to any person in relation to the Hotel.

	O.	 	Taxation

	O.1	 	 Accounts, Payment of Tax and Compliance

	 	(a)	 	The Accounts of each Group Member make full provision or reserve within
French GAAP in respect of any period ended on or before the Accounts Date for all
Tax assessed or liable to be assessed on any Group Member or for which it is
accountable at the Accounts Date whether or not the Group Member has or may have
any right of reimbursement against any other person.
	 
	 	(b)	 	Since the Accounts Date, no Group Member has been involved in any
transaction which has given or may give rise to a liability to Tax on any Group
Member (or would have given or might give rise to such a liability but for the
availability of any Relief) other than Tax in respect of normal trading income or
receipts of the Group Member concerned arising from transactions entered into by it
in the ordinary and usual course of business.
	 
	 	(c)	 	Each Group Member has paid all Tax which it has become liable to pay and is
not, and has not in the three years ending on the date of this Agreement been,
liable to pay a penalty, surcharge, fine or interest in connection with Tax and, so
far as the Seller is aware, there are no circumstances by reason of which any Group
Member may become liable to pay any penalty, surcharge, fine or interest in
connection with Tax.
	 
	 	(d)	 	Each Group Member has within applicable time limits made all returns,
provided all information, given all notices and maintained all records in relation
to Tax as it is required to make, provide, give or maintain and all such returns,
information and notices are correct and accurate in all material respects, so far as
the Seller is aware, and are not the subject of any dispute and each Group Member
has fully complied on a timely basis with all notices served on it and any other
requirements lawfully made of it by any Tax Authority.

 

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	 	(e)	 	The Company and its subsidiary Hôtel Inter-Continental London (Holdings)
SAS have always been subject to French Corporate Income Tax. SNC de l’Hôtel
InterContinental Paris has never elected for French Corporate Income Tax regime.
	 
	 	(f)	 	No Group Member is involved in any dispute in relation to Tax with any Tax
Authority and, so far as the Seller is aware, no Tax Authority has investigated or
indicated that it intends to investigate the Tax affairs of any Group Member other
than under the normal tax audit procedures of the relevant Tax Authority and there
are no facts which might cause such an investigation to be instituted.
	 
	 	(g)	 	A valid carry back election was made by the Company in March 2005 in
conformity with article 220 Quinquies of the French Tax Code.
	 
	 	(h)	 	No Group Member has, during the 12 months preceding the date of
this Agreement, held any real estate asset located in France other than the Property.
	 
	 	(i)	 	The sale of the entire issued share capital of Hotel Inter-Continental London Limited by Hotel Inter-Continental (Holdings) SAS as part of the
Pre-sale Reorganisation was effected at fair market value.

	O.2	 	 French registration tax

French registration tax arising on all documents which are necessary to establish the
title of any Group Member to any asset or to enforce any rights and in respect of which
any French registration tax or other similar tax is payable (whether as a result of an
obligation to pay such registration tax under French law or as a result of the necessity
to register a document to ensure its validity) has been paid.

	O.3 	 	Residence

	 	(a)	 	No Group Member is liable to Tax in any jurisdiction other than the
jurisdiction in which it is incorporated nor does any Group Member have or has ever
had a permanent establishment in a jurisdiction other than the jurisdiction of
incorporation.
	 
	 	(b)	 	No Group Member is an agent or permanent establishment of another company,
person, business, or enterprise for the purpose of assessing the company, person,
business or enterprise to Tax in the country of residence of the first company.

	O.4 	 	Groups

The Company and Hôtel Inter-Continental London (Holdings) SAS have been members of the
French Tax Group established in accordance with the provisions of Articles 223 A and
seq. of the French Tax Code (régime d’intégration fiscale) since January 1st 2004. The

 

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Company has regularly sent to the Tax Authority a letter referring to such election and
Hôtel Inter-Continental London (Holdings) SAS has in accordance with relevant procedures
sent to the Tax Authority a letter referring to its acceptance for such tax consolidated
regime.

	O.5 	 	Keeping of Accounting documents requirements

The Company and its Subsidiaries duly fulfil their respective obligations regarding the
period of retention of formal documents as is required under French Corporate and Tax
Law (including without limitation the requirements of Article L 102 B of the French book
of Tax procedures (livre des procedures fiscals)).

	P.	 	Finance

	P.1	 	 No Group Member has any Indebtedness.

	P.2 	 	Details of all overdrafts, loans or other financial facilities available to the Group
Members are Disclosed.

	P.3  	 	There are no debts owing to any Group Member other than trade debts incurred in the
ordinary and usual course of business.

	P.4 	 	There is no outstanding liability (actual or contingent) between any Group Member and any
directors, officers or employees of a Group Member or of the Seller or any member of the
Seller’s Group (save for accrued salary and expenses claims) or so far as the Seller is
aware, any relatives or controlled companies of any such persons.

	P.5 	 	Since 1 April 1998, all dividends and distributions declared, made or paid by each Group
Member at any time were, when declared, made or paid, in accordance with the requirements
of general law and the articles of association of the relevant Group Member.

	P.6 	 	There is not outstanding any agreement or arrangement which establishes any
guarantee, indemnity, suretyship, form of comfort or support (whether or not legally
binding):

	 	(a)	 	given by any Group Member in respect of the obligations or solvency of any
third party;
	 
	 	(b)	 	given by any third party in respect of the obligations or solvency of any Group
Member; or
	 
	 	(c)	 	given by the Seller or any member of the Seller’s Group in respect of any
liability of any Group Member.

 

 

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	P.7	 	There are no loans, material undertakings, material commitments or unusual liabilities,
actual or contingent, made, given, entered into or incurred by or on behalf of the Company
or any other Group Member.
	 
	P.8	 	The entry into the Revolving Facility Loan was in the corporate interest of both Hotel
InterContinental London (Holdings) SAS and the Company.
	 
	Q.	 	Information Technology, Data Protection and Intellectual Property
	 
	Q.1	 	For the purposes of this paragraph Q:

	 	 	“Data Protection Legislation” means the Data Processing, Data Files and Individual
Liberties Act of 6 January 1978 (Loi Informatique et Libertés) and any subordinate
legislation or orders made under that Act;
	 
	 	 	“Group IT” means all Information Technology which is owned by any Group Company
or which has in the last two years been used in connection with the business of any
Group Company other than Retained IT;
	 
	 	 	“Information Technology” means computer systems, communication systems, software and
hardware;
	 
	 	 	“Material Intellectual Property” means all rights and interests held by any of the Group
Companies in Intellectual Property (whether as owner, licensee or otherwise) which at or
immediately before Completion is used in relation to the Group and which is material to
the business of the Group other than the Retained Intellectual Property;
	 
	 	 	“Retained Intellectual Property” means Intellectual Property owned by, or licensed to,
the Seller’s Group; and
	 
	 	 	“Retained IT” means Information Technology included in Excluded Assets.
	 
	 	 	Information Technology

	Q.2	 	Each of the Group IT is owned by or licensed to the relevant Group Company.
	 
	Q.3	 	All arrangements relating to, and licences of, Group IT are Disclosed and:

	 	(a)	 	are in full force and effect, no notice having been given by either side to
terminate them;
	 
	 	(b)	 	no circumstances exist or have existed which would entitle a party to
terminate them, vary them and/or make a claim for money or a money equivalent in
respect of them; and

 

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	 	(c)	 	so far as the Seller is aware the obligations of the parties thereto have been fully
complied with,

	 	 	and no disputes, claims or proceedings have arisen or are foreseeable in respect of those
arrangements and licences.
	 
	Q.4	 	There are, and in the past two years there have been, no performance reductions or
breakdowns of, or logical or physical instructions to, any Information Technology or loss of
data which have had (or are having) a material adverse effect on the business of the Group
and the Seller is not aware of any fact or matter (including, but not limited to, a change of
control of any of the Group Companies) which may give rise to such a material adverse effect.
	 
	Q.5	 	The Group Companies have in place procedures which are in accordance with current good
industry practice:

	 	(a)	 	to prevent unauthorised access to and the introduction of viruses and other
contaminants into the Group IT;
	 
	 	(b)	 	to take and store back-up copies of the software and data in the Group IT; and
	 
	 	(c)	 	to ensure that the business of the Group Companies can continue without
material disruption in the event of breakdown or performance reduction of the Group IT
or loss of data, whether due to natural disaster, power failure or otherwise.

	Q.6	 	No written claim has been made by a third party which:

	 	(a)	 	alleges that the operations of any Group Member infringe or are likely to
infringe, the Intellectual Property of a third party; or
	 
	 	(b)	 	disputes the right of any Group Member to use the Group IT;

	 	 	and so far as the Seller is aware, no circumstances exist which are likely to give rise to
such a claim.

	 	 	Data Protection

	Q.7	 	In the last two years each Group Company has complied in all material respects with all
applicable requirements of any Data Protection Legislation.
	 
	Q.8	 	In the last two years no notice alleging non-compliance with the Data Protection Legislation
(including any enforcement notice, deregistration notice or transfer prohibition notice) has
been received by any of the Group Companies from any relevant regulator.
	 
	Q.9	 	In the last two years no undertaking has been made in relation to Data Protection
Legislation by any Group Company to any relevant regulator.

 

 

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	Q.10		In the last two years so far as the Seller is aware, no correspondence, dispute, enquiry
or information notice has been made or audit undertaken or proposed by any relevant
regulator under Data Protection Legislation in relation to any Group Company.
	 
	 	 	Intellectual Property
	 
	Q.11	 	So far as the Seller is aware, all the Material Intellectual Property (whether registered
or not) and all pending applications therefore are (or where appropriate in the case of
pending applications, will upon registration be) legally owned by, licensed to or used
under the authority of the owner by the Group Companies.
	 
	Q.12	 	The Company Systems are the subject of current maintenance and support agreements,
complete and accurate copies of which are Disclosed.

	R.	 	Grants
	 
	R.1	 	No Group Member is subject to any arrangement for the receipt, reduction or repayment of
any grant, subsidy or financial assistance from any government department or agency or any
local or other authority.
	 
	S.	 	The Seller
	 
	S.1	 	The Seller is a company duly incorporated and organised and validly existing under the
laws of The Netherlands.
	 
	S.2	 	The Seller has full power and authority, and has obtained or satisfied all applicable
governmental, statutory, regulatory or other consents, licences, waivers or exemptions
required to empower it to enter into and to perform its obligations under this Agreement
and each of the other agreements to be entered into by it pursuant to, or otherwise in
connection with, this Agreement in accordance with their respective terms.
	 
	S.3	 	The entry into, and the implementation of the transactions contemplated by, this Agreement
and each of the other agreements to be entered into by the Seller pursuant to, or otherwise
in connection with, this Agreement will not result in:

	 	(a)	 	a violation or breach of any provision of the memorandum and articles of
association or equivalent constitutional documents of the Seller;
	 
	 	(b)	 	a breach of, or give rise to a default under, any contract or other
instrument to which the Seller is a party or by which it is bound;
	 
	 	(c)	 	a violation or breach of any applicable laws or regulations or of any order,
decree or judgment of any court, governmental agency or regulatory authority
applicable to the Seller or any of its assets; or

 

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	 	(d)	 	a requirement for the Seller to obtain any consent or approval of, or give any
notice to or make any registration with, any governmental, regulatory or other
authority which has not been obtained or made at the date of this Agreement on a
basis which is both unconditional and cannot be revoked.

	S.4	 	This Agreement and each of the other agreements to be entered into by the Seller pursuant
to, or otherwise in connection with, this Agreement constitute valid and legally binding
obligations of the Seller enforceable in accordance with their respective terms.
	 
	 
	T.	 	The Guarantor
	 
	T.1	 	The Guarantor is a company duly incorporated and organised and validly existing under the
laws of England and Wales.
	 
	T.2	 	The Guarantor has full power and authority, and has obtained or satisfied all applicable
governmental, statutory, regulatory or other consents, licences, waivers or exemptions
required to empower it to enter into and to perform its obligations under this Agreement
in accordance with its terms.
	 
	T.3	 	The entry into, and the implementation of the transactions contemplated by, this
Agreement will not result in:

	 	(a)	 	a violation or breach of any provision of the memorandum and articles of
association or equivalent constitutional documents of the Guarantor;
	 
	 	(b)	 	a breach of, or give rise to a default under, any contract or other
instrument to which the Guarantor is a party or by which it is bound;
	 
	 	(c)	 	a violation or breach of any applicable laws or regulations or of any
order, decree or judgment of any court, governmental agency or regulatory authority
applicable to the Guarantor or any of its assets; or
	 
	 	(d)	 	a requirement for the Guarantor to obtain any consent or approval of, or
give any notice to or make any registration with, any governmental, regulatory or
other authority which has not been obtained or made at the date of this Agreement
on a basis which is both unconditional and cannot be revoked.

	T.4	 	This Agreement constitutes valid and legally binding obligations of the Guarantor
enforceable in accordance with its terms.

 

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	U.	 	General
	 
	U.1	 	Quality of Information
	 
	 	 	All information contained in the recitals and in schedules 1 and 2 and the following
disclosures contained in the Disclosure Letter: the first paragraph of the disclosure
against Warranty M.1 and the disclosure against Warranty M.16 is true, complete and
accurate and not misleading in any respect.

 

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Schedule 4

Purchaser’s Warranties

	1.	 	The Purchaser is a company duly incorporated and organised and validly existing under the
laws of France.

	2.	 	The Purchaser has full power and authority, and has obtained or satisfied all applicable
governmental, statutory, regulatory or other consents, licences, waivers or exemptions
required to empower it to enter into and to perform its obligations under this Agreement
and each of the other agreements to be entered into by it pursuant to, or otherwise in
connection with, this Agreement in accordance with their respective terms.

	3.	 	The entry into, and the implementation of the transactions contemplated by, this
Agreement and each of the other agreements to be entered into by the Purchaser pursuant
to, or otherwise in connection with, this Agreement will not result in:

		(a)	 	a violation or breach of any provision of the memorandum and articles of
association or equivalent constitutional documents of the Purchaser;
	 
	 	(b)	 	a breach of, or give rise to a default under, any contract or other
instrument to which the Purchaser is a party or by which it is bound;
	 
	 	(c)	 	a violation or breach of any applicable laws or regulations or of any
order, decree or judgment of any court, governmental agents or regulatory authority
applicable to the Purchaser or any of its assets; or
	 
	 	(d)	 	a requirement for the Purchaser to obtain any consent or approval of, or
give any notice to or make any registration with, any governmental, regulatory or
other authority which has not been obtained or made at the date of this Agreement on
a basis which is both unconditional and cannot be revoked.

	4.	 	This Agreement and each of the other agreements to be entered into by the Purchaser
pursuant to, or otherwise in connection with, this Agreement constitutes valid and legally
binding obligations of the Purchaser enforceable in accordance with their respective terms.

	5.	 	The Purchaser has no intention as at the date of this Agreement of making a Claim for
breach of any of the Warranties.

 

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Schedule 5

Part 1

Determination and Confirmation of Net Current Assets Amount, Long Term Liabilities

and Provisions

	1.	 	Stock Value and Closing Procedure
	 
	1.1	 	Agreement of Stock. The Seller and the Purchaser shall, on the day before the Completion
Date, agree the value of the Stock as at the Completion Date.
	 
	1.2	 	Closing Procedure. To establish the Net Current Assets Amount a closing year end
procedure shall be undertaken at Completion which conforms to the closing year end
procedure undertaken with respect to the Accounts in relation to those items to be
included in the determination of the Net Current Assets Statement.
	 
	2.	 	Submission of the Net Current Assets Statement
	 
	2.1	 	Net Current Assets Statement. The Seller must as soon as reasonably possible, and in any
event on or before the day that is 30 Business Days following the Completion Date prepare
and deliver to the Purchaser the Net Current Assets Statement which shall:

	 	(a)	 	be prepared in accordance with the principles and methodology set out in part 2
of this schedule 5;
	 
	 	(b)	 	be in the format of the pro forma Net Current Assets Statement set out in part
3 of this schedule 5; and
	 
	 	(c)	 	include any Long Term Liabilities and Provisions.

Within 30 Business Days following receipt of the Net Current Assets Statement the
Purchaser may notify the Seller if it disagrees with the Net Current Assets Statement and
specify the items and/or amounts challenged. The Seller and the Purchaser shall then,
within 30 Business Days following such notice, attempt to reach agreement. In the absence
of notice of objection at the expiry of the above -mentioned 30 Business Days period, the
Purchaser shall be deemed to have accepted the content of the Net Current Assets
Statement.

	3.	 	Access to Information
	 
	3.1	 	Access to information. The Purchaser and the Seller must, in connection with the
preparation and review of the Net Current Assets Statement or any dispute or Expert
determination:

 

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	 	(a)	 	provide or ensure the provision of all information and assistance which may
reasonably be requested by the Seller or the Purchaser or the Expert, as the case may
be; and
	 
	 	(b)	 	permit representatives of the Seller or the Purchaser or the Expert to have
access to and take extracts from or copies of any books, correspondence, accounts or
other records relating to the Group or the Property for the period prior to Completion
in the Purchaser’s or Seller’s possession or control or that of any member of their
respective groups or the possession or control of the Group.

	3.2	 	Working papers and files. The Seller shall procure that all working papers and files within
its possession or control as may be reasonably required by the Purchaser which are relevant
to the preparation of the Net Current Assets Statement shall be made available upon a request
for them. If requested the Seller shall also provide the Purchaser with access to the
personnel who are relevant to the preparation of the Net Current Assets Statement.
	 
	4.	 	Disputes
	 
	4.1	 	Disputes. If no agreement is reached in the 30 Business Days mentioned in paragraph 2.1
above (the “Period”) the Seller and the Purchaser shall refer the matters in dispute in
relation to the Net Current Assets Statement to a partner, of at least 10 years qualified
experience as an expert comptable in France, at an independent firm of chartered accountants
agreed by the parties, in writing or failing such agreement within five Business Days of the
end of the Period, a similarly—qualified accountant appointed, on the application of either
party, by the President of the Tribunal de Commerce de Paris (the “Expert”).
	 
	4.2	 	Basis. The Expert shall act on the following basis:

	 	(a)	 	the Expert shall act as an expert and not as an arbitrator;
	 
	 	(b)	 	the Expert’s terms of reference shall be to determine only the matters in
dispute in relation to the Net Current Assets Statement as soon as is reasonably
practicable following his appointment and in accordance with any procedure established
by him for doing so;
	 
	 	(c)	 	the decision of the Expert is, in the absence of fraud or manifest error,
final and binding on the Seller and the Purchaser unless in the case of manifest
error either party challenges the decision before an arbitration tribunal on the
grounds of manifest error, in accordance with clause 33.2 of the Agreement, within 14
Business Days of the Expert delivering his decision. There is no limitation period in
the case of fraud;

 

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	 	(d)	 	applying the accounting policies, principles, procedures, practices, terms and
conditions, methods and bases referred to in this Schedule 5 and in the manner
prescribed herein;
	 
	 	(e)	 	the decision of the Expert shall be in writing and in the English language; and
	 
	 	(f)	 	the Seller and the Purchaser shall each pay one half of the Expert’s costs or
as the Expert may determine.

	4.3	 	Procedure. The procedure of the Expert shall:-

	 	(a)	 	give the parties a reasonable opportunity to make written and oral
representations to him;
	 
	 	(b)	 	require that the parties supply each other with a copy of any written
representations at the same time as they are made to the Expert; and
	 
	 	(c)	 	permit each party to be present while oral submissions are being made by any
other party.

	4.4	 	Expert’s Jurisdiction. For the avoidance of doubt, the Expert shall only address and resolve
differences of the parties and shall not otherwise be entitled to determine the scope of his
own jurisdiction.
	 
	4.5	 	No Presumption. There is no presumption that the treatment of any matter in dispute should
or should not be changed from that in the Net Current Assets Statement and no objection
should be made to any matter raised by the Purchaser on the grounds that the matter in
respect of which such notice is raised is below any materiality level which might otherwise
apply.
	 
	4.6	 	Determination. The determination of the Expert shall (i) be made in writing and sent to the
parties and (ii) unless otherwise agreed by the parties, include reasons for each relevant
determination.
	 
	4.7	 	Privilege. Subject to paragraph 4.9, nothing in this paragraph 4 shall entitle a party or
the Expert access to any information or document which is protected by legal professional
privilege, or which has been prepared by the other party or its accountants and other
professional advisers with a view to assessing the merits of any claim or argument.
	 
	4.8	 	Refusal to Supply. A party shall not be entitled by reason of paragraph 4.9 to refuse to
supply such part or parts of documents as contain only the facts on which the relevant claim
or argument is based.
	 
	4.9	 	Confidentiality. Each party shall, and shall procure that its accountants and other advisers
shall, instruct the Expert to keep all information and documents provided to them

 

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pursuant to this paragraph 4 confidential and shall not use the same for any purpose,
except for disclosure or use in connection with the preparation of the Net Current Assets
Statement, the proceedings of the Expert or another matter arising out of this Agreement
or in defending any claim or argument or alleged claim or argument relating to this
Agreement or its subject matter.

 

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Schedule 5

Part 2

Accounting Policies to be Adopted in the Net Current Assets Statement

	1.	 	Preparation of Valuation
	 
	1.1	 	The Net Current Assets Statement and any element of it shall be prepared and all assets
and liabilities relevant to the preparation of the Net Current Assets Statement valued and
determined in accordance with the policies that are referred to, and in the order of
priority shown, in this paragraph 1:

	 	(a)	 	in accordance with the specific accounting policies set out in paragraphs
2, 3, 4 and 5 of this part 2 of schedule 5;
	 
	 	(b)	 	save to the extent inconsistent with or contradictory to paragraph 1.1(a)
of this part 2, on a basis consistent with the principles, policies, procedures,
methods, bases and practices used in the preparation of the Accounts to the extent
consistent with French GAAP as at the Accounts Date as if they were statutory
accounts required to be prepared under applicable French legislation; and
	 
	 	(c)	 	save to the extent inconsistent with or contradictory to paragraphs 1.1(a)
and 1.1(b) of this part 2, in accordance with French GAAP as at the Completion
Date.

	2.	 	Specific Accounting Policies
	 
	2.1	 	Doubtful debts. Doubtful debt provisions will be included applying consistent principles
to those used in the Accounts.
	 
	2.2	 	Judgement. Where judgement is required in determining the value of assets and
liabilities, save as expressly provided in this Schedule 5, the Net Current Assets
Statement should reflect the normal practices adopted in the Accounts and subject thereto
will reflect reasonable judgement.
	 
	2.3	 	Trade Debtors. Subject to paragraphs 2.1 and 2.2 in this Part 2, all Trade Debtors of the
Group as at the Completion Date shall be included.
	 
	2.4	 	Stock. Any items of Stock which are unsaleable, unusable, spoilt or out of date shall be
excluded from Stock and Stock will be valued at the lower of cost and net realisable value.
	 
	2.5	 	Deferred Income and Prepayments. Deferred Income and Prepayments will be apportioned on a
time basis in relation to the period to which the Deferred Income or the Prepayment
relates, as at the Completion Date or, in the case of pre-paid block bookings, on the
number of rooms not yet used. Prepayments which are in respect of goods or

 

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services which will not be provided following Completion or are for goods which bear a
Protected Name shall be disregarded.

	2.6	 	Cash. Cash shall be determined by reference to the cash book balance used by the Group
as opposed to the Group’s bank statement balance and shall include any Cash held at the
Property.
	 
	2.7	 	Carry-back Receivable.

	 	(a)	 	Subject to 2.7(b) below, 50% of the Carry-back Receivable Proceeds shall be
included as an asset.
	 
	 	(b)	 	If the Company does not enter into a Carry -back Receivable Sale Contract or
the Company enters into a Carry-back Receivable Sale Contract but does not receive
Carry -back Receivable Proceeds by the time the Net Current Assets Statement is
agreed between the Purchaser and the Seller, then the provisions of 2.7(a) above
shall not apply and instead the provisions of clause 7.5 of this Agreement shall
apply.

An
amount of €1,300,000 shall be included as an asset in respect of the Carry -back
Receivable.

	2.8	 	Provisions. Provisions shall not be taken into account in the Net Current Assets
Statement to the extent that they have otherwise been taken into account in the Net
Current Assets Statement.
	 
	2.9	 	Middle Eastern Debts. A full provision shall be made in respect of the debts owing on
Completion by Al Gawhara and by VIP Company.
	 	 
	3.	 	Current
Liabilities and Provisions
	 
	3.1	 	To recognise liability for Taxation (if any) provision shall be made to reflect liability
for Taxation (if any) arising on profits generated during the current tax year up to the
Completion Date plus any Taxation liability undischarged from previous periods of account
as if Completion was the end of a tax accounting period and calculating profits for that
deemed period consistently with all the provisions of this schedule including, without
limitation, taking into account expenditure provided for in paragraph 3.6.
	 
	3.2	 	Such adjustment shall be calculated on the basis of French GAAP as at Completion and,
except in relation to French Corporate Income Tax, on the basis of the tax rules and
practices applied to each Group Member on a stand alone basis. In relation to French
Corporate Income Tax, the adjustment shall be calculated with regard to the provisions of
Article 223A to 223U of the French Tax Code which are applicable to the Group. The

 

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parties agree that, for Corporate Income Tax purposes, the current tax consolidated group
will not cease as a result of Completion.

	3.3	 	All Creditors of the Company as at the Completion Date shall be included.
	 
	3.4	 	There shall be no provision for Deferred Tax liabilities.
	 
	3.5	 	Inter-company trading amounts so far as they are solely between Group Members shall be
treated as reconciled to zero.
	 
	3.6	 	The following liabilities are to be provided for at the following amounts:

	 	(a)	 	Chimneys — €390,000
	 
	 	(b)	 	Internet access — €172,500
	 
	 	(c)	 	in respect of Retirement Indemnity accruals — €1,550,000
	 
	 	(d)	 	No balancing of hot and chilled water to rooms FCU’s — €50,625
	 
	 	(e)	 	Hot Water Treatment Problems — €88,152
	 
	 	(f)	 	Rectify Poor Chilled Water Treatment — €104,618
	 
	 	(g)	 	Water Flooding inside AHUs — potential leakage, damage and legionella — €30,960
	 
	 	(h)	 	Toilet odour problem in rooms and corridors — €96,788
	 
	 	(i)	 	Lack of proper Hot Water Supply to Guest Rooms — €428,102
	 
	 	(j)	 	Basement Leakage — €28,125

	3.7	 	Disregarding all amounts owed to a Group Member by any member of the Seller’s Group
save for trade debt in the ordinary and usual course.

	4.	 	Aggregation
	 
	 	 	Each entry shall be the aggregate of the separate amounts in respect of any heading for each
Group Member.
	 
	5.	 	Issues of Judgement
	 
	5.1	 	General

	 	(a)	 	Materiality

In preparing the Net Current Assets Statement no minimum materiality limits shall be
applied.

 

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	 	(b)	 	Cut-off date for post balance sheet events.

In preparing and agreeing the Net Current Assets Statement, account shall only
be taken of post balance sheet events known to either party during the period
ending on the date on which the Net Current Assets Statement is delivered
pursuant to paragraph 2.1 of part 1 of this schedule 5.

 

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SCHEDULE 5

PART 3

PRO
FORMA
NET
CURRENT
ASSET
STATEMENT IN RESPECT
OF THE
NET CURRENT
ASSETS AMOUNT

	 	 	 	 	 	 	 	 	 
	Asset / Liability	 	Amount (€)	 	Amount (€)
	Current Assets
	 	 	 	 	 	 	 	 
	Trade Debtors
	 	 	·	 	 	 	·	 
	Stock
	 	 	·	 	 	 	·	 
	Cash
	 	 	·	 	 	 	·	 
	50% of the Carry-back Receivable Proceeds

	 	 	 	 	 	 	 	 
	
Amount included in respect of the Carry-back Receivable
	 	 	·	 	 	 	·	 
	 	 	 
	 
	 	 	 	 	 	 	 	 
	Less
	 	 	(     ·	)	 	 	 	 
	Current Liabilities
	 	 	 	 	 	 	 	 
	Creditors
	 	 	 	 	 	 	(     ·	)
	Tax
	 	 	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	Less
	 	 	 	 	 	 	 	 
	Long-Term Liabilities (if any)
	 	 	 	 	 	 	·	 
	Provisions (if any)
	 	 	 	 	 	 	·	 
	 
	Net Current Assets/(Liabilities) Amount
	 	 	 	 	 	 	·	 
	 

 

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SCHEDULE 6

TAX COVENANT

	1.	 	DEFINITIONS
	 
	1.1	 	In this Schedule:

“Accounts Relief” means a Relief, the availability of which has been shown as an asset
in the Net Current Assets Statement (but which shall not include the amount of the asset
required to be included in the Net Current Assets Statement in respect of the Carry -back
Receivable or the Carry-back Receivable itself);

“Actual Tax Liability” means any liability of any Group Member to make actual payments
of Tax (or payments on account of Tax) to a Tax Authority;

“Cross Border Claim” means:

	 	(a)	 	the claims instituted before the High Court of England and Wales with Claim
Number HC03C00857 and HC03C03431 in relation to the transfer or surrender of
any Relief from a Group Member to any member of the Seller’s Tax
Group;
	 
	 	(b)	 	any appeal of such claim to any court of appellate jurisdiction in the UK, to the
Court of Justice of the European Communities or to such other body which it may
be determined has jurisdiction over the matter dealt with by such claim;
	 
	 	(c)	 	the remittance of such claim by any court referred to in (b) above to any other
court referred to in (b) above or to such other body which it may be determined
has jurisdiction over the matter dealt with by such claim;
	 
	 	(d)	 	the appeal of any claim for group relief made under Chapter 4 of Part X of the
Income and Corporation Taxes Act 1988 relating to such claim;

“Deemed Tax Liability” means:

	 	(a)	 	the loss of or failure to obtain an Accounts Relief;
	 
	 	(b)	 	the use or set off of a Purchaser’s Relief in circumstances where, but for such use
or set off, the Group Member utilising such Purchaser’s Relief would have had an
Actual Tax Liability in respect of which the Seller would have had a liability under
this schedule;
	 
	 	(c)	 	an obligation on the Company to repay any amount to the purchaser of the Carry-
back Receivable pursuant to the terms of the Carry-back Receivable Sale
Contract

 

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	 	 	 	the reduction of the undiscounted value of the Carry -back
Receivable below
€3,637,069 as a result of a Tax adjustment confirmed by the French Tax
Authorities by means of a formal reply to the taxpayer’s
comments (Réponse aux
observations de contribuable);

“Demand” means

	 	(a)	 	the issuance of any notice, demand, assessment, letter or other document by or
on behalf of any Tax Authority (including any document referring to the intention of
any Tax Authority to implement a Tax adjustment or a Tax audit in respect of a
Group Member) or the taking of any other action by or on behalf of any Tax
Authority (including the imposition, or any document referring to the
possible
imposition, of any withholding of or on account of Tax); or
	 
	 	(b)	 	the preparation or submission to a Tax Authority of any notice, return, assessment,
letter or other document by the Purchaser, any Group Member or any other
person;

from which it appears that a Tax Liability may be incurred by or may be imposed on any
Group Member (including for the avoidance of doubt as a result of obligations of the
Company pursuant to the Carry-back Receivable Sale Contract a reduction in the
undiscounted amount of the Carry-back Receivable below
€3,637,069);

“Event” means any transaction (including the transaction contemplated by this
Agreement), act, event, circumstance, state of affairs or omission, (including any change
in the residence of any person for the purposes of any Tax, the death of any person, a
failure to take any action which would avoid an apportionment or deemed distribution of
income regardless of whether the taking of any such action after Completion could have
avoided such apportionment or deemed distribution);

“French Corporate Income Tax” (“Impôt sur les sociétés”) means corporate income tax
as defined in Articles 205 and seq. of the French Tax Code;

“French
Tax Code” means the Code Général
des Impôts;

“French Tax Group” means a group formed between Hotel Inter -Continental Paris SAS
and Hotel Inter-Continental London (Holdings) SAS for French
Corporate Income Tax purposes under Article 223 A and seq. of the French Tax Code;

“Group Member” means Hotel Inter-Continental Paris SAS, Hotel Inter-Continental
London (Holdings) SAS and SNC de l’Hotel Inter-Continental Paris taken individually or
together (referred to as “Group Members”);

“Group Undertaking” means as defined in section 259 of the Companies Act 1985;

 

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“Income, Profits or Gains” means income, profits, gains or any other standard or
measure for the purposes of any Tax and references to Income, Profits or Gains earned,
accrued or received on or before a particular date (including, without limitation,
Completion) shall include Income, Profits or Gains deemed or treated for Tax purposes as
earned, accrued or received on or before that date;

“Post-Completion Relief” means any Relief which arises to any Group Member as a
consequence of any Event occurring (or being treated for Tax purposes as occurring)
after Completion, or from Income, Profits or Gains earned, accrued or received, after
Completion;

“Purchaser’s Group” means the Purchaser and any other company or companies which
either are or become after Completion members of the same group as the Purchaser;

“Purchaser’s Relief” means:

	 	(a)	 	any Accounts Relief;
	 
	 	(b)	 	any Post-Completion Relief;
	 
	 	(c)	 	any Relief arising to any member of the Purchaser’s Group (other than any Group
Member);
	 
	 	(d)	 	the Carry-back Receivable;

“Real Estate Company” means a real estate predominant company (“Société a
preponderance immobilière”) for the purposes of Article 726 of the French Tax Code;

“Relief” means any relief, allowance, credit, deduction, exemption or set off in respect of
any Tax or relevant to the computation of any Income, Profits or Gains (which for the
avoidance of doubt shall include any losses for Tax purposes carried forward), or any
right to repayment of or saving of Tax and any reference to the use or set off of a Relief
shall be construed accordingly;

“Seller’s Tax Group” means the Seller and any other company or companies (other than
the Group Members) which either are or become after Completion, or have within the six
years ending at Completion been treated as, members of the same group as, or otherwise
connected or associated in any way with, the Seller for any Tax purpose;

“Surrender” means the surrender of any Relief which may become eligible for transfer by
Group Members to the Seller’s Tax Group as a result of or in consequence of any Cross
Border Claim;

“Tax” or “Taxation” means any and all forms of taxes, levies, social security contributions,
stamp or registration duties, fiscal or specific taxes, duties and charges of a tax nature

 

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and all withholdings or deductions in respect thereof of whatever nature including, but not
limited to, income tax, corporation tax, withholding taxes, indirect taxes, local taxes,
transfer tax, value added tax payable by any of the Group Members, irrespective of the
assessment basis or the body responsible for its recovery or the status of the entity in
whose name they are collected and generally any duties and levy assessed in whole or in
part on the income, including any interest, penalties, fines and other related costs.

“Tax Authority” means any taxing or other governmental (local or central), state or
municipal authority (whether within or outside the Republic of France) competent to
impose any liability for or to collect Tax;

“Tax Group Agreement” (“convention d’intégration fiscale”) means the agreement, if any,
that has been concluded between each of the Group Members belonging to the French
Tax Group and that provides for the sharing out of the global Tax burden incurred by the
French Tax Group between each of the companies belonging to this French Tax Group;

“Tax Liability” means an Actual Tax Liability or a Deemed Tax Liability;

“Transfer Tax” means all transfer tax, registration tax or any other similar tax whether of
the Republic of France or elsewhere payable in relation to the transfer of the Shares
pursuant to this Agreement;

“Transfer Tax Demand” means an assertion by a Tax Authority that the Company was,
at Completion or during the twelve months preceding Completion a Real Estate Company,
in circumstances which could give rise to a liability for the Seller for breach of the
warranties appearing at paragraphs O.1(h) and O.1(i) of schedule 3 to this Agreement;

“VAT” means value added tax imposed in the Republic of France or equivalent tax in any
other jurisdiction;

	1.2	 	References in this schedule to paragraphs are to paragraphs of this schedule unless
otherwise stated.
	 
	2.	 	Covenant
	 
	2.1	 	Subject to the other provisions of the Agreement and the provisions of paragraph 3, the
Seller covenants with the Purchaser to pay to the Purchaser by way of repayment of the
consideration payable for the Shares under this Agreement an amount equal to:

	 	(a)	 	any Actual Tax Liability arising (i) as a consequence of or by reference to any
Event which occurred (or is treated for Tax purposes as occurring) on or before
Completion (including for the avoidance of doubt, Completion itself); or (ii) in
respect of or by reference to any Income, Profits or Gains earned, accrued or
received on or before Completion;

 

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	 	(b)	 	any Deemed Tax Liability;
	 
	 	(c)	 	any net Tax Liability of the Group Members taken together arising directly on the
transactions constituting the Pre-sale Reorganisation;
	 
	 	(d)	 	any Actual Tax Liability which any Group Member is required to pay to a Tax Authority as a result of a failure by any member of the Seller’s Tax Group to
discharge that Tax where such Tax was primarily chargeable against any member
of the Seller’s Tax Group;
	 
	 	(e)	 	any costs and expenses reasonably and properly incurred by the Purchaser, any
Group Member or any other member of the Purchaser’s Group in connection with:

	 	(i)	 	any Tax Liability referred to in paragraph 2.1(a) to (d) above; or
	 
	 	(ii)	 	any Demand from which it appears to the Purchaser that any such Tax
Liability may arise or has arisen to the extent that such Demand gives rise
to a liability under paragraph 2.1(a) to (d); or
	 
	 	(iii)	 	any action successfully taken or defended under paragraph 5.2(a) of this
schedule.

	2.2	 	For the purposes of this schedule, the amount of a Deemed Tax Liability of a Group
Member shall be determined as follows:

	 	(a)	 	in the case of a Deemed Tax Liability within paragraph (c) of the definition of
Deemed Tax Liability, 50% of the amount (including interest if applicable) which
the Company is obliged to pay to the purchaser of the Carry -back Receivable
pursuant to the Carry-back Receivable Sale Contract

50% of the amount given by the formula:

x

 

(1.075)T

Where:

x is equal to the amount in Euros by which the undiscounted value of the Carry-
back Receivable has been reduced
below €3,637,069 by the French Tax
Authorities by means of a formal reply to the taxpayer’s comments (Réponse aux
observations de contribuable); and

T
is equal to the period, expressed in years and (if appropriate) fractions of years
between the date of the reduction in the undiscounted value of the Carry -back
Receivable implemented by the French Tax Authorities by means of a formal reply

 

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to the taxpayer’s comments (Réponse aux observations de contribuable) and 30
June 2010;

	 	(b)	 	in the case of a loss of or failure to obtain an Accounts Relief:

	 	(i)	 	where such Accounts Relief is a right to repayment of Tax, the amount of
the Relief lost or not obtained;
	 
	 	(ii)	 	in any other case, the amount of Tax which is payable by such Group
Member which would not have been payable but for the loss or failure to
obtain such Accounts Relief;

	 	(c)	 	in the case of a use or set off of a Purchaser’s Relief, the amount of Tax which
would have been payable but for the use or set off of the Purchaser’s Relief,
and, for the purposes of paragraphs 2.2(b) and 2.2(c) it shall be assumed that Reliefs
which are not Purchaser’s Reliefs are used (so far as legally possible) or treated as lost or
not obtained in priority to Purchaser’s Reliefs.

	3.	 	Limitations And Exclusions

	3.1	 	The Seller shall not be liable under the covenant contained in paragraph 2.1 or for a
breach of the Tax Warranties in respect of any Tax Liability of a Group Member (or in
respect of any costs and expenses relating thereto):

	 	(a)	 	(a) unless the Purchaser has served on the Seller a written notice on or
before the fourth anniversary of the end of the accounting period in which the
Completion Date falls plus one (1) month giving such details of the claim as the
Purchaser then has; or
	 
	 	(b)	 	to the extent that the Tax Liability has been fully recovered under a claim made in
respect of another Tax Liability; or
	 
	 	(c)	 	to the extent that the Tax Liability results from a legislative or regulatory change,
or from a change in the published tax administrative guidelines of
the French Tax Authorities or from a change in a recognised interpretation by the courts (“jurisprudence constante”) of existing laws or regulations, regardless of whether
or not retroactive in effect; or
	 
	 	(d)	 	to the extent that the Tax Liability results from a change in the accounting
principles and methods or the length of any accounting period of the Purchaser or
a Group Member introduced after the Completion Date unless introduced to
comply with any requirement of law which was not being properly complied with
by a Group Member on or prior to Completion; or

 

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	 	(e)	 	to the extent that the Tax Liability is increased by any change in Tax rates
applicable on the Completion Date, even if such change in Tax rates
has
retroactive effect; or
	 
	 	(f)	 	to the extent that provision or reserve was made in the Net Current Assets
Statement in respect of such Tax Liability, or to the extent that such Tax Liability
or payment or discharge thereof was otherwise taken into account in computing
such reserve or provision; or
	 
	 	(g)	 	to the extent that the Tax Liability would not have arisen but for a voluntary act of
the Purchaser or a Group Member or any other member of the Purchaser’s Group
after Completion unless such act was carried out:

	 	(i)	 	pursuant to an obligation of the Purchaser, a Group Member or any other
member of the Purchaser’s Group incurred on or prior to the Completion
Date; or
	 
	 	(ii)	 	with the written agreement or at the written request of the Seller; or
	 
	 	(iii)	 	in the ordinary course of the business of a Group Member as carried on at
Completion and, for this purpose, but without limitation, the following shall
not be regarded as being in the ordinary course of business:

	 	(1)	 	any transaction entered into by a Group Member in circumstances
where the consideration (if any) received by or, as the case may
be, paid by such Group Member in respect thereof is less than (in
the case of consideration received or receivable by it) or more than
(in the case of consideration paid or payable by it) the
consideration deemed to have been received (or receivable) by it
or paid (or payable) by it for Tax purposes but to the extent only of
the liability for Tax arising in respect of the amount by which the
deemed consideration exceeds or is less than the actual
consideration; or
	 
	 	(2)	 	any failure by a Group Member to comply with the provisions of
any Tax legislation (including regulations);
	 
	 	(3)	 	the entry into any scheme or arrangement for which the main
purpose, or one of the main purposes, was the avoidance or
reduction of a liability to Tax,

provided that this paragraph shall not apply to Tax Liabilities falling solely within
paragraph 2.1(c) above unless the relevant voluntary act had as its main purpose

 

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or one of its main purposes the generation or crystallisation of a liability to which
paragraph 2.1(c) above could apply;

	 	(h)	 	to the extent that the Tax Liability would not have arisen or
would have been reduced or eliminated but for the failure or omission on the part of a Group
Member to make any valid claim, election, surrender or disclaimer, to give any
valid notice or consent, or to do any other thing under the provisions of any
enactment or regulation relating to Tax after Completion, the making, giving or
doing of which was either (i) taken into account in the Net Current
Assets
Statement and full details of which are included in notes to the Net Current Assets
Statement delivered to the Purchaser at the same time that the Net Current
Assets Statement is delivered to the Purchaser pursuant to Schedule 5 to this
Agreement or (ii) requested by the Seller pursuant to and within the terms of
paragraph 7; or
	 
	 	(i)	 	to the extent that the Tax Liability arises as a result of transactions concluded after
Completion between Group Members forming part of the French Tax Group which
become taxable either:

	 	(i)	 	because a Group Member exits the French Tax Group; or
	 
	 	(ii)	 	because the French Tax Group of which a Group Member is a member is
terminated.

	 	(j)	 	to the extent that any Relief (other than a Purchaser’s Relief) is available to a
Group Member (or would have been available but for the use of the Relief to set
against or mitigate a liability of any company for which the Seller is not liable
under this schedule or the Tax Warranties) to set against or otherwise mitigate the
Tax Liability provided it has not already been taken into account under paragraph
8 and is not a Relief in respect of which credit has been given under paragraph 9;
or
	 
	 	(k)	 	to the extent that the Tax Liability would not have arisen or would have been
reduced or eliminated but for any claim, election, surrender or disclaimer made or
notice or consent given after Completion by the Purchaser, a Group Member or
any other member of the Purchaser’s Group under the provisions of any
enactment or regulation relating to Tax other than any claim, election, surrender,
disclaimer, notice or consent assumed to have been made, given or done in the
Net Current Assets Statement; or
	 
	 	(l)	 	to the extent that the Tax Liability relates to Income, Profits or Gains actually
earned, accrued or received before Completion and not taken into account in the
Net Current Assets Statement; or

 

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	 	(m)	 	to the extent that the amount of the Tax Liability has been recovered from any
person (excluding the Purchaser, a Group Member or any other member of the
Purchaser’s Group but including a Tax Authority); or
	 
	 	(n)	 	to the extent that the Tax Liability would not have arisen or been increased but for
the failure of the Purchaser to comply with its obligations contained in paragraphs
5 or 7; or
	 
	 	(o)	 	to the extent that the Tax Liability arises as a result of changes in the value of an
asset at any time after Completion; or
	 
	 	(p)	 	to the extent that the Tax Liability (with the exception of interest or late payment
penalties (if any) paid) arises because a Tax Authority makes an adjustment to the
Tax affairs of a Group Member the sole effect of which is the transfer of expense,
income or liability to account for value added tax from one financial year to
another; or
	 
	 	(q)	 	to the extent that the Tax Liability would not have arisen but for the declaration by
a Group Member of any dividend or other distribution of profit after Completion
and on or before 31 December 2005.

	4.	 	Further Limitations
	 
	4.1	 	Subject to paragraph 4.2 below, the maximum aggregate liability of the Seller in
respect of
claims for breach of the Tax Warranties and claims under the covenant contained in
paragraph 2.1 above shall not exceed €150,000,000.
	 
	4.2	 	The amount in paragraph 4.1 above shall be increased by the amount of any liability of
the Seller arising under paragraph 2.1(d) of this Tax Covenant.
	 
	4.3	 	The Seller shall have no liability for breach of the warranties set out at paragraphs
O.1(h)
and O.1(i) of Schedule 3 in the absence of compliance by the Purchaser with the
obligations specified in paragraph 5 below, to the extent that such obligations relate to a
Transfer Tax Demand.
	 
	5.	 	 Manner of  Making And  Conduct of   Claims 
	 
	5.1	 	If the Purchaser or a Group Member becomes aware of any Demand which could give rise to a liability for the Seller under this Tax Covenant or for breach of any of the Tax
Warranties (including a Transfer Tax Demand), the Purchaser, any Group Member or any
member of the Purchaser’s Group becoming aware of such Demand shall give notice to
the Seller of that Demand (including reasonably sufficient details of such Demand or if
relevant full details of a Transfer Tax Demand) as soon as reasonably practicable (and in
any event not less than twenty-one (21) Business Days before the expiry
of any

 

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	 	 	applicable legal deadline to respond to the Demand) in order to ascertain the Seller’s
intentions as to the conduct of any relevant action.

	5.2	 	Subject to paragraph 5.3, in such case as mentioned in paragraph 5.1, the Seller will
be entitled to:

	 	(a)	 	either request the Purchaser to take (or procure that a Group Member or a
member of the Purchaser’s Group takes) such action as the Seller may
reasonably request to avoid, dispute, resist, appeal, compromise or defend such
Demand or any matter relating to such Demand; or
	 
	 	(b)	 	notify to the Purchaser its intention to participate in the conduct of such action as
the Seller may reasonably request to avoid, dispute, resist, appeal, compromise or
defend such Demand or any matter relating to such Demand.

	5.3	 	If a Tax Authority has made a Transfer Tax Demand, then the provisions of paragraph 5.2
shall not apply and instead the Seller shall be entitled to:

	 	(a)	 	either require the Purchaser to take (or procure that a Group Member or a
member of the Purchaser’s Group takes) such action as the Seller may request in
its absolute discretion to avoid, dispute, resist, appeal, compromise or defend the
Transfer Tax Demand or any matter relating to the Transfer Tax Demand; or
	 
	 	(b)	 	notify to the Purchaser its intention to participate in the conduct of such action as
the Seller may request in its absolute discretion to avoid, dispute, resist, appeal
compromise or defend the Transfer Tax Demand or any matter relating to the
Transfer Tax Demand.

	5.4	 	The Purchaser shall have no obligation to comply with the Seller’s requests made
pursuant to 5.2 if such requests:

	 	(a)	 	are illegal under any relevant legislation; or
	 
	 	(b)	 	would require the Purchaser or any member of the Purchaser’s Group to act in a
way which, in its reasonable opinion, is not in accordance with normal commercial
practice (such as it applies to the conduct of proceedings relating to disputes with
a Tax Authority),

but it is agreed (for the avoidance of doubt) that where the dispute with the Tax Authority
takes the form of a Transfer Tax Demand, the Purchaser shall be obliged to comply with
each of the Seller’s requests pursuant to paragraph 5.3 unless such requests are illegal
under relevant legislation.

 

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	5.5	 	Subject at all times to paragraph 5.4 above, in the event that the Seller requests that
the Purchaser takes (or procure that a Group Member or a member of the Purchaser’s Group
takes) such action as mentioned in paragraph 5.2(a) or paragraph 5.3(a):

	 	(a)	 	the Seller shall have the right (if it wishes) to control any proceedings taken in
connection with such action, and shall in any event be kept fully informed of any
actual or proposed developments (including any meetings) and shall be provided
with copies of all correspondence and documentation relating to such Demand or
action, and such other information, assistance and access to records and
personnel as it reasonably requires; and
	 
	 	(b)	 	the Seller shall indemnify the Purchaser, the Group Members and any other
member of the Purchaser’s Group to the Purchaser’s reasonable satisfaction
against all costs or expenses reasonably and properly incurred as a result of such
action.

	5.6	 	Subject at all times to paragraph 5.4 above, in the event that the Seller participates
in the
conduct of such action as mentioned in paragraph 5.2(b) or paragraph 5.3(b):

	 	(a)	 	the Seller will:

	 	(i)	 	be entitled to freely organise, at its own expense, the defence of its
interests and the interests of the Group Members or any member of the
Purchaser’s Group;
	 
	 	(ii)	 	be authorised, after having consulted with the Purchaser, to settle,
compromise, accept any liability or withdraw;
	 
	 	(iii)	 	act at all times with a view to mitigating the Tax Liability ;
	 
	 	(iv)	 	keep the Purchaser informed on a regular basis as to developments in the
proceedings;
	 
	 	(v)	 	submit to the Purchaser any communication (written or email) or discuss in
advance any prepared oral communication relating to the claim which is to
be transmitted to the relevant Tax Authority and shall consider the
reasonable comments of the Purchaser with regard to the communication;
	 
	 	(vi)	 	not settle o r compromise the claim or agree any matter in the conduct of
the claim in a manner which will affect the conduct of the Tax affairs of a
Group Company, and/or the Purchaser and/or (provided the impact on the
relevant member of the Purchaser’s Group has been explicitly notified to
the Seller) any other member of the Purchaser’s Group for a period ending

 

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	 	 	 	after Completion without the Purchaser’s prior written approval (not to be
unreasonably withheld or delayed); and

	 	(b)	 	Subject to paragraph 5.7, the Purchaser will, and procures that the
Group
Members and other members of the Purchaser’s Group will, co-operate with and
provide the Seller with any assistance the Seller may reasonably require, and give
the Seller reasonable access to any information and any person as the Seller may
reasonably require, including copies of all information and documents necessary
for the defence of the Seller’s interests and the interests of the Group Members or
members of the Purchaser’s Group, provided that (except in relation to action
taken under paragraph 5.3 in relation to a Transfer Tax Demand) the Purchaser
shall be entitled to delete or redact from such information or documents any
information which in its reasonable opinion is not necessary for such defence.

	5.7	 	Subject to paragraph 5.8 and 5.9, in both of the cases referred to in paragraph 5.2 and
paragraph 5.3, the Purchaser shall procure that no matter relating to such Demand as is
referred to in paragraph 5.1 or to a Transfer Tax Demand is settled or
otherwise
compromised without the Seller’s prior written consent and the Purchaser shall, and shall
procure that each other member of the Purchaser’s Group and their advisers shall, not
submit any correspondence or return or send any other document to any Tax Authority
where the Purchaser or any such person is aware or could reasonably be expected to be
aware that the effect of submitting such correspondence or return or sending such
document would or could be to put such Tax Authority on notice of any matter which could
give rise to, or could increase, a claim under this Tax Covenant or for breach of any of the
Tax Warranties, without first affording the Seller a reasonable opportunity to comment
thereon and without taking account of such comments so far as it is reasonable to do so.
	 
	5.8	 	If the Seller does not inform in writing the Purchaser of its intentions as to the
conduct of
such action as mentioned in paragraph 5.2 by the date which is 10 Business Days prior to
any deadline for action in connection with a Demand, or if the Seller requires
the
Purchaser to take (or procure that a Group Member or a member of the Purchaser’s
Group takes) such action as mentioned in paragraph 5.2 (a) and does not indemnify the
Purchaser, the Group Members and any other member of the Purchaser’s Group as
stated in paragraph 5.5 (b), the Purchaser shall be free to satisfy or settle the relevant Tax
Liability on such terms as it may reasonably think fit.
	 
	5.9	 	If the Seller does not inform in writing the Purchaser of its intentions as to the
conduct of such action as mentioned in paragraph 5.3 by the date which is 10 Business Days prior to
any deadline for action in connection with the Transfer Tax Demand, then:

	 	(a)	 	the Purchaser will take all action necessary in the first instance to defer the need
for action in response to the Transfer Tax Demand while seeking confirmation

 

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from the Seller that it has received notice under paragraph 5.1 above and as to
the Seller’s instructions pursuant to paragraph 5.3; and

	 	(b)	 	if it becomes necessary to formally appeal against the Transfer Tax Demand in
order to afford the Purchaser sufficient time to carry out its obligations under (a)
above then the Purchaser shall take all steps necessary to formally appeal the
Transfer Tax Demand,

but if after ninety (90) Business Days of the date of the notice given to the Seller by the
Purchaser under paragraph 5.1 the Seller has not required the Purchaser to take (or
procure that a Group Member or a member of the Purchaser’s Group takes) such action
as mentioned in paragraph 5.3 or if the Seller requires the Purchaser to take (or procure
that a Group Member or a member of the Purchaser’s Group takes) such action as
mentioned in paragraph 5.3(a) and does not indemnify the Purchaser, the
Group
Members and any other member of the Purchaser’s Group as stated in paragraph 5.5(b)
the Purchaser shall be free to satisfy or settle the Transfer Tax Demand on such terms as
it may reasonably think fit.

	5.10	 	The preceding provisions of this paragraph 5 (except paragraphs 5.3 and 5.9) shall apply,
as they apply to a Demand, to any document issued or action taken by a Tax Authority
and the preparation or submission of any document to a Tax Authority from which it
appears that any Surrender pursuant to paragraph 10 by a Group Member to any member
of the Seller’s Tax Group is or may be reduced or eliminated, and so that:

	 	(a)	 	references to claims under, amounts due, or payments to be made under this Tax
Covenant shall be replaced by appropriate references to such reduction or
elimination;
	 
	 	(b)	 	the reference to the relevant Tax Liability in paragraph 5.8 shall be replaced by a
reference to such reduction or elimination being accepted without any appeal
being pursued; and
	 
	 	(c)	 	the rights of the Seller under paragraph 5.2 shall extend to requiring Group
Members to reduce or withdraw notices of consent or give new notices of consent
on such terms as the Seller thinks fit.

	6.	 	Payment Of Claims 
	 
	6.1	 	Payments by the Seller of any liability under paragraph 2 shall be made in cleared and
immediately available funds on the days specified in paragraph 6.2.

 

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	6.2	 	The days referred to in paragraph 6.1 are as follows:

	 	(a)	 	in a case that involves an actual payment of Tax, five Business Days before the
last date on which the relevant Group Member would have had to pay to the
relevant Tax Authority the Tax that has given rise to the Seller’s liability under the
Tax Covenant or for a breach of the Tax Warranties in order to avoid incurring a
liability to interest or a charge or penalty in respect of that Tax.
	 
	 	(b)	 	in the case of a Deemed Tax Liability, the later of five Business Days after
demand is made therefor by or on behalf of the Purchaser and:

	 	(i)	 	in the case of a Deemed Tax Liability within paragraph (c) of the definition
of Deemed Tax Liability, the day on which the Company is obliged to make
a payment pursuant to the Carry -back Receivable Sale
Contract French
Tax Authorities confirm in their formal reply to the taxpayer’s comments
(Réponse aux observations de contribuable) that the undiscounted value
of the Carry-back Receivable is reduced below
€3,637,069;
	 
	 	(ii)	 	in the case of the loss of or failure to obtain an Accounts Relief which is a
right to repayment of Tax, the day on which such Tax would otherwise
have been repaid by the relevant Tax Authority;
	 
	 	(iii)	 	in the case of the loss of or failure to obtain any other Accounts Relief,
three Business Days before Tax which would otherwise have been saved becomes due and payable to the relevant Tax Authority;
	 
	 	(iv)	 	in the case of the use or set-off of a Purchaser’s Relief, the day on which
Tax would have been due and payable to the relevant Tax Authority but for the use or set -off of the Purchaser’s Relief;

	 	(c)	 	in any other case, five Business Days after the date on which demand is made
therefore by or on behalf of the Purchaser.

	7.	 	Tax Returns And  Computations 

	7.1	 	Without prejudice to paragraph 5, the Seller or its duly authorised agents shall be
responsible for, and have the conduct of preparing, submitting to and agreeing with the
relevant Tax Authorities all Tax returns and computations of each Group Member
including (without limitation and subject to paragraph 10) claims, elections, surrenders,
notices or consents in respect of any Surrender under paragraph 10, for all Tax
accounting periods of such Group Members ending on or before
Completion and in connection therewith:

 

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	 	(a)	 	all returns, computations, documents and substantive correspondence relating
thereto shall be submitted in draft form by the Seller to the Purchaser or its duly
authorised agents for comment;
	 
	 	(b)	 	the Purchaser or its duly authorised agent shall comment within 21 days of such
submission but if the Seller has not received any comments within 21 days, the
Purchaser and its duly authorised agents shall be deemed to have approved such
draft documents;
	 
	 	(c)	 	the Seller shall take into account all reasonable comments and suggestions made
by the Purchaser or its duly authorised agents;
	 
	 	(d)	 	the Seller and the Purchaser shall each respectively afford (or procure
the affordance) to the other or their duly authorised agents of information
and assistance which may reasonably be required to prepare, submit and agree all
such outstanding Tax returns and computations;
	 
	 	(e)	 	the Seller and the Purchaser shall as soon as practicable deliver to each other
copies of all correspondence sent to or received from any Tax Authority;
	 
	 	(f)	 	the Purchaser undertakes to procure that each Group Member shall at the request
of the Seller sign and submit to the relevant Tax Authority all such notices of claim,
surrender or consent to surrender (including provisional or protective notices of
claim, surrender or consent to surrender in cases where any relevant Tax
computations have not yet been agreed) and all such other documents and
returns as the Seller shall reasonably request to give effect to the foregoing
provisions provided that the Purchaser shall not be obliged to procure that a
Group Member signs and submits any document which in its reasonable opinion it
considers to be wrong, misleading or inaccurate in any material respects.

	7.2	 	The provisions of paragraph 7.1 (other than paragraph 7.1(f))
shall apply in respect of the Tax accounting period of the Group Members in which Completion falls as if the word
“Seller” reads “Purchaser” and the word “Purchaser” reads “Seller” PROVIDED THAT the
Seller shall not have any right to comment on or to receive copies of correspondence in
relation to any matter which relates solely to an Event or Events occurring (or treated as
occurring) after Completion.

	 
	8.	 	
Corresponding
Savings And
Third
Party
Recovery
	 
	8.1	 	If any Tax Liability which has resulted in a payment having been made by the Seller
under this Tax Covenant or for breach of any of the Tax Warranties has given rise to a Relief
(other than a Purchaser’s Relief) which would not otherwise have arisen, then:

 

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	 	(a)	 	the Purchaser shall procure that full details of such Relief are given to the Seller
as soon as reasonably practicable; and
	 
	 	(b)	 	to the extent that a liability to make an actual payment of Tax is reduced as a
result of the use or set off of such Relief, the Purchaser shall pay to the Seller on
the date when the Purchaser or any Group Member would have been under an
obligation to make the payment so reduced an amount equal to the lower of the
amount by which such liability is so reduced and the amount of the payment
previously made by the Seller in respect of the Tax Liability giving rise to the
Relief, and, for these purposes, any such Relief as is referred to in this paragraph
8.1 shall, insofar as legally possible, be used in priority to any other Relief
(provided that the use of such Relief does not restrict the future availability of a
Purchaser’s Relief) and the Seller shall be entitled, at its own expense, to require
that the relevant Group Member’s auditors (acting as experts and not arbitrators)
shall certify the amount and date of use of such Relief, which certification shall, in
the absence of manifest error, be final and binding on the parties.

	8.2	 	If the Seller at any time pays to the Purchaser an amount under this Tax Covenant or
for
breach of the Tax Warranties and the Purchaser or a Group Member or
any other
member of the Purchaser’s Group is or becomes entitled to recover from some other
person (other than a member of the Purchaser’s Group but including any Tax Authority)
any sum in respect of the matter giving rise to such payment (other than by reason of the
use or set off of a Purchaser’s Relief), the Purchaser, if so required by the Seller, will
(and
will procure that the relevant Group Member or member of the Purchaser’s Group will), at
the cost of the Seller and upon the Seller providing security to the reasonable satisfaction
of the Purchaser against all costs, expenses, losses or damages which may thereby be
incurred, take all reasonable steps to enforce such recovery (provided that neither the
relevant Group Member nor the Purchaser nor the relevant member of the Purchaser’s
Group shall be obliged to take any action which it reasonably considers to be prejudicial
to its interests), and the Purchaser shall within 2 Business Days of such recovery, pay to
the Seller the lesser of:

	 	(a)	 	the sum so recovered by the Purchaser or the Group Member or the member of
the Purchaser’s Group (as applicable) from such other person (including sums
recovered in respect of costs and any interest or repayment supplement received
in respect of the sum recovered, but less any costs of recovery not previously
reimbursed and less any Tax chargeable on the sum recovered); and
	 
	 	(b)	 	the amount paid by the Seller to the Purchaser as referred to in paragraph 8.1
above plus any interest or repayment supplement received in respect of the sum
recovered, less any Tax chargeable thereon, to the extent such interest
or

 

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	 	 	 	repayment supplement is attributable to any period following
the payment by the Seller to the Purchaser as referred to above.

	8.3	 	Any amounts paid by the Seller under this Tax Covenant or for breach of the Tax
Warranties and subsequently refunded and/or set -off under this paragraph 8 shall be
disregarded to the extent of the refund and/or set -off for the purpose of paragraph 4.1
above in the event of any further claim under this Tax Covenant or for breach of the Tax
Warranties.

	 
	9.	 	
Over
Provisions
     
	 
	9.1	 	If the Seller shall become liable in respect of any claim arising under this Tax
Covenant or for breach of any of the Tax Warranties credit shall be given to the Seller against such
liability for any amount referred to in paragraph 9.2 (a “Relevant Amount”) which shall be
dealt with in accordance with paragraph 9.4.

	 
	9.2	 	A Relevant Amount for the purposes of paragraph 9.1 shall be:

	 	(a)	 	the amount by which any provision for Tax contained in the Net Current Assets
Statement proves to be an over provision (otherwise than by reason of the use or
set off of any Purchaser’s Relief); or
	 
	 	(b)	 	the amount of any right to repayment of Tax owed to a Group Member by a Tax
Authority which:

	 	(i)	 	arises as a consequence of or by reference to any Event which occurred
(or is treated for Tax purposes as occurring) on or before Completion or in
respect of or by reference to any Income, Profits or Gains earned, accrued
or received on or before Completion;
	 
	 	(ii)	 	is not reflected in the Net Current Assets Statement;
	 
	 	(iii)	 	does not arise from the use of a Purchaser’s Relief; and
	 
	 	(iv)	 	is not a Relief to which paragraph 8 applies, which has been taken into
account in paragraph 3.1(j) or in respect of which credit has been given
under any other provision of paragraph 9; or

	 	(c)	 	the amount of any Tax saved by the Purchaser, a Group Member or any other
member of the Purchaser’s Group for which the Seller is not liable under this Tax
Covenant or for breach of the Tax Warranties as a result of the use or set off of a
Relief arising to a Group Member on or prior to Completion (other than a
Purchaser’s Relief, a Relief which has been taken into account in paragraph 3.1(j),

 

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	 	 	 	a Relief to which paragraph 8 applies or a Relief in respect
of which credit has been given under any other provision of paragraph 9).

	9.3	 	If the Purchaser becomes aware that there are or may be such amounts as are referred to
in paragraph 9.2, it shall (or shall procure that the relevant Group Member or a member of
the Purchaser’s Group shall) promptly inform the Seller of that fact. If the auditors for the
time being of a Group Member or any member of the Purchaser’s Group are requested by
either of the parties hereto to certify any of such amounts as are referred to above the
relevant party shall procure that the auditors are instructed to give and shall (at the
expense of the party requesting) give as soon as practicable such certificate and in so
doing they shall act as experts and not as arbitrators and (in the absence of manifest error)
their decision shall be final and binding on the parties hereto.
	 
	9.4	 	Each Relevant Amount is to be dealt with as follows:

	 	(a)	 	the Relevant Amount shall first be set off against any payment then due from the
Seller under this Tax Covenant or for breach of the Tax Warranties; and
	 
	 	(b)	 	to the extent there is an excess of the Relevant Amount after any amounts have
been set off under paragraph 9.4(a) a refund shall be made to the Seller of any
previous payment or payments made by the Seller under this Tax Covenant or for
breach of the Tax Warranties and which have not previously been refunded under
this paragraph 9.4(b), up to the amount of such excess; and
	 
	 	(c)	 	to the extent that the excess referred to in paragraph 9.4(b) is not exhausted
under that paragraph, the remainder of that excess shall be carried forward and
set off against any future payment or payments which become due from the
Sellers under this Tax Covenant or for breach of the Tax Warranties.

	9.5	 	Where any such certification as is mentioned in paragraph 9.3 has been made, the Seller
or the Purchaser may (at its own expense) request the auditors to review
such
certification in the light of all relevant circumstances, including any facts which have
become known only since such certification, and to certify whether such certification
remains correct or whether, in the light of those circumstances, the amount that was the
subject of such certification should be amended.
	 
	9.6	 	If the auditors certify under paragraph 9.5 that an amount previously certified should
be
amended, that amended amount shall be substituted for the purposes of paragraph 9.4 as
the Relevant Amount in respect of the certification in question in place of the amount
originally certified, and such adjusting payment (if any) as may be required by virtue of the
above mentioned substitution shall be made as soon as practicable by the Seller or the
Purchaser, as the case may be.

 

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	10.	 	
Cross
-Border 
Surrenders 

	10.1	 	Subject to the following provisions of this paragraph, and without
prejudice to the
generality of paragraph 7, the Purchaser shall procure after Completion that the Group
Members shall (so far as legally possible), in respect of any time or period falling on or
prior to the Completion Date, make, give or enter into such claims, elections, surrenders,
notices or consents (whether unconditional or conditional, whether or not forming part of
any other return or tax document, whether provisional or final, and including amendments
to or withdrawals of earlier claims, elections, surrenders, notices or consents, whether or
not made before or after Completion) as the Seller shall direct in connection with any
Surrender to any member of the Seller’s Tax Group by a Group Member and shall not,
otherwise than directed pursuant to this paragraph, make Surrenders or
withdraw
Surrenders previously made. No payment shall be made in respect of any Surrender.
	 
	10.2	 	The Purchaser shall, or shall procure that the Group Members shall, at the request of the
Seller, take all actions within their power necessary or desirable to
facilitate the
continuation and successful conclusion of all legal proceedings relating to Surrenders

falling within paragraph 10.1.
	 
	10.3	 	Neither the Purchaser nor any of the Group Members shall be obliged to comply with
requests made under paragraphs 10.1 and 10.2 above to the extent that the effect of so
doing would be either: (i) to increase a liability to Tax of the Purchaser or any of the Group
Members; or (ii) result in the loss of any Relief which could be used by the Purchaser or
any of the Group Members to reduce a liability to Tax.
	 
	10.4	 	If, upon conclusion of the legal proceedings referred to in paragraph
10.2 or any
successor legal proceedings which take place either in the European Court of Justice, or
in the national courts, tax tribunal or similar forum of any member state of the European
Union, it is determined that damages or any other monetary consideration shall be paid to
any Group Member or any other member of the Purchaser’s Group by any third party, the
Purchaser shall, or shall procure that the relevant Group Member or member of the
Purchaser’s Group shall, by way of repayment of the consideration given for the Shares,
pay to the Seller an amount equal to the damages or other monetary consideration which
it is ordered should be paid to that Group Member or other member of the Purchaser’s
Group.
	 
	10.5	 	The payment envisaged by paragraph 10.4 shall be made by the Group Member or, as
the case may be, other member of the Purchaser’s Group, within 30 days of receipt of the
damages or other monetary consideration which give rise to the obligation to make a
payment or payments under paragraph 10.4.

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