Document:

Exhibit 10.2

 

Execution Copy

 

EMPLOYMENT AGREEMENT

 

--------------------

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) dated October 2,
2008, between Tuesday Morning Corporation, a Delaware corporation (the “Company”),
and Michael Marchetti (“Executive”).

 

In consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

 

1.             Employment.  The Company shall employ
Executive, and Executive shall continue to serve as an employee of the Company,
upon the terms and conditions set forth in this Agreement.

 

2.             Position and Duties.

 

(a)           During the Employment
Period, Executive shall serve as the Executive Vice President and Chief Operating
Officer of the Company and shall have the normal duties, responsibilities and
authority consistent with such titles, subject to the power of the Chief
Executive Officer of the Company (the “CEO”) and board of directors of the
Company (the “Board”) to expand or limit such duties, responsibilities and
authority and to override the actions of Executive.

 

(b)           Executive shall report to
the CEO, and Executive shall devote his full business time and attention
(except for permitted vacation periods and reasonable periods of illness or
other incapacity) to the business and affairs of the Company and its
subsidiaries.  It is understood that
Executive may devote time to charitable activities and personal investments and
serve on the boards of directors of other companies, so long as these
activities do not interfere with the performance of his duties hereunder.

 

3.             Salary, Benefits, Bonus and Expenses.

 

(a)           Effective as of July 1,
2008, and until Executive’s employment with the Company is terminated as
provided in paragraph 4 hereof (the “Employment Period”), Executive’s base
salary shall be $450,000 per annum or such higher rate as the Compensation
Committee of the Board (the “Compensation Committee”) may designate from time
to time (the “Base Salary”), payable in regular installments in accordance with
the Company’s general payroll practices and subject to customary
withholding.  In addition, during the
Employment Period, Executive shall be entitled to five weeks of vacation in
each 12 month period and to participate in all of the Company’s employee
benefit programs for which senior executive employees of the Company and its
subsidiaries are generally eligible, including medical and dental insurance and
the Company’s 401(k) plan.

 

(b)           During the Employment
Period, Executive shall be eligible to participate in the Company’s annual
bonus program or any successor plan thereto (the “Annual Incentive Program”). 
The bonus opportunity afforded Executive pursuant to this
paragraph 3(b) may vary 

 

1

 

from year to year and any
bonus earned thereunder shall be paid at a time and in a manner specified in
the Annual Incentive Program.  Executive’s
bonus levels under the Annual Incentive Program will be contingent upon the
Company achieving predetermined performance goals and the approval by the
Compensation Committee.  The Company may
also award the Executive a discretionary cash bonus or other cash bonus outside
of the Annual Incentive Program for services performed by Executive during a
fiscal year.  In addition to the bonuses
described above in this paragraph 3(b), Executive shall be entitled to receive
additional compensation (“Additional Compensation”) as follows:  If the Company’s stockholders approve the
Company’s 2008 Long-Term Equity Incentive Plan (the “2008 Plan”) at the annual
meeting of the Company’s stockholders to be held in 2008 (the “2008 Meeting”),
then during the Employment Period Executive shall be granted a one time
restricted stock award with a value (determined as of the date of the award)
equal to $100,000 on June 30, 2009; if, however, the Company’s
stockholders do not approve the 2008 Plan at the 2008 Meeting, then (1) during
the Employment Period the Company shall pay Executive an additional annual
bonus in cash in the amount of $200,000 per bonus on June 30 of each
fiscal year ending on June 30, 2009, 2010 and 2011, and (2) for each
additional fiscal year during the Employment Period, commencing with the fiscal
year ending June 30, 2012, unless the Company otherwise notifies Executive
in writing on or before September 30, 2011, Executive shall be entitled to
receive the same amount of cash bonus Additional Compensation as the cash bonus
Additional Compensation he received for the fiscal year ended June 30,
2011.  Such cash bonus Additional
Compensation shall be paid on June 30 of each such fiscal year.

 

(c)           In connection with his
employment, Executive was granted by the Company the following stock options
under the Company’s 1997 Long-Term Equity Incentive Plan, as amended, covering
the number of shares of the Company’s stock, par valve $0.01 per share (“Common
Stock”), set forth below:

 

 

	
  Dates of Grant

  	
   

  	
  Number of Shares Covered

  	
   

  	
  Exercise Price

  	
   

  
	
  Feb 05, 2001

  	
   

  	
  100,000

  	
   

  	
  $

  	
  8.31

  	
   

  
	
  Feb 19, 2002

  	
   

  	
  45,000

  	
   

  	
  $

  	
  16.92

  	
   

  
	
  Apr 14, 2003

  	
   

  	
  40,000

  	
   

  	
  $

  	
  20.01

  	
   

  
	
  Aug 18, 2004

  	
   

  	
  50,000

  	
   

  	
  $

  	
  30.25

  	
   

  
	
  May 27, 2005

  	
   

  	
  65,000

  	
   

  	
  $

  	
  30.61

  	
   

  

 

These options vest ratably on a daily basis over five
years, have original general terms of ten years and continue to be exercisable
until the end of their original general terms.

 

On May 21, 2008, the Company granted Executive
stock options covering 75,000 shares of the Common Stock having an exercise
price of $4.89, vesting ratably on a daily basis over three years, and having
an original general term of ten years, if the Company achieves certain earnings
per share goals for the fiscal year ending June 30, 2009.  In connection with his 

 

2

 

employment under this
Agreement, and subject to the condition that the Company’s stockholders
approve the 2008 Plan at the 2008 Meeting, on November 14, 2008,
Executive will be granted by the Company under the 2008 Plan a combination of a
stock option intended to be an incentive stock option (the “New ISO”) under the
Internal Revenue Code of 1986, as amended (the “Code”) and a nonqualified stock
option (together with the New ISO, the “New Options”) covering, in the
aggregate, 100,000 shares of the Common Stock, with the allocation between the
number of shares subject to the New ISO and the number of shares subject to the
remainder of the New Options to be determined by the Company’s Compensation
Committee on November 14, 2008, with the goal of maximizing the number of
shares subject to the New ISO’s as the Compensation Committee may deem
reasonably acceptable under applicable law and regulations.  The exercise price per share of the New
Options will be the fair market value of a share of the Common Stock on November 14,
2008, as determined in accordance with the 2008 Plan.  The New Options will vest ratably on a daily
basis over three years, and the New Options will have a general term of
ten years.  In the event that Executive’s
employment hereunder is terminated by the Company without “Cause” or by him
with “Good Reason” (as each such term is defined below), (i) the options
described in this paragraph 3(c), including without limitation the New Options
(together, the “Options”), which are then vested will continue to be
exercisable until the end of their original general terms, and (ii) of the
Options which are not then vested, an amount equal to one more year’s vesting
will vest and become exercisable upon such termination and continue to be
exercisable until the end of their original general terms.  Executive understands that exercising any
incentive stock option, including without limitation the New ISO after
termination of his employment may affect its status under the Code and that the
qualification of any incentive stock option, including without limitation the
New ISO, under the Code is subject in part to Executive complying with the
applicable provisions thereof.

 

(d)           In connection with his
employment under this Agreement, and subject to the condition that the Company’s
stockholders approve the 2008 Plan at the 2008 Meeting, on November 14,
2008, Executive shall be granted by the Company under the 2008 Plan a
restricted stock award of Common Stock having a fair market value on November 14,
2008, equal to $600,000.  The restricted
stock award shall be subject to substantial risk of forfeiture restrictions
one-third of which shall lapse upon each of November 14, 2009, November 14,
2010, and November 14, 2011.

 

(e)           The Company shall reimburse
Executive for all reasonable expenses incurred by him in the course of
performing his duties under this Agreement consistent and in accordance with
the Company’s policies with respect to travel, entertainment and other business
expenses, subject to the Company’s requirements with respect to reporting and
documentation of such expenses.

 

4.             Term and Severance Benefits.

 

(a)           The Employment Period shall continue until Executive’s
resignation, death or disability as defined (including any waiting or
qualifying period) in the long-term disability insurance maintained by the
Company for Executive or until the Board terminates Executive’s employment.

 

3

 

(b)           If Executive’s employment is terminated by the
Company without Cause, or if Executive terminates his employment with Good
Reason, and (in either case), there has been no Change in Control during the
three years before such termination, Executive shall be entitled to receive for
18 months Monthly Severance Payments, but only for so long as Executive
has not breached and does not breach any of the provisions of paragraphs 5 and
6 hereof and only if Executive has executed and delivered to the Company a
general release in form and substance reasonably satisfactory to the
Company.  Each “Monthly Severance Payment”
shall be equal to 1/12 of the sum (the “Termination Payment Sum”) of (i) Executive’s
Base Salary in effect at the time of Executive’s termination of employment, and
(ii) the most recent cash bonuses for a full fiscal year Executive has
received pursuant to paragraph 3(b) of this Agreement (including bonuses
pursuant to the Annual Incentive Program and any annual cash bonus Additional
Compensation).  The Monthly Severance
Payments will be paid by the Company to Executive in accordance with the
following schedule:  (i) if
Executive is a Specified Employee, the Company shall pay Executive the Monthly
Severance Payments for the first six months on the date that is six months
following the date on which Executive incurs a Separation From Service and
thereafter the Company shall pay Executive the remaining Monthly Severance
Payments on a monthly basis on the first regular executive payroll date for the
month of payment or (ii) if Executive is not a Specified Employee, the
Company shall pay Executive the Monthly Severance Payments on a monthly basis
beginning on the first regular executive payroll date after Executive incurs a
Separation From Service.  For purposes of
this Agreement, “Separation From Service”
and “Specified Employee” have the meanings ascribed to such terms in Section 409A.  For purposes of this Agreement, “Section 409A”
means section 409A of the Code and the Internal Revenue Service and Department
of Treasury rules and regulations issued thereunder.

 

(c)           If Executive’s employment is
terminated by the Company without Cause, or if Executive terminates his
employment with Good Reason, and (in either case), there has been a Change in
Control during the three years before such termination, Executive shall be
entitled to receive a lump sum payment in an amount equal to: (i) if the
termination of employment occurs before the first anniversary of the date of
the Change in Control, 2.99 times the Termination Payment Sum; (ii) if
the termination of employment occurs after the first anniversary of the date of
the Change in Control, but before the second anniversary of the date of
the Change in Control, 2.25 times the Termination Payment Sum; and (iii) if
the termination of employment occurs after the second anniversary of the date
of the Change in Control but before the third anniversary of the date of the
Change in Control, 1.5 times the Termination Payment Sum.  The lump sum payment will be paid by the
Company to Executive in accordance with the following schedule: (i) if
Executive is a Specified Employee, the Company shall pay Executive the lump sum
on the date that is six months following the date on which Executive incurs a
Separation From Service or (ii) if Executive is not a Specified Employee,
the Company shall pay Executive the lump sum on the first regular executive
payroll date after Executive incurs a Separation From Service.

 

(d)           If Executive’s employment is
terminated for any reason other than as set forth in paragraph 4(b) or 4(c) above,
Executive shall only be entitled to his Base Salary through the date of
termination of employment; provided, however, that if such employment is
terminated by his death, the Company shall continue to cover his immediate
family under his medical and dental insurance for six months.

 

4

 

(e)           Except as set forth herein,
all of Executive’s rights to benefits and bonuses, except as required by law
(such as COBRA) or any applicable benefit plan, and, except as otherwise
provided herein, hereunder shall cease upon termination of the Employment
Period.

 

(f)            For purposes of this
Agreement, “Cause” shall mean (i) the commission of a felony or a crime
involving moral turpitude or the commission of any other act or omission
involving willful dishonesty, disloyalty or fraud with respect to the Company
or any of its subsidiaries, (ii) conduct tending to bring the Company or
any of its subsidiaries into substantial public disgrace or disrepute, (iii) substantial
and repeated failure, after reasonable notice and opportunity to cure, to
perform duties consistent with the office of Executive as reasonably directed
by the Board, (iv) gross negligence or willful misconduct with respect to
the Company or any of its subsidiaries or (v) any breach of
paragraph 5 or 6 of this Agreement. 
For purposes of this Agreement, where Cause is an issue, the burden of
proof relating to Cause shall be on the Company, as to whether or not there is
Cause, and not on Executive to prove that an action is without Cause.

 

(g)           For purposes of this
Agreement, “Good Reason” shall mean:

 

(i)            removal, without the consent
of Executive in writing, from the office of Executive Vice President and Chief
Operating Officer or any material reduction in Executive’s authority or
responsibility, other than as a result of a valid termination for Cause;

 

(ii)           the movement of the chief
executive office of the Company more than 50 miles from its current location,
unless Executive shall approve thereof;

 

(iii)          a directive that Executive
not work principally at the Company’s chief executive office, unless Executive
shall approve thereof;

 

(iv)          the Company commits a
material breach of this Agreement or purports to attempt to terminate it for
Cause without the right to do so; and

 

(v)           the failure to provide to
Executive any applicable employee benefit or any indemnification protection provided
to other senior executive officers of the Company, unless Executive shall
approve thereof.

 

(h)           For purposes of this
Agreement, “Change in Control” shall have the same meaning as is set forth in
the 2008 Plan, but if the Company’s stockholders do not approve the 2008 Plan
at the 2008 Meeting, then “Change in Control” shall have the same meaning as
set forth in the 1997 Plan.

 

5.             Confidential Information.  Executive
acknowledges that the information, observations and data obtained by him prior to the
date of this Agreement and hereafter while employed by the Company concerning
the business or affairs of the Company and its subsidiaries (“Confidential
Information”) are the property of the Company and its subsidiaries.  Therefore, Executive agrees that he shall not
disclose to any unauthorized person or use for his own purposes any
Confidential Information without the prior written consent of the Board, unless
and to the extent that the aforementioned matters become generally known to and
available for use

 

5

 

by the public other than as a result of Executive’s
acts or omissions.  Executive shall
deliver to the Company at the termination of the Employment Period, or at any
other time the Company may request, all memoranda, notes, plans, records,
reports, computer tapes, printouts and software and other documents and data
(and copies thereof) relating to the Confidential Information or the business
of the Company or any subsidiary which he may then possess or have under her
control.

 

6.             Non-Compete,
Non-Solicitation.

 

(a)           In
further consideration of the compensation to be paid to Executive hereunder,
Executive acknowledges that in the course of his employment with the Company he
has become and will continue to be familiar with the Company’s and its
subsidiaries’ trade secrets and with other Confidential Information and that
his services have been and shall be of special, unique and extraordinary value
to the Company and its subsidiaries. 
Therefore, Executive agrees that, during the Employment Period and for
eighteen (18) months thereafter (the “Noncompete Period”), he shall not
directly or indirectly own any interest in, manage, control, participate in,
consult with, render services for, or in any manner engage in any business
competing with the businesses of the Company or its subsidiaries, as such
businesses exist or are in process on the date of the termination of Executive’s
employment, within any geographical area in which the Company or its
subsidiaries engage or plan to engage in such businesses.  Nothing herein shall prohibit Executive from
being a passive owner or not more than 2% of the outstanding stock of any class
of a corporation which is publicly traded, so long as Executive has no active
participation in the business of such corporation.

 

(b)           During
the Noncompete Period, Executive shall not directly or indirectly through
another entity (i) induce or attempt to induce any employee of the Company
or any subsidiary to leave the employ of the Company or such subsidiary, or in
any way interfere with the relationship between the Company or any subsidiary
and any employee thereof, (ii) hire any person who was an employee of the
Company or any subsidiary at any time during the Employment Period or (iii) induce
or attempt to induce any customer, supplier, licensee, licensor, franchisee or
other business relation of the Company or any subsidiary to cease doing
business with the Company or such subsidiary, or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any subsidiary (including, without limitation, making any
negative statements or communications about the Company or its subsidiaries).

 

(c)           If,
at the time of enforcement of this paragraph 6, a court shall hold that the
duration, scope or area restrictions stated herein are unreasonable under
circumstances then existing, the parties agree that the maximum duration, scope
or area reasonable under such circumstances shall be substituted for the stated
duration, scope or area and that the court shall be allowed to revise the
restrictions contained herein to cover the maximum period, scope and area
permitted by law.  Executive agrees that
the restrictions contained in this paragraph 6 are reasonable.

 

(d)           Because
Executive’s services are unique and because Executive has access to
Confidential Information, the parties hereto agree that money damages would not
be an adequate remedy for any breach of this Agreement.  In the event of the breach or a threatened 

 

6

 

breach by
Executive of any of the provisions of this paragraph 6, the Company, in
addition and supplementary to other rights and remedies existing in its favor,
may apply to any court of law or equity of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce or prevent
any violations of the provisions hereof (without posting a bond or other
security).  In addition, in the event of
an alleged breach or violation by Executive of this paragraph 6, the Noncompete
Period shall be tolled until such breach or violation has been duly cured.

 

7.             Executive’s
Representations.  Executive hereby
represents and warrants to the Company that (a) the execution, delivery
and performance of this Agreement by Executive do not and shall not conflict
with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which Executive is a party or by which
he is bound, (b) Executive is not a party to or bound by any employment
agreement, noncompete agreement or confidentiality agreement with any other
person or entity and (c) upon the execution and delivery of this Agreement
by the Company, this Agreement shall be the valid and binding obligation of
Executive, enforceable in accordance with its terms.  Executive hereby acknowledges and represents
that he has consulted with independent legal counsel regarding his rights and
obligations under this Agreement and that he fully understands the terms and
conditions contained herein.

 

8.             The Company’s
Representations.  The Company hereby
represents and warrants to Executive that (a) the execution, delivery and
performance of this Agreement have been duly authorized by all requisite action
on the part of the Company and do not and shall not conflict with, breach,
violate or cause a default under any contract, agreement, instrument, order or
decree to which the Company or any of its subsidiaries is a party or by which
any of them is bound and (b) upon the execution and delivery of this
Agreement by Executive, this Agreement shall be the valid and binding
obligation of the Company, enforceable in accordance with its terms.

 

9.             Survival.  Paragraphs 4, 5 and 6 and paragraphs 9
through 19 shall survive and continue in full force in accordance with their
terms notwithstanding any termination of the Employment Period.

 

10.           Notices.  Any notice provided for in this Agreement
shall be in writing and shall be either personally delivered, or mailed by
first class mail, return receipt requested, to the recipient at the address
below indicated:

 

Notices to Executive:

 

Michael Marchetti

7333 Breckenridge Drive

Plano, Texas 75025

 

Notices to Company:

 

Tuesday Morning Corporation

6250 LBJ Freeway

Dallas, TX 75240

Attention: Chairman of the Compensation Committee of the Board of
Directors

 

7

 

or such other address or to the attention of such other person as the
recipient party shall have specified by prior written notice to the sending
party.  Any notice under this Agreement
shall be deemed to have been given when so delivered or mailed.

 

11.           Section 409A.

 

(a)           This
Agreement shall be interpreted and administered in compliance with Section 409A.

 

(b)           The
Company shall hold harmless and indemnify Executive on a fully grossed-up after
tax basis from and against (i) any and all taxes imposed by any taxing
authority in connection with (A) stock options granted by the Company to
Executive prior to January 1, 2005, or granted as required herein (the “Options”)
and (B) any amounts payable under this Agreement that are subject to Section 409A
(“Deferred Compensation”), in the case of either (A) or (B), as a result
of any taxing authority taking the position that the Options are nonqualified
deferred compensation within the meaning of Section 409A or similar state
or local tax law, and (ii) all expenses (including reasonable attorneys’,
accountants’, and experts’ fees and expenses) incurred by Executive due to a
tax audit or litigation addressing the existence or amount of a tax liability
described in clause (i); (iii) any tax penalty expenses or interest
expenses incurred by Executive at any time in connection with the Options; and (iv) the
amount of additional taxes imposed upon Executive due to the Company’s payment
of the initial taxes and expenses described in clauses (i), (ii) and
(iii).  The amount of expenses eligible
for reimbursement pursuant to clause (ii) or clause (iii) above
during a taxable year of Executive shall not affect the expenses eligible for
reimbursement in any other taxable year of Executive and Executive’s right to
reimbursement pursuant to clause (ii) or clause (iii) above shall not
be subject to liquidation or exchange for another benefit.

 

(c)           The
Company shall make a payment to reimburse Executive in an amount equal to all
federal, state and local taxes imposed upon Executive that are described in
clauses (i) and (iv) of paragraph 11(b) above, including
the amount of additional taxes imposed upon Executive due to the Company’s
payment of the initial taxes on such amounts, within thirty (30) days of
the date Executive gives notice to the Company of such payment but in no event
later than by the end of Executive’s taxable year next following Executive’s
taxable year in which Executive remits the related taxes to the taxing
authority.  The Company shall make a
payment to reimburse Executive in an amount equal to all expenses and other
amounts incurred due to a tax audit or litigation addressing the existence or
amount of a tax liability pursuant to clause (ii) of paragraph 11(b) above,
within thirty (30) days of the date Executive gives notice to the Company
of such payment but in no event later than by the end of Executive’s taxable
year following Executive’s taxable year in which the taxes that are the subject
of the audit or litigation are remitted to the taxing authority, or where as a
result of such audit or litigation no taxes are remitted, within
thirty (30) days of the date Executive gives notice to the Company of the
completion of the audit or the final and nonappealable settlement or other
resolution of the litigation but in no event later than the end of Executive’s
taxable year following Executive’s taxable year in which the audit is completed
or there is a final and nonappealable settlement or 

 

8

 

other
resolution of the litigation.  The
Company shall make a payment to reimburse Executive pursuant to clause (iii) of
paragraph 11(b) above within thirty (30) days of the date
Executive gives notice to the Company of such payment but in no event later
than by the end of Executive’s taxable year next following Executive’s taxable
year in which Executive incurred the expense.

 

(d)           The
agreements contained herein are cumulative, and not exclusive, and are in
addition to any other rights to which Executive’s may now or in the future be
entitled under any provision of the Bylaws or Certificate of Incorporation of
the Company, the Certificate of Incorporation or Bylaws or other governing
documents of any direct or indirect wholly-owned subsidiary of the Company, any
provision of law or otherwise.  Except as
required by applicable law, the Company shall not adopt any amendment to its
Bylaws or Certificate of Incorporation the effect of which would be to deny,
diminish or encumber Executive’s right to indemnification under this Agreement.

 

(e)           As
soon as practicable, but no later than 20 days after Executive (or his
representatives) is informed in writing that a taxing authority is taking a
position that could entitle Executive to a payment under this paragraph 11,
Executive will provide notice to the Company of such position in a manner that
will apprise the Company of the nature of such position.  Executive shall allow the Company to
participate in any audit or other proceeding relating to such position, provide
the Company all reasonable information requested by the Company with respect to
such position, allow the Company to contest such position, take such action in
connection with contesting such position as the Company shall reasonably
request in writing from time to time, including without limitation, accepting
legal representation with respect to such claim by an attorney reasonably
selected by the Company, and cooperate with the Company in good faith in order
to effectively contest such claim.

 

12.           Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or rule in
any jurisdiction, such invalidity, illegality or unenforceability shall not
affect any other jurisdiction, but this Agreement shall be reformed, construed
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.

 

13.           Complete
Agreement.  This Agreement embodies the
complete agreement and understanding among the parties with respect to the
subject matter hereof and supersedes and preempts any prior understandings,
agreements or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way.

 

14.           No Strict
Construction.  The language used in this
Agreement shall be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction shall be
applied against any party.

 

15.           Counterparts.  This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.

 

9

 

16.           Successors and
Assigns.  This Agreement is intended to
bind and inure to the benefit of and be enforceable by Executive, the Company
and their respective heirs, successors and assigns, except that Executive may
not assign his rights or delegate his obligations hereunder without the prior
written consent of the Company.

 

17.           Choice of Law.  All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and
the exhibits and schedules hereto shall be governed by, and construed in
accordance with, the laws of the State of Texas, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State
of Texas or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Texas.

 

18.           Enforcement Costs.  All costs and expenses, including reasonable
attorneys’ fees, incurred by either party in connection with the enforcement of
any provisions of this Agreement, including interest thereon, shall be paid by
the party against whom such enforcement is granted.  Any such reimbursement of an expense incurred
by Executive shall be made within thirty (30) days of the date Executive
gives notice to the Company of such payment but in no event later than the last
day of Executive’s taxable year in which the expense was incurred.   The amount of expenses eligible for
reimbursement pursuant to this paragraph 18 during a taxable year of
Executive shall not affect the expenses eligible for reimbursement in any other
taxable year of Executive and Executive’s right to reimbursement pursuant to this
paragraph 19 shall not be subject to liquidation or exchange for another
benefit.

 

19.           Amendment and
Waiver.  The provisions of this Agreement
may be amended or waived only with the prior written consent of the Company and
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.

 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement.

 

 

	
   

  	
  TUESDAY MORNING CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: October 2, 2008

  	
  By:

  	
       /s/ Stephanie Bowman

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
     Executive Vice President and Chief

  
	
   

  	
   

  	
     Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated: October 2, 2008

  	
           /s/ Michael
  Marchetti

  
	
   

  	
                Michael
  Marchetti

  
				

 

10Exhibit 10.1

 

EXECUTION VERSION

 

Any text removed pursuant to Lehman Brothers Holdings Inc.’s
confidential treatment

request has been separately filed with the U.S. Securities and Exchange

Commission and is marked “[***]” herein.

 

Dated 29 September 2008

 

THE HK INSOLVENCY OFFICERS

 

and

 

THE SINGAPORE INSOLVENCY OFFICERS

 

and

 

THE AUSTRALIA INSOLVENCY OFFICERS

 

and

 

THE SELLERS LISTED IN SCHEDULE
1

 

and

 

NOMURA HOLDINGS INC.

 

INTERNATIONAL ASSET SALE AGREEMENT

 

relating
to certain of the assets and employees of the business of the Lehman Brothers
International Group in the Asia-Pacific region (including Japan and Australia)

 

 

International
Asset Sale Agreement

 

This Agreement is made on  29 September 2008,
between:

 

(1)                              Paul Jeremy Brough, Edward Simon Middleton and Patrick Cowley, each
of KPMG (whose registered address is 8th floor, Princes Building,
16-20 Chater Road, Central, Hong Kong), as joint and several provisional
liquidators to each of the HK Insolvent Companies (the “HK
Insolvency Officers”);

 

(2)                              Peter Chay Fook Yuen, Bob Yap Cheng Ghee and Roger Tay Puay Cheng,
each of KPMG (whose registered address is 16 Raffles Quay, #22-00, Singapore),
as joint and several provisional liquidators of the Singapore Insolvent Company
(the “Singapore  Insolvency Officers”);

 

(3)                              Neil Geoffrey Singleton and Stephen James Parbery, each of PPB
(whose registered address is Level 46, MLC Centre, 19 Martin Place, Sydney NSW
2000, Australia), as joint and several administrators of the Australia
Insolvent Companies (the “Australia Insolvency
Officers”);

 

(4)                              Nomura Holdings Inc. (“NHI”), for and
on behalf of itself and the other entities listed in Schedule 2 (each, together with NHI, a “Purchaser” and together the “Purchasers”); and

 

(5)                              The
entities listed in Schedule 1 (each a “Seller” and
collectively the “Sellers”),

 

each a “party” and
together the “parties”.

 

Whereas:

 

(A)                           The HK Insolvency Officers were appointed to act as provisional
liquidators of Lehman Brothers Securities Asia Limited (Provisional Liquidators
Appointed) on 17 September 2008 and as provisional liquidators of Lehman
Brothers Asia Holdings Limited (Provisional Liquidators Appointed) and Lehman
Brothers Asia Limited (Provisional Liquidators Appointed) on 19 September 2008
by orders of the Court of the Hong Kong Special Administrative Region.

 

(B)                             The Singapore Insolvency Officers were appointed to act as
provisional liquidators of the Singapore Insolvent Company by a written
resolution of the board of directors of the Singapore Insolvency Company dated
23 September 2008.

 

(C)                             The Australia Insolvency Officers were appointed to act as joint and
several administrators of the Australia Insolvent Companies by resolutions of
the boards of directors of the Australian Insolvent Companies, each dated 26 September 2008,
and by instruments of appointment relating to the Australian Insolvent
Companies, each dated 26 September 2008.

 

(D)                            The Sellers have agreed to sell the Sale Assets (each as to those
Sale Assets listed across its respective name in the Sale Assets Exhibit and
the Lease Exhibit) and the Purchasers have agreed to: (i) purchase all of
the Sale Assets, and (ii) make offers of employment to the Transferred
Employees, in each case on the terms and subject to the conditions of this
Agreement.

 

2

 

It is agreed as follows:

 

1                                      Interpretation

 

In this Agreement, unless the context
otherwise requires, the provisions in this Clause 1 apply:

 

1.1                            Definitions

 

“2008 Bonus” has the meaning given to it in paragraph 1 of Schedule 5;

 

“2009 Bonus“has the meaning given to it in paragraph 1 of Schedule 5;

 

“Actual Completion”
has the meaning given to it in paragraph 1 of Schedule 6;

 

“Additional Retention Fund”
has the meaning given to it in paragraph 1 of
Schedule 5;

 

“Advisor Fees”
means the amounts of (i) [***] to be paid to NM Rothschild & Sons
Limited; (ii) [***] to be paid to KPMG Hong Kong; and (iii) [***] to
be paid to Linklaters;

 

“Agreed
Terms” means, in relation to a document, such document in the terms
agreed between the Insolvency Officers, the Sellers and NHI (for and on behalf
of the Purchasers), with such alterations as may be agreed in writing between
the Insolvency Officers, the Sellers and NHI (for and on behalf of the
Purchasers) from time to time;

 

“Asia Executive Committee”
has the meaning given to it in paragraph 1 of
Schedule 5;

 

“Australia Insolvent
Companies” means those companies listed as parties 12 and 13 in
Schedule 1 and “Australia Insolvent Company” means
any one of them;

 

“Australia Insolvency
Officers” has the meaning given to it in the parties Clause of this
Agreement;

 

“Book  Debts” means in respect of the Sellers and the Group
Companies all book and other debts or sums owing to them (after deduction of
any set-offs or counterclaims), whether or not then due and payable, in
relation to goods supplied or services performed by the Sellers in connection
with the Business prior to Japan Completion or General Completion (as the case
may be), together with any interest payable on those sums and the benefit of
any security or guarantee for their payment;

 

“Bonus Pool” has the meaning given to it in paragraph 1 of Schedule 5;

 

“Business” means
the investment banking, capital markets (fixed
income and equities) and financial services businesses conducted by the Lehman
Brothers International Group in the Asia-Pacific region (including Japan and
Australia) (and for the avoidance of doubt, excluding the back office functions
of the Lehman Brothers International Group in Powai, India);

 

“Business
Day” means a day which is not a Saturday, a Sunday or a public
holiday in Hong Kong and Tokyo;

 

“Completion”
means either Japan Completion or General Completion (as the case may be);

 

“Continuing  Transferred  Employees” has
the meaning given to it in paragraph 1 of Schedule 5;

 

“Debentures” has
the meaning given to it in Clause 7.3.1;

 

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“Employee  Benefits” has the meaning given to it in paragraph 1 of
Schedule 5;

 

“Employee  Liabilities”
has the meaning given to it in paragraph 1 of
Schedule 5;

 

“Fiscal  Year 2007” has the meaning
given to it in paragraph 1 of Schedule 5;

 

“Fiscal  Year 2008” has the meaning
given to it in paragraph 1 of Schedule 5;

 

“General Completion” means the completion of the sale of the
General Sale Assets pursuant to Clauses 4.4, 6.1.2 and 6.2.3 and Schedule 4 and
the making of offers of employment by any of the Purchasers to the General
Transferred Employees pursuant to Clause 8.1 and Schedule 5;

 

“General Consent Premises” has the meaning given to it in
paragraph 1 of Schedule 6;

 

“General Leasehold Premises” 
means (i) each and every of the leasehold or leased premises,
sites, spaces, facilities and locations which any of the Sellers and/or Group
Companies lease, license, occupy, use or enjoy (details of which are set out in
the Sale Assets Exhibit and/or the Lease Exhibit), and (ii) each and
every of the other leasehold or leased premises leased or licensed by any of
the Sellers and/or Group Companies for the benefit of any Transferred Employee
(excluding the Japan Leasehold Premises and Korean Leasehold Premises);

 

“General Purchase Price” has the meaning given to it in
Clause 3.1.2;

 

“General Sale Assets” means all the Sale Assets other than
the Japan Sale Assets;

 

“General Sale Assets Price” has the meaning given to it in
Clause 3.1.2(i);

 

“General  Sellers” means
all Sellers other than the Japan Sellers;

 

“General Transfer Payment Amount” has the meaning given to it
in Clause 3.1.2(ii);

 

“General Transferred Employees” means all the Transferred Employees
other than the Japan Transferred Employees;

 

“Group
Companies” means the companies in the Lehman Brothers International
Group operating or otherwise comprised in the Business and “Group Company” means any one of them;

 

“HK Insolvency Officers”
has the meaning given to it in the parties Clause of this Agreement;

 

“HK Insolvent Companies”
means those companies listed as parties 1 to 3 in Schedule 1 and “HK Insolvent Company” means any one of them;

 

“Insolvency Officers”
means the HK Insolvency Officers, the Singapore Insolvency Officers and the
Australia Insolvency Officers and such other provisional liquidators,
liquidators, administrative receivers, administrators, judicial managers,
compulsory managers, trustees or other similar officers appointed to analogous
positions in any jurisdiction in respect of the liquidation (voluntary or
compulsory, solvent or insolvent), rehabilitation, reorganisation or
composition process of any Group Company;

 

“Insolvency Officers’
Records” means all records
produced by or at the direction of any of the Insolvency Officers or their
staff or representatives or by any other person including the officers and
employees of any of the Insolvent Companies in connection with the
administration of any of the Insolvent Companies, the statutory books and
accounting records of the Insolvent Companies (excluding the Transferred
Employees Records and 

 

4

 

the Transferred Sale Assets Records),
documents relating to the appointment of any of the Insolvency Officers and any
other records which any of the Insolvency Officers is required by any
applicable law or regulation to retain;

 

“Insolvent Companies”
means the Japan Rehabilitation Company, the HK Insolvent Companies, the
Singapore Insolvent Company, the Australia Insolvent Companies and  those other Sellers which enter into or
otherwise become subject to any provisional liquidation, liquidation (voluntary
or compulsory, solvent or insolvent), rehabilitation, administration or
composition process from time to time and “Insolvent Company”
means any one of them;

 

“Japan Completion” means the completion of the sale of the
Japan Sale Assets pursuant to Clauses 6.1.1 and 6.2.2 and Schedule 4 and the
making of offers of employment by any of the Purchasers to the Japan
Transferred Employees pursuant to Clauses 8.1 and Schedule 5;

 

“Japan Consent Premises” has the meaning given to it in
paragraph 1 of Schedule 6;

 

“Japan Leasehold Premises” means (i) each and every of
the leasehold or leased premises, sites, spaces, facilities and locations which
any of the Sellers and/or Group Companies lease, license, occupy, use or enjoy
in Japan in respect of the Business (details of which are set out in the Sale
Assets Exhibit and/or the Lease Exhibit), and (ii) each and every of
the other leasehold or leased premises in Japan leased or licensed by any of
the Sellers and/or Group Companies for the benefit of any Transferred Employee;

 

“Japan  Rehabilitation  Company” means the entity listed as party 4 in Schedule 1;

 

“Japan Purchase Price” has the meaning given to it in Clause 3.1.1;

 

“Japan Sale Assets” means the Sale Assets listed across the
respective names of the Japan Sellers in the Sale Assets Exhibit and/or
the Japan Leasehold Premises;

 

“Japan Sale Assets Price” has the meaning given to it in
Clause 3.1.1(i);

 

“Japan  Sellers” means
the entities listed as parties 4 to 6 in Schedule 1;

 

“Japan Transfer Payment Amount” has the meaning given to it
in Clause 3.1.1(ii);

 

“Japan Transferred Employees” means those Transferred
Employees identified as being employed in or seconded to Japan, in each case as
set out in the Transferred Employee Exhibit;

 

“Korean Assets”
means the assets set out in the Sale Assets Exhibit as being attributable
to the Korean Branches and the Korean Leasehold Premises;

 

“Korean Branches”
means [***];

 

“Korean Leasehold Premises”
means (i) each and every of the
leasehold or leased premises, sites, spaces, facilities and locations which any
of the Sellers and/or Group Companies lease, license, occupy, use or enjoy in
Korea in respect of the Business, (details of which are set out in the Sale
Assets Exhibit and/or the Lease Exhibit), and (ii) each and every of
the other leasehold or leased premises in Korea leased or licensed by any of
the Sellers and/or Group Companies for the benefit of any Transferred Employee;

 

“Landlord”
has the meaning given to it in paragraph 1 of Schedule 6;

 

5

 

“LBHI” means
Lehman Brothers Holdings Inc.;

 

“Lease” has the meaning given to it in paragraph 1 of
Schedule 6;

 

“Lease Exhibit”
means the exhibit setting out details of leases to this Agreement marked “C” in
the Agreed Terms;

 

“Leasehold Premises”
means those premises and leases set out in the Sale Assets Exhibit and/or
the Lease Exhibit other than the Korean Leasehold Premises;

 

“Lehman Brothers
International Group” means LBHI and its subsidiaries worldwide;

 

“Letting Documents”  has the
meaning given to it in paragraph 1 of Schedule 6;

 

“Licence” has the meaning given to it in
paragraph 1 of Schedule 6;

 

“Licence Fee” has the meaning given to it in
paragraph 1 of Schedule 6;

 

“Licence Period”
has the meaning given to it in paragraph 1 of Schedule 6;

 

“Licensed Premises” has the meaning given to it in paragraph
1 of Schedule 6;

 

“Long  Stop  Date” means 31 October 2008
(or such other date as the parties may agree in writing);

 

“Losses”
means all losses, liabilities, costs (including without limitation legal costs
and experts’ and consultants’ fees), charges, expenses, actions, proceedings,
claims and demands;

 

“NHI” has the
meaning given to it in the parties Clause of this Agreement;

 

“Nominated Employees”
has the meaning given to it in paragraph 1 of Schedule 5;

 

“Non-Disclosure
Agreement” means the confidentiality agreement dated 19 September 2008
pursuant to which certain confidential information relating to the Business was
made available to the Purchasers and/or their representatives and advisers;

 

“Occupancy Costs”
means: (a) all rental payments in respect of the General Leasehold
Premises or Japan Leasehold Premises (as the case may be) of the relevant
Insolvent Companies and the equipment and facilities at such General Leasehold
Premises or Japan Leasehold Premises (as the case may be) and (b) all
charges, outgoings and expenses in respect of such General Leasehold Premises
or Japan Leasehold Premises (as the case may be) and the equipment and
facilities at such General Leasehold Premises or Japan Leasehold Premises (as
the case may be) or arising directly or indirectly from the use of such General
Leasehold Premises or Japan Leasehold Premises (as the case may be) or the
equipment or facilities at such General Leasehold Premises or Japan Leasehold
Premises (as the case may be) including the cost of all rates, utilities charges,
cleaning charges, security charges, air-conditioning charges, maintenance
charges, service charges, insurance, heating, telecommunications and other
services, the cost of complying with fire safety and other statutory
regulations and other typical occupancy costs;

 

“Property Losses” has the meaning given to it in paragraph 1
of Schedule 6;

 

“Purchase
Price” has the meaning set out in Clause 3.1;

 

“Purchasers” has
the meaning given to it in the parties Clause of this Agreement;

 

“Purchaser Group”
means NHI and its subsidiaries from time to time;

 

6

 

“Quarter Days” has the meaning given to it in paragraph 1 of
Schedule 6;

 

“Relevant Conditions”
has the meaning given to it in Clause 4.4.1;

 

“Relevant Employer”
has the meaning given to it in paragraph 1 of Schedule 5;

 

“Relevant Jurisdiction(s)”
has the meaning given to it in Clause 4.4.1;

 

“Relevant Purchaser”
means the relevant Purchaser nominated by NHI to be the relevant purchaser to
buy the relevant Sale Assets from the relevant Seller pursuant to Clause 2.1;

 

“Relevant Transferred
Employees” has the meaning given to it in paragraph 1 of Schedule 5;

 

“Retained  Records” means all the records (including historical
customer, financial, business or trading information, books, data, information
or document (including in electronic format)) used by or otherwise relating to
the Business, including the Transferred Employees Records but excluding the
Transferred Sale Assets Records and the Insolvency Officers’ Records;

 

“Sale Assets Exhibit”
means the exhibit to this Agreement marked “A” setting out the details of the
Sale Assets in the Agreed Terms;

 

“Sale Assets”
means all the assets listed in the Sale Assets Exhibit and the Leasehold
Premises, but excluding the Korean Assets;

 

“Selected Employees”
has the meaning given to it in paragraph 1 of Schedule 5;

 

“Sellers” has
the meaning given to it in the parties Clause of this Agreement;

 

“Services”
means the services specified in Clause 11.2.1 and “Service” means any one of them;

 

“Severance  Pay” has the meaning given to it in paragraph 1 of Schedule
5;

 

“Singapore  Insolvent Company” means the company listed as party 22 in
Schedule 1;

 

“Singapore Insolvency
Officers” has the meaning given to it in the parties Clause of this
Agreement;

 

“Taxation”
or “Tax” means all forms of
taxation whether direct or indirect and whether levied by reference to income,
profits, gains, net wealth, asset values, turnover, added value or other
reference and statutory, governmental, state, provincial, local governmental or
municipal impositions, duties, contributions, rates and levies (including
without limitation social security contributions and any other payroll taxes),
whenever and wherever imposed (whether imposed by way of a withholding or
deduction for or on account of tax or otherwise) and in respect of any person
and all penalties, charges, costs and interest relating thereto;

 

“Third  Party  Consents” means
all consents, licences, approvals, permits, authorisations or waivers required
from third parties for the assignment or transfer or novation to the Purchasers
of any General Leasehold Premises or Japan Leasehold Premises (as the case may
be) or the entering into of a new agreement between a landlord and any
Purchaser(s) in relation to the General Leasehold Premises or Japan
Leasehold Premises (as the case may be);

 

“Transfer Payment”
means the payment to be made by the Purchasers to the Sellers in consideration
for the Sellers providing the names (and certain other details) of the 

 

7

 

Transferred Employees to the Purchasers and
consenting to the Transferred Employees ceasing their existing employment at
short notice;

 

“Transferred Employee
Exhibit” means the exhibit to this Agreement marked “B” setting out
details of Transferred Employees in the Agreed Terms;

 

“Transferred Employees”
means the relevant employees of the Lehman Brothers International Group who are
to receive offers of employment from a member of the Purchaser Group pursuant
to the terms of this Agreement (and whose details are set out in the
Transferred Employee Exhibit) (being all employees of the Lehman Brothers
International Group who are currently employed in the Business, and such other
employees of the Lehman Brothers International Group who are seconded to the
Business) (and include, for the avoidance of doubt, those employees employed in
or seconded to Korea) and up to 10 further
employees of the Business as are nominated by the Sellers within 5 days of the
date hereof subject to the prior written approval of NHI;

 

“Transferred Employees
Records” means the personnel and other records used by the Business
in relation to the Transferred Employees, but excluding the Insolvency Officers’
Records;

 

“Transferred
Sale Assets Records” means the documents of title and other records
relating to the Sale Assets, but excluding the Insolvency Officers’ Records;

 

“TSAs” means the
Transition Services Agreement between LBHI and NHI and the Assignment and
Assumption Agreement between Barclays Capital Inc., LBHI and NHI, in each case
to be entered into in the Agreed Terms;

 

 “US TSA” means the Transition Services Agreement dated 19 September 2008
between Barclays Capital Inc. and LBHI;

 

“US$” means US
dollars, the currency of the United States of America; and

 

“Yen (¥)” means
Japanese Yen, the currency of Japan.

 

1.2                            Singular,
plural, gender

 

References to one gender include all genders
and references to the singular include the plural and vice versa.

 

1.3                            Modification
etc. of statutes

 

References to a statute or statutory
provision include:

 

1.3.1                   that statute or provision as from time to time modified, re-enacted
or consolidated whether before or after the date of this Agreement;

 

1.3.2                   any past statute or statutory provision (as from time to time
modified, re-enacted or consolidated) which that statute or provision has
directly or indirectly replaced; and

 

1.3.3                   any subordinate legislation made from time to time under that
statute or statutory provision which is
in force at the date of this Agreement

 

except to the extent that any
statute, statutory provision or subordinate legislation made or enacted after
the date of this Agreement would create or increase a liability of a Seller,
any Insolvency Officer or any Purchaser under this Agreement.

 

8

 

1.4                            References
to persons and companies

 

References to:

 

1.4.1                   a person include any individual, company, partnership or
unincorporated association (whether or not having separate legal personality);
and

 

1.4.2                   a company include any company, corporation or any body corporate,
wherever incorporated.

 

1.5                            Schedules
etc.

 

References to this Agreement shall include
any Recitals, Exhibits and Schedules to it and references to Clauses, Recitals,
Exhibits and Schedules are to Clauses of, and Recitals, Exhibits and Schedules
to, this Agreement. References to paragraphs and Parts are to paragraphs and
Parts of the Schedules.

 

1.6                            Headings

 

Headings shall be ignored in interpreting
this Agreement.

 

1.7                            Legal
Terms

 

References to any English legal term shall,
in respect of any jurisdiction other than England and Wales, be construed as
references to the term or concept which most nearly corresponds to it in that
jurisdiction.

 

1.8                            Construction

 

1.8.1                   In this Agreement a reference to:

 

(i)                                a “claim” includes any
claim, demand, action or proceeding of any kind, actual or contingent;

 

(ii)                             “representatives”
includes partners, agents, employees and any other person acting on behalf and
with the authority of a party;

 

(iii)                          “including”, “includes”
or “in particular” means including,
includes or in particular without limitation; and

 

(iv)                         a time of day is to Hong Kong time.

 

1.8.2                   In this Agreement a reference:

 

(i)                                to the HK Insolvency Officers shall mean jointly and severally the
HK Insolvency Officers and to any other person who is appointed as provisional
liquidator in substitution for any HK Insolvency Officer or as an additional
provisional liquidator in conjunction with the HK Insolvency Officers and any
liquidator appointed to the HK Insolvent Companies;

 

(ii)                             to the Singapore Insolvency Officers shall mean jointly and
severally the Singapore Insolvency Officers and to any other person who is
appointed as provisional liquidator in substitution for any Singapore Insolvency
Officer or as an additional provisional liquidator in conjunction with the
Singapore Insolvency Officers and any liquidator appointed to the Singapore
Insolvent Company; and

 

(iii)                          to the Australia Insolvency Officers shall mean jointly and severally
the Australia Insolvency Officers and to any other person who is appointed as 

 

9

 

administrator in substitution for any
Australia Insolvency Officer or as an additional administrator in conjunction
with the Australia Insolvency Officers and any administrator appointed to the
Australia Insolvent Companies.

 

1.9                            References
to subsidiaries and holding companies

 

A company is a “subsidiary” of another company (its “holding company”) if that other company,
directly or indirectly through one or more subsidiaries:

 

1.9.1                   holds a majority of the voting rights which may be exercised at its
general meetings;

 

1.9.2                   is a member or shareholder of it and has the right to appoint or
remove a majority of its board of directors or equivalent managing body;

 

1.9.3                   is a member or shareholder of it and controls alone, pursuant to an
agreement with other shareholders or members, a majority of the voting rights
in it; or

 

1.9.4                   has the right to exercise a dominant influence over it, for example
by having the right to give directions with respect to its operating and
financial policies, with which directions its directors are obliged to comply.

 

1.10                     Information

 

References to books, records or other
information mean books, records or other information in any form including
paper, electronically stored data, magnetic media, film and microfilm.

 

1.11                      Joint
and several liability

 

1.11.1             Any provision of this Agreement which is expressed to bind the
Sellers (other than the Insolvent Companies) shall, save where inconsistent
with the context or where otherwise expressly stated, bind the Sellers (other
than the Insolvent Companies) jointly and severally.

 

1.11.2             Any provision of this Agreement which is expressed to bind the
Purchasers shall, save where inconsistent with the context or where otherwise
expressly stated, bind the Purchasers jointly and severally.

 

1.11.3             Any provision of this Agreement which is expressed to bind any other
party shall bind such other party severally.

 

1.12                     Successors and
assigns

 

This Agreement is binding on each of the
parties, its successors in title and assigns.

 

1.13                     NHI

 

NHI shall take all steps, and shall procure
that members of the Purchaser Group shall take all steps, to give effect to and
comply with the provisions of this Agreement.

 

10

 

1.14       Transfer of Sale Asset to a Purchaser

 

For the avoidance of doubt, the transfer (whether by
delivery or otherwise) of any Sale Asset to any Purchaser shall be an absolute
discharge of the obligations of the Sellers and Insolvency Officers to transfer
and/or deliver that Sale Asset to the Purchasers (save as set out in Schedule 6
in respect of the transfer of General Leasehold Premises or Japan Leasehold
Premises (as the case may be)).

 

2             Agreement to sell the Sale Assets and transfer the
Transferred Employees

 

2.1         Sale of Sale Assets and transfer of Transferred
Employees

 

On and subject to the
terms and conditions of this Agreement:

 

2.1.1      In respect of the Japan Sale Assets and Japan Transferred Employees:

 

(i)           as soon as reasonably
practicable after the date of this Agreement, the Relevant Employer(s) shall
make offers of employment to all the Japan Transferred Employees (including,
for the avoidance of doubt, those Nominated Employees employed in or seconded
to Japan) in accordance with Clause 8.1 and Schedule 5; and

 

(ii)          on Japan Completion,
the Japan Sellers shall sell (each as to those Sale Assets set out against its
name in the Sale Assets Exhibit or the Lease Exhibit) and the Relevant
Purchaser(s) shall buy such right, title and interest as the Japan Sellers
have at Japan Completion in the Japan Sale Assets, with the intention that all
such right, title and interest shall vest in the Relevant Purchasers at Japan
Completion.

 

2.1.2      In respect of the General Sale Assets and General Transferred Employees:

 

(i)           as soon as reasonably
practicable after the date of this Agreement, the Relevant Employers shall make
offers of employment to all the General Transferred Employees (including, for
the avoidance of doubt, the Nominated Employees but excluding those employed in
or seconded to Japan) in accordance with Clause 8.1 and Schedule 5; and

 

(ii)          on General Completion,
the General Sellers shall sell (each as to those Sale Assets set out against
its name in the Sale Assets Exhibit or the Lease Exhibit) and the Relevant
Purchaser(s) shall buy such right, title and interest as the General
Sellers have at General Completion in the General Sale Assets, with the
intention that all such right, title and interest shall vest in the Relevant
Purchasers at General Completion.

 

2.2         Excluded Assets

 

This Agreement shall not transfer to any of the
Purchasers any interest in any asset or right, title or interest in respect of
such asset of the Sellers (other than the Sale Assets and Transferred
Employees), and, for the avoidance of doubt and without limitation, excludes
the following:

 

2.2.1      the Book Debts and any collateral held in relation to the Book Debts;

 

2.2.2      the Insolvency Officers’ Records and the Retained Records;

 

11

 

2.2.3      all assets of any client of the Lehman Brothers International Group;

 

2.2.4      all cash in hand, or in a bank or other financial institution, and all
cheques, credit or debit card vouchers, drafts, bills, notes or other
negotiable instruments;

 

2.2.5      the benefit of any actual or potential claim, or right to make a claim,
in relation to or in connection with the Business relating to Japan, which
accrues prior to Japan Completion or the rest of the Business, which accrues
prior to General Completion or arises out of events occurring prior to Japan
Completion or General Completion (as the case may be)  (other than claims under manufacturers’ or
suppliers’ warranties included in the relevant Sale Assets transferred pursuant
to such Completion) including the proceeds of any litigation;

 

2.2.6      all rental deposits and rental prepayments and all other payments, paid
by or to or payable to any Seller or any Group Company;

 

2.2.7      the benefit of all policies of insurance or assurance and any claims
made thereunder;

 

2.2.8      all proprietary investments of the Lehman Brothers International Group;

 

2.2.9      the benefit of all Tax allowances and all rights and claims for
repayment of any Tax;

 

2.2.10    all Debentures;

 

2.2.11    any shares in or any securities of any body corporate; and

 

2.2.12    any other asset, right, title or interest not expressly referred to in
this Agreement.

 

2.3         Excluded Liabilities

 

This Agreement shall not transfer to any of the
Purchasers, and the Purchasers shall not be liable for, and none of the Insolvency
Officers or the Sellers shall make any claim against any of NHI, the
Purchasers, the Transferred Employees or the Sale Assets in respect of, any
obligation or liability of any of the Sellers, the Insolvency Officers or the
Business, save in each case as expressly set out in this Agreement. For the
avoidance of doubt, the parties acknowledge that:

 

2.3.1      this Agreement is not intended to transfer the Business as a going
concern or to operate, save as expressly provided in this Agreement, to transfer
any related liabilities (whether in whole or in part) of the Sellers to the
Purchasers;

 

2.3.2      the sale of the relevant Sale Assets and the transfer of the relevant
Transferred Employees, in each case relating to Hong Kong, is not intended to
operate as a transfer of business (whether in whole or in part) for the purpose
of the Transfer of Businesses (Protection of Business) Ordinance (Chapter 49 of
the Laws of Hong Kong); and

 

2.3.3      the sale of the relevant Sale Assets and the transfer of the relevant Transferred
Employees, in each case relating to Singapore, is not intended to operate as a
transfer of the undertakings of the relevant Sellers in Singapore, pursuant to Section 18A
of the Employment Act (Chapter 91 of Singapore).

 

12

 

3             Consideration

 

3.1         Amount

 

The aggregate consideration (“Purchase Price”) to be paid by the
Purchasers shall comprise:

 

3.1.1      to the Japan Sellers (the “Japan
Purchase Price”) as follows:

 

(i)           Sale
Assets: US$87,400,000 (the “Japan  Sale  Assets  Price”)
for the purchase of the Japan Sale Assets; and

 

(ii)          Transfer
Payment: US$21,900,000 (the “Japan Transfer Payment  Amount”) as Transfer Payment in respect of
the Japan Transferred Employees;

 

3.1.2      to the General Sellers (the “General
Purchase Price”) as follows:

 

(i)           Sale
Assets: US$76,300,000 (the “General Sale  Assets
Price”) for the purchase of the
General Sale Assets; and

 

(ii)          Transfer
Payment: US$25,800,000 (the “General Transfer Payment  Amount”) as Transfer Payment in respect of
the General Transferred Employees.

 

3.2         Time of payment

 

The Japan Purchase Price shall be paid in full on
Japan Completion and the General Purchase Price shall be paid in full on
General Completion, in each case in accordance with Clauses 3.3, 3.4, 3.5 and
6.

 

3.3         Payment method

 

3.3.1      All sums payable by the Purchasers to the Sellers and/or any of the
Insolvency Officers shall be paid by telegraphic transfer on or by the date due
for payment. Such payment shall be paid in immediately available funds for same
day value into the account(s) of the relevant recipient(s), details of
which shall be notified in writing by the relevant recipient(s) to the
Purchasers on or before the relevant date of payment.

 

3.3.2      All sums payable to the Japan Sellers under this Agreement shall be paid
in Yen (¥) as converted at the prevailing exchange rate available at the
relevant time of payment and shall be paid into the bank account(s) of the
Japan Sellers in Japan, details of which shall be notified in writing by the
Japan Sellers to the Purchasers on or before the relevant date of payment.

 

3.3.3      The Insolvent Companies confirm that, to the extent relevant:

 

(i)           the HK Insolvency
Officers may, for and on behalf of the HK Insolvent Companies, give a good
receipt for all payments to the HK Insolvent Companies;

 

(ii)          the Singapore
Insolvency Officers may, for and on behalf of the Singapore Insolvent Company,
give a good receipt for all payments to the Singapore Insolvent Company; and

 

13

 

(iii)         the Australia
Insolvency Officers may, for and on behalf of the Australia Insolvent
Companies, give a good receipt for all payments to the Australia Insolvent
Companies.

 

3.3.4      The receipt of the Japan Purchase Price and the General Purchase Price,
in each case into the account(s) referred to in Clause 3.3.1, shall be an
absolute discharge to the Purchasers and the Purchasers shall have no
responsibility in respect of the allocation or application of the Purchase
Price amongst the Sellers.

 

3.4         Withholdings

 

NHI, the Sellers and the Insolvency Officers agree
that where any sums payable under this Agreement are subject to deductions,
withholdings, set-offs or counterclaims, they shall (to the extent they are
able to) use all reasonable endeavours to make such payments so as to minimise
any deductions, withholdings, set-offs or counterclaims that may apply or be
imposed in respect thereof.

 

3.5         Purchase Price Allocation

 

3.5.1      Japan Purchase Price Allocation

 

(i)           The Japan Sale Assets
Price shall be allocated between the Japan Sellers as set out in Schedule 3 Part A
and the sum as allocated shall be distributed to each of the Japan Sellers
after deducting an amount representing a 12.5 per cent. discount to book value
being applied pro rata to the Sale Assets transferred by each Japan Seller (the
book value in respect of such of the Japan Sale Assets to be sold by each Japan
Seller being as set out in Schedule 3 Part A). The consideration for each
of the individual Japan Sale Assets (which has a book value as set out in the
Sale Assets Exhibit) shall be determined by applying a 12.5 per cent. discount
to such book value.

 

(ii)          The Japan Transfer
Payment Amount shall be allocated between the Japan Sellers as set out in
Schedule 3 Part B in accordance with the proportion of the total number of
Transferred Employees who are employed by or seconded to the Japan Sellers.

 

3.5.2      General Purchase Price Allocation

 

(i)           The General Sale Assets
Price shall be allocated between the General Sellers as set out in Schedule 3 Part A
and the sum as allocated shall be distributed to each of the General Sellers
after deducting an amount representing a 12.5 per cent. discount to book value
being applied pro rata to the Sale Assets transferred by each General Seller
(the book value in respect of such of the General Sale Assets to be sold by
each General Seller being as set out in Schedule 3 Part A). The
consideration for each of the individual General Sale Assets (which has a book
value as set out in the Sale Assets Exhibit) shall be determined by applying a
12.5 per cent. discount to such book value.

 

(ii)          The General Transfer
Payment Amount shall be allocated between the General Sellers as set out in
Schedule 3 Part B in accordance with the proportion of the total number of
Transferred Employees who are employed by or seconded to the General Sellers.

 

14

 

4             Conditions

 

4.1         Conditions Precedent

 

4.1.1      The purchase and sale of the Japan Sale Assets and transfer of the Japan
Transferred Employees are conditional upon the satisfaction (or, in the case of
Clauses 4.1.1(i) and 4.1.1(vi) , the waiver in writing by NHI in its
sole discretion) of the following conditions by the Long Stop Date:

 

(i)           the acceptance by 70
per cent. or more in number of the Nominated Employees of the binding offers of
employment made by any of the Relevant Employers in accordance with Clause 8.1
and Schedule 5;

 

(ii)          the receipt by the
Japan Rehabilitation Company of all approvals or consents from the Tokyo
District Courts under the Civil Rehabilitation Procedure;

 

(iii)         the expiration of the
waiting period required and the obtaining of all approvals (including the
approval of the Japan Fair Trade Commission), consents or clearances required,
in each case under the Anti Monopoly Law of Japan;

 

(iv)         in respect of any of
the Japan Sellers which are not subject to any provisional liquidation,
liquidation or administration proceeding, LBHI obtaining any approval required
under the US Bankruptcy Code;

 

(v)          no governmental,
administrative, statutory or regulatory body, court or agency in any
jurisdiction having taken or initiated any action, proceeding, suit or
investigation or enacted or made or proposed (and there not being continuing or
outstanding) any statute, regulation, demand or order that would render the
consummation of the transactions contemplated in this Agreement illegal, void
or unenforceable; and

 

(vi)         the occurrence of
General Completion.

 

4.1.2      The purchase and sale of the General Sale Assets and transfer of the
General Transferred Employees are conditional upon the satisfaction (or a
written waiver by NHI in its sole discretion of Clause 4.1.2(i) or, for
the purposes of Clause 4.4, of Clauses 4.1.2(iv), 4.1.2(v) and/or
4.1.2(vi)) of the following conditions by the Long Stop Date:

 

(i)           the acceptance by 70
per cent. or more in number of the Nominated Employees of the binding offers of
employment made by any of the Relevant Employers in accordance with Clause 8.1
and Schedule 5;

 

(ii)          the receipt by the HK
Insolvency Officers of all approvals or consents required from the Hong Kong
court;

 

(iii)         in respect of any of
the General Sellers which are not subject to any provisional liquidation,
liquidation or administration proceeding, LBHI obtaining any approval required
under the US Bankruptcy Code;

 

(iv)         the obtaining of all
legal, regulatory, self-regulatory, exchange, clearing organisation and
governmental approvals, authorisations, waivers and/or licences required to be
given by any governmental or regulatory body 

 

15

 

having jurisdiction over the Sellers, Purchasers,
Insolvency Officers and/or the business comprised in the Sale Assets;

 

(v)          no governmental,
administrative, statutory or regulatory body, court or agency in any
jurisdiction having taken or initiated any action, proceeding, suit or
investigation or enacted or made or proposed (and there not being continuing or
outstanding) any statute, regulation, demand or order that would render the
consummation of the transactions contemplated in this Agreement illegal;

 

(vi)         the obtaining of all
approvals or consents required from any other court or court appointed
supervisor or analogous body in any jurisdiction; and

 

(vii)        the entry into of the
TSAs by the parties thereto.

 

4.2         Responsibility for Satisfaction

 

4.2.1      The:

 

(i)           Japan Sellers shall use
reasonable endeavours to ensure the satisfaction of the conditions set out in
Clauses 4.1.1(i) to 4.1.1(v);

 

(ii)          General Sellers shall
use reasonable endeavours to ensure the satisfaction of the conditions set out
in Clauses 4.1.1(vi) and 4.1.2(i) to 4.1.2(vii);

 

(iii)         HK Insolvency Officers
shall use reasonable endeavours to ensure the satisfaction of the conditions
set out in Clauses 4.1.1(vi), 4.1.2(ii) and 4.1.2(v) in so far as it
relates to proceedings in Hong Kong in respect of the HK Insolvent Companies;
and

 

(iv)         Purchasers shall
(without prejudice to their obligations under Clause 8.1 and Schedule 5) use
reasonable endeavours to ensure the satisfaction of the conditions set out in
Clauses 4.1.1(i), 4.1.1(iii), 4.1.1(vi), 4.1.2(i), 4.1.2(iv), 4.1.2(vi) and
4.1.2(vii),

 

in each case as soon as practicable.

 

4.2.2      Without prejudice to Clause 4.2.1, the parties agree that all requests
and enquiries from any government, governmental, supranational or trade agency,
court or other regulatory body shall be dealt with by the Insolvency Officers,
NHI (for and on behalf of the Purchasers) and the Sellers in consultation with
each other and they shall promptly co-operate with and provide all necessary
information and assistance reasonably required by such government, agency,
court or body upon being requested to do so by the other.

 

4.3         Non-Satisfaction

 

4.3.1      The parties responsible for satisfaction of any condition in Clause 4.1
(as set out in Clause 4.2) shall give notice to the other parties of the
satisfaction of the relevant conditions within two Business Days of becoming
aware of the same.

 

4.3.2      If the conditions in Clause 4.1.1(i) to 4.1.1(vi) are not
satisfied (or waived, to the extent permitted in this Agreement) on or before
the Long Stop Date, save as expressly provided, this Agreement (with respect to
the Japan Completion) (other than Clauses 1, 6.5, 14, 15 and 16) shall, unless
otherwise agreed in writing 

 

16

 

between each of the Insolvency Officers, the Sellers
and NHI (for and on behalf of the Purchasers), be terminable by notice in
writing served by (i) NHI (for and on behalf of the Purchasers) on the Insolvency
Officers and the Sellers, (ii) the HK Insolvency Officers (acting jointly)
on NHI (for and on behalf of the Purchasers), the Sellers, the Singapore
Insolvency Officers and the Australia Insolvency Officers, (iii) the
Singapore Insolvency Officers (acting jointly) on NHI (for and on behalf of the
Purchasers), the Sellers, the HK Insolvency Officers and the Australia
Insolvency Officers, (iv) the Australia Insolvency Officers (acting
jointly) on NHI (for and on behalf of the Purchasers), the Sellers, the HK
Insolvency Officers and the Singapore Insolvency Officers, or (v) the
Sellers (acting jointly) on NHI (for and on behalf of the Purchasers) and the
Insolvency Officers. No party may terminate this Agreement after satisfaction
(or waiver, to the extent permitted in this Agreement) of the conditions in
Clause 4.1, except in accordance with this Agreement.

 

4.4         Modified General Completion

 

4.4.1      NHI may waive, in whole or in part, any of the conditions set out in
Clauses 4.1.2(iv), 4.1.2(v) and/or 4.1.2(vi) (the “Relevant Conditions”) in respect of any
particular jurisdiction (the “Relevant
Jurisdiction(s)”) in which any of the General Sale Assets or any of
the General Transferred Employees is located, so as to permit General
Completion to occur in accordance with Clause 6, but on the basis that General
Completion in respect of the General Sale Assets and the General Transferred
Employees in each Relevant Jurisdiction shall be excluded from such completion,
and that the General Transfer Payment Amount and the General Sale Assets Price
shall be adjusted accordingly and on a basis consistent with Clause 3.5.

 

4.4.2      Upon satisfaction of the Relevant Conditions in respect of each Relevant
Jurisdiction, the relevant parties shall then proceed to General Completion in
respect of those General Sale Assets and those General Transferred Employees in
that Relevant Jurisdiction in accordance with Clause 6, and the obligations of
the relevant parties in respect of each such Completion shall be modified
accordingly.

 

5             Pre-Closing

 

5.1         The Obligations of the Sellers in Relation to the
Conduct of the Business

 

Each
of the Sellers undertakes, so far as it is able (and subject to the obligations
of the Insolvent Companies and the duties of the Insolvency Officers (in respect
of the Insolvent Companies) under the insolvency laws in the relevant
jurisdictions, the terms of the orders appointing the respective Insolvency
Officers and any other relevant court order) that between the date of this
Agreement and each of Japan Completion and General Completion (as the case may
be):

 

5.1.1      it shall use its commercially reasonable efforts to preserve the value
of the Sale Assets;

 

5.1.2      no Employee Benefits shall be materially increased, no other unusual or
extraordinary bonus shall be paid, no terms of employment of any employee shall
be amended and no employee shall be dismissed or additional employee hired, in 

 

17

 

each case without the consent of NHI (such consent not
to be unreasonably withheld);

 

5.1.3      other than for cause, it shall not dismiss or (save as provided in
Schedule 5) give notice of termination of employment to any Nominated Employee
or Selected Employee or amend (or agree to amend) the terms of employment
(including annual compensation, bonus entitlement, benefit or other direct,
indirect or deferred compensation or severance entitlement), duties or title of
any Transferred Employee (including any Nominated Employee or Selected
Employee), other than pursuant to the terms of this Agreement, in each case
without the consent of NHI (such consent not to be unreasonably withheld);

 

5.1.4      no Sale Asset shall be sold or otherwise transferred, no security shall
be granted over any Sale Asset and no Sale Asset shall be otherwise encumbered
(to the extent it is not already so encumbered) (except by operation of law or
pursuant to court order or any analogous event);

 

5.1.5      no material litigation or dispute relating to any Sale Asset shall be
commenced or settled by any of the Sellers;

 

5.1.6      the Purchasers shall be given such access as they shall reasonably
require to the Transferred Sale Assets Records (subject to any restrictions
imposed by data protection laws or other applicable law or regulation relating
to data privacy or client confidentiality);

 

5.1.7      it shall not transfer to or re-locate to the Business any employee of
the Lehman Brothers International Group that is not currently an employee of or
seconded to the Business and, other than pursuant to a prior contractual commitment,
not transfer or re-locate any Transferred Employee away from the Business;

 

5.1.8      it shall not assume voluntarily any liability that would be transferred
with the Sale Assets in connection with the Japan Completion and/or the General
Completion by operation of law or otherwise (other than in the ordinary course
of business);

 

5.1.9      not change the existing use, terminate, or give notice to terminate, any
lease, tenancy, or license in respect of the General Leasehold Premises or
Japan Leasehold Premises (as the case may be) and shall not agree to a new rent
or fee payable under a lease, tenancy or license in respect of the General
Leasehold Premises or Japan Leasehold Premises (as the case may be);

 

5.1.10    it shall not take any action that is inconsistent with the provisions of
this Agreement, or that is or will constitute or cause a breach of any
undertaking under this Agreement; and

 

5.1.11    it shall not agree to do anything prohibited by this Clause 5.1,

 

provided that nothing shall prevent: (i) the Sellers
from managing the solvency of any member of the Lehman Brothers International
Group in accordance with their fiduciary, legal and regulatory duties; and (ii) the
Insolvency Officers from carrying out their duties under the insolvency laws in
the relevant jurisdictions and/or complying with the terms of the orders
appointing the respective Insolvency Officers and any other relevant court
order.

 

18

 

6             Japan Completion and General Completion

 

6.1         Date and Place

 

Subject to Clauses 3.2 and 4:

 

6.1.1      completion of the sale and purchase of the Japan Sale Assets (other than
in respect of the Japan Consent Premises, the completion of which shall take
place in accordance with the terms of Schedule 6) and the transfer of the Japan
Transferred Employees shall occur no more than three Business Days following
the satisfaction of the conditions in Clause 4.1.1; and

 

6.1.2      completion of the sale and purchase of the General Sale Assets (other
than in respect of the General Consent Premises, the completion of which shall
take place in accordance with the terms of Schedule 6) and the transfer of the
General Transferred Employees shall occur no more than three Business Days
following the satisfaction of the conditions in Clause 4.1.2; 

 

in each case at such
place and time as the Insolvency Officers, the Sellers and NHI may agree.

 

6.2         Completion Events

 

6.2.1      On each of Japan Completion and General Completion, the relevant parties
shall comply with their respective obligations specified in Parts A, B and/or C
of Schedule 4.

 

6.2.2      The Japan Sellers may waive any or all of the obligations of the
Purchasers and NHI (for and on behalf of the Purchasers) may waive any or all
of the obligations of the Japan Sellers, in respect of Japan Completion, in
each case as set out in Parts A and B of Schedule 4.

 

6.2.3      The General Sellers may waive any or all of the respective obligations
of the Purchasers or the Insolvency Officers, NHI (for and on behalf of the
Purchasers) may waive any or all of the respective obligations of the General
Sellers or the Insolvency Officers, the HK Insolvency Officers may waive any or
all of the respective obligations of the Purchasers, the Sellers, the Singapore
Insolvency Officers or the Australia Insolvency Officers, the Singapore
Insolvency Officers may waive any or all of the respective obligations of the
Purchasers, the Sellers, the HK Insolvency Officers or the Australia Insolvency
Officers, and the Australia Insolvency Officers may waive any or all of the
respective obligations of the Purchasers, the Sellers, the HK Insolvency
Officers or the Singapore Insolvency Officers, in each case in respect of
General Completion, and in each case as set out in Parts A and C of Schedule 4.

 

6.3         Passing of risk

 

The Japan Sale Assets shall be at the sole risk of the
Purchasers from Japan Completion and the General Sale Assets shall be at the
sole risk of the Purchasers from General Completion, and in each case the
Purchasers (and not the relevant Insolvency Officers or any of the Sellers)
shall be responsible for the insurance of the relevant Sale Assets from the
Japan Completion and/or General Completion (as the case may be).

 

19

 

6.4         Breach of Completion Obligations

 

If any party fails to comply with any material
obligation in Clauses 6.1, 6.2 or 8 or Schedule 4 in relation to Japan
Completion or General Completion (as the case may be), NHI (in the case of
non-compliance by any of the Sellers or the Insolvency Officers) or the Sellers
or the Insolvency Officers (in the case of non-compliance by any of the
Purchasers), shall be entitled (in addition to and without prejudice to all
other rights or remedies available, including the right to claim damages) by
written notice to the other parties, served on Japan Completion and/or General
Completion (as the case may be):

 

6.4.1      to terminate this Agreement in respect of Japan Completion or General
Completion, as the case may be, (other than Clauses 1, 2, 6.5, 14, 15 and 16),
without liability on its part or on the part of those on whose behalf notice is
served;

 

6.4.2      to effect Japan Completion or General Completion (as the case may be) so
far as practicable having regard to the defaults which have occurred; or

 

6.4.3      to fix a new date for the Japan Completion or General Completion (as the
case may be) (not being more than 20 Business Days after the agreed date for
Japan Completion and/or General Completion (as the case may be)).

 

6.5         Pre-Completion Indemnity

 

6.5.1      If Japan Completion does not occur by 1 October 2008, the
Purchasers shall indemnify the Insolvent Companies and the Insolvency Officers
and shall keep them indemnified in respect of the period commencing on 1 October 2008
and ending upon the occurrence of Japan Completion or termination of this
Agreement in respect of Japan Completion, whichever is the earlier, in respect
of:

 

(i)           without prejudice to
the provisions of Clause 8.1 and Schedule 5, all Employee Benefits (other than
Severance Pay) in so far as such Employee Benefits relate to the Japan
Transferred Employees employed by such Insolvent Companies; and

 

(ii)          all Occupancy Costs (in
so far as they relate to the Japan Leasehold Premises of such Insolvent
Companies) provided that to the extent any payment of Occupancy Costs is
proposed to be made (in advance) during the period from 1 October 2008 to
the Long Stop Date, which payment is in respect of Occupancy Costs which will
arise during the period following the Long Stop Date, such payment may only be
made with the prior written consent of NHI.

 

6.5.2      If General Completion does not occur by 1 October 2008, the
Purchasers shall indemnify the Insolvent Companies and the Insolvency Officers
and keep them indemnified in respect of the period commencing on 1 October 2008
and ending upon the occurrence of General Completion or termination of this
Agreement in respect of General Completion, whichever is the earlier, in
respect of:

 

(i)           without prejudice to
the provisions of Clause 8.1 and Schedule 5, all Employee Benefits (other than
Severance Pay) in so far as such Employee Benefits relate to the General
Transferred Employees employed by such Insolvent Companies; and

 

20

 

(ii)                               all Occupancy Costs (in so far as they relate to the General
Leasehold Premises of such Insolvent Companies) provided that to the extent any
payment of Occupancy Costs is proposed to be made (in advance) during the
period from 1 October 2008 to the Long Stop Date, which payment is in
respect of Occupancy Costs which will arise during the period following the
Long Stop Date, such payment may only be made with the prior written consent of
NHI.

 

6.5.3                   Without prejudice to Clauses 6.5.1 and 6.5.2, subject to being provided with proper evidence and reasonable
details of each payment involved (including a copy of the invoice, confirmation
of the amount due and explanation of the nature of the payment and details of
the parties involved) at least five Business Days or such lesser period as NHI
may agree in advance of the proposed date for payment, NHI shall put the
relevant Insolvent Company or the Insolvency Officers (as the case may be) in
funds to discharge payments in respect of the relevant Employee Benefits and
the relevant Occupancy Costs by no later than one Business Day in advance of
them becoming legally due and payable.

 

6.5.4                   If this Agreement is terminated, and the Purchasers have made any
payments in respect of any Employee Benefits and/or Occupancy Costs in respect
of a period after 31 October 2008, then such Purchasers shall be allowed
to claim as unsecured creditors in respect of such amounts.

 

7                                      Future
transactions - Korea

 

7.1                            The parties
acknowledge that NHI intends to make an offer in accordance with the provisions
of Clause 8.1 and Schedule 5 to all of the Transferred Employees employed in or
seconded to the Korean Branches. Notwithstanding the terms of Schedule 5, the
parties agree that such offers shall be binding and become unconditional once
the Korean Assets have been acquired by one or more of the Purchasers (and/or
other member(s) of the Purchaser Group) which shall, to the extent it
occurs, be effected by way of a separate agreement between NHI and the entities
within the Lehman Brothers International Group which own the Korean Branches.

 

7.2                            NHI agrees
(for and on behalf of the Purchasers) that, if it, any other Purchaser(s) and/or
any other member of the Purchaser Group acquires the Korean Assets, [***].

 

7.3                            Debentures

 

7.3.1                   The Sellers, the Insolvency Officers and NHI agree that they shall
in good faith enter into discussions and commence negotiations in respect of
the acquisition by NHI, any other Purchasers and/or any other member of the
Purchaser Group of the school and club debentures (the “Debentures”) held as at the date of this
Agreement by certain of the Group Companies for the use of the Transferred
Employees.

 

7.3.2                   The Sellers and the Insolvency Officers agree and acknowledge that
they shall, in so far as they are able, use reasonable endeavours to continue
to make the 

 

21

 

Debentures available for the use of the
Transferred Employees for a period of four months from the date of this
Agreement (or as mutually agreed between the parties) or until such date on
which the relevant parties reach an agreement on the acquisition by NHI and/or
any other member of the Purchaser Group of the Debentures, whichever is the
earlier. NHI shall bear all costs relating to making the Debentures available.

 

8                                      Transferred
Employees and Leasehold Premises

 

8.1                            On and with
effect from the date of this Agreement, the provisions of Schedule 5 will apply
in respect of the Japan Transferred Employees and the General Transferred
Employees.

 

8.2                            On and with
effect from the date of this Agreement, the provisions of Schedule 6 will apply
in respect of the Japan Leasehold Premises and the General Leasehold Premises.

 

9                                      Book
Debts

 

If any person pays to a Purchaser, and that
Purchaser actually receives any payment in respect of, any Book Debt or any
other sum due to a Seller or Insolvency Officer or other Group Company, such
Purchaser shall promptly pay all such monies to the relevant Seller or
Insolvency Officer or other Group Company (as the case may be) as such relevant
party may direct. Until all such monies are so paid they shall be kept in an
account separate from such Purchaser’s own monies and held on trust for the
Seller or Insolvency Officer or other Group Company (as the case may be).

 

10                               Apportionments

 

10.1                     Payments in
advance

 

10.1.1            Without prejudice to NHI’s liability under the indemnity in respect
of Occupancy Costs under Clause 6.5, NHI shall pay to the relevant Seller or
relevant Insolvency Officers (as the case may be) the apportioned value of all
periodic expense payments made by a Seller or Insolvency Officer or other Group
Company (as the case may be) in connection with the relevant Sale Assets and
for the direct or indirect benefit of a Purchaser in respect of any period
after Japan Completion or General Completion (as the case may be). Such
periodic expense payments shall be deemed to accrue equally from day to day and
shall be apportioned as at Japan Completion or General Completion (as the case
may be). The apportionment shall be agreed between the Insolvency Officers, the
Sellers and NHI within two months of Japan Completion or General Completion (as
the case may be).

 

10.1.2            For the avoidance of doubt, the payments referred to in Clause 10.1.1 shall include payments for services contracted for or otherwise
provided in connection with the relevant General Leasehold Premises or Japan
Leasehold Premises (as the case may be) (in respect of any period after Japan
Completion or General Completion (as the case may be)).

 

22

 

10.2                     Orders

 

The Purchasers shall pay for all goods or
services ordered by a Seller, Insolvency Officer or any other Group Company,
relating to any of the Sale Assets and for the benefit of the relevant
Purchaser, which have not been delivered or performed prior to Japan Completion
or General Completion (as the case may be) but are actually delivered or
performed after Japan Completion or General Completion (as the case may be) and
(where terminated by the relevant Purchaser) the cost of termination of such
goods or services (as the case may be). Payment shall be made within five
Business Days of the date of delivery to the relevant Purchaser of an invoice
in respect of those goods or services or their termination, by the relevant
Seller or the supplier of such goods or services. The Purchasers shall
indemnify and keep the relevant Seller (for itself or on behalf of such other
Group Company) and relevant Insolvency Officers and each of them fully
indemnified against any Losses arising as a result of any of the Purchasers’
failure to comply with the terms of this Clause 10.2.

 

10.3                     Pre-Completion
liabilities

 

For the avoidance of doubt, except as
expressly provided otherwise in this Agreement and without prejudice to Clause 6.5:

 

10.3.1            each of the Japan Sellers shall continue to be responsible for (and
the Purchasers shall have no obligation to discharge any liability in respect
of) all debts payable by it, and all claims and liabilities (including
contingent claims and liabilities) outstanding against it, or any of its
assets, as at Japan Completion; and

 

10.3.2            each of the General Sellers shall continue to be responsible for
(and the Purchasers shall have no obligation to discharge any liability in
respect of) all debts payable by it, and all claims and liabilities (including
contingent claims and liabilities) outstanding against it, or any of its
assets, as at General Completion.

 

10.4                     Post-Completion
liabilities

 

For the avoidance of doubt, the Purchasers
shall pay, satisfy and discharge all debts and liabilities in respect of the:

 

10.4.1            Japan Sale Assets and Japan Transferred Employees incurred on and
after Japan Completion; and

 

10.4.2            General Sale Assets and General Transferred Employees incurred on
and after General Completion,

 

and
shall in each case indemnify the Sellers and Insolvency Officers (where
applicable) from and against all claims and liabilities in respect thereof.

 

11                                Retained Records

 

11.1                      Ownership and maintenance of Retained Records

 

11.1.1             The Purchasers agree
and acknowledge that:

 

(i)                                  other than the Transferred Sale Assets Records, all records of the
Lehman Brothers International Group (including without limitation the Retained 

 

23

 

Records) shall
remain the property of the relevant members of the Lehman Brothers
International Group;

 

(ii)                             due to their nature
and form, the Retained Records may either be comprised within the Sale Assets
or are only accessible through use of the Sale Assets; and

 

(iii)                          after Japan Completion or General Completion (as
the case may be), the Purchasers or other members of the
Purchaser Group may come into possession of the Retained Records or the
relevant Sale Assets within which
the Retained Records are contained or through which the Retained Records must
be accessed.

 

11.1.2             Subject to Clause
11.3, in respect of the Retained Records that come
into the Purchasers’ (or other members of the Purchaser Group’s) possession
either on or following Japan Completion or General
Completion (as the case may be), each of the relevant Purchasers shall:

 

(i)                                  hold the Retained Records as custodian for and on behalf of the relevant Sellers and relevant
Insolvency Officers (where applicable);

 

(ii)                               not have title to or
further right of possession in respect of, or exercise any lien over, any of
the Retained Records;

 

(iii)                            other than in
respect of the Transferred Employees Records, not have the right to view,
access, use, disseminate, copy or otherwise deal with any of the Retained Records, whether for business or otherwise;

 

(iv)                           so far as is
practicable, not manipulate, tamper, corrupt or otherwise alter any historical
customer, financial, business or trading information or data;

 

(v)                              not hold itself out
as the owner of any of the Retained Records;

 

(vi)                           not sell or offer
for sale, any of the Retained Records;

 

(vii)                        at its own expense,
store, maintain and backup the Retained Records;

 

(viii)                     comply with all
obligations in relation to Chinese walls, information barriers, any obligation
of confidentiality, data and privacy protection and any applicable legal or
regulatory obligations and constraints that may apply in respect of the
Retained Records and keep the Retained Records separate from the Purchasers’
records or the records of any other member of the Purchaser Group;

 

(ix)                             comply with any
directions or instructions of the Sellers and the Insolvency Officers (where
applicable) from time to time in respect of the maintenance, access, storage,
removal, deletion, transfer, copying or other dealings in respect of the Retained Records (to the extent necessary and without causing any Losses
to any Purchaser); and

 

(x)                                procure other members of the Purchaser Group to comply with the
provisions of Clause 11.1.2 above.

 

11.1.3             In respect of the Transferred Employees Records, the Purchasers shall:

 

(i)                                  not have title to or
further right of possession in respect of any of the Transferred Employees
Records; and

 

24

 

(ii)                               have the right to
view, access, use and make copies of the Transferred Employees Records.

 

11.1.4             Except as expressly
provided in this Agreement, the fact that any assets are Retained Records shall
not entitle the Purchasers to any compensation, damages or reduction in or
repayment of the relevant Purchase Price paid or payable or entitle the
Purchasers to rescind this Agreement, all rights to which are hereby expressly
waived and released by the Purchasers.

 

11.1.5             Subject to compliance with any data privacy or data protection,
banking secrecy, client confidentiality, obligations of confidence, or any
other applicable laws, regulations, rules or practice, or their respective
legal or fiduciary duties, and subject (where relevant) to obtaining the
requisite client consent, the Insolvency Officers and the Sellers will make
available any Retained Records which are reasonably requested in writing by the
Purchasers for a proper purpose. The Purchasers shall indemnify and keep the
relevant Insolvency Officer(s) and/or Sellers (each for itself and on
behalf of any other Group Company) and each of them fully indemnified against
any Losses arising out of the use by the Purchasers (or any other member of the
Purchaser Group and their respective directors, officers, employees or agents)
of any such Retained Records.

 

11.2                      Access to Retained Records

 

11.2.1             Subject to the terms and conditions set forth in this Clause 11.2,
the Purchasers shall, with effect from Japan Completion or General Completion
(as the case may be) and continuing for a period of 12 months thereafter,
provide or procure the provision of the following services to the Insolvency
Officers and the Japan Sellers (“Services”):

 

(i)                                  access to and use of a reasonable extent of the office premises
acquired or occupied by any of the Purchasers pursuant to the transactions
contemplated in this Agreement which the relevant Sellers were occupying and
using before Japan Completion or General Completion (as the case may be) (the
specifics of which access and use shall be agreed by NHI and each Insolvency
Officer as the case may be, as soon as reasonably practicable after Japan
Completion or General Completion (as the case may be));

 

(ii)                               access to and use (including the right to make copies) of the
Retained Records (including the Transferred Sale Assets Records but excluding
the Transferred Employees Records) that relate or belong to any of the Sellers,
the Business and/or any other business of the Lehman Brothers International
Group, in so far as they are in the Purchasers’ possession, at the time of the
request for access and howsoever they are held; and

 

(iii)                            the services of (part of) the Transferred Employees who are in the
employ of a Purchaser or another member of the Purchaser Group at the time of
the request for services, in so far as may be reasonably required:

 

(a)                        so that the Insolvency Officers and the debtors-in-possession of the
Japan Sellers are and will be able to discharge their duties as Insolvency
Officers or debtors-in-possession of the Japan Sellers in respect of each of
the relevant Insolvent Companies and other 

 

25

 

entities in the Lehman Brothers International
Group that may become insolvent, and

 

(b)                       in respect of any Group Company, otherwise for the purpose of
preserving the value of the assets of each of the Group Companies  or liquidating any Group Company (the
specifics of which services shall be agreed by NHI, the Insolvency Officers and
the debtors-in-possession of the Japan Rehabilitation Company).

 

For the purpose of this Clause 11.2, “reasonable”
shall mean reasonable in light of the Insolvency Officers’ and
debtors-in-possession of the Japan Sellers respective obligations to discharge
their statutory and other duties as Insolvency Officers and
debtors-in-possession of the Japan Sellers. For avoidance of doubt, the
Transferred Employees shall, subject to Clause 8.1 and Schedule 5, at all times
remain under the control of and employees of, the Purchasers.

 

11.3                      Each of the Insolvency Officers, debtors-in-possession of
the Japan Sellers and the Purchasers shall cooperate with one another and use
its good faith and commercially reasonable efforts to effect the efficient and
timely provision and receipt of such Service.

 

11.4                      The Insolvency Officers and debtors-in-possession of the
Japan Sellers shall, in receiving the benefit of the Services, comply with and
procure that their respective representatives comply with all security, health
and safety and other site requirements applicable to the premises in which the
Services are provided.

 

11.5                      So far as
necessary, within 2 months from Japan Completion, the parties shall use their
reasonable efforts to enter into one or more transitional services agreements
in order to accurately and comprehensively define the Services to be provided
under this Agreement by the Purchasers to the Insolvency Officers.

 

11.6                      The
Purchasers shall provide or procure the provision of, and the Insolvency
Officers and debtors-in-possession of the
Japan Sellers shall accept, the Services in a manner and to such
an extent as would not breach any obligation of confidence, privacy or data
protection law or any other applicable law or regulation.

 

11.7                      Data
Protection

 

From
Japan Completion or General Completion (as the case may be), each Purchaser
shall use reasonable endeavours to do all things necessary to ensure that the
transfer to it of any data forming part of the relevant Sale Assets or the
relevant Transferred Sale Assets Records is in all material respects in
compliance with all applicable data protection and privacy laws and such other
regulatory obligations and constrains that may be applicable. If such
compliance requires the alteration of any registration, the giving of any
notice or the obtaining of any consent (of a data subject or otherwise) by any
of the Sellers or Insolvency Officers, then the relevant Sellers or relevant
Insolvency Officers (as the case may be) shall, at the relevant Purchaser’s
request and expense, use reasonable endeavours to procure that such steps are
taken.

 

26

 

12                               Warranties

 

12.1                     Sellers’
Warranties

 

Each Seller warrants to the relevant
Purchasers as at the date of this Agreement that:

 

12.1.1            it is validly existing and is a company duly incorporated under the
law of its jurisdiction of incorporation;

 

12.1.2            it has the legal right and full power and authority to enter into
and (subject to any approvals required pursuant to Clause 4.1) perform this
Agreement and any other documents to be executed by it pursuant to or in
connection with this Agreement;

 

12.1.3            the documents referred to in Clause 12.1.2 will, when
executed, constitute valid and binding obligations on it in accordance with
their respective terms; and

 

12.1.4            it (other than an Insolvent Company) has taken or will have taken by
Japan Completion or General Completion (as the case may be) (in which the sale
of its Sale Assets or transfer of its Transferred Employees is to be completed)
all corporate action required by it to authorise it to enter into and to
perform this Agreement and any other documents to be executed by it pursuant to
or in connection with this Agreement.

 

12.2                     Purchasers’
Warranties

 

NHI (for and on behalf of the Purchasers)
warrants and represents to the Sellers and the Insolvency Officers as at the
date of this Agreement that:

 

12.2.1            each Purchaser is validly existing and is a company duly
incorporated under the law of its jurisdiction of incorporation and has full
power to conduct its business as conducted at the date of this Agreement;

 

12.2.2            each Purchaser has the legal right and full power and authority to
enter into and subject to any approvals required pursuant to Clause 4.1 perform
this Agreement and any other documents to be executed by it pursuant to or in
connection with this Agreement;

 

12.2.3            NHI has the full power and authority to enter into (subject to any
approvals required pursuant to Clause 4.1) and perform this Agreement and any
other documents to be executed by it pursuant to or in connection with this
Agreement, for and on behalf of the Purchasers;

 

12.2.4            the documents referred to in Clause 12.2.2 will, when executed,
constitute valid and binding obligations on the relevant Purchaser, in
accordance with their respective terms; and

 

12.2.5            NHI:

 

(i)                                  has and at Japan Completion will have sufficient internal funds
available to pay the Japan Purchase Price and any expenses incurred by it
and/or the other Purchasers in connection with the transactions contemplated by
this Agreement (insofar as they relate to Japan Completion);

 

(ii)                               has and at General Completion will have sufficient internal funds
available to pay the General Purchase Price and any expenses incurred by it
and/or 

 

27

 

the other Purchasers in connection with the
transactions contemplated by this Agreement;

 

(iii)                            has and at each of Japan Completion and General Completion will have
the resources and capabilities (financial or otherwise) to perform its and/or
the other Purchasers’ relevant obligations hereunder; and

 

(iv)                           no other Purchaser has incurred any obligation, commitment,
restriction or Losses of any kind which would impair or adversely affect such
resources and capabilities.

 

13                               Exclusions

 

13.1                     Exclusion of
warranties

 

All representations, warranties, conditions,
guarantees and stipulations, express or implied, statutory, customary or
otherwise in respect of the Sale Assets or the Transferred Employees or any of
the rights, title and interests transferred or agreed to be transferred
pursuant to this Agreement are expressly excluded (including without limitation
warranties, conditions as to title, rights to dispose, quiet possession,
freedom from encumbrances, merchantable or satisfactory quality, fitness for
purpose and description). Except as expressly set out in this Agreement any lists
contained in any Schedule, Exhibit or annex are for guidance only and are
not exhaustive or complete lists of the items in question and shall not
constitute any warranty in respect of the ownership or interest of any Seller
or Insolvency Officer in the listed items or otherwise.

 

13.2                     Condition of Sale
Assets

 

The Sale Assets are sold in their condition
and locations at Japan Completion or General Completion (as the case may be)
and subject to all faults, liens, executions, distraints, encumbrances and
claims of third parties, of which the expense of discharging shall be met by
the Purchasers.  The Sellers shall
provide the Purchasers with such information or assistance as is reasonably
necessary to enable the Purchasers to obtain the necessary discharges. Unless
otherwise required by law (and then only to that extent), none of the Sellers
and the Insolvency Officers shall be liable for any Losses or damage of any
kind whatever, consequential or otherwise, arising out of, or due to, or caused
by any defects or deficiencies in any of the Sale Assets.

 

13.3                     Purchasers’
acknowledgement

 

13.3.1            The Purchasers agree that the terms and conditions of this Agreement
and all documents entered into pursuant to this Agreement and the exclusions
and limitations contained in them respectively are fair and reasonable having
regard to the following:

 

(i)                                  that the sale of the Sale Assets and the transfer of the Transferred
Employees and the Transferred Sale Assets Records include sale and transfer by
the Insolvent Companies in circumstances where it is usual that no
representations and warranties can be given by or on behalf of the Insolvent
Companies, the Insolvency Officers or those Sellers that are
debtors-in-possession;

 

(ii)                               that the Purchasers have relied solely upon their own opinions and
those of their representatives and/or professional advisors concerning the Sale

 

28

 

Assets and Transferred Sale Assets Records;
their quality, condition, description, fitness and/or suitability for any
purpose, the possibility that some or all of them may have defects not apparent
on inspection and examination, and the use they intend or propose to put them
to;

 

(iii)                            that the Purchasers have relied solely upon their own opinions and those
of their professional advisors concerning the Transferred Employees;

 

(iv)                           that the Purchasers have agreed to purchase the Sale Assets for a
consideration which takes into account the risks to the Purchasers represented
by the parties’ belief that the said exclusions and limitations are or would be
recognised by the courts;

 

(v)                              that the Purchasers, their representatives and advisers have been
given an opportunity to obtain information from the Sellers and/or Insolvency
Officers (where applicable) relating to the Sale Assets and Transferred Sale
Assets Records; and

 

(vi)                           that the Purchasers, their representatives and advisers have been
given an opportunity to obtain information from the Sellers and/or Insolvency
Officers (where applicable) relating to the Transferred Employees.

 

13.3.2            The Purchasers acknowledge that whenever and wherever in this
Agreement they have agreed to indemnify any Insolvency Officers or the
debtors-in-possession of the Japan Sellers, they shall also indemnify any firm,
partner, employee, agent, adviser or representative of such person (in their
capacity as such with respect to the Insolvency Officers’ duties to the
Insolvent Companies) to the same extent and in the same regard.

 

13.4                     No rescission

 

The Purchasers acknowledge that if the
Sellers do not have title or unencumbered title to any or all of the Sale
Assets, if any Lease cannot be transferred to the Relevant Purchasers for any
reason whatsoever or if the Purchasers cannot exercise any right conferred or
purported to be conferred on them by this Agreement, this shall not be a ground
or grounds for rescinding, avoiding or varying any or all of the provisions of
this Agreement, or for any reduction or repayment of any part of the Purchase
Price paid or payable.

 

14                               Confidentiality

 

14.1                     Announcements

 

No announcement or circular in connection
with the existence or the subject matter of this Agreement shall at any time be
made or issued by or on behalf of any party without the prior written approval
of all the Sellers, the Insolvency Officers and NHI. This shall not affect any
announcement or circular required by current insolvency practice, law or any
regulatory body or the rules of any recognised stock exchange, or as
required to enable the Insolvency Officers or the debtors-in-possession of the
Japan Rehabilitation Company to properly carry out the duties of their office,
but the party with an obligation to make an announcement or issue a circular
shall consult with the other parties (NHI (for and on behalf of the Purchasers (where
applicable)) insofar as is reasonably practical before complying with any such
obligation.

 

29

 

14.2                     Confidentiality

 

14.2.1            The parties acknowledge that any confidentiality agreement or
undertaking between them in respect of the transactions contemplated by this
Agreement, including the Non-Disclosure Agreement, shall cease to have any
force or effect from the date of this Agreement.

 

14.2.2            Subject to Clauses 14.1 and 14.2.3:

 

(i)                                  each of the parties shall treat as strictly confidential and not
disclose or use any information received or obtained as a result of entering
into this Agreement (or any agreement entered into pursuant to this Agreement)
which relates to:

 

(a)                        the existence and the provisions of this Agreement and of any
agreement entered into pursuant to this Agreement;

 

(b)                       the negotiations relating to this Agreement (and any such other
agreements); or

 

(c)                        any contract entered into pursuant to Clause 8.1 and Schedule 5;

 

(ii)                               the Sellers and Insolvency Officers shall treat as strictly
confidential and not disclose or use any information relating to the relevant
Sale Assets and the relevant Transferred Employees following Japan Completion
or General Completion (as the case may be) and any other information relating
to the business, financial or other affairs (including future plans and
targets) of the Purchaser;

 

(iii)                            the Purchasers shall treat as strictly confidential and not disclose
or use any information relating to the business, financial or other affairs
(including future plans and targets) of the Sellers or Insolvency Officers.

 

14.2.3            Clause 14.2.2 shall not prohibit disclosure or use of
any information if and to the extent:

 

(i)                                  the disclosure or use is required by current insolvency practice or
to enable the Insolvency Officers or the debtors-in-possession of the Japan
Rehabilitation Company to properly carry out the duties of their office;

 

(ii)                               the disclosure or use is made by the Insolvency Officers or the
debtors-in-possession of the Japan Rehabilitation Company to any subsequent
supervisor, liquidator or other officeholder of an Insolvent Company;

 

(iii)                            the disclosure or use is required by law, any regulatory body or any
recognised stock exchange;

 

(iv)                           the disclosure or use is required to vest the full benefit of this
Agreement in any of the parties or is required in order for the parties to
perform their obligations pursuant to this Agreement;

 

(v)                              the disclosure or use is required for the purpose of any judicial
proceedings arising out of this Agreement or any other agreement entered into
under or pursuant to this Agreement or the disclosure is made to a taxation
authority in connection with the taxation affairs of the disclosing party;

 

30

 

(vi)                         the disclosure is made to professional advisers of any of the
parties on terms that such professional advisers undertake to comply with the
provisions of Clause 14.2.2 in respect of such information as if they
were a party to this Agreement;

 

(vii)                      the information is or becomes publicly available (other than by
breach of any confidentiality agreement or of this Agreement);

 

(viii)                   the Sellers, Insolvency Officers and NHI have given prior written
approval to the disclosure or use; or

 

(ix)                           the information is independently developed after Japan Completion or
General Completion (as the case may be).

 

15                               Liability
of Insolvency Officers

 

15.1                     The HK Insolvency
Officers have entered into and signed this Agreement as agents for and on
behalf of the HK Insolvent Companies in their capacity as provisional
liquidators. In their capacity as provisional liquidators, none of the HK
Insolvency Officers, their firm, partners, employees, agents, advisers and
representatives shall incur any personal liability whatever in respect of any
of the obligations undertaken by any of the HK Insolvent Companies; or in
respect of any failure on the part of any of the HK Insolvent Companies to
observe, perform or comply with any such obligations; or under or in relation
to any associated arrangements or negotiations; or under any document or
assurance made pursuant to this Agreement. In their capacity as provisional
liquidators, the HK Insolvency Officers are party to this Agreement in their
personal capacity only for the purpose of receiving the benefit of all
limitations, exclusions, undertakings, covenants and indemnities in their
favour contained in this Agreement.

 

15.2                     The Singapore Insolvency
Officers have entered into and signed this Agreement as agents for and on
behalf of the Singapore Insolvent Company in their capacity as provisional
liquidators. In their capacity as provisional liquidators, none of the
Singapore Insolvency Officers, their firm, partners, employees, agents,
advisers and representatives shall incur any personal liability whatever in
respect of any of the obligations undertaken by any of the Singapore Insolvent
Company; or in respect of any failure on the part of any of the Singapore
Insolvent Company to observe, perform or comply with any such obligations; or
under or in relation to any associated arrangements or negotiations; or under
any document or assurance made pursuant to this Agreement. In their capacity as
provisional liquidators, the Singapore Insolvency Officers are party to this
Agreement in their personal capacity only for the purpose of receiving the
benefit of all limitations, exclusions, undertakings, covenants and indemnities
in their favour contained in this Agreement.

 

15.3                     The Australia Insolvency
Officers have entered into and signed this Agreement as agents for and on
behalf of the Australia Insolvent Companies in their capacity as
administrators. In their capacity as administrators, none of the Australia
Insolvency Officers, their firm, partners, employees, agents, advisers and
representatives shall incur any personal liability whatever in respect of any
of the obligations undertaken by any of the Australia Insolvent Companies; or
in respect of any failure on the part of any of the Australia Insolvent
Companies to observe, perform or comply with any such obligations; or under or
in relation 

 

31

 

to any associated
arrangements or negotiations; or under any document or assurance made pursuant
to this Agreement. In their capacity as administrators, the Australia
Insolvency Officers are party to this Agreement in their personal capacity only
for the purpose of receiving the benefit of all limitations, exclusions,
undertakings, covenants and indemnities in their favour contained in this
Agreement.

 

16                               Other
Provisions

 

16.1                     Further
Assurances

 

Subject to the
terms of this Agreement and, in relation to any Insolvent Company or Seller
that has become insolvent, any court approval that may be required or
considered desirable, and following Japan Completion or General Completion (as
the case may be): (i) the Sellers shall (at the Purchasers’ expense)
execute and deliver (or procure the execution and delivery of) such documents,
and do such things, as may reasonably be required by NHI to vest in the Purchasers
the whole of the title to the Sale Assets; and (ii) each party shall from
time to time execute and deliver (or procure the execution and delivery of)
such documents, and do such things, as any other party may reasonably require
to give that party the full benefit of this Agreement.

 

16.2                     Whole
Agreement

 

16.2.1                        This Agreement contains the whole agreement between the parties
relating to the subject matter of this Agreement at the date hereof to the
exclusion of any terms implied by law which may be excluded by contract and
supersedes any previous written or oral agreement between the parties in
relation to the matters dealt with in this Agreement.

 

16.2.2                        The Purchasers acknowledge that they have not been induced to enter
into this Agreement by any representation, warranty or undertaking not
expressly incorporated into it.

 

16.2.3                        So far as is permitted by law and except in the case of fraud, each
of the parties agrees and acknowledges that its only right and remedy in
relation to any representation, warranty or undertaking made or given in
connection with this Agreement shall be for breach of the terms of this
Agreement to the exclusion of all other rights and remedies (including those in
tort or arising under statute).

 

16.2.4                        In Clauses 16.2.1 to 16.2.3, “this
Agreement” includes the Non-Disclosure Agreement and all documents entered into
pursuant to this Agreement.

 

16.3                     Reasonableness

 

Each of the parties confirms that it has
received independent legal advice relating to all the matters provided for in
this Agreement, including the terms of Clause 16.2, and agrees that the provisions of this Agreement and all documents
entered into pursuant to this Agreement are fair and reasonable.

 

16.4                     No
Assignment

 

16.4.1                        Except as otherwise expressly provided in this Agreement and this
Clause 16.4, no party may without the prior written consent of the Insolvency
Officers, the Sellers 

 

32

 

and
NHI, assign, grant any security interest over, hold on trust or otherwise
transfer the benefit of the whole or any part of this Agreement.

 

16.4.2                        Except as otherwise expressly provided in this Agreement, a party
may, without the consent of any other party, assign to a subsidiary the benefit
of the whole or any part of this Agreement provided however that such
assignment shall not be absolute but shall be expressed to have effect only for
so long as the assignee remains a subsidiary of the party concerned.

 

16.4.3                        The Insolvency Officers may in their absolute discretion assign the
benefit of Clause 11 to any person, other than the Purchasers, who
acquires any asset, right or interest in the Lehman Brothers International
Group.

 

16.5                     UK:
Third Party Rights

 

16.5.1                        A person who is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) Act 1999 to enforce any term of, or enjoy
any benefit under this Agreement, except to the extent set out in this Clause 16.5.

 

16.5.2                        Each of Linklaters, NM Rothschild & Sons Limited and KPMG
Hong Kong may separately enforce and rely on the provisions of Clauses 16.8.2 and 16.8.3 to the same extent as if it were a party
to this Agreement.

 

16.5.3                        Any Insolvency Officers appointed in respect of any Group Company
after the date of this Agreement may enforce and rely on the provisions of this
Agreement to the same extent as if they were a party to this Agreement.

 

16.6                     Variation

 

No variation of this Agreement shall be
effective unless in writing and signed by Insolvency Officers, the Sellers and
NHI.

 

16.7                     Time
of the Essence

 

Time shall be of the essence of this
Agreement both as regards any dates and periods mentioned and as regards any
dates and periods which may be substituted for them in accordance with this
Agreement or by agreement in writing between the parties.

 

16.8                     Costs

 

16.8.1                        Subject to Clause 16.8.2, each party shall
bear its own costs in connection with the preparation, negotiation, entry and
performance of this Agreement.

 

16.8.2                        On Japan Completion, General Completion or termination of this
Agreement, whichever is earliest, the Purchasers shall (as referred to in
paragraph 1.2.2 of Part A of Schedule 4), pay the Advisor Fees in respect
of the transaction expenses of the HK Insolvency Officers’ and their
professional advisers, in connection with the preparation, negotiation, entry
and performance of this Agreement.

 

16.8.3                        The Advisor Fees
shall be paid by telegraphic transfer on or by the date due for payment, in the
amounts and in favour of the relevant recipients set out below and to the bank
accounts of the relevant recipients (as notified in writing by the relevant
recipients to NHI) in immediately available funds for same day value:

 

33

 

	
  (i)

  	
   

  	
  Recipient:

  	
   

  	
  NM
  Rothschild & Sons Limited

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  Amount:

  	
   

  	
  US$[***]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  Recipient:

  	
   

  	
  Linklaters

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  Amount:

  	
   

  	
  US$[***]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (i)

  	
   

  	
  Recipient:

  	
   

  	
  KPMG Hong
  Kong

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  Amount:

  	
   

  	
  US$[***]

  

 

16.9                     Notarial
Fees, Registration, Stamp and Transfer Taxes and Duties

 

The Purchasers shall bear the cost of all
notarial fees and all registration, stamp and transfer taxes (including
consumption tax, value added tax and goods and services tax) and duties or
their equivalents in all jurisdictions where such fees, taxes and duties are
payable as a result of the transactions contemplated by this Agreement. The
Purchasers shall be responsible for arranging the payment of all such fees,
taxes (including consumption tax, value added tax and goods and services tax)
and duties, including fulfilling any administrative or reporting obligation
imposed by the jurisdiction in question in connection with the payment of such
taxes and duties. The Purchasers shall indemnify the other parties and any
other member of each of their respective groups against any Losses suffered by such
party or member of such party’s group as a result of the Purchasers failing to
comply with their obligations under this Clause 16.9.

 

16.10              Interest

 

If any party defaults in the payment when due
of any sum payable under this Agreement (howsoever determined) the liability of
that party shall be increased to include interest on such sum from the date
when such payment is due until the date of actual payment (as well after as
before judgment) at a rate per annum of 2 per cent. above the base lending rate
from time to time of HSBC plc. Such interest shall accrue from day to day.

 

16.11               Notices

 

16.11.1                  Any notice or other communication in connection with this Agreement
(each, a “Notice”) shall be:

 

(i)                      in writing in English;

 

(ii)                   delivered by hand, fax, registered post or by courier using an
internationally recognised courier company.

 

16.11.2                  A Notice to a Seller shall be sent to the Seller at the address set
out against its  respective name in
Schedule 1 and shall be addressed to its Directors.

 

16.11.3                  A Notice to the Japan Sellers shall be sent to such party at the
following address, or such other person or address as the Japan Sellers may
notify to the Insolvency Officers, the other Sellers and NHI from time to time:

 

34

 

Oh-ebashi LPC &
Partners

2F Kishimoto Building 2-2-1, Marunouchi, Chiyoda-ku

Tokyo, 100-005

Japan

 

	
  Fax:

  	
   

  	
  +813 5224 5565

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  Nobutaka Tanaka

  

 

16.11.4                  A Notice to the HK Insolvency Officers shall be sent to such party
at the following address, or such other person or address as the HK Insolvency
Officers may notify to the Singapore Insolvency Officers, Australia Insolvency
Officers, the Sellers and NHI from time to time:

 

KPMG

8th Floor,  Princes Building 

16-20 Chater Road,

Central, Hong
Kong

 

	
  Fax:

  	
   

  	
  +852 2869 7357

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  Patrick Cowley

  

 

16.11.5                  A Notice to the Singapore Insolvency Officers shall be sent to such
party at the following address, or such other person or address as the
Singapore Insolvency Officers may notify to the HK Insolvency Officers,
Australia Insolvency Officers, the Sellers and NHI from time to time:

 

KPMG

16 Raffles Quay, #22-00

Singapore

 

	
  Fax:

  	
   

  	
  +65 6225 0984

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  Peter Chay Fook Yuen

  

 

16.11.6                  A Notice to the Australia Insolvency Officers shall be sent to such
party at the following address, or such other person or address as the
Australia Insolvency Officers may notify to the HK Insolvency Officers,
Singapore Insolvency Officers, the Sellers and NHI from time to time:

 

PPB

Level 46

MLC, 19 Martin
Place

Sydney NSW
2000

Australia

 

	
  Fax:

  	
   

  	
  + 61 2 81163111

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  Neil Geoffrey Singleton and Tony Sims

  

 

16.11.7                  A Notice to a Purchaser shall be sent to NHI at the following
address, or such other person or address as NHI may notify to the Insolvency
Officers and the Sellers from time to time:

 

Nomura
International plc

Nomura House

 

35

 

1 St Martin’s-le-Grand

London EC1A 4NP

Tel: (44 20)
7521 2000

Fax: (44 20) 7521 2121

 

Attention:
General Counsel and Company Secretary

 

16.11.8                  A Notice shall be effective upon receipt and shall be deemed to have
been received:

 

(i)                      at the time of delivery, if delivered by hand, registered post or
courier;

 

(ii)                   at the time of transmission in legible form, if delivered by fax.

 

16.12              Invalidity

 

16.12.1                 If any provision in this Agreement shall be held to be illegal,
invalid or unenforceable, in whole or in part, the provision shall apply with
whatever deletion or modification is necessary so that the provision is legal,
valid and enforceable and gives effect to the commercial intention of the
parties.

 

16.12.2                 To the extent it is not possible to delete or modify the provision,
in whole or in part, under Clause 16.12.1, then such provision
or part of it shall, to the extent that it is illegal, invalid or
unenforceable, be deemed not to form part of this Agreement and the legality,
validity and enforceability of the remainder of this Agreement shall, subject
to any deletion or modification made under Clause 16.12.1, not be affected.

 

16.13              Counterparts

 

This Agreement may be entered into in any
number of counterparts, all of which taken together shall constitute one and
the same instrument. Any party may enter into this Agreement by executing any
such counterpart.

 

16.14              Governing
Law and Submission to Jurisdiction

 

16.14.1                 This Agreement and any non-contractual obligations arising out of or
in connection with it shall be governed by and construed in accordance with
English law.

 

16.14.2                 Each of the parties irrevocably agrees that the courts of England
are to have non-exclusive jurisdiction to settle any dispute which may arise
out of or in connection with this Agreement and the documents to be entered
into pursuant to it and that accordingly any proceedings arising out of or in
connection with this Agreement and the documents to be entered into pursuant to
it shall be brought in such courts. Each of the parties irrevocably submits to
the jurisdiction of such courts and waives any objection to proceedings in any
such court on the ground of venue or on the ground that proceedings have been
brought in an inconvenient forum.

 

16.15              Appointment
of Process Agent

 

16.15.1                 The HK Insolvency Officers hereby irrevocably appoint Hackwood
Secretaries Limited of One Silk Street, London EC2Y 8HQ as their agent to
accept service of process in England in any legal action or proceedings arising
out of this 

 

36

 

Agreement,
service upon whom shall be deemed completed whether or not forwarded to or
received by the HK Insolvency Officers.

 

16.15.2                 The HK Insolvency Officers agree to inform the other parties in
writing of any change of address of such process agent within 28 days of such
change.

 

16.15.3                 If such process agent ceases to be able to act as such or to have an
address in England, the HK Insolvency Officers irrevocably agree to appoint a
new process agent in England acceptable to the other parties and to deliver to
the other parties within 14 days a copy of a written acceptance of appointment
by the process agent.

 

16.15.4                 The Australia Insolvency Officers hereby irrevocably appoint Louise
Verrill of Brown Rudnick, 8 Clifford Street, London W1S 2LQ, United Kingdom as
their agent to accept service of process in England in any legal action or
proceedings arising out of this Agreement, service upon whom shall be deemed
completed whether or not forwarded to or received by the Australia Insolvency
Officers.

 

16.15.5                 The Australia Insolvency Officers agree to inform the other parties
in writing of any change of address of such process agent within 28 days of
such change.

 

16.15.6                 If such process agent ceases to be able to act as such or to have an
address in England, the Australia Insolvency Officers irrevocably agree to
appoint a new process agent in England acceptable to the other parties and to
deliver to the other parties within 14 days a copy of a written acceptance of
appointment by the process agent.

 

16.15.7                 The Singapore Insolvency Officers hereby irrevocably appoint
Hackwood Secretaries Limited of One Silk Street, London EC2Y 8HQ as their agent
to accept service of process in England in any legal action or proceedings
arising out of this Agreement, service upon whom shall be deemed completed
whether or not forwarded to or received by the Singapore Insolvency Officers.

 

16.15.8                 The Singapore Insolvency Officers agree to inform the other parties
in writing of any change of address of such process agent within 28 days of
such change.

 

16.15.9                 If such process agent ceases to be able to act as such or to have an
address in England, the Singapore Insolvency Officers irrevocably agree to
appoint a new process agent in England acceptable to the other parties and to
deliver to the other parties within 14 days a copy of a written acceptance of appointment
by the process agent.

 

16.15.10          NHI hereby for and on behalf of the Purchasers irrevocably appoints
Nomura International plc of Nomura House, 1 St Martin’s-le-Grand, London EC1A
4NP as agent to accept service of process for and on behalf of the Purchasers
in England  in any legal action or
proceedings arising out of this Agreement, service upon whom shall be deemed
completed whether or not forwarded to or received by NHI (for and on behalf of
the Purchasers).

 

16.15.11           NHI (for and on behalf of the Purchasers) agrees to inform the other
parties in writing of any change of address of such process agent within 28
days of such change.

 

16.15.12          If such process agent ceases to be able to act as such or to have an
address in England, NHI irrevocably agrees for and on behalf of the Purchasers
to appoint a new process agent in England for and on behalf of the Purchasers
acceptable to 

 

37

 

the other
parties and to deliver to the other parties within 14 days a copy of a written
acceptance of appointment by the process agent.

 

16.15.13          Nothing in this Agreement shall affect the right to serve process in
any other manner permitted by law.

 

In witness whereof this Agreement has been duly executed.

 

38

 

	
  SIGNED by EDWARD MIDDLETON

  	
   

  	
  /s/ Edward Middleton

  
	
  as joint and several provisional

  liquidators, without personal liability, for

  and on behalf of Lehman Brothers Asia

  Limited (Provisional Liquidators Appointed):

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED BY EDWARD MIDDLETON

  	
   

  	
  /s/ Edward Middleton

  
	
  as joint and several provisional

  liquidators of Lehman Brothers Asia

  Limited (Provisional Liquidators

  Appointed), without personal liability:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED by PATRICK COWLEY

  	
   

  	
  /s/ Patrick Cowley 

  
	
  as joint and several provisional

  liquidators, without personal liability, for

  and on behalf of Lehman Brothers Asia

  Holdings Limited (Provisional

  Liquidators Appointed): 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED BY PATRICK COWLEY

  	
   

  	
  /s/ Patrick Cowley

  
	
  as joint and several provisional

  liquidators of Lehman Brothers Asia

  Holdings Limited (Provisional

  Liquidators Appointed), without personal

  liability:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED by PAUL BROUGH

  	
   

  	
  /s/ Paul Brough 

  
	
  as joint and several provisional

  liquidators, without personal liability, for

  and on behalf of Lehman Brothers

  Securities Asia Limited (Provisional

  Liquidators Appointed): 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED BY PAUL BROUGH

  	
   

  	
  /s/ Paul Brough

  
	
  as joint and several provisional

  liquidators of Lehman Brothers

  Securities Asia Limited (Provisional

  Liquidators Appointed), without personal

  liability:

  	
   

  	
   

  

 

39

 

	
  SIGNED by JASJIT BHATTAL

  	
   

  	
  /s/ Jasjit Bhattal

  
	
  on behalf of Lehman Brothers Japan

  Inc.:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED by JASJIT BHATTAL

  	
   

  	
  /s/ Jasjit Bhattal

  
	
  on behalf of Lehman Brothers Finance

  (Japan) Inc.:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED by JASJIT BHATTAL

  	
   

  	
  /s/ Jasjit Bhattal

  
	
  on behalf of Lehman Brothers Real

  Estate Limited:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  /s/ Jasjit Bhattal

  
	
  on behalf of Lehman Brothers Securities

  Private Limited:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  /s/ Jasjit Bhattal

  
	
  on behalf of Lehman Brothers Fixed

  Income Securities Private Limited:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  /s/ Jasjit Bhattal

  
	
  on behalf of Lehman Brothers Advisers

  Private Limited:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  /s/ Jasjit Bhattal

  
	
  on behalf of Lehman Brothers Capital

  Private Limited:

  	
   

  	
   

  

 

40

 

	
   

  	
  SIGNED by 

  	
   

  	
  /s/ Jasjit Bhattal

  
	
  on behalf of Lehman Brothers 

  (Thailand) Limited:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SIGNED by

  	
   

  	
  /s/ Neil Geoffrey Singleton

  
	
   

  	
  as joint and several administrators, 

  without personal liability, for and on 

  behalf of Lehman Brothers Australia 

  Holdings Pty Ltd. (Administrators Appointed):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SIGNED BY

  	
   

  	
  /s/ Stephen James Parbery

  
	
   

  	
  as joint and several administrators of 

  Lehman Brothers Australia Holdings Pty 

  Ltd. (Administrators Appointed), without 

  personal liability:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SIGNED by 

  	
   

  	
  /s/ Neil Geoffrey Singleton

  
	
   

  	
  as joint and several administrators, 

  without personal liability, for and on 

  behalf of Lehman Brothers Australia 

  Ltd. (Administrators Appointed):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SIGNED BY

  	
   

  	
  /s/ Stephen James Parbery

  
	
   

  	
  as joint and several administrators of 

  Lehman Brothers Australia Ltd. 

  (Administrators Appointed), without 

  personal liability:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SIGNED by

  	
   

  	
  /s/ Jasjit Bhattal

  
	
  on behalf of Lehman Brothers 

  Investment Consulting (Shanghai) Co. 

  Ltd:

  	
   

  	
   

  

 

41

 

	
   

  	
  SIGNED by EDWARD MIDDLETON

  	
   

  	
  /s/ Edward Middleton

  
	
  on behalf of Lehman Brothers Asia 

  	
   

  	
   

  
	
  Limited Shanghai Rep Office:

  	
   

  	
  /s/ Jasjit Bhattal

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SIGNED by 

  	
   

  	
  /s/ Jasjit Bhattal

  
	
  on behalf of Lehman Brothers Securities 

  Taiwan Limited:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SIGNED by 

  	
   

  	
  /s/ Jasjit Bhattal

  
	
  on behalf of Lehman Brothers Taiwan 

  Limited:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SIGNED by 

  	
   

  	
  /s/ Jasjit Bhattal

  
	
  on behalf of Lehman Brothers 

  Commodities Pte Limited:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SIGNED by 

  	
   

  	
  /s/ Jasjit Bhattal

  
	
  on behalf of Lehman Brothers 

  Singapore Pte Limited:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SIGNED by 

  	
   

  	
  /s/ Jasjit Bhattal

  
	
  on behalf of Lehman Brothers 

  Investments Pte Limited:

  	
   

  	
   

  

 

42

 

	
   

  	
  SIGNED by BOB YAP CHENG CHEE,

  	
   

  	
  /s/ Bob Yap Cheng Chee

  
	
  PETER CHAY FOOK YUEN & TAY 

  	
   

  	
   

  
	
  PUAY CHENG

  	
   

  	
  /s/ Peter Chay Fook Yuen

  
	
  as joint and several provisional 

  	
   

  	
   

  
	
   

  	
  liquidators, without personal liability,
  for 

  	
   

  	
  /s/ Tay Puay Cheng

  
	
   

  	
  and on behalf of Lehman Brothers 

  Finance Asia Pte Ltd (Provisional 

  Liquidators Appointed):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SIGNED BY

  as joint and several provisional 

  liquidators of Lehman Brothers Finance 

  Asia Pte Ltd (Provisional Liquidators 

  Appointed), without personal liability:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SIGNED by 

  	
   

  	
  /s/ Jasjit Bhattal

  
	
  on behalf of Lehman Brothers Services 

  India Private Limited:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SIGNED by 

  	
   

  	
  /s/ Takumi Shibata

  
	
   

  	
  on behalf of Nomura Holdings Inc.:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SIGNED by 

  	
   

  	
  /s/ Takumi Shibata

  
	
   

  	
  on behalf of Nomura Securities Co.
  Ltd.:

  	
   

  	
   

  

 

43

 

Schedule 1 - Details of the Sellers

 

1.               Lehman
Brothers Asia Limited (Provisional Liquidators Appointed), a company
incorporated in Hong Kong whose registered office is at Unit 1907-9, 1913-5 of
19/F, 2201, 2210-7 of 22/F, 25-26/F, 2706-2714 of 27/F, Two International
Finance Center, 8 Finance Street, Central, Hong Kong;

 

2.               Lehman
Brothers Asia Holdings Limited (Provisional Liquidators Appointed), a company
incorporated in Hong Kong whose registered office is at Unit 1907-9, 1913-5 of
19/F, 2201, 2210-7 of 22/F, 25-26/F, 2706-2714 of 27/F, Two International
Finance Center, 8 Finance Street, Central, Hong Kong;

 

3.               Lehman
Brothers Securities Asia Limited (Provisional Liquidators Appointed), a company
incorporated in Hong Kong whose registered office is at Unit 1907-9, 1913-5 of
19/F, 2201, 2210-7 of 22/F, 25-26/F, 2706-2714 of 27/F, Two International
Finance Center, 8 Finance Street, Central, Hong Kong;

 

4.               Lehman
Brothers Japan Inc., a company incorporated in Japan whose registered office is
at 6-10-1 Roppongi Minato-ku, Tokyo Japan, (as debtors-in-possession of Lehman
Brothers Japan Inc. under the Civil Rehabilitation Procedure, and having filed
voluntary petitions for relief under Article 21 of Civil Rehabilitation
Law on September 16 2008 in Tokyo District Court);

 

5.               Lehman
Brothers Finance (Japan) Inc., a company incorporated in Delaware, United
States of America whose Tokyo Branch is at Roppongi Hills 31F, 6-10-1 Roppongi
Minato-ku, Tokyo Japan;

 

6.               Lehman
Brothers Real Estate Limited, a company incorporated in Japan whose registered
office is at Roppongi Hills Mori Tower, 6-10-1 Roppongi Minato-ku, Tokyo,
Japan;

 

7.               Lehman
Brothers Securities Private Limited, a company incorporated in India whose
registered office is at 11th Floor, Shiv Sagar Estate, Dr. Annie Besant
Road, Worli, Mumbai 400018, India;

 

8.               Lehman
Brothers Fixed Income Securities Private Limited, a company incorporated in
India whose registered office is at 11th floor, Ceejay House, Shiv Sagar
Estate, Dr Annie Besant Road, Worli, Mumbai 400 018;

 

9.               Lehman
Brothers Advisers Private Limited, a company incorporated in India whose
registered office is at 11th floor, Ceejay House, Shiv Sagar Estate, Dr Annie
Besant Road, Worli, Mumbai 400 018;

 

10.         Lehman
Brothers Capital Private Limited, a company incorporated in India whose
registered office is at 11th floor, Ceejay House, Shiv Sagar Estate, Dr Annie
Besant Road, Worli, Mumbai 400 018;

 

11.         Lehman
Brothers (Thailand) Limited, a company incorporated in Thailand whose
registered office is at 990 Abdulrahim Place Unit 2601, 26th Floor, Rama IV
Road, Kwaeng Silom, Khet Bangrak, Bangkok 10500, Thailand;

 

12.         Lehman
Brothers Australia Holdings Pty Ltd. (Administrators Appointed), a company
incorporated in Victoria, Australia whose registered office is at Level 29, 530
Collins Street, Melbourne, VIC 3000, Australia;

 

44

 

13.         Lehman
Brothers Australia Ltd (Administrators Appointed), a company incorporated in
New South Wales, Australia whose registered office is at Level 25, Governor
Phillip Tower, 1 Farrer Place, SYDNEY, NSW 2000, Australia;

 

14.         Lehman
Brothers Investment Consulting (Shanghai) Co. Ltd, a company incorporated in
the People’s Republic of China whose registered office is at Unit 3551, 35/F
Citic Square, 1168 Nanjing Road West, Shanghai, China;

 

15.         Lehman
Brothers Asia Limited Shanghai Rep Office, a representative office of Lehman
Brothers Asia Limited, a company incorporated in Hong Kong whose registered
office is at Unit 1907-9, 1913-5 of 19/F, 2201, 2210-7 of 22/F, 25-26/F,
2706-2714 of 27/F, Two International Finance Center, 8 Finance Street, Central,
Hong Kong;

 

16.         Lehman
Brothers Securities Taiwan Limited, a company incorporated in Taiwan whose
registered office is at 12th Floor, No. 7, Sungren Road, Shin-Yi District,
Taipei, Taiwan;

 

17.         Lehman
Brothers Taiwan Limited, a company incorporated in Taiwan whose registered
office is at 12th Floor, No. 7, Sungren Road, Shin-Yi District, Taipei,
Taiwan;

 

18.         Lehman
Brothers Commodities Pte Limited, a company incorporated in Singapore whose
registered office is at 5 Temasek Boulevard, #11-01 Suntec Tower Five,
Singapore 038985;

 

19.         Lehman
Brothers Singapore Pte Limited, a company incorporated in Singapore whose registered
office is at 5 Temasek Boulevard, #11-01 Suntec Tower Five, Singapore 038985;

 

20.         Lehman
Brothers Investments Pte Limited, a company incorporated in Singapore whose
registered office is at 5 Temasek Boulevard, #11-01 Suntec Tower Five, Singapore
038985;

 

21.         Lehman
Brothers Finance Asia Pte Ltd (Provisional Liquidators Appointed), a company
incorporated in Singapore whose registered office is at 5 Temasek Boulevard,
#11-01 Suntec Tower Five, Singapore 038985; and

 

22.         Lehman
Brothers Services India Private Limited, a company incorporated in India whose
registered office is at 10th Floor, Winchester, Hiranandani Business Park,
Powai-Mumbai - 400 076, India.

 

45

 

Schedule 2 - Details of the Purchasers

 

1.                                   Nomura Holdings Inc., a company incorporated in Japan, and whose
registered office is at 1-9-1
Nihonbashi, Chuo-ku, Tokyo 103-8645, Japan.

 

2.                                   Nomura Securities Co. Ltd., a
company incorporated in Japan, and whose registered office is at 1-9-1 Nihonbashi,
Chuo-ku, Tokyo 103-8011, Japan.

 

3.                                   Such other subsidiaries or
affiliated entities of NHI as may be nominated by NHI at least one Business Day
before the relevant Completion.

 

46

 

Schedule 3 – Price Allocation

 

PART A

 

1.                                   Japan Sale Assets Price

 

US$87,400,000

 

2.                                   General Sale Assets Price

 

US$76,300,000

 

PART B

 

1.                                   Japan Transfer Payment Amount

 

US$21,900,000

 

2.                                   General Transfer Amount

 

US$25,800,000

 

47

 

Schedule 4 - Completion Deliverables

 

PART A- GENERAL

1                                      Completion

 

1.1                            The Sellers’ Obligations

 

1.1.1                   On both Japan
Completion and General Completion, the Sellers shall deliver or make available to NHI (for and on behalf
of the Purchasers):

 

(i)                                copies of the requisite corporate
approvals of the Sellers in respect of the authorisation and execution of this
Agreement; and

 

(ii)                             duly executed conveyances,
transfers or assignments of the relevant General Leasehold Premises or Japan
Leasehold Premises (as the case may be), together with the relevant documents
of title and the relevant Third Party Consents, except that this paragraph
shall not apply in relation to any Consent Premises where the necessary Third
Party Consent has not been obtained by Japan Completion
or General Completion (as the case may be), in which case such properties shall be
transferred in accordance with Schedule 6.

 

1.1.2                   On Japan Completion and General Completion, the Sellers shall:

 

(i)                                let the relevant Purchasers take
possession of all those relevant Sale Assets to which title is capable
of transfer by delivery, at their then current locations, at which time title
shall pass to the relevant Purchaser; and

 

(ii)                             make all applicable Transferred Sale Assets Records available to NHI (for and on behalf of the Purchasers).

 

1.2                            The Purchasers’ Obligations

 

On Japan
Completion and General Completion, NHI shall:

 

1.2.1                   make all payments due under
Clauses 3 and 16.8.2; and

 

1.2.2                   make such arrangements as it sees
fit for collecting any relevant Sale Assets, title to which passes by
delivery.

 

1.3                            General Transfer Obligations

 

On Japan Completion and General Completion,
the Sellers and the Purchasers shall execute and/or deliver all relevant
transfer documents and take such steps as are required to transfer the relevant
Sale Assets (other than the Leasehold Premises in respect of which the terms of
Schedule 6 shall apply) and Transferred Employees.

 

48

 

PART B – JAPAN COMPLETION

 

In addition to the obligations
to be satisfied under Part A, on Japan Completion:

 

1.1                            the Japan
Rehabilitation Company shall provide copies of all approvals or consents from
the Tokyo District Courts under the Civil Rehabilitation Procedure (or confirm
that none is required);

 

1.2                            NHI shall provide copies of all approvals (including the approval of the
Japan Fair Trade Commission), consents or clearances required under the Anti
Monopoly Law of Japan (or confirm that, save as to any which has been provided, none is
required); and

 

1.3                            NHI shall provide
reasonably satisfactory evidence of the Purchasers paying or procuring the
payment of the Advisor Fees (to the extent this has not already been done).

 

49

 

PART C – GENERAL COMPLETION

 

In addition to the obligations
to be satisfied under Part A, on General Completion:

 

1.1                            NHI and/or the Sellers shall
provide evidence of the acceptance by 70 per cent. or more in number of the Nominated Employees
of the conditional binding offers of employment made by any of the Purchasers
(or any of their affiliates) in accordance with Clause 8.1 and Schedule 5
(subject to NHI’s waiving this requirement in which case NHI shall provide
evidence of such waiver);

 

1.2                            the Sellers’
Representative shall provide a certified true copy of the resolutions of the
shareholders of each Singapore-incorporated Seller not subject to any
provisional liquidation, liquidation or administration proceeding approving the
disposition of the Sale Assets to be sold by such Singapore-incorporated Seller
pursuant to section 160 of the Companies Act of Singapore, where such
Singapore-incorporated Seller is disposing of any of its Sale Assets; and

 

1.3                            NHI shall provide evidence of the
Purchasers paying or procuring the payment of the Advisor Fees (to the extent this has not
already been done).

 

1.4                            The HK Insolvency Officers’
Obligations

On General Completion, the HK  Insolvency Officers  shall
deliver or make available to the other parties (including NHI (for and on
behalf of the Purchasers)):

 

1.4.1                   sealed copies of the court orders
appointing the HK  Insolvency Officers;

 

1.4.2                   sealed copies of the court orders
approving the transactions contemplated by this Agreement; and

 

1.4.3                   copies of all approvals or consents required from the Hong Kong court (or confirm that
none are required);

 

1.5                            The Singapore Insolvency Officers’
Obligations

 

On General Completion, the Singapore  Insolvency Officers  shall deliver or make available to the other
parties (including NHI (for and on behalf of the Purchasers)) the written resolution of the board of directors of the Singapore
Insolvency Company dated 23 September 2008 appointing the Singapore
Insolvency Officers to act as its provisional liquidators.

 

1.6                            The Australia Insolvency Officers’
Obligations

 

On General
Completion, the Australia  Insolvency
Officers  shall deliver or
make available to the other parties (including NHI (for and on behalf of the
Purchasers)) the:

 

1.6.1                   resolutions of the boards of
directors of the Australian Insolvent Companies each dated 26 September 2008;

 

1.6.2                   instruments of appointment
appointing the Australian Insolvency Officers to act as joint and several
administrators of the Australian Insolvent Companies; and

 

1.6.3                   in respect of Lehman Brothers Australia
Ltd., a full release
and discharge of the charges in favour of Australia and New Zealand Banking
Group Limited and Citigroup Securities Clearing Australia Limited.

 

50

 

Schedule 5 – Transferred Employees

 

Part A

 

1                                      Definitions

 

For the purposes of this Schedule 5:

 

“2008 Bonus” has
the meaning given to it in paragraph 4.1.3 below;

 

“2009 Bonus”
has the meaning given to it in paragraph 4.2 below;

 

“Additional Retention Fund”
means an amount equal to [***] of the Bonus Pool plus any amount of the Bonus
Pool not allocated and paid under paragraph 4.1.3 below;

 

“Asia Executive Committee”
means [***], provided that no new member shall be appointed without the prior
written consent of NHI;

 

“Bonus Pool” has
the meaning given to it in paragraph 4.1.3 below;

 

“Continuing
Transferred Employees” means those of the
Relevant Transferred Employees who continue to be employed by a member of the
Purchaser Group and who have not served a notice of termination of employment
on the relevant payment or calculation date;

 

“Employee Benefits” means benefits and entitlements of
employment (recognizing continuity of service
and length of service),
including without limitation salary, benefits, allowances,
overtime, commission, incentives, other remuneration, tax, previously
guaranteed bonuses, contractual bonus entitlements, pension contributions,
healthcare benefits, payments in connection with wrongful or improper
dismissal, health/disability/life insurance, club memberships, mortgage
subsidies, loans, Expatriate Costs, holiday leave entitlement, school fee
payments, social security contributions, tax equalization, out-of-pocket
expenses, benefits relating to residential leases (including all rent, rental
deposits and related expenses), the provision and maintenance of corporate cars
and drivers, tax preparatory and advisory work, and any liabilities (including
all applicable membership fees and administrative charges) (whether owing to
the Transferred Employee by way of re-imbursement or to the provider of the
corporate credit card) arising in respect of reimbursement of expenses properly
incurred in connection with employment in the Business by any Transferred
Employee on a corporate credit card or in cash, payable in accordance with
applicable policies or on previously agreed contractual terms or obligations of
the Lehman Brothers International Group which applied on 22 September 2008,
including reimbursement where any such payment has already been made;

 

“Employee  Liabilities”
means the liabilities of the Sellers, the other
members of the Lehman Brothers International Group and any other relevant
employing entity to Employee Benefits arising in respect of the Transferred
Employees;

 

“Expatriate Costs” means
expatriate related costs (including transportation and shipping costs, costs of
air travel, relocation costs, removal costs and other repatriation costs);

 

“Fiscal  Year 2007” means the fiscal
year of the Lehman Brothers International Group commencing on 1 December 2006
and ending on 30 November 2007;

 

51

 

“Fiscal  Year 2008” means the fiscal
year of the Lehman Brothers International Group commencing on 1 December 2007
and ending on 30 November 2008;

 

“Nominated  Employees” means those of the Transferred Employees as are
listed in Part C of Schedule 5;

 

“Relevant Employer”
means the relevant Purchaser nominated by NHI to make the offers of employment
to the relevant Transferred Employees pursuant to paragraph 2.1 below.

 

“Relevant Transferred
Employees” means those of the Transferred Employees who accept their
offers of employment from the Relevant Employer made pursuant to paragraph 2.1
below;

 

“Selected Employees”
means those of the Transferred Employees as are listed in Part D of
Schedule 5; and

 

“Severance Pay” means the relevant Employee Benefits to which a Transferred Employee
would have been entitled on termination of employment under the contractual
terms of employment and/or contractual and non-contractual employment policies
of the Lehman Brothers International Group which applied on 22 September 2008.

 

2                                      Transfer of employees

 

2.1                            As soon as practicable following the date of this Agreement, and in
any event before Completion, the Relevant Employer(s) shall make, or shall
procure the making of, offers of employment (conditional and subject to Japan
Completion or General Completion (as the case may be)) to all of the
Transferred Employees in accordance with the provisions of this Agreement on terms
no less favourable than those currently enjoyed by the Transferred Employees
under their respective contracts of employment with the Sellers or any other
relevant entity in the Lehman Brothers International Group.

 

2.2                            With effect from the relevant Completion, the Relevant Employer(s) shall
pay, satisfy and discharge all liabilities of the Sellers, the other members of
the Lehman Brothers International Group and any other relevant employing entity
arising in respect of the Relevant Transferred Employees (including without
limitation in respect of Employee Liabilities) incurred in respect of the
period after Completion.

 

2.3                            With effect from the relevant Completion, the Relevant Employer(s) shall
discharge all employer’s obligations in respect of the Relevant Transferred
Employees (including, without limitation, in respect of Employee Liabilities) incurred in respect of the period after the
relevant Completion.

 

2.4                            Upon the acceptance by a Transferred Employee of the offer of
employment made by or on behalf of the Relevant Employer(s), the relevant
Seller shall terminate (conditional on and subject to the relevant Completion)
the employment of the relevant Transferred Employee.

 

2.5                            To the extent that any Transferred Employee remains a director or
officer of any Group Company following Japan Completion or General Completion
(as the case may be), NHI shall not, and shall procure that the Purchaser Group
(including the Relevant Employer) shall not, take any action against that
Relevant Transferred Employee for any breach of his/her employment contract or
obligations in respect of any such position (provided that any action/omission
taken by that employee in his/her capacity as a holder of any such position
does not conflict with his/her duty to any member of the Purchaser Group and
that 

 

52

 

Relevant Transferred Employee(s) cease
to act in such position as soon as reasonably practicable following the
relevant Completion).

 

2.6                            To the extent that any Relevant Transferred Employee accepts an
offer of employment pursuant to this paragraph 2, neither the Seller, the other
members of the Lehman Brothers International Group nor any other relevant
employing entity shall take any action (and each Seller, the other members of
the Lehman Brothers International Group and any other relevant employing entity
irrevocably waives any claim) against that Relevant Transferred Employee for
breach of employment contract or obligations in respect thereof arising from
the acceptance of such offer of employment and the performance of his/her
employment contract with the Purchaser Group. Each Seller, other members of the
Lehman Brothers International Group and any other relevant employing entity
irrevocably waives any non-competition, non-solicitation and similar
restrictions which it may have against the Relevant Transferred Employee in
respect thereof.

 

3                                      Indemnity from the Relevant Employer

 

The Relevant Employer shall indemnify the
Sellers and the Insolvency Officers and keep them indemnified against all
Losses which relate to, arise out of or are connected with:

 

3.1                            the employment of the Relevant Transferred Employees by the Relevant
Employer on or after the relevant Completion;

 

3.2                            any failure by the Relevant Employer to discharge all employer’s
obligations (including without limitation as to Employee Liabilities) to the
Relevant Transferred Employees in respect of the period after the relevant
Completion in accordance with paragraph 2.3;

 

3.3                            any breach by the Relevant Employer of any obligation in paragraphs
2.2 or 4.1.2;

 

3.4                            any misrepresentation or misstatement, whether negligent or
otherwise, made by the Relevant Employer to any of the Relevant Transferred
Employees or their representatives, whether before or after the relevant
Completion and whether liability for any such claim arises before, on or after
the relevant Completion; and

 

3.5                            any claim made by any Relevant Transferred Employee in their
capacity as a Relevant Transferred Employee against their then relevant
employing entity arising out of circumstances arising on or after the relevant
Completion, which for the avoidance of doubt shall not include any claim
arising from any waiver by the
Relevant Transferred Employee of a claim against the Relevant Employer in
respect of a liability of the Sellers, the other members of the Lehman Brothers
International Group and other relevant employing entity arising from the
Transferred Employee’s previous employment by the Sellers, the other members of
the Lehman Brothers International Group and any other relevant employing entity.

 

4                                      Post-Completion obligations of the Relevant Employer

 

4.1                            Transferred Employees

 

The Relevant Employer shall:

 

4.1.1                   pay to any Relevant Transferred Employee whose employment is
terminated by the Relevant Employer (or any other member of the Purchaser
Group) on or following the Japan Completion or General Completion (as the case
may be) without cause, [***] Severance Pay [***]

 

53

 

(provided that such Severance
Pay shall be deemed to constitute payments of, and thereby reduce the amount
of, any statutory severance payments which may otherwise be payable by the
Relevant Employer to the Relevant Transferred Employee);

 

4.1.2                   procure, for so long as any Relevant Transferred Employees remain
employed by the Purchaser Group, that such Relevant Transferred Employees’
Employee Benefits are in each case at a level not lower than the level offered
to such Relevant Transferred Employees’ in the offer of employment made pursuant
to paragraph 2 above;

 

4.1.3                   pay entirely in cash for the benefit of the Continuing Transferred Employees, a bonus in respect of Fiscal
Year 2008 (the “2008 Bonus”). The Relevant
Employer shall make available a bonus pool [***] (the “Bonus
Pool”). The allocation of the 2008 Bonus from the Bonus Pool to
individuals shall be determined in accordance with past policies and practice
on individual bonus allocation by the Asia Executive Committee (but shall be no
worse than the terms of each individual’s offer letter). [***];

 

4.1.4                   pay entirely in cash to the Continuing Transferred Employees, in addition to any other amounts payable under this
Schedule 5, at such time and in such manner to be
determined by the Asia Executive Committee, an amount equal in aggregate to the
Additional Retention Fund to be made available by the Relevant Employer, such
amount to be used by such senior management to incentivize and retain
Continuing Transferred Employees and/or employees hired after the relevant
Completion, as appropriate; and

 

4.1.5                   pay any Expatriate Costs in respect of those expatriate Relevant
Transferred Employees whose employment is terminated by the Relevant Employer
(except for cause) on or following the relevant Completion or who the Relevant
Employer determines (on or following the relevant Completion) should for
business reasons be transferred or seconded to or from Asia.

 

4.2                            Nominated  Employees

 

The Relevant Employer shall, in addition to
complying with paragraphs 4.1 in respect of Nominated Employees but subject to
paragraph 4.4.1, pay to each Nominated  Employees a bonus [***] (the “2009 Bonus”), pursuant to paragraph 4.1.3 and such Nominated
Employee’s contract of employment. [***]

 

54

 

4.3                            Selected  Employees

 

The Relevant Employer shall, in addition to
complying with paragraphs 4.1 and 4.2 in respect of Selected Employees, pay to
each Selected  Employee a retention payment in cash at the relevant
Completion (less any applicable deductions) [***]. Each such
payment shall be made in the form of a forgivable interest free loan with a
term of three years from the relevant Completion and the amount of which shall
reduce by one third on each anniversary of the relevant Completion, or some
other structure having substantially the same effect. The loan will be
documented in a loan agreement to be entered into between the Relevant Employer
and each Selected Employee and it will be provided that the loan will only be
forgivable if such Selected Employee continues to be employed by any member of
the Purchaser Group on the relevant anniversary date (otherwise the loan
outstanding shall be (i) repaid by that Selected Employee within 10
Business Days of his employment being terminated for cause or (ii) forgiven
in full with effect from the date of his employment being terminated without
cause). The Relevant Employer shall consult with the Selected Employee on the
structure of the arrangement and the form of documentation in light of inter
alia the relevant Selected Employees’ tax position but ultimately these are at
the discretion of the Relevant Employer.

 

4.4                            Selected and Nominated  Employees  – guarantees/new contracts

 

The
Relevant Employer shall:

 

4.4.1                   notwithstanding any other provision of this Schedule and this Agreement,
guarantee all of the relevant payments due to the Nominated Employees and
Selected Employees pursuant to this Agreement (including, without limitation,
payments made in accordance with this Schedule) in their respective employment
contracts, as being payable whether or not the employment of such Nominated
Employees or Selected Employees is terminated by any of the Relevant Employers
(or any other member of the Purchasers’ Group) at any such time on or following
the relevant Completion (and if such employees are terminated, as being payable
within 60 days of the date of termination), unless the employment of such
Nominated Employees or Selected Employee has been terminated for cause or such
employee has served a notice of termination of employment on or before the
relevant payment date (in which case, the relevant payment will not be
payable);

 

4.4.2                   as soon as practicable, and to the extent that they have not already
done so, make binding offers (conditional and subject to the relevant
Completion) of new contracts of employment pursuant to the terms of this
Agreement with the relevant Nominated Employees and Selected Employees, such
contracts to be in compliance with each provision, inter alia,
of paragraph 4 of this Schedule 5.

 

55

 

[Part B]

 

[***]

 

 

[Part C]

 

[***]

 

 

[Part D]

 

[***]

 

 

Schedule 6 – The General Leasehold Premises and Japan Leasehold
Premises

 

General Provisions relating to General Leasehold
Premises and Japan Leasehold Premises

 

1                                      Interpretation

 

1.1                            The following further definitions apply in this Schedule 6:

 

“Actual
Completion” means the actual
completion of the transfer of any one of the 
Leases in respect of the General Consent Premises or Japan Consent
Premises (as the case may be) under this Agreement where such completion does
not take place on General Completion or Japan Completion respectively because
all necessary Third Party Consents have not been obtained;

 

“General Consent Premises” means any of the General Leasehold
Premises for which a Third Party Consent is required;

 

“General Leasehold Premises” means (i) each of the
leasehold or leased premises, sites, spaces, facilities and locations which any
of the Sellers and/or Group Companies lease, license, occupy, use or enjoy, and
as identified in the Sale Assets Exhibit and/or the Lease Exhibit, other
than the Japan Leasehold Premises and (ii) each and every of the other
leasehold or leased premises leased or licensed by any of the Sellers and/or
Group Companies for the benefit of any Transferred Employee, excluding the
Japan Leasehold Premises and Korean Leasehold Premises;

 

“Japan Consent Premises” means any of the Japan Leasehold
Premises for which a Third Party Consent is required;

 

“Japan Leasehold Premises” means (i) each of the
leasehold or leased premises, sites, spaces, facilities and locations which any
of the Sellers and/or Group Companies lease, license, occupy, use or enjoy in
Japan, details of which are set out in the Sale Assets Exhibit and/or the
Lease Exhibit and (ii) each and every of the other leasehold or
leased premises in Japan leased or licensed by any of the Sellers and/or Group
Companies for the benefit of any Transferred Employee;

 

“Landlord” means the person entitled to the
reversion immediately expectant on the termination of the term granted by any
of the Leases;

 

“Lease” means the lease or licence document or tenancy
agreement under which the relevant General Leasehold Premises or Japan
Leasehold Premises (as the case may be) are leased or licensed to the relevant
Seller and/or Group Companies, including all side letters, ancillary documents,
letters, agreements and any documents supplemental thereto;

 

“Letting Documents” has the meaning given to it in paragraph
3.1.1 of this Schedule 6;

 

“Licence” means a non-exclusive
right of occupation of the Licensed Premises in conjunction with the Sellers
and/or Group Companies only during the Licence Period pursuant to this
Schedule;

 

“Licence Fee” means an indemnity payment in
respect of certain liabilities of the Sellers and/or Group Companies pending
completion of the transfer of the Leases in respect of the Licensed Premises to
the Purchasers;

 

56

 

“Licence Period” means a period which may be different for each
of the Licensed Premises commencing on the date of General Completion or Japan
Completion (as the case may be) and ending on the earliest of the following
dates:

 

1.1.1                   the date on which this Agreement is terminated by whatever means
whether in whole or in relation to the relevant Licensed Premises;

 

1.1.2                   the date on which the term of the relevant Lease ends by whatever
means; and

 

1.1.3                   the date of Actual Completion in relation to the relevant General
Consent Premises or Japan Consent Premises (as the case may be);

 

“Licensed Premises” means any of the General Consent Premises
or Japan Consent Premises (as the case may be) for which all relevant Third
Party Consents have not been obtained prior to General Completion or Japan
Completion (as the case may be);

 

“Property Losses” means all losses, damages, costs, charges
or expenses which the Sellers, the Group Companies and/or the Insolvency
Officers have incurred or sustained or may, directly or indirectly, incur or
sustain, excluding any claims by the Landlord for loss of rent and outgoings;

 

“Quarter Days” means 25 March, 24 June, 29 September and
25 December in every year and Quarter Day
means any of them;

 

“Sellers’  Solicitors” means Linklaters; and

 

“transfer” for the purposes of this Schedule 6 only, means
and includes (i) assignment or novation; or (ii) the entering into a
new agreement between the Landlord and the Purchasers, in respect of any
General Leasehold Premises or Japan Leasehold Premises (as the case may be),
and “a  transfer” means
and includes any instruments, deeds, agreements or documents in connection
with, relating to or effecting such transfer.

 

1.2                            Without prejudice to Clause 13.4 of this Agreement, each of the
General Leasehold Premises, Japan Leasehold Premises and/or the Leases thereof
shall be transferred subject to the terms set out in this Schedule and all
other applicable terms of this Agreement.

 

2                                      Completion

 

2.1                            The General Purchase Price and Japan Purchase Price shall be paid to
the Sellers on General Completion and Japan Completion respectively in
accordance with this Agreement even if any necessary Third Party Consent has
not then been obtained, but the transfer of the Leases shall only take place on
General Completion in respect of the General Consent Premises and on Japan
Completion in respect of the Japan Consent Premises if all necessary Third
Party Consents have been obtained prior to General Completion or Japan
Completion (as the case may be).

 

2.2                            Actual Completion in respect of the Licensed Premises shall take
place 14 Business Days after the grant of the relevant Third Party Consents or
on such other date as the parties shall agree acting reasonably and, in
this respect, the parties agree to use reasonable endeavours to achieve Actual
Completion as soon as reasonably practicable after General Completion or Japan
Completion (as the case may be).

 

2.3                            On General Completion, Japan Completion or Actual Completion (as the
case may be) in respect of each of the Leases in respect of the General
Leasehold Premises or Japan 

 

57

 

Leasehold
Premises (as the case may be) being transferred at the relevant date of General
Completion, Japan Completion or Actual Completion:

 

2.3.1                   if the transfer is by way of assignment or novation:

 

(i)           the Sellers shall deliver to the Purchasers (in a form to be agreed
in advance between the parties to such document):

 

(a)             a novation or an assignment of the Lease in respect of the
relevant General Leasehold Premises or Japan Leasehold Premises duly executed
(as the case may be); and

 

(b)             the Lease in the possession or under the control of the relevant
Seller which relates to that General Leasehold Premises or Japan Leasehold
Premises (as the case may be);

 

(c)             (where necessary) in the case of General Consent Premises in the
PRC, a deed of consent between the Sellers, the Purchasers and the Landlord (in
triplicate) under which the Sellers agrees to be bound by the terms of the
Lease up to the date of General Completion or Actual Completion (as the case may
be) and the Landlords consents to the assignment or novation. Such deed of
consent shall also be registered with the relevant real estate authorities;

 

(ii)             the
Purchasers shall deliver to the Sellers a counterpart of such novation  or assignment (in duplicate or triplicate as
the case may be) duly executed by the relevant Purchaser and (where applicable)
the relevant Landlord;

 

2.3.2                   if the transfer is by way of entering into a new agreement between
the Landlord and the relevant Purchaser in respect of the relevant General
Leasehold Premises or Japan Leasehold Premises (as the case may be), the
Purchasers shall deliver to the Sellers a copy of such new agreement duly
executed by the relevant Purchaser. 
Subject to:

 

(i)           the Purchasers complying with
paragraph 2.3.3 and/or 2.3.4  of this Schedule;

 

(ii)          the relevant Landlord agreeing in writing to refund to the relevant
Seller and/or Group Companies any cash security deposit still held by the
relevant Landlord and/or release the relevant Seller and/or Group Companies
from all deposit bank guarantees provided in lieu of the cash security deposit
in respect of the relevant General Leasehold Premises or Japan Leasehold
Premises (as the case may be); and/or

 

(iii)         the relevant Landlord agreeing in writing to refund to the relevant
Seller and/or Group Companies any prepayment of rent in respect of a General
Leasehold Premises or Japan Leasehold Premises (as the case may be),

 

the
relevant Seller shall if requested by the Purchasers procure that the Lease
with the relevant Landlord shall be terminated and shall deliver a copy of such
termination document to the relevant Purchaser;

 

2.3.3                   to the extent that there is a cash security deposit held in respect
of a General Leasehold Premises or Japan Leasehold Premises (as the case may
be) and all or part thereof is still held by the relevant Landlord under the
relevant Lease and/or in 

 

58

 

respect of the
relevant General Leasehold Premises or Japan Leasehold Premises (as the case
may be), the Purchasers shall (subject to the relevant Seller and the
relevant Landlord agreeing in writing to treat such deposit paid by the
relevant Seller as having been paid by the relevant Purchaser(s) and
refundable to the relevant Purchaser(s) pursuant to the Lease) pay to the Sellers or reimburse the Sellers and/or Group Companies
an amount equal to all or part of such deposit subsisting and held by the relevant Landlord
or procure that the Sellers and/or Group Companies are
released from all deposit bank guarantees provided in lieu of the cash security
deposit in respect of the relevant General Leasehold Premises or Japan
Leasehold Premises (after deducting all of the relevant Seller’s liabilities to
the relevant Landlord due and owing as of the Actual Completion, Japan
Completion or General Completion) (as the case may be); and

 

2.3.4                   to the extent that the relevant Landlord has confirmed in writing
that there is a prepayment of rent in respect of a General Leasehold Premises
or Japan Leasehold Premises by the Sellers and/or Group Companies (as the case
may be), the Purchasers shall pay to the Sellers or reimburse the Sellers
and/or Group Companies an amount equal to the amount of such prepayment
provided that the relevant Landlord has acknowledged that such prepayments
shall be treated as having been paid by the relevant Purchaser.

 

2.4                            Notwithstanding anything herein contained to the contrary, the
Sellers are under no obligation to transfer the relevant Lease to the relevant
Purchaser(s) if the relevant Purchaser(s) fail to comply with
paragraph 2.3.3 and/or 2.3.4 of this Schedule.

 

2.5                            Completion of the transfer of the Leases in respect of the General
Leasehold Premises or Japan Leasehold Premises (as the case may be) shall take
place at such place as the parties may agree.

 

3                                      Subjections

 

3.1                            Each of the Leases in respect of the General Leasehold Premises
and/or Japan Leasehold Premises (as the case may be) is transferred subject to
and where applicable with the benefit of:

 

3.1.1                   all tenancies, licenses and rights of occupation affecting each of
the General Leasehold Premises or Japan Leasehold Premises (as the case may be)
(the “Letting Documents”);

 

3.1.2                   all matters contained or referred to in the property, proprietorship
and charges registers of the registered title relating to the relevant General
Leasehold Premises or Japan Leasehold Premises (as the case may be);

 

3.1.3                   the rents, covenants, conditions, restrictions, exceptions,
reservations, agreements and declarations, overriding interests and other
matters reserved by or contained in the Lease of each of the General Leasehold
Premises or Japan Leasehold Premises (as the case may be); and

 

3.1.4                   all notices served at or in respect of any of the General Leasehold
Premises or Japan Leasehold Premises (as the case may be) and/or in respect of
the Leases by or on behalf of any person,

 

in all cases
without any obligation on the part of 
the Sellers or Insolvency Officers to define the same;

 

59

 

3.2                            Neither the Sellers nor the Insolvency Officers give any warranty as
to the use, area, description or identity of any of the General Leasehold
Premises or Japan Leasehold Premises (as the case may be) and shall not be
required to define the exact boundaries of any of the General Leasehold
Premises or Japan Leasehold Premises (as the case may be). The transfer shall
not be annulled nor shall any compensation be allowed or payable in respect of
any error, misstatement or omission in respect of any such matters.

 

3.3                            The Purchasers acknowledge that the Sellers may not have all of the
original documents in respect of each of the General Leasehold Premises or
Japan Leasehold Premises (as the case may be) and the Purchasers shall not be
entitled to raise any enquiry, objection or requisition about any original
documents which the Insolvency Officers or Sellers’ Solicitors are unable to
provide to the Purchasers on completion of the transfer of the Leases of any of
the General Leasehold Premises or Japan Leasehold Premises (as the case may
be). The Purchasers agree and acknowledges that all and any obligation on the
part of the Sellers, the Group Companies and/or the Insolvency Officers to
deliver vacant possession of any General Leasehold Premises or Japan Leasehold
Premises (as the case may be) (or any part thereof)  whether
on General Completion, Japan Completion or Actual Completion (as the case may
be) or otherwise (whether express or implied) are excluded and the Purchasers
shall not be entitled to raise requisition or objection if any third party has
or claims to have a right to occupy, use or possess the whole or any part of
the General Leasehold Premises or Japan Leasehold Premises (as the case may be)
or any of them.

 

3.4                            Without prejudice to Clause 13 of this Agreement, the Purchasers
acknowledges that no person acting for the Sellers or the Insolvency Officers
has at any time had the authority of the Sellers or the Insolvency Officers to
make any statement or representation in relation to the Leases and/or the
General Leasehold Premises or Japan Leasehold Premises (as the case may be) or
any of them.

 

3.5                            Without prejudice to Clause 13 of this Agreement, it is agreed by
the Purchasers that the Insolvency Officers have specifically told the
Purchasers that the Purchasers must rely absolutely on the Purchasers’ own
opinion and/or professional advice concerning the Leases and/or the General
Leasehold Premises or Japan Leasehold Premises (as the case may be), their
state and condition, fitness and/or suitability for any purpose and the
possibility that the General Leasehold Premises or Japan Leasehold Premises (as
the case may be) (or any of them) may have defects not apparent on inspection
and examination.

 

4                                      Transfers

 

4.1                            The Purchasers shall use reasonable efforts to prepare or obtain
from the Landlord the engrossments of the transfers of the Leases and (where applicable) deed of
consent of each of the General Consent Premises or
Japan Consent Premises (as the case may be) and to deliver them to the Sellers
for execution by the
relevant Seller and/or Group Companies not less than 7
days prior to the date of Actual Completion (where applicable).

 

4.2                            The transfer of each of the General Leasehold Premises or the Japan
Leasehold Premises (as the case may be) and/or the Leases thereof shall
contain:

 

4.2.1                   covenants with the Sellers and/or Group Companies and the Insolvency
Officers by the Purchasers to comply with the:

 

(i)                                  obligations arising under the Lease; and

 

60

 

(ii)                               the Sellers and/or Group Companies’ obligations under the Letting
Documents;

 

insofar as the Sellers and/or Group Companies
may remain liable directly or indirectly for them after the date of the
transfer and to indemnify the Sellers and/or Group Companies and the Insolvency
Officers against any non-compliance by the Purchasers; and

 

4.2.2                   any other provisions required to make it consistent with the
provisions of this Agreement.

 

5                                      Third Party Consents in relation to the General Consent Premises and
Japan Consent Premises

 

5.1                            This paragraph 5 of this Schedule shall apply separately to each of
the General Consent Premises and Japan Consent Premises (as the case may be).

 

5.2                            If any Third Party Consent is required,

 

5.2.1                   the Purchasers shall:

 

(i)           apply for such consent as soon as practicable and shall use their
reasonable endeavours to procure such consent with reasonable support by the
Sellers;

 

(ii)          supply such information and references as may reasonably be required
by a Landlord, any superior landlord or other relevant person with reasonable
support by the Sellers;

 

(iii)         undertake to pay, or procure the giving of undertakings to pay, all
costs properly incurred by a Landlord, any superior landlord or other relevant
person in connection with any application for a consent, whether or not the
consent is given;

 

(iv)         enter into such covenants for the payment of the rent reserved by
the Lease and for the observance and performance of the covenants and
conditions contained in the Lease or otherwise affecting the General Consent
Premises or Japan Consent Premises (as the case may be) as may reasonably be
required by the Landlord, any superior landlord or other relevant person; and

 

(v)          if lawfully required by the Landlord, any superior landlord or other
relevant person, procure that sureties acceptable to them guarantee the
Purchasers’ obligations under the Lease following the transfer of the General
Consent Premises or Japan Consent Premises (as the case may be) and/or the
Leases thereof;

 

5.2.2                   the Sellers shall:

 

(i)           not without the prior consent of the Purchasers, modify, terminate,
assign, sublet or surrender the General Consent Premises or Japan Consent
Premises (as the case may be) otherwise than by operation of law or pursuant to
court order or any analogous event or for the purpose of effecting a transfer
of the Lease relating to the General Consent Premises or Japan Consent Premises
(as the case may be) to the Purchasers;

 

61

 

(ii)                               at the cost and expense of the Purchasers render such assistance as
may reasonably be required to achieve Actual Completion;

 

(iii)                            provide such authorisations, confirmations, release or directions as
the relevant Landlord may reasonably request from the Sellers in connection
with or relating to obtaining any Third Party Consent including the release by
the Sellers of the relevant Landlord from the relevant Landlord’s obligations
to refund to the Seller in accordance with the Lease any cash security deposits
paid by the Sellers;

 

(iv)                           (where necessary) enter into a deed of surrender with the relevant
Landlord relating to the General Consent Premises or Japan Consent Premises (as
the case may be) where the transfer of the Leases in respect of the General
Consent Premises or Japan Consent Premises (as the case may be) is pursuant to
a new agreement to be entered into between the relevant Purchaser and the
relevant Landlord; and

 

(v)                              (where necessary) enter into a deed of consent referred to in
paragraph 2.3.1(i)(c) of this Schedule;

 

provided that:

 

(i)                                  nothing shall prevent the Sellers from managing the solvency of any
member of the Lehman Brothers International Group in accordance with their
fiduciary, legal and regulatory duties; and

 

(ii)                               the Sellers shall not be obliged to comply with this paragraph 5.2.2(iii) and/or
(iv) of this Schedule unless:

 

(a)          the Purchasers comply with paragraph 2.3.3 and/or 2.3.4 of this
Schedule;

 

(b)          the relevant Landlord agreeing in writing to refund to the relevant
Seller and/or Group Companies any cash security deposit still held by the
relevant Landlord and/or release the relevant Seller and/or Group Companies
from all deposit bank guarantees provided in lieu of the cash security deposit
in respect of the relevant General Leasehold Premises or Japan Leasehold
Premises (as the case may be); and/or

 

(c)          the relevant Landlord agreeing in writing to refund to the relevant
Seller and/or Group Companies any prepayment of rent in respect of a General
Leasehold Premises or Japan Leasehold Premises (as the case may be).

 

5.3                            The Purchasers must give written notice to the Sellers as soon as
reasonably practicable after obtaining any Third Party Consent which shall be
accompanied by a copy of such consent.

 

5.4                            Pending the grant of all Third Party Consents after General
Completion or Japan Completion (as the case may be), the Sellers shall permit
the Purchasers to occupy the General Consent Premises or Japan Consent Premises
(as the case may be) under a Licence for the Licence Period on the terms set
out in this Schedule.

 

5.5                            The Purchasers acknowledges that the grant of the Licence of the
General Consent Premises or Japan Consent Premises (as the case may be) may
amount to a breach of the 

 

62

 

terms of the Lease and any risk in respect
thereof or in respect of any refusal on the part of any reversioner to consent
to the proposed transfer to the Purchasers is the Purchasers’ alone.

 

5.6                            The Sellers shall not be obliged to pay any moneys, provide or
procure the giving of any guarantees or security or incur any other financial
liability in connection with the obtaining of the Third Party Consents.
Specifically, the Sellers shall not be obliged to:

 

5.6.1                   apply to any court for a declaration that a Third Party Consent is
being unreasonably withheld and/or delayed;

 

5.6.2                   remedy or make good any breach of covenant or obligation in the
Lease; or

 

5.6.3                   pay any sum to the Landlord including, without limitation, any
arrears of rents, or other sums due under the Lease unless the Purchasers have
paid such sum to the Sellers pursuant to paragraph 7 of this Schedule.

 

5.7                            If the Landlord reasonably requires it, the Sellers will enter into
any document required to document the Landlord’s consent subject to:

 

5.7.1                   the Sellers’ Solicitors first approving its terms; and

 

5.7.2                   that document not containing any obligations on the part of the
Sellers, the Group Companies or the Insolvency Officers (where applicable);

 

5.8                            The Purchasers shall, within 7 days of receipt of a written demand providing proper details, pay to the Seller or to the Insolvency Officers (on behalf of the
Seller where the Seller is an Insolvent Company) the reasonable costs which the
relevant Seller and/or Group Companies has incurred in complying with its obligations
in this paragraph or in complying with any other request of the Purchasers
(compliance with any such request to remain at the absolute discretion of the
relevant Seller, the Group Companies and the Insolvency Officers (where
applicable)).

 

5.9                            The Purchasers shall be responsible for (and shall indemnify the
Sellers, the Group Companies and the Insolvency Officers (where applicable),
and each of them, against) the costs, charges, and expenses of the Landlords
involved in the grant of any Third Party Consents which shall include (without
limitation) the costs, charges and expenses of the Landlord’s solicitors and
agents plus Tax and disbursements.

 

6                                      Termination

 

6.1                            If the Licence Period comes to an end in relation to any of the
Licensed Premises (other
than pursuant to paragraph 7.13 of this Schedule) then:

 

6.1.1                   the Agreement is deemed to be at an end in relation to those Licensed Premises;
and

 

6.1.2                   the provisions of this paragraph 6 of this Schedule will apply in
relation to those Licensed Premises.

 

6.2                            Subject to this Agreement (and in particular subject to no
alterative occupation arrangement having been agreed), upon termination of the
Licence or this Agreement in relation to any Licensed Premises
for any reason, the Purchasers shall:

 

6.2.1                   not be entitled to any refund in whole or in part of any
Licence Fee or the Purchase Price;

 

63

 

6.2.2                   vacate the Licensed Premises forthwith save and except if the
Licence is terminated by Actual Completion;

 

6.2.3                   remove from the Licensed Premises all items belonging to them save
and except if the Licence is terminated by Actual Completion; and

 

6.2.4                   leave the Licensed Premises in a clean and tidy condition save and
except if the Licence is terminated by Actual Completion.

 

7                                      Licence

 

7.1                            Notwithstanding the terms of the Leases, the Sellers will allow the
Purchasers to share non-exclusive occupation of each of the Licensed Premises
in conjunction with the Sellers and/or Group Companies for the Licence Period
relating to the relevant Licensed Premises.

 

7.2                            The Licence of each Licensed Premises is granted:

 

7.2.1                   subject to all of the matters subject to which the relevant Leases
relating to the General Leasehold Premises or Japan Leasehold Premises (as the
case may be) are transferred under this Agreement;

 

7.2.2                   out of whatever right, title and interest (if any) that the Sellers
and/or Group Companies have in the relevant Leases and/or the Licensed
Premises;

 

7.2.3                   without making any statement or representation that the Sellers are
entitled to grant it; and

 

7.2.4                   entirely at the risk of the Purchasers.

 

7.3                            Without prejudice to Clause 6.5 of this Agreement, at General
Completion or Japan Completion (as the case may be), the Purchasers must pay to
the Sellers and/or Group Companies such a Licence Fee equal to:

 

7.3.1                   all rents payable in respect of the Licensed Premises for the period
from and including General Completion or Japan Completion (as the case may be)
to the second Quarter Day following General Completion or Japan Completion (as
the case may be) as they fall due under the relevant Lease; and

 

7.3.2                   the outgoings such as rates, government rent, management charges and
air-conditioning charges payable by the Sellers and/or Group Companies
(excluding the rents as mentioned in paragraph 7.3.1 of this Schedule) as they
fall due under the Lease for the period from and including General Completion
or Japan Completion (as the case may be) to and including the second Quarter
Day following General Completion or Japan Completion (as the case may be);

 

Provided that in the event that any Licence
is terminated, subject to the Sellers’ right to set-off or deduct any sum
payable by the Purchasers to the Sellers under this Schedule, the Sellers shall
as soon as practicable following such termination refund to the Purchasers any
pre-payment paid under this paragraph in respect of the unexpired term of such
Licence.

 

7.4                            Following identification by the Sellers of any other payments
payable as part of the rent and the outgoings as mentioned in paragraph 7.3 of
this Schedule for the period that the Purchasers are in occupation under this
Licence the Purchasers will pay a further amount 

 

64

 

to the Sellers and/or Group Companies by way
of Licence Fee equal to such amount. All payments to be made by the Purchasers
shall be either:

 

7.4.1                   payable not less than five Business Days before any sum falls due
subject to the Sellers giving the Purchasers not less than Seven (7) Business
Days written notice to that effect; or

 

7.4.2                   in the case of any sum already having become due to the Sellers
and/or Group Companies but there having been a miscalculation or mis-statement
of the component elements of the Licence Fee described at paragraph 7.3 of this
Schedule, all payments shall be payable to the Purchasers not less than 5
Business Days after the Sellers gives the Purchasers not less than Seven (7) Business
Days notice to that effect.

 

7.5                            The Sellers will apply all sums received from the Purchasers under
paragraphs 7.3 and 7.4 of this Schedule to pay the rents payable in respect of the Licensed
Premises and the outgoings as mentioned in paragraph
7.3.2 of this Schedule.

 

7.6                            If the Purchasers fail to make the payment or any part of it specified
in this paragraph 7 of this Schedule or are otherwise in breach of the
fundamental or material provisions of the Licence (other than the breaches in
paragraph 5.5 of this Schedule) then the Sellers shall give to the Purchasers
not less than 20 Business Days’ written notice requiring the Purchasers to
rectify the breach, failing which, the Sellers shall give to the Purchasers not
less than 20 Business Days’ written notice to terminate the Licence in respect
of a Licensed Premises specified in the notice.

 

7.7                            Throughout the period of the Licence, the Purchasers shall:

 

7.7.1                   pay and discharge, or otherwise indemnify the Sellers, the Group
Companies and the Insolvency Officers from and against, all outgoings and
expenses in respect of the Licensed Premises, including the cost of all rent,
rates, service charges, insurance, heating, electricity, gas,
telecommunications and other services, and the cost of complying with fire and
other statutory regulations to the extent not otherwise paid under paragraph 7.3
of this Schedule;

 

7.7.2                   keep the Licensed Premises in a state of repair at least as good as
they are in at General Completion or Japan Completion (as the case may be) fair
wear and tear excepted;

 

7.7.3                   comply with the provisions of the Lease under which the Sellers
and/or Group Companies holds the Licensed Premises (other than in relation to
the payment of rent);

 

7.7.4                   make good and pay for all damage to the Licensed Premises (including
accidental damage) caused by the Purchasers, its representatives or invitees to
the Licensed Premises;

 

7.7.5                   use the Licensed Premises only in accordance with the terms of the
user clause contained in the Lease of any one of the Licensed Premises;

 

7.7.6                   if applicable, indemnify the Sellers, the Group Companies and the Provisional
Liquidators from and against all Property Losses arising from or connected with
the Purchasers’ occupation of the Licensed Premises where the relevant Seller
is at General Completion or Japan Completion (as the case may be) an entity
either in liquidation or subject to analogous proceedings; and

 

65

 

7.7.7                   comply with any recommendations which the insurers of the Licensed
Premises may make in respect of them, including all recommendations in respect
of fire precautions.

 

7.8                            Throughout the period of the Licence, the Purchasers shall not:

 

7.8.1                   carry out any alterations without the Seller’s consent;

 

7.8.2                   use, or permit the use of, the whole of any part of the Licensed
Premises for any illegal purpose;

 

7.8.3                   store or bring upon the Licensed Premises anything that is
dangerous, illegal or inflammable;

 

7.8.4                   do, suffer or permit anything to be done which increases the
premiums payable in respect of any insurance of the Licensed Premises without
paying any such increased amount or makes that insurance void or voidable;

 

7.9                            This Licence will, at the election of the Sellers or the Insolvency
Officers (where the relevant Seller is an Insolvent Company), determine in
relation to any one or more of the Licensed Premises on reasonable notice from
the relevant Seller and/or the Insolvency Officers (as the case may be) if:

 

7.9.1                   the Sellers, the Group Companies and the Insolvency Officers or any
of them receives any notice or objection to the Purchasers’ occupation of the
relevant Licensed Premises from the relevant Landlord or any other competent
person; or

 

7.9.2                   subject to paragraph 7.6 of this Schedule, the Purchasers fail to
make the payment or any part of it specified in this paragraph 7 of this
Schedule or are otherwise in breach of the provisions of the Licence.

 

7.10                     On the termination of the Licence the Purchasers shall;

 

7.10.1            vacate the Licensed Premises forthwith;

 

7.10.2            remove from the Licensed Premises all items belonging to them;

 

7.10.3            leave the Licensed Premises in a clean and tidy condition.

 

7.11                      Determination of this Licence pursuant to paragraph 7.9 of this
Schedule shall:

 

7.11.1             have the effect of making the provisions of this Licence in so far
as it relates to the relevant Licensed Premises severable from the remainder of
this Agreement and this Agreement shall otherwise remain in full force and
effect;

 

7.11.2             not entitle the Purchasers to any refund, abatement or reduction of
the Purchase Price or any sums paid as Licence Fee; and

 

7.11.3             not prejudice or affect any claim by the Sellers and/or Group
Companies in respect of any prior breach of this Agreement by the Purchasers;

 

Provided that throughout the period of the
Licence, the Sellers shall take all reasonable steps to assist the Purchasers
in continuing their occupation of the General Leasehold Premises and the Japan
Leasehold Premises as contemplated under this Agreement.

 

7.12                     The occupation and use of the Licensed Premises pending Actual
Completion is at the sole risk and expense of the Purchasers.

 

66

 

7.13                     If the Landlord or any other relevant third party commences
proceedings, raises any objection or takes any other action in connection with
the Purchasers’ occupation or use of any of the Licensed Premises pending the
obtaining of the relevant Third Party Consent, the Purchasers shall be entitled
to forthwith terminate the Licence in relation to such Licensed Premises by
written notice to the Sellers or the Insolvency Officers (where the relevant
Seller is an Insolvent Company), and where the Purchaser does not so terminate
the Licence in relation to such Licensed Premises and the Sellers or the
Insolvency Officers (where the relevant Seller is an Insolvent Company) have
not determined the Licence pursuant to paragraph 7.9.1 of this Schedule in
relation to such Licensed Premises, the Purchasers shall forthwith take such
steps as the Sellers and/or Group Companies may reasonably and properly require
in connection with such proceedings, objection or action and shall indemnify
and keep indemnified the Sellers, the Group Companies and the Insolvency
Officers (where the relevant Seller is an Insolvent Company) and each of them
against Property Losses incurred by any of them in respect of such proceedings,
objection or action.

 

7.14                     The Purchasers and Sellers shall each inform the other forthwith of
any notice received by it in relation to any of the Licensed Premises from the
Landlord or any other third party.

 

67

 

A – SALE ASSETS EXHIBIT

 

68

 

B – TRANSFERRED EMPLOYEE EXHIBIT

 

[***]

 

69

 

C – LEASE EXHIBIT

 

70

 

Table of Contents

 

	
  Contents

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1

  	
  Interpretation

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  2

  	
  Agreement to sell the Sale Assets and
  transfer the Transferred Employees

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  3

  	
  Consideration

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  4

  	
  Conditions

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  5

  	
  Pre-Closing

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  6

  	
  Japan Completion and General Completion

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  7

  	
  Future transactions - Korea

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  8

  	
  Transferred Employees and Leasehold
  Premises

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  9

  	
  Book Debts

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  10

  	
  Apportionments

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  11

  	
  Retained Records

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  12

  	
  Warranties

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  13

  	
  Exclusions

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  14

  	
  Confidentiality

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  15

  	
  Liability of Insolvency Officers

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  16

  	
  Other Provisions

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 1 -
  Details of the Sellers

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 2 -
  Details of the Purchasers

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 3 – Price
  Allocation

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 4 - Completion
  Deliverables

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 5 –
  Transferred Employees

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 5 –
  Transferred Employees

  	
   

  	
  51

  
	
   

  	
   

  	
   

  
	
  Schedule 6 – The
  General Leasehold Premises and Japan Leasehold Premises

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  A – SALE ASSETS
  EXHIBIT

  	
   

  	
  68

  
					

 

i

 

	
  B – TRANSFERRED
  EMPLOYEE EXHIBIT

  	
  69

  
	
   

  	
   

  
	
  C – LEASE EXHIBIT

  	
  70

  

 

ii

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