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Exhibit 2.3
GENERAL SHARE PURCHASE AGREEMENT
AMONG
KONINKLIJKE LUCHTVAART MAATSCHAPPIJ N.V.
(KLM ROYAL DUTCH AIRLINES),
GALILEO NEDERLAND BV,
AND
GALILEO INTERNATIONAL PARTNERSHIP
DATED AS OF _______________, 1997
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TABLE OF CONTENTS
SECTION PAGE
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms.......................................................... 1
SECTION 1.02. Other Defined Terms............................................................ 6
ARTICLE II
PURCHASE AND SALE
SECTION 2.01. Purchase and Sale of the Shares................................................ 7
SECTION 2.02. Purchase Price................................................................. 7
SECTION 2.03. Closing........................................................................ 7
SECTION 2.04. Closing Deliveries............................................................. 7
SECTION 2.05. Cash Mechanism. .............................................................. 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
SECTION 3.01. Organization, Authority and Qualification of the
Seller............................................................. 11
SECTION 3.02. Organization, Authority and Qualification of the
Company. ......................................................... 11
SECTION 3.03. Shares......................................................................... 12
SECTION 3.04. No Conflict.................................................................... 13
SECTION 3.05. Consents and Approvals......................................................... 14
SECTION 3.06. Financial Information and Books and Records.................................... 14
SECTION 3.07. No Undisclosed Liabilities..................................................... 15
SECTION 3.08. Conduct in the Ordinary Course, Absence of Certain
Changes, Events and Conditions..................................... 15
SECTION 3.09. Violations and Litigation...................................................... 17
SECTION 3.10. Compliance with Laws........................................................... 17
SECTION 3.11. Environmental and Other Permits and Licenses;
Related Matters.................................................... 18
SECTION 3.12. Material Contracts............................................................. 18
SECTION 3.13. Intellectual Property.......................................................... 20
SECTION 3.14. Real Property and Leases....................................................... 21
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SECTION 3.15. Assets......................................................................... 21
SECTION 3.16. Labor Matters.................................................................. 22
SECTION 3.17. Taxes.......................................................................... 23
SECTION 3.18. Insurance...................................................................... 24
SECTION 3.19. Brokers........................................................................ 25
SECTION 3.20. Year 2000 Compliance........................................................... 25
SECTION 3.21. Network Services. ............................................................. 26
SECTION 3.22. Capital Contributions.......................................................... 26
SECTION 3.23. Relationship With Ogilvy & Xxxxxx.............................................. 26
SECTION 3.24. Certain Arrangements........................................................... 26
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
SECTION 4.01. Organization, Authority and Qualification of the
Purchaser. ....................................................... 27
SECTION 4.02. No Conflict.................................................................... 27
SECTION 4.03. Governmental Consents and Approvals............................................ 27
SECTION 4.04. Investment Purpose............................................................. 28
SECTION 4.05. Brokers........................................................................ 28
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Conduct of Business Prior to the Closing....................................... 28
SECTION 5.02. Access to Information.......................................................... 29
SECTION 5.03. Confidentiality................................................................ 30
SECTION 5.04. Regulatory and Other Authorizations; Notices and
Consents........................................................... 31
SECTION 5.05. Notice of Developments......................................................... 31
SECTION 5.06. No Solicitation of Employees................................................... 32
SECTION 5.07. Use of Intellectual Property................................................... 32
SECTION 5.08. Monthly Financial Statements................................................... 33
SECTION 5.09. Audit of Net Asset Test Reference Balance Sheet................................ 33
SECTION 5.10. Pre-Closing Balance Sheet...................................................... 33
SECTION 5.11. Company Pension Fund........................................................... 34
SECTION 5.12. Certain Services............................................................... 35
SECTION 5.13. Certain Intercompany Payments.................................................. 35
SECTION 5.14. Further Action................................................................. 36
SECTION 5.15. Seconded Employees............................................................. 36
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SECTION 5.16. Business Plan.................................................................. 37
ARTICLE VI
TAX MATTERS
SECTION 6.01. Tax Indemnity.................................................................. 37
SECTION 6.02. Apportionment of Taxes......................................................... 38
SECTION 6.03. Returns and Payments........................................................... 39
SECTION 6.04. Contests....................................................................... 40
SECTION 6.05. Survival of Obligations........................................................ 42
SECTION 6.06. Conveyance Taxes............................................................... 42
SECTION 6.07. Tax Refunds, Credits and Other Payments........................................ 42
SECTION 6.08. Performance of Acts............................................................ 43
ARTICLE VII
CONDITIONS TO CLOSING
SECTION 7.01. Conditions to Obligations of the Seller and the
Company............................................................ 43
SECTION 7.02 Conditions to Obligations of the Purchaser...................................... 44
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. Survival of Representations and Warranties..................................... 46
SECTION 8.02. Indemnification by the Seller.................................................. 47
SECTION 8.03. Tax Matters.................................................................... 49
SECTION 8.04. Indemnification by the Purchaser............................................... 49
SECTION 8.05. Indemnification Procedures..................................................... 50
ARTICLE IX
TERMINATION AND WAIVER
SECTION 9.01. Termination.................................................................... 51
SECTION 9.02. Effect of Termination.......................................................... 52
SECTION 9.03. Waiver......................................................................... 52
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ARTICLE X
GENERAL PROVISIONS
SECTION 10.01. Expenses...................................................................... 53
SECTION 10.02. Notices. ..................................................................... 53
SECTION 10.03. Public Announcements.......................................................... 55
SECTION 10.04. Headings...................................................................... 55
SECTION 10.05. Severability.................................................................. 55
SECTION 10.06. Entire Agreement.............................................................. 55
SECTION 10.07. Assignment.................................................................... 56
SECTION 10.08. No Third Party Beneficiaries.................................................. 56
SECTION 10.09. Amendment..................................................................... 56
SECTION 10.10. Arbitration................................................................... 56
SECTION 10.11. Governing Law................................................................. 58
SECTION 10.12. Counterparts.................................................................. 58
SECTION 10.13. Specific Performance.......................................................... 58
SECTION 10.14. No rescission................................................................. 58
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SCHEDULE 1.01(a)
[TO COME]
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SCHEDULE 1.01(b)
[TO COME]
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GENERAL SHARE PURCHASE AGREEMENT (this "Agreement"), dated as
of ________, 1997, among KONINKLIJKE LUCHTVAART MAATSCHAPPIJ N.V. (KLM Royal
Dutch Airlines), a public company incorporated in The Netherlands (the
"Seller"), GALILEO NEDERLAND BV, a Dutch private company with limited liability
(the "Company"), and GALILEO INTERNATIONAL PARTNERSHIP, a Delaware general
partnership, and any successor in interest thereto, including, without
limitation, the corporation or limited liability company formed in connection
with the IPO (the "Purchaser").
WHEREAS, the Seller has full right and title to 40 issued and
outstanding shares, nominal value NLG 1,000 per share, in the share capital of
the Company with numbers 1 through 40 (the "Shares"), which constitute all of
the issued and outstanding shares in the share capital of the Company; and
WHEREAS, the Seller desires to sell, and the Purchaser desires
to acquire, the Shares upon the terms and subject to the conditions set forth
herein;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements and covenants hereinafter set forth, the Purchaser and the
Seller hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings:
"Accounting Principles" means the requirements of all relevant
laws and accounting principles generally accepted in The Netherlands with
respect to the preparation of financial statements and monthly accounts.
"Action" means any claim, action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental Authority.
"Affiliate" means, with respect to any specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person.
"After-Tax Basis" means, (i) with respect to any Loss that is
required to be indemnified pursuant to Article VI or Article VIII on an
After-Tax Basis, that the indemnification payment will be calculated so as to
take into account both the deductibility or creditability by the indemnitee or
the Company for Tax purposes of the Loss being
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indemnified and the taxability to the indemnitee of the indemnifying payment
(including taxability of any payments made to gross up for the taxability of the
indemnifying payment), and (ii) with respect to any refund or credit that is
required to be paid on an After-Tax Basis pursuant to Section 6.07, that the
refund or credit payable by the Purchaser to the Seller will be calculated so as
to take into account both the deductibility by the Company for Tax purposes of
the payment of such refund or credit to the Seller and (a) the taxability to the
Company of the receipt of the refund or credit and (b) any tax to the Company or
the Purchaser (or any Affiliate thereof) in connection with any distribution of
the credit or refund (or any portion thereof) to the Purchaser (or any Affiliate
thereof).
"Agreement" or "this Agreement" means this Share Purchase
Agreement, dated as of , 1997, among the parties listed in the preamble
(including the Exhibits hereto and the Seller's Disclosure Schedule) and all
amendments hereto made in accordance with the provisions of Section 10.09.
"Business Day" means any day that is not a Saturday, a Sunday
or other day on which banks are required or authorized by law or by the
applicable collective labour agreement ("CAO") to be closed in The Netherlands.
"Company Intellectual Property" means all trademarks,
trademark rights, trade names, trade name rights, patents, patent rights,
industrial models, inventions, copyrights, service marks, trade secrets,
applications for trademarks and for service marks, know-how and other
proprietary rights and information used or held for use in connection with the
business of the Company as currently conducted or as contemplated (by existing
Company management) to be conducted, together with all applications currently
pending for any of the foregoing.
"control" (including the terms "controlled by" and "under
common control with"), with respect to the relationship between or among two or
more Persons, means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of voting securities, as
trustee or executor, by contract or otherwise, including, without limitation,
the ownership, directly or indirectly, of securities having the power to elect a
majority of the board of directors or similar body governing the affairs of such
Person.
"Encumbrance" means any security interest, pledge, mortgage,
lien (including, without limitation, environmental and tax liens), charge,
encumbrance, adverse claim, attachment, usufruct, preferential arrangement or
restriction of any kind, including, without limitation, any restriction on the
use, voting, transfer, receipt of income or other exercise of any attributes of
ownership.
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"Environment" means surface waters, groundwaters, surface
water sediment, soil, subsurface strata and ambient air.
"Environmental Claims" means any and all actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or violation,
notices of liability or potential liability, investigations, proceedings,
consent orders or consent agreements relating in any way to any Environmental
Law, any Environmental Permit or any Hazardous Material or arising from any
alleged injury or threat of injury to health, safety or the Environment.
"Environmental Law" means any Law, now or hereafter in effect
and as amended, and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or judgment,
relating to pollution or protection of the Environment, health or safety or to
the use, handling, transportation, treatment, storage, disposal, release or
discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required to operate the
business of the Company under any applicable Environmental Law.
"Governmental Authority" means any Dutch or foreign federal,
state or local government, governmental, regulatory or administrative authority,
agency or commission or any court, tribunal, or judicial or arbitral body.
"Governmental Order" means any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority, other than any rules and regulations (whether
promulgated by order or otherwise) which apply generally to the computer
reservations system industry.
"Hazardous Materials" means (a) petroleum and petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials and polychlorinated biphenyls and (b) any other
chemicals, materials or substances regulated as toxic or hazardous or as
pollutant, contaminant or waste under any applicable Environmental Law.
"Income Taxes" means corporate income Taxes as defined in the
Dutch Corporate Income Tax Act of 1969 or any successor provisions or similar
non-Dutch levies.
"Independent Accounting Firm" means any one of the "big six"
accounting firms other than the Purchaser's accountants and the Seller's
accountants.
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"Law" means any federal, state, national, provincial,
municipal, local or foreign statute, law, ordinance, regulation, rule, code,
order, other requirement or rule of law.
"Liabilities" means any and all debts, liabilities and
obligations, whether accrued or fixed, absolute or contingent, matured or
unmatured or determined or determinable, including, without limitation, those
arising under any Law (including without limitation, any Environmental Law),
Action or Governmental Order and those arising under any contract, agreement,
arrangement, commitment or undertaking.
"Material Adverse Effect" means any change in or effect on the
business of the Company that, when taken individually or together with all other
adverse changes and effects, is or is reasonably likely to be materially adverse
to the business, operations, properties, condition (financial or otherwise),
assets or Liabilities of the Company or prevents consummation of the
transactions contemplated hereby.
"Net Asset Test Reference Balance Sheet" means the balance
sheet (including the related notes and schedules thereto) of the Company, dated
as of March 31, 1997, prepared by the Seller, excluding (i) any indebtedness for
borrowed money of the Company and (ii) any Cash other than cash in the amount of
any checks outstanding, a copy of which is set forth in Section 3.06(a) of the
Seller's Disclosure Schedule.
"Net Assets" means the excess of total assets over total
liabilities of the Company shown on the Net Asset Test Reference Balance Sheet,
the Audited Net Asset Test Reference Balance Sheet, the Pre-Closing Balance
Sheet or the Seasonally Adjusted Net Asset Test Reference Balance Sheet, as
applicable.
"Ordinary Course Taxes" means Taxes, other than Income Taxes
or VAT, relating to periods (or portions thereof) prior to the Closing Date and
paid by the Company after the Closing Date in the ordinary course of business
and not as a result of an audit or examination by a government or Tax authority
or an administrative or judicial proceeding or a settlement or compromise
thereof in connection with a Tax previously paid or a Return previously filed.
"Permitted Encumbrances" means such of the following as to
which no enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced: (a) liens for Taxes, assessments and governmental
charges or levies not yet due and payable; (b) Encumbrances imposed by law, such
as materialmen's, mechanics', carriers', workmen's and repairmen's liens and
other similar liens arising in the ordinary course of business securing
obligations; (c) pledges or deposits to secure obligations under workers'
compensation laws or similar legislation or to secure public or statutory
obligations; and (d) minor survey exceptions, reciprocal easement agreements and
other customary
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encumbrances on title to real property that (i) were not incurred in connection
with any indebtedness for borrowed money of the Company, (ii) do not render
title to the property encumbered thereby unmarketable and (iii) do not,
individually or in the aggregate, materially adversely affect the value or use
of such property for its current and anticipated purposes.
"Person" means any individual, partnership, limited liability
company, firm, corporation, association, trust, unincorporated organization or
other entity.
"Purchaser's Accountants" means KPMG Peat Marwick LLP,
independent accountants of the Purchaser.
"Real Property" means the real property leased or owned by the
Company.
"Return" means any return, report or form relating to a Tax or
Taxes.
"Seasonally Adjusted Net Asset Test Reference Balance Sheet"
means the Net Asset Test Reference Balance Sheet adjusted to multiply current
assets reflected thereon by the appropriate seasonal adjustment factors set
forth on Schedule 1.01(a) hereto and current liabilities by the appropriate
seasonal adjustment factors set forth on Schedule 1.01(b) hereto.
"Tax" or "Taxes" means any and all taxes, fees, levies,
duties, tariffs, imposts, and other similar charges (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any government or taxing authority (whether federal,
state, local, foreign or otherwise), including, without limitation: Income
Taxes, VAT, gift taxes, environmental levies, other community charges, any other
taxes or other charges on or with respect to income, franchises, windfall or
other profits, gross receipts, property, sales, use, capital stock, payroll
(including, without limitation, wage Taxes), employment, social security
(including, without limitation, premiums), workers' compensation, unemployment
compensation, or net worth; taxes or other charges in the nature of excise,
withholding, ad valorem, stamp, transfer, value added, or gains taxes; license,
registration and documentation fees; and customs duties, tariffs, and similar
charges.
"Tax Benefit" means the value, when actually received, of any
deduction, loss, credit or refund to the Purchaser, the Company or the Seller,
as the case may be.
"VAT" means Value Added Tax as defined in the Dutch Value
Added Tax Act of 1968 or any successor provisions or similar non-Dutch levies.
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SECTION 1.02. Other Defined Terms. Each of the following terms
is defined in the Section set forth opposite such term:
Terms Section
----- -------
Agreement ..................................................................................Preamble
Arbitration Panel.........................................................................10.10(iii)
Arbitration Request.........................................................................10.10(i)
Assets.......................................................................................3.15(a)
Audited Net Asset Test Reference Balance Sheet..................................................5.09
Average Cash Amount..........................................................................2.05(b)
Award......................................................................................10.10(iv)
Business Plan...................................................................................5.16
Cash.........................................................................................2.05(b)
Cash Payment Amount..........................................................................2.05(b)
Claimant..................................................................................10.10(iii)
Closing.........................................................................................2.03
Closing Cash Amount..........................................................................2.05(e)
Closing Date....................................................................................2.03
Company.....................................................................................Preamble
Company Accrued Benefits.....................................................................5.11(c)
Company Charter Documents....................................................................3.02(a)
Company Licenses................................................................................3.13
Company Names................................................................................5.07(a)
Demand of Arbitration.......................................................................10.10(i)
Dispute Notice..............................................................................10.10(i)
Employee.....................................................................................5.15(a)
Employment Offer.............................................................................5.15(b)
Escrow Agent..............................................................................2.05(f)(i)
Financial Statements.........................................................................3.06(a)
Indemnified Party...............................................................................8.05
Indemnifying Party..............................................................................8.05
Independent Accounting Firm..............................................................2.04(b)(ii)
IPO.............................................................................................2.03
Loss.........................................................................................8.02(a)
Material Contracts...........................................................................3.12(a)
Measuring Period.............................................................................2.05(b)
New Pension Plan.............................................................................5.11(a)
Non-Disclosure Agreement.....................................................................5.03(a)
Old Pension Plan.............................................................................5.11(b)
Pre-Closing Balance Sheet.......................................................................5.10
Purchase Price..................................................................................2.02
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Purchaser...................................................................................Preamble
Purchaser Indemnified Party..................................................................8.02(a)
Respondent................................................................................10.10(iii)
SEC..........................................................................................5.03(a)
Seller......................................................................................Preamble
Seller's Disclosure Schedule.................................................................3.02(a)
Seller Indemnified Party.....................................................................8.04(a)
Shares......................................................................................Recitals
SITA.........................................................................................3.21(c)
Third Party Claim...............................................................................8.05
Transaction Agreement........................................................................7.01(f)
ARTICLE II
PURCHASE AND SALE
SECTION 2.01. Purchase and Sale of the Shares. Upon the terms
and subject to the conditions of this Agreement, the Seller hereby agrees to
sell to the Purchaser at the Closing, and the Purchaser hereby agrees to
purchase from the Seller at the Closing, the Shares.
SECTION 2.02. Purchase Price. The purchase price for the
Shares shall be US$2,000,000 in cash (the "Purchase Price").
SECTION 2.03. Closing. Upon the terms and subject to the
conditions of this Agreement, the sale and purchase of the Shares shall take
place at a closing (the "Closing") to be held at the offices of [Shearman &
Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, New York] at 10:00 a.m. New York time
on the day of the consummation of the proposed initial public offering by the
Purchaser (the "IPO"), or at such other place or at such other time or on such
other date as the Seller and the Purchaser may mutually agree upon in writing
(the day on which the Closing takes place being the "Closing Date").
SECTION 2.04. Closing Deliveries. (a) At the Closing and upon
payment of the Purchase Price, (i) the Seller and the Company shall deliver to
the Purchaser any documents required to be delivered by the Seller and the
Company pursuant to Section 7.02, (ii) the Seller shall transfer the Shares to
the Purchaser through the signing by the parties of a deed of transfer, which
will be passed by any civil law notary of Xxxxx Dutilh, and (iii) the Company
shall acknowledge the transfer of the Shares and shall enter such transfer in
its register of shareholders.
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(b) At the Closing and upon receipt of the documents described
in Section 2.04(a), the Purchaser shall deliver to the Seller (i) any documents
required to be delivered by the Purchaser pursuant to Section 7.01, and (ii) the
Purchase Price.
SECTION 2.05. Cash Mechanism. (a) Subject to the provisions of
this Section 2.05, at or immediately following the Closing, the Company will pay
to the Seller the Cash Payment Amount.
(b) For purposes of this Section 2.05, (i) the "Average Cash
Amount" means, subject to adjustment as set forth in Section 2.05(c), the amount
of cash that is equal to the simple average daily balance of cash, time
deposits, certificates of deposit, marketable securities and other short term
investments and cash equivalents, including the "current account" balance
between the Company and the Seller (whether positive or negative) ("Cash") of
the Company at the close of business on each Business Day during the Measuring
Period, (ii) "Measuring Period" means the period commencing at 12:01 a.m. on the
date of the month immediately preceding the month in which the Closing Date
occurs that is the same date of the month as the Closing Date (or if such date
is not a calendar date, the date that corresponds most closely to the date that
is the Closing Date) and ending at 11:59 p.m. on the day immediately preceding
the Closing Date, and (iii) "Cash Payment Amount" means the Average Cash Amount
less the checks issued by the Company that have not cleared on the Closing Date.
(c) The Average Cash Amount will be adjusted in the event the
Company makes any Cash distribution (in respect of the Shares) to the Seller
during the Measuring Period by subtracting the amount of any such distribution
from the daily amount of Cash in each of the days during the Measuring Period
immediately preceding the date of such distribution.
(d) During the Measuring Period, each of the Purchaser and the
Company will make all payments that are to be made to each other under existing
contractual arrangements or agreements in the ordinary course of business
consistent with past practice. In addition, during the Measuring Period, the
Company will conduct its business in the ordinary course consistent with past
practice, including, without limitation, not shortening or lengthening the
customary payment time for any of its payables or receivables and continuing its
purchasing and capital purchasing practices in accordance with past practice. To
facilitate the foregoing, (i) the Seller shall circulate to the relevant
personnel of the Company at least thirty days prior to the expected commencement
of the Measuring Period written instructions to such effect, (ii) the Company
will provide representatives of the Purchaser with access, at reasonable times,
to all offices, personnel, books and records of the Company that the Purchaser
may reasonably request for purposes of monitoring the compliance by the
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Company with this Section 2.05(d) and the calculation by the Company of the
Average Cash Amount, the Cash Payment Amount and the Closing Cash Amount in
accordance with this Section 2.05, and (iii) the parties will agree on mutually
agreeable procedures for implementing the cash transfers described in Section
2.05(e). During the period from 11:59 p.m. on the day immediately preceding the
Closing Date through the Closing, the Company will make no payments of cash
except pursuant to normal banking transactions, including check clearing or
deposits, that are not under the control of the Company, or pursuant to
contractual obligations with third parties that were previously disclosed to the
Purchaser or that were entered into in the ordinary course of business
consistent with past practice.
(e) On the Closing Date, the Company will inform each of the
Seller and the Purchaser of the (i) Average Cash Amount, as well as the
calculations resulting therein, (ii) the aggregate amount with respect to which
checks of the Company have been issued but not cleared on the Closing Date, and
(iii) the amount of Cash of the Company as of 12:01 a.m. on the Closing Date
(the "Closing Cash Amount"). If the Closing Cash Amount is less than the Cash
Payment Amount, then the Purchaser will make available to the Company such
difference and, subject to the provisions of Section 2.05(f), the Cash Payment
Amount will be paid to the Seller as set forth in Section 2.05(a). If the
Closing Cash Amount is greater than the Cash Payment Amount, then, subject to
the provisions of Section 2.05(f), the Cash Payment Amount will be paid to the
Seller as set forth in Section 2.05(a), and the difference between the Closing
Cash Amount and the Cash Payment Amount will be retained by the Company.
(f) (i) Prior to the Closing, the Purchaser and the Seller
shall enter into an Escrow Agreement, in substantially the form attached hereto
as Exhibit 2.05(f), with a third party selected by the Purchaser and reasonably
acceptable to the Seller (the "Escrow Agent"). In accordance with the terms of
the Escrow Agreement, the Seller will, on the Closing Date, deposit the sum of
NLG 500,000 with the Escrow Agent, which will hold such amount in an interest
bearing account until the day that is 90 days following the Closing Date, to be
managed and paid out in accordance with the Escrow Agreement and this Section
2.05.
(ii) Not later than 90 days after the Closing Date, the
Purchaser will deliver to the Seller its calculation of the Average Cash Amount
and the aggregate amount with respect to which checks of the Company had been
issued but not cleared on the Closing Date, including a correction of any
manifest errors set forth in the Company's calculation of such amounts pursuant
to Section 2.05(e). In the event the Purchaser determines, within such 90 day
period following the Closing Date, that the agreements of the Company contained
in Section 2.05(d) were not complied with and, as a result of such
non-compliance, the Average Cash Amount was either greater or
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lesser than the average amount of Cash that the Company would have had during
the Measuring Period had such provisions been complied with, the Purchaser will
provide written notice to the Seller to such effect, specifying the amount of
the difference and its reasons for such determination. In the absence of any
written notice of dispute delivered by the Seller to the Purchaser and the
Escrow Agent within 10 days after receipt of the Purchaser's written notice as
to such determination and the amount of such difference, (x) in the event the
Average Cash Amount is greater than it would have been, the Purchaser will
receive from the Escrow Agent and the Seller, if appropriate, a cash payment
equal to the amount of such difference, together with interest thereon, as set
forth in clause (iii) below, and (y) in the event the Average Cash Amount is
less than it would have been, the Seller will receive from the Company or the
Purchaser a cash payment equal to the amount of such difference, together with
interest thereon, as set forth in clause (iii) below. In the event the Seller
delivers such a written notice disputing such determination or the amount of
such difference, such dispute will be submitted for resolution to the
Independent Accounting Firm, which will resolve such dispute within 30 days of
the date of such submission and whose decision will be final and binding on the
Seller and the Purchaser. The fees and expenses of the Independent Accounting
Firm will be allocated between the Purchaser, on the one hand, and the Seller,
on the other hand, in the same proportion that the aggregate amount of the
difference so submitted to the Independent Accounting Firm that is
unsuccessfully disputed by the Seller, on the one hand, or the Purchaser, on the
other hand, bears to the total amount of the difference so submitted.
(iii) In the event any payment is to be made to the Purchaser
pursuant to clause (ii) above, the Escrow Agent will pay such amount to the
Purchaser, together with the appropriate amount of interest thereon, and if such
payment is less than the amount of such difference, the Purchaser will recover
such excess amount from the Seller, together with interest thereon from the
Closing Date to and including the date of payment by the Seller to the Purchaser
at the Interest Rate (as such term is defined in the Escrow Agreement), pursuant
to the provisions of Section 8.02 (except that the provisions of Section
8.02(b)(i) and (ii) will not apply). In the event any payment is to be made to
the Seller pursuant to clause (ii) above, the Company or the Purchaser will pay
such amount to the Seller, together with interest thereon from the Closing Date
to and including the date of payment by the Company or Purchaser to the Seller
at the Interest Rate, pursuant to the provisions of Section 8.04. In the event
any amount remains in the Escrow Fund (as such term is defined in the Escrow
Agreement) on the later of (A) the 90th day following the Closing Date or (B)
the date on which any dispute pursuant to Section 2.5(f)(ii) has been resolved,
all amounts held by the Escrow Agent on such day, after giving effect to any
payments to be made to the Purchaser hereunder, will be paid to the Seller,
including all interest accrued on the remaining principal amount.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
As an inducement to the Purchaser to enter into this
Agreement, the Seller hereby represents and warrants to the Purchaser as
follows:
SECTION 3.01. Organization, Authority and Qualification of the
Seller. The Seller is a corporation duly organized and validly existing under
the laws of the Netherlands and has all necessary power and authority to enter
into this Agreement, to carry out its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement by the Seller, the performance by the Seller of its obligations
hereunder and the consummation by the Seller of the transactions contemplated
hereby have been duly authorized by all requisite action on the part of the
Seller. This Agreement has been duly executed and delivered by the Seller and
(assuming due authorization, execution and delivery by the Purchaser) this
Agreement constitutes a legal, valid and binding obligation of Seller
enforceable against it in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally or by general principles of equity.
SECTION 3.02. Organization, Authority and Qualification of the
Company. (a) The Company is a private company with limited liability ("besloten
vennootschap met beperkte aansprakelijkheid ") duly incorporated and validly
existing under the laws of The Netherlands with B.V. number 34074914 and (except
in those jurisdictions set forth in Section 3.02(a) of the disclosure schedule
which has been delivered by the Seller to the Purchaser prior to the date hereof
and which is attached hereto (the "Seller's Disclosure Schedule")) is duly
licensed or qualified to do business and is in good standing in each
jurisdiction in which the properties owned or leased by it or the operation of
its business makes such licensing or qualification necessary. The Company has
all the necessary power and authority to own, operate or lease the properties
and assets owned, operated or leased by it and to carry on its business as it
has been and is currently conducted by the Company. All material actions taken
by the Company have been duly authorized, and the Company has not taken any
material action that in any respect conflicts with or results in a violation of
any provision of the Company's organizational documents (the "Company Charter
Documents"). A true and correct copy of the Company Charter Documents, as in
effect on the date hereof, has been delivered by the Seller to the Purchaser.
The execution and delivery of this Agreement by the Company, the performance by
the Company of its obligations hereunder and the consummation by the Company of
the transactions contemplated hereby have been duly authorized by all requisite
action on
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the part of the Company. This Agreement has been duly executed and delivered by
the Company, and (assuming due authorization, execution and delivery by the
Purchaser) this Agreement constitutes a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally or by general principles of
equity.
(b) There has been no proposal made or resolution adopted (by
the competent corporate bodies) for the dissolution or liquidation of the
Company, nor, to the best of the Seller's and the Company's knowledge, do any
circumstances exist which may result in the dissolution or liquidation of the
Company, and no proposal has been made or resolution adopted for the statutory
merger ("juridische fusie") of the Company with any other entity.
(c) The Company has neither been declared bankrupt nor been
granted a moratorium of payments ("surceance van betaling"), nor has it applied
for a declaration of bankruptcy or a moratorium of payments.
(d) No resolution has been passed or adopted by any corporate
body of the Company which has not been fully executed or implemented.
(e) The Company is registered in the Trade Register at
[_________] (number [ ]). The extract dated ____________ attached hereto as
Exhibit 3.02(e) is correct and complete as of the date thereof and the
information contained therein has not been modified by any later filing.
(f) The Company has no managing directors ("statutair
directeuren"), supervisory directors ("commissarissen") or proxyholders
("procuratiehouders") other than the persons named in the extract(s) referred to
in Section 3.02(e).
(g) There are no other corporations, partnerships or limited
liability companies in which the Company owns, of record or beneficially, any
direct or other interest or any right (contingent or otherwise) to acquire the
same. The Company is not, directly or indirectly, a participant in any joint
venture.
SECTION 3.03. Shares. The authorized share capital of the
Company consists of 200 ordinary shares with a nominal value of NLG 1,000 each,
of which 40 shares have been validly issued and, of the issued shares, no shares
have been repurchased and redeemed by the Company. There are no grounds on the
basis whereof any issue of the shares may be invalidated. As of the date hereof,
the Seller has full right and title to the Shares. None of the Shares was issued
in violation of
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any preemptive rights. There are no options, warrants, convertible securities or
other rights, agreements, arrangements or commitments of any character relating
to the Shares or any other equity interests of the Company or obligations of the
Seller to issue or sell any shares of capital stock of the Company or any other
interest in the Company. There are no outstanding contractual obligations of the
Company to repurchase, redeem or otherwise acquire any equity interests of or to
provide funds to, or make any investment (in the form of a loan, capital
contribution or otherwise) in, any other Person. The Shares constitute all the
issued and outstanding equity interests in the Company, are fully paid up and
are free and clear of all Encumbrances. Upon consummation of the transactions
contemplated by Article II, the Purchaser will own 100% of all the issued and
outstanding shares of the Company's capital stock, free and clear of all
Encumbrances (other than Encumbrances created by the Purchaser). There are no
voting trusts, proxies or other agreements or understandings in effect with
respect to the voting or transfer of any of the Shares. No depository receipts
of shares in the Company's capital stock have been issued with the cooperation
of the Company. Other than a dividend to be paid in respect of the fiscal year
ending on March 31, 1997, since March 31, 1997, no (interim) dividend or other
distribution has been declared on the Shares or has been paid or agreed to be
paid from the general reserves of the Company.
SECTION 3.04. No Conflict. The execution and delivery of this
Agreement by the Seller and the Company does not, and the performance of this
Agreement by the Seller and the Company will not as of the Closing Date, (a)
violate, conflict with or result in the breach of any provision of the articles
of association ("statuten") of the Seller or the Company as in effect on the
date hereof or as of the Closing Date, as applicable, (b) conflict with or
violate (or cause an event which could have a Material Adverse Effect as a
result of) any Law or Governmental Order applicable to the Seller or the
Company, or any of their respective assets, properties or businesses, as in
effect on the date hereof or as of the Closing Date, as applicable, or (c)
conflict with, result in any breach of, constitute a default (or event which
with the giving of notice or lapse of time, or both, would become a default)
under, require any consent under, or give to others any rights of termination,
amendment, acceleration, suspension, revocation or cancellation of, or result in
the creation of any Encumbrance on any of the Shares or on any of the assets or
properties of the Company pursuant to, any note, bond, mortgage or indenture, or
material contract, agreement, lease, sublease, license, sublicense, permit,
franchise or other instrument or arrangement to which the Seller or the Company
is a party or by which any of the Shares or any of the Company's assets or
properties is bound or affected; provided, however, that any breach of this
clause (c) that results directly from any act or omission of the Purchaser or
one of its Affiliates after the Closing Date shall not be deemed a breach of
this clause (c) for purposes of this Agreement.
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SECTION 3.05. Consents and Approvals. The execution, delivery
and performance of this Agreement by the Seller and the Company do not and will
not require any consent, approval, authorization or other order of, action by,
filing with or notification to any Governmental Authority or any other Person,
except for the consents, approvals and authorizations set forth in Section 3.05
of the Seller's Disclosure Schedule.
SECTION 3.06. Financial Information and Books and Records. (a)
True and complete copies of the balance sheet of the Company for each of the
three fiscal years ended as of March 31, 1995, March 31, 1996 and March 31,
1997, and the related statements of income, together with all related notes and
schedules thereto, accompanied by the reports thereon of the Seller's internal
auditors (collectively referred to herein as the "Financial Statements") have
been delivered by the Seller to the Purchaser. The Financial Statements and the
Net Asset Test Reference Balance Sheet (i) were prepared in accordance with the
books of account and other financial records of the Company, (ii) present fairly
the financial condition and results of operations of the Company as of the dates
thereof or for the periods covered thereby, (iii) have been prepared in
accordance with the Accounting Principles applied on a consistent basis, (iv)
include all adjustments (consisting only of normal adjustments) that are
necessary for a fair presentation of the financial condition of the Company and
the results of the operations of the Company as of the dates thereof or for the
periods covered thereby, except in the case of the Net Asset Test Reference
Balance Sheet (a copy of which is set forth in Section 3.06(a) of the Seller's
Disclosure Schedule), which excludes (A) any indebtedness for borrowed money of
the Company and (B) any Cash other than cash in the amount of any checks
outstanding, and (v) are not materially distorted by items of an unusual or
non-recurring nature nor are they materially affected by the results of
transactions with Persons directly or indirectly related to the Company or the
Seller (except as expressly disclosed in the explanatory notes thereto).
(b) The books of account and other financial records of the
Company: (i) reflect all items of income and expense and all assets and
Liabilities required to be reflected therein in accordance with the Accounting
Principles and (ii) are in all material respects complete and correct, and do
not contain or reflect any material inaccuracies or discrepancies.
(c) Except as set forth in Section 3.06(c) of the Seller's
Disclosure Schedule, the minute books of the Company contain accurate records of
all meetings and accurately reflect all other actions taken by the Company or by
the Seller as sole stockholder thereof. Complete and accurate copies of all such
minute books have been provided to the Purchaser.
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SECTION 3.07. No Undisclosed Liabilities. There are no
Liabilities of the Company, other than Liabilities (i) reflected or reserved
against on the Net Asset Test Reference Balance Sheet, (ii) incurred since March
31, 1997 in the ordinary course of the business, consistent with the past
practice, of the Company or (iii) disclosed in this Agreement or in the Seller's
Disclosure Schedule and which do not and could not have a Material Adverse
Effect.
SECTION 3.08. Conduct in the Ordinary Course, Absence of
Certain Changes, Events and Conditions. Except as disclosed in Section 3.08 of
the Seller's Disclosure Schedule, since March 31, 1997, the business of the
Company has been conducted in the ordinary course and consistent with past
practice. As amplification and not limitation of the foregoing, since March 31,
1997, except as disclosed in Section 3.08 of the Seller's Disclosure Schedule,
the Company has not:
(i) permitted or allowed any of its assets or properties
(whether tangible or intangible) to be subjected to any Encumbrance,
other than Permitted Encumbrances;
(ii) except in the ordinary course of business consistent with
past practice, discharged or otherwise obtained the release of any
Encumbrance or paid or otherwise discharged any Liability, other than
current liabilities reflected on the Net Asset Test Reference Balance
Sheet and current liabilities incurred in the ordinary course of
business consistent with past practice since March 31, 1997;
(iii) made any loan to, guaranteed any indebtedness of or
otherwise incurred any indebtedness on behalf of any Person;
(iv) redeemed any of the Shares;
(v) except as specifically requested by the Purchaser or as
required to accommodate changes in the Purchaser's business practices,
made any material changes in the customary methods of operations of the
Company including, without limitation, practices and policies relating
to marketing, selling and pricing;
(vi) merged with, entered into a consolidation with or
acquired any interest in any Person or acquired a substantial portion
of the assets or business of any Person or any division or line of
business thereof, or otherwise acquired any material assets;
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(vii) made any capital expenditure or commitment for any
capital expenditure in excess of the capital expenditures contemplated
by the planned budget, a true and complete copy of which has been
provided to the Purchaser;
(viii) sold, transferred, leased, subleased, licensed or
otherwise disposed of any properties or assets, real, personal or mixed
(including, without limitation, leasehold interests and intangible
assets) with an individual value in excess of NLG 25,000;
(ix) issued or sold any Shares or other equity interest or any
option, warrant or other right to acquire the same of, or any other
interest in, the Company, except as contemplated by this Agreement;
(x) except for agreements, arrangements or transactions with
the Purchaser or having an individual value of less than NLG 25,000,
entered into any agreement, arrangement or transaction with any of its
managing directors, supervisory directors, any employees of the Seller
who are seconded to the Company, or any of its stockholders (or with
any relative, beneficiary, spouse or Affiliate of such Person):
(xi) (A) granted any increase, or announced any increase, in
the wages, salaries, compensation, bonuses, incentives, pension or
other benefits payable by the Company to any of its employees,
including, without limitation any increase or change pursuant to any
Plan, or (B) established or increased or promised to increase any
benefits under any Plan, in either case except for ordinary increases
consistent with the past practices of the Company:
(xii) revalued any assets of the Company other than in
accordance with Applicable Accounting Principles;
(xiii) amended, terminated, canceled or compromised any
material claims of the Company or waived any other rights of material
value to the Company;
(xiv) made any material change in any method of accounting or
accounting practice or policy used by the Company;
(xv) amended or restated the organizational documents of the
Company;
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(xvi) made any express or deemed election or settled or
compromised any liability that is the subject of a dispute with any
government or taxing authority, with respect to (A) Taxes of the
Company or (B) Taxes, insofar as Company items are involved, of the
Seller;
(xvii) suffered any casualty loss or damage with respect to
any of the Assets which individually has a replacement cost of more
than NLG 25,000, which loss or damage shall not have been covered by
insurance;
(xviii) suffered any Material Adverse Effect; or
(xix) agreed, whether in writing or otherwise, to take any of
the actions specified in this Section 3.08 or granted any options to
purchase, rights of first refusal, rights of first offer or any other
similar rights or commitments with respect to any of the actions
specified in this Section 3.08.
SECTION 3.09. Violations and Litigation. (a) Except as set
forth in Section 3.09 of the Seller's Disclosure Schedule, there are no Actions
by or against the Company (or by or against the Seller or any Affiliate thereof
and relating to the Company or its business) or affecting any of the Assets,
pending or threatened before any Governmental Authority. Neither the Company,
any of the Assets nor the Seller is subject to any Governmental Order, nor are
there any such Governmental Orders threatened to be imposed by any Governmental
Authority) which has or could reasonably be expected to have a Material Adverse
Effect.
(b) The Company is not a party to any agreement or arrangement
which contravenes the Act on Economic Competition ("Wet Economische
Mededinging") or which is or should have been registered under the
aforementioned Act or was or should have been notified to the European
Commission under Article 85 of the EC Treaty.
(c) The Company has received no notice, summons or official
request of any kind from the European Commission or from the authorities in the
Netherlands or in any other country, competent in anti-trust matters, with
respect to any aspect of the Company's activities.
SECTION 3.10. Compliance with Laws. (a) The Company has
conducted and continues to conduct its business in accordance with all Laws and
Governmental Orders applicable to the Company or any of the Assets or such
business, and the Company is not in violation of any such Law or Governmental
Order.
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(b) Section 3.10 of the Seller's Disclosure Schedule sets
forth a brief description of each Governmental Order applicable to the Company
or any of the Assets or its business and no such Governmental Order has or could
reasonably be expected to have a Material Adverse Effect.
SECTION 3.11. Environmental and Other Permits and Licenses;
Related Matters. (a) (i) Neither the Seller nor the Company has received notice
of any violation of any Environmental Laws; (ii) the Company has obtained all
Environmental Permits and is and has been in material compliance with their
requirements; (iii) except as disclosed in Section 3.11(a)(iii) of the Seller's
Disclosure Schedule, or as permitted by or as would not result in any material
liability under applicable Environmental Laws, there are no underground or
aboveground storage tanks or any surface impoundments, septic tanks, pits, sumps
or lagoons in which Hazardous Materials are being or have been treated, stored
or disposed on any of the owned, or leased properties or, with respect to the
period of the Company's ownership, tenancy or operation of such property, on any
real property formerly owned, leased or occupied by the Company; (iv) there is
no asbestos or asbestos-containing material on any of the owned or leased
properties, except as permitted by or as would not result in any material
liability under applicable Environmental Laws; (v) the Company has not released,
discharged or disposed of an amount of Hazardous Materials on any of the owned
or leased properties or on any real property formerly owned, leased or occupied
by the Company in any manner or quantity which would have a material effect on
the Company; (vi) the Company is not undertaking, has not completed, and is not
required to conduct, any investigation or assessment or remedial or response
action relating to any release, discharge or disposal of or contamination with
an amount of Hazardous Materials at any site, location or operation, either
voluntarily or pursuant to the order of any Governmental Authority or the
requirements of any Environmental Law which would have a material effect on the
Company; and (vii) there are no past, pending or threatened in writing
Environmental Claims against the Company, or any of its properties, and there
are no facts which can form the basis of any such Environmental Claim.
(b) Except as disclosed in Section 3.11(b) of the Seller's
Disclosure, Schedule, there are no environmental audit reports, studies or
analyses in the possession of the Seller or the Company or under their control
relating to the owned or leased properties or the operations of the Company.
SECTION 3.12. Material Contracts. (a) Section 3.12(a) of the
Seller's Disclosure Schedule lists each of the following contracts and
agreements (including, without limitation, oral contracts and agreements) of the
Company (such contracts and agreements being "Material Contracts"):
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(i) all broker, distributor, dealer, manufacturer's
representative, franchise, agency, sales promotion, market research,
marketing consulting and advertising contracts and agreements to which
the Company is a party under which the Company can reasonably be
expected to pay or be paid at least NLG 50,000 during the course of the
twelve months following the date hereof;
(ii) all management contracts and contracts with independent
contractors or consultants (or similar arrangements) to which the
Company is a party, which are not cancelable without penalty or further
payment and without more than 30 days' notice, and under which the
Company can be reasonably expected to pay or be paid at least NLG
25,000 during the course of the twelve months following the date
hereof;
(iii) all contracts and agreements relating to Indebtedness of
the Company;
(iv) any agreements that are material to the business of the
Company and that are currently in effect with subscribers that have
generated annual booking fees of US$250,000 or more per annum over the
course of any of the last three fiscal years;
(v) all contracts and agreements with any Governmental
Authority to which the Company is a party, and under which the Company
can be reasonably expected to pay or be paid at least NLG 25,000 during
the course of the twelve months following the date hereof;
(vi) all contracts and agreements that limit or purport to
limit the ability of the Company to compete in any line of business or
with any Person or in any geographic area or during any period of time;
(vii) all contracts and agreements between or among the
Company and the Seller or an Affiliate of the Seller; and
(viii ) all other contracts and agreements whether or not made
in the ordinary course of business, which are material to the Company
or the conduct of its businesses or the absence of which would have a
Material Adverse Effect.
(b) Each Material Contract: (i) is valid and binding on the
respective parties thereto and is in full force and effect and (ii) upon
consummation of the transactions contemplated by this Agreement, except to the
extent that any consents set forth in Section 3.05 of the Seller's Disclosure
Schedule are not obtained,
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shall continue in full force and effect without penalty or other adverse
consequence. The Company is not in breach of, or default under, any Material
Contract. The Seller has furnished the Purchaser with true and complete copies
of all Material Contracts.
(c) To the best knowledge of the Seller and the Company, no
other party to any Material Contract is in breach thereof or default thereunder
(d) There is no contract, agreement or other arrangement
granting any Person any preferential right to purchase, other than in the
ordinary course of business consistent with past practice, any of the properties
or assets of the Company.
(e) Attached as Exhibit 3.12(e) hereto are complete and
correct copies of any contracts between the Company and Getronics relating to
services to be provided by Vitel.
SECTION 3.13. Intellectual Property. The Company owns or
possesses adequate licenses or other valid rights to use all of the Company
Intellectual Property, including, without limitation, Galileo View, which is
material to the conduct of the business of the Company, including a right to
sublicense Galileo View, and there is no assertion or claim challenging the
validity of such Company Intellectual Property. There are no infringements of
any Company Intellectual Property. There are no pending or threatened
interferences, reexaminations, oppositions or nullities involving any patents,
patent rights or applications therefor of the Company which are material to the
conduct of the business of the Company. Section 3.13 of the Seller's Disclosure
Schedule lists each material license or other agreement pursuant to which the
Company has the right to use Company Intellectual Property utilized in
connection with any services provided by the Company (the "Company Licenses").
There is no breach or violation of any Company License by the Company or by any
third party or threatened or actual loss of rights accruing to the Company under
any Company License. Each Company License is a legal, valid and binding
agreement of the Company and, to the best knowledge of the Seller and the
Company, each Company License is a legal, valid and binding agreement of the
other parties thereto. The consummation of the transactions contemplated by this
Agreement will not result in the termination of, or any modification to, any
Company License, except where the foregoing would not have a material effect on
the conduct of the business of the Partnership. The Company has taken reasonable
measures to maintain the confidentiality of the know-how of the Company, the
value of which to the Company is dependent upon the maintenance of the
confidentiality thereof. The Company has not licensed or otherwise permitted the
use by any third party of any proprietary information on terms or in a manner
that is reasonably likely to have a Material Adverse Effect. The conduct of the
business of the Company as currently
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conducted or as currently contemplated (by existing Company management) to be
conducted does not and, to the best knowledge of the Seller and the Company,
will not infringe upon or conflict with, in any way, any license, trademark,
trademark right, trade name, trade name right, patent, patent right, industrial
model, invention, service xxxx or copyright of any third party that is
reasonably likely to be material to the Company's operations.
SECTION 3.14. Real Property and Leases. (a) Set forth on
Section 3.14(a) of the Seller's Disclosure Schedule is a list of all Real
Property.
(b) The Company has sufficient title or leasehold interests to
all its Real Property to conduct its business as currently conducted or as
contemplated (by existing Company management) to be conducted.
(c) All leases of real property leased for the use or benefit
of the Company to which the Company is a party which are material, individually
or in the aggregate, to the business of the Company, and all amendments and
modifications thereto are in full force and effect and have not been modified or
amended, and there exists no default under any such lease by the Company, nor
any event which with notice or lapse of time or both would constitute a default
thereunder by the Company, which would permit any such lease to be terminated by
the other party thereto.
(d) To the extent that any of the Real Property has been
leased with value added tax, such tax has been applied in the manner prescribed
by Law and within the statutory periods.
SECTION 3.15. Assets. (a) The Company owns, leases or has the
legal right to use all material properties and assets, including, without
limitation, the Company Intellectual Property, used or intended to be used in
the conduct of its business or otherwise owned, leased or used by the Company
and, with respect to contract rights, is a party to and enjoys the right to the
benefits of all material contracts, agreements and other arrangements used or
intended to be used by the Company or in, or relating to the conduct of its
business (all such properties, assets and contract rights being the "Assets").
Set forth on Section 3.15(a) of the Seller's Disclosure Schedule is a list of
all of the Assets as of the date hereof. The Company has good and marketable
title to, or, in the case of leased or subleased Assets, valid and subsisting
leasehold interests in, all the Assets, free and clear of all Encumbrances,
except for Permitted Encumbrances.
(b) The Assets constitute all the material properties, assets
and rights forming a part of, used, held or intended to be used in, and all such
properties, assets and rights as are necessary in the conduct of, the business
(as currently
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conducted by existing Company management) of the Company. At all times since
March 31, 1997, the Company has caused the Assets to be maintained in accordance
with good business practice, and the Assets are generally in good operating
condition and repair and are suitable for the purposes for which they are used
and intended, except for ordinary wear commemorate with the age and depreciated
value of such Assets.
(c) Following the consummation of the transactions
contemplated by this Agreement, the Company will continue to own, pursuant to
good and marketable title, or lease, under valid and subsisting leases, or
otherwise retain its interest in the Assets without incurring any penalty or
other adverse consequence, including, without limitation, any increase in
rentals, royalties, or licenses or other fees imposed as a result of, or arising
from, the consummation of the transactions contemplated by this Agreement
(except, with respect to contractual arrangements to the extent that any
consents set forth in Section 3.05 of the Seller's Disclosure Schedule are not
obtained). Immediately following the Closing, (i) in the case of books and
records other than Tax-related books and records, the Company shall own or
possess all documents, books, records, agreements and financial data of any sort
used by the Company which is material to the conduct of its business, and (ii)
in the case of Tax-related books and records (including all information
(including copies of Returns, original work papers, and source documents (or
copies thereof)) relating to any and all Tax filings of the Company), the
Company shall own or possess all of such books and records.
SECTION 3.16. Labor Matters. (a) On the Closing Date, no
person will have, or will at any time have had, a (full-time or part time)
employment agreement with the Company.
(b) There is no dispute pending (or threatened) with respect
to any of the Employees. There have been no collective labor disputes at the
Company since January 1, 1992.
(c) The Company has at all times complied, and continues to
comply, in all material respects with applicable labor laws and regulations and
no non-compliance with such laws has had or could reasonably be expected to have
a Material Adverse Effect.
(d) The Company has at all times complied, and continues to
comply, with all European Union, national, provincial and municipal laws,
provisions, regulations and orders in respect of employment and employment
practices, including, without limitation, in respect of labor circumstances,
work place protection, hygiene, health and safety protection.
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(e) There have been no serious industrial accidents at the
Company since January 1, 1992, and no industrial accident at the Company may
reasonably be expected to lead to a claim against the Company which would not be
fully covered by insurance for the continued benefit of the Company after the
Closing Date. No Employee or former seconded employee of the Company has
experienced any employment-related illnesses.
(f) Since January 1, 1997, the Seller has not granted or
promised to grant to any Employee any salary increase, bonus or other emolument,
other than those required by law or made pursuant to collective bargaining
agreements.
(g) The Seller has obtained all licenses required for the
secondment of the Employees.
SECTION 3.17. Taxes. Except as set forth in Section 3.17 of
the Seller's Disclosure Schedule, (a) (i) all returns and reports in respect of
Taxes required to be filed with respect to the Company with respect to Taxes of
the Company for all periods ending on or before the Closing Date have been
timely filed (or will be timely filed) by the Company or any other entity which
by law is required to do such filing for the Company; (ii) all Taxes required to
be shown on such returns and reports or otherwise due have been or will be
timely paid; (iii) all returns and reports relating to Income Taxes are true,
correct and complete and all Returns, if any, and reports of the Company or any
other entity which by law is required to file such returns and reports for the
Company relating to Taxes other than Income Taxes are true, correct and complete
in all material respects; (iv) no adjustment relating to such returns has been
proposed in writing formally or informally by any Tax authority and no basis
exists for any such adjustment; (v) there are no pending or, to the best
knowledge of the Seller after due inquiry, threatened actions or proceedings for
the assessment or collection of Taxes against the Company or any other entity
for which the Company can be held liable by law; (vi) there are no Tax liens on
any assets of the Company except liens for Taxes not yet due and payable; (vii)
the Company has not been at any time a member of any partnership or joint
venture or the holder of a beneficial interest in any trust for any period for
which the statute of limitations for any Tax has not expired; (viii) there are
no outstanding waivers or agreements extending the statute of limitations for
any period with respect to any Tax to which the Company may be subject; (ix) the
Company does not have any income reportable for a period ending after the
Closing Date but attributable to the sale of property or the provision of
services (e.g., an installment sale) occurring in or a change in accounting
method made for a period ending on or prior to the Closing Date which resulted
in a deferred reporting of income from which economically accrued in a period
ending on or before the Closing Date from such transaction or from such change
in accounting method; (x) there are no requests by any Tax authority for
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information currently outstanding with respect to Taxes concerning the Company;
(xi) there are no proposed reassessments of any property owned by the Company or
other taxpayer specific proposals that could increase the amount of any Tax to
which the Company would be subject, (xii) no power of attorney that is currently
in force has been granted with respect to any matter relating to Taxes of the
Company, and (xiii) the Company is not doing business or engaged in a trade or
business in any jurisdiction in which it has not filed all required Returns
including Returns relating to Income Taxes and VAT.
(b) For purposes of the Seller's indemnification of the
Purchaser pursuant to Section 6.01, the representations in Section 3.17(a) shall
be deemed to have been made with no exception for items disclosed in Section
3.17 of the Disclosure Schedule or otherwise.
(c) (i) Section 3.17 of the Seller's Disclosure Schedule lists
all Returns filed by or on behalf of the Company for taxable periods ended on or
after January 28, 1988, indicates for which jurisdictions Returns relating to
the Company have been filed on the basis of fiscal unity or on the basis of a
consolidated, combined or unitary group, indicates the most recent Return for
each relevant jurisdiction and type of Tax for which an audit has been completed
or the statute of limitations has lapsed and indicates all Returns that
currently are the subject of audit; (ii) the Seller has made available to the
Purchaser correct and complete copies of all Returns, if any, examination
reports, preliminary and final corporate income tax assessments, accounts and
statements of deficiencies assessed against or agreed to by the Company since
January 28, 1988; and (iii) the Seller has delivered to the Purchaser a true and
complete copy of any tax-sharing or allocation agreement or arrangement to which
the Company is a party and a true and complete description of any such unwritten
or informal agreement or arrangement.
SECTION 3.18. Insurance. (a) Section 3.18 of the Seller's
Disclosure Schedule sets forth a complete list of all material policies of
insurance (including without limitation, errors and omissions insurance) that
the Company has in effect.
(b) With respect to each such insurance policy: (i) the policy
is legal, valid, binding and enforceable in accordance with its terms and,
except for policies that have expired under their terms in the ordinary course,
is in full force and effect; (ii) the Company is not in breach or default
(including any breach or default with respect to the payment of premiums or the
giving of notice), and no event has occurred which, with notice or the lapse of
time, would constitute such a breach or default or permit termination or
modification, under the policy; (iii) no party to the policy has repudiated or
given notice of an intent to repudiate, any provision thereof;
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and (iv) to the best knowledge of the Seller and the Company after due inquiry,
no insurer on the policy has been declared insolvent or placed in receivership,
conservatorship or liquidation.
(c) Section 3.18(c) of the Seller's Disclosure Schedule sets
forth a general description of all risks of a nature generally insured against
which the Company is self-insured or which are covered under any risk retention
program in which the Company participates.
(d) All material assets, properties and risks of the Company
are covered by valid and, except for policies that have expired under their
terms in the ordinary course, currently effective insurance policies or binders
of insurance (including, without limitation, general liability insurance,
property insurance and workers' compensation insurance) issued in favor of the
Seller, in each case with responsible insurance companies, in such types and
amounts and covering such risks as are consistent with customary practices and
standards of companies engaged in businesses and operations similar to those of
the Seller.
SECTION 3.19. Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Seller or the Company. Any amounts owing for
services provided to the Company by any Person in connection with the
transactions contemplated by this Agreement or any other transaction involving
the Company (including, without limitation, any other sale of the Company or
public offering of the Company) will be settled by the Company prior to the
Closing Date or by the Seller.
SECTION 3.20. Year 2000 Compliance. As evidenced by the
letters set forth in Section 3.20 of the Seller's Disclosure Schedule, and
pursuant to reasonable follow-up efforts following the delivery of such letters,
the Seller and the Company have used their best efforts to obtain from
Microsoft, EXACT, CSC and Support Magic a warranty that all software licensed
from such Persons is Year 2000 compliant or will be Year 2000 compliant, in each
case at no cost to the Company or the Purchaser, in sufficient time to avoid any
disruption to the Company's business. Year 2000 compliance is not relevant to
any other software owned by the Company or licensed by the Company pursuant to a
Company License (other than any software licensed from the Purchaser), nor is it
relevant to any other products used by the Company in connection with its
business (other than any product obtained from the Purchaser). For purposes of
this Section 3.20, such software and such other products shall be deemed to be
Year 2000 compliant to the extent they can manage and manipulate data involving
the transition of dates from 1999 to 2000 without functional or data abnormality
and without inaccurate results related to such dates.
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SECTION 3.21. Network Services. (a) A complete and correct
summary of the categories of network services the Seller provides to the
Company, together with the terms on which the Seller provides such network
services to the Company, is set forth in Section 3.21(a) of the Seller's
Disclosure Schedule.
(b) Neither the Seller nor any of its Affiliates (other than
the Company) is a party to the agreement between the Company and Societe
Internationale de Telecommunications Aeronautiques ("SITA") pursuant to which
SITA provides network services to the Company, and the Company is the only party
that is billed for any services provided by SITA thereunder.
(c) The Company does not have any liability to the Seller for
breakage fees (or any other liabilities or costs) relating to the provision of
network services by the Seller to the Company.
SECTION 3.22. Capital Contributions. Any Taxes relating to, or
arising out of, any capital contributions made to the Company by the Seller are
and will be for the account of the Seller.
SECTION 3.23. Relationship With Ogilvy & Xxxxxx. A complete
and correct summary of the categories of services the Company provides to Ogilvy
& Xxxxxx, together with the terms on which the Company provides such services,
is set forth in Section 3.23 of the Seller's Disclosure Schedule.
SECTION 3.24. Certain Arrangements. (a) A complete and correct
summary of the terms and conditions on which the Company provides support
payments to multinational travel providers is set forth in Section 3.24(a) of
the Seller's Disclosure Schedule.
(b) A complete and correct summary of the terms and conditions
of any warranty or indemnification obligation provided by the Company to the
lessor of any Real Property formerly occupied by the Company with respect to
environmental liabilities is set forth in Section 3.24(b) of the Seller's
Disclosure Schedule.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As an inducement to the Seller and the Company to enter into
this Agreement, the Purchaser hereby represents and warrants to the Seller and
the Company as follows:
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SECTION 4.01. Organization, Authority and Qualification of the
Purchaser. The Purchaser is a general partnership, and on or prior to the
Closing will be a corporation or a limited liability company, duly organized and
validly existing under the laws of the State of Delaware and is duly licensed or
qualified to do business and is in good standing in each jurisdiction in which
the properties owned or leased by it or the operation of its business makes such
licensing or qualification necessary, except to the extent that the failure to
be so licensed or qualified would not adversely affect the ability of the
Purchaser to carry out its obligations under, and to consummate the transactions
contemplated by, this Agreement. The Purchaser has all necessary power and
authority to enter into this Agreement, to carry out its obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by the Purchaser, the performance by the Purchaser of
its obligations hereunder and the consummation by the Purchaser of the
transactions contemplated hereby have been duly authorized by all requisite
action on its part. This Agreement has been duly executed and delivered by the
Purchaser and (assuming due authorization, execution and delivery by the Seller)
this Agreement constitutes a legal, valid and binding obligation of the
Purchaser enforceable against the Purchaser in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally or by general principles of
equity.
SECTION 4.02. No Conflict. Except as may result from any facts
or circumstances relating solely to the Seller or the Company, the execution,
delivery and performance of this Agreement by the Purchaser do not and will not
(a) violate, conflict with or result in the breach of any provision of the
Purchaser's Partnership Agreement, (b) conflict with or violate any Law or
Governmental Order applicable to the Purchaser or [(c) except for the Credit
Agreement dated as of July 3, 1996, among the Purchaser, the banks parties
thereto, the letter of credit issuing banks named therein and Xxxxxx Guaranty
Trust Company of New York as agent,] conflict with or result in any breach of,
constitute a default (or event which with the giving of notice or lapse of time,
or both, would become a default) under, require any consent under, or give to
others any rights of termination, amendment, acceleration, suspension,
revocation, or cancellation of, or result in the creation of any Encumbrance on
any of the assets or properties of the Purchaser pursuant to, any note, bond,
mortgage or indenture, contract, agreement, lease, sublease, license, permit,
franchise or other instrument or arrangement to which the Purchaser is a party
or by which any of such assets or properties are bound or affected which would
have a material adverse effect on the ability of the Purchaser to consummate the
transactions contemplated by this Agreement.
SECTION 4.03. Governmental Consents and Approvals. The
execution, delivery and performance of this Agreement by the Purchaser do not
and
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will not require any consent, approval, authorization or other order of, action
by, filing with, or notification to, any Governmental Authority[, except as
described in a writing given to the Seller by the Purchaser on or prior to the
date of this Agreement].
SECTION 4.04. Investment Purpose. The Purchaser is acquiring
the Shares solely for the purpose of investment and not with a view to, or for
offer or sale in connection with, any distribution thereof.
SECTION 4.05. Brokers. Except for X.X. Xxxxxx, the fees and
expenses of which will be paid for by the Purchaser, no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Purchaser.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Conduct of Business Prior to the Closing. (a)
The Seller covenants and agrees that, except as described in Section 5.01(a) of
the Seller's Disclosure Schedule, between the date hereof and the time of the
Closing, the Company shall conduct its business in the ordinary course and
consistent with the Company's prior practice. Without limiting the generality of
the foregoing, except as described in Section 5.01(a) of the Seller's Disclosure
Schedule, as requested by the Purchaser, or as required to accommodate changes
in the Purchaser's business practices, the Company shall (i) continue its
advertising and promotional activities, and pricing and purchasing policies,
including capital purchasing, in accordance with past practice; (ii) not shorten
or lengthen the customary payment cycles for any of its payables or receivables;
(iii) use all reasonable efforts to (A) preserve intact its business
organization,(B) cause the employees of the Seller which on the date of this
Agreement are seconded to the Company to be employees of the Company as of the
Closing Date or such other date to be agreed upon among the Seller, the
Purchaser and the Company and (C) preserve its current relationships with its
customers, suppliers and other persons with which it has significant business
relationships; (iv) exercise, but only after notice to the Purchaser and receipt
of the Purchaser's prior written approval, any rights of renewal pursuant to the
terms of any of the material leases or subleases which by their terms would
otherwise expire: and (v) not engage in any practice, take any action, fail to
take any action or enter into any transaction which could cause any
representation or warranty of the Seller to be untrue or result in a breach of
any covenant made by the Seller in this Agreement.
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(b) Except as described in Section 5.01(b) of the Seller's
Disclosure Schedule, the Seller covenants and agrees that, prior to the Closing,
without the prior written consent of the Purchaser, the Company will not do any
of the things enumerated in the second sentence of Section 3.08 (including,
without limitation, clauses (i) through (xix) thereof); provided, however, that
if the Company desires to take any of the actions enumerated in Section 3.08(v)
in response to general industry conditions, the Company shall provide written
notice of the proposed actions to the Purchaser and the Purchaser shall respond
to such written notice not more than two Business Days after the receipt
thereof.
SECTION 5.02. Access to Information. (a) From the date hereof
until the Closing, upon reasonable notice, the Company shall, and the Company
shall cause each of the Company's officers, directors, employees, agents,
representatives, accountants and counsel to: (i) afford the officers, employees
and authorized agents, accountants, counsel, underwriters, financing sources and
representatives of the Purchaser reasonable access, during normal business
hours, to the offices, properties, plants, other facilities, books and records
of the Company (including access to the Company's 1996 financial audit work
papers) and to those officers, directors, employees, agents, accountants and
counsel of the Company who have any knowledge relating to the Company or its
business and (ii) furnish to the officers, employees and authorized agents,
accountants, counsel, underwriters, financing sources and representatives of the
Purchaser such additional financial and operating data and other information
regarding the assets, properties and goodwill of the Company (excluding any
Returns or other Tax information of the Seller) and its business (or legible
copies thereof) as the Purchaser may from time to time reasonably request,
including, without limitation, any financial information or other information
that will be required in connection with the IPO.
(b) In order to facilitate the resolution of any claims made
against or incurred by the Seller prior to the Closing, for a period of seven
years after the Closing, the Purchaser shall (i) retain the books and records of
the Company relating to periods prior to the Closing in a manner reasonably
consistent with the prior practice of the Company; provided, however, that any
Tax-related books and records shall be maintained for a period of ten years
after the Closing Date, and prior to disposal thereof the Purchaser shall
contact the Seller and offer to provide it with copies of any such books and
records subject to reimbursement of reasonable expenses; and (ii) upon
reasonable notice, afford the officers, employees and authorized agents and
representatives of the Seller reasonable access (including the right to make, at
the Seller's expense, photocopies), during normal business hours, to such books
and records.
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(c) In order to facilitate the resolution of any claims made
by or against or incurred by the Purchaser or the Company after the Closing or
for any other reasonable purpose, for a period of seven years following the
Closing, the Seller shall (i) retain the books and records of the Seller which
relate to the Company and its operations for periods prior to the Closing and
which shall not otherwise have been delivered to the Purchaser or the Company;
(ii) upon reasonable notice, afford the officers, employees and authorized
agents and representatives of the Purchaser or the Company reasonable access
(including the right to make photocopies, at the expense of the Purchaser or the
Company) during normal business hours, to such books and records.
SECTION 5.03. Confidentiality. (a) Except to the extent of any
disclosure required (after consultation with the Seller and after seeking
appropriate confidential treatment) to be made in the Purchaser's registration
statement on Form S-1 (including in any exhibits thereto) filed with the
Securities and Exchange Commission (the "SEC") in connection with the IPO or in
any future filings made with the SEC or other regulatory authorities, and except
as reasonably required by the underwriters in connection with the IPO, the
Parties shall comply with, and shall cause their respective representatives and
agents to comply with all of their respective obligations under the
Non-Disclosure Agreement, dated as of June 4, 1996, between the Company and the
Purchaser (the "Non-Disclosure Agreement"), until the Closing, at which time
such Non-Disclosure Agreement and the obligations of the Purchaser and the
Company thereunder shall terminate. If this Agreement is, for any reason,
terminated prior to the Closing, the Non-Disclosure Agreement shall continue in
full force and effect.
(b) The Seller agrees to, and shall cause its agents,
representatives and Affiliates to: (i) treat, hold as confidential and (in the
case of the Seller) not exploit for its benefit or the benefit of other
relationships with any of its customers (and not disclose or provide access to
any Person to) all information relating to the Company's products, customers,
assets, plans, business, finances and technological developments and programs,
(ii) in the event that the Seller or any such agent, representative or Affiliate
becomes legally compelled to disclose any such information, provide the
Purchaser with prompt written notice of such requirement so that the Purchaser
or the Company may seek a protective order or other remedy or waive compliance
with this Section 5.03(b), and (iii) in the event that such protective order or
other remedy is not obtained, or the Purchaser waives compliance with this
Section 5.03(b), furnish only that portion of such confidential information
which is legally required to be provided and exercise its best efforts to obtain
assurances that confidential treatment will be accorded such information,
provided, however, that this sentence shall not apply to any information that,
at the time of disclosure, is available publicly and was not disclosed in breach
of this Agreement by the Seller, its agents,
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representatives or Affiliates; provided further that, with respect to Company
Intellectual Property, specific information shall not be deemed to be within the
foregoing exception merely because it is embraced in general disclosures in the
public domain.
SECTION 5.04. Regulatory and Other Authorizations; Notices and
Consents. (a) Each party shall for itself use all reasonable efforts to obtain
(or, in the case of the Seller, cause the Company to obtain) all authorizations,
consents, orders and approvals of all Governmental Authorities and officials
that may be or become necessary for its execution and delivery of, and the
performance of its obligations pursuant to, this Agreement and will cooperate
fully in promptly seeking to obtain all such authorizations, consents, orders
and approvals. Each party hereto agrees for itself to supply as promptly as
practicable to the appropriate Governmental Authorities any additional
information and documentary material that may be requested pursuant to any
applicable Law. Without limiting the generality of the foregoing, each party
hereto will (i) use all reasonable efforts to prevent the entry in a judicial or
administrative proceeding brought under any antitrust law of any preliminary
injunction or other order that would make consummation of the transactions
contemplated hereby unlawful or would prevent or delay such consummation; and
(ii) take promptly, in the event that such an injunction or order has been
issued in such a proceeding, all steps necessary to prosecute an appeal of such
an injunction or order, and diligently prosecute such appeal.
(b) The Seller shall or shall cause the Company to give
promptly such notices to third parties and use all reasonable efforts to obtain
such third party consents as the Purchaser may deem necessary or desirable in
connection with the transactions contemplated by this Agreement.
(c) The Purchaser shall cooperate and use all reasonable
efforts to assist the Seller in giving such notices and obtaining such consents;
provided, however, that neither the Purchaser nor the Seller shall have any
obligation to give any guarantee or other consideration of any nature in
connection with any such notice or consent or to consent to any change in the
terms of any agreement or arrangement which the Purchaser may deem adverse to
the interests of the Purchaser or the Company or their respective businesses.
(d) Neither the Purchaser nor the Seller knows of any reason
why all the consents, approvals and authorizations necessary for the
consummation of the transactions contemplated hereby will not be received.
SECTION 5.05. Notice of Developments. (a) Prior to the
Closing, the Seller and the Company shall promptly notify the Purchaser in
writing of all
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events, circumstances, facts and occurrences arising subsequent to the date of
this Agreement which could result in any breach of a representation or warranty
or covenant of the Seller in this Agreement, or could result in any breach of a
covenant of the Company in this Agreement, or which could have the effect of
making any representation or warranty of the Seller in this Agreement untrue or
incorrect in any material respect.
(b) Prior to the Closing, the Purchaser shall promptly notify
the Seller in writing of all events, circumstances, facts and occurrences
arising subsequent to the date of this Agreement which could result in any
breach of a representation or warranty or covenant of the Purchaser in this
Agreement or which could have the effect of making any representation or
warranty of the Purchaser untrue or incorrect in any material respect.
SECTION 5.06. No Solicitation of Employees. Except as
expressly contemplated by Section 5.15, the Seller agrees that it shall not, and
shall cause each of its Affiliates not to, during the period from the date
hereof until Closing and, if the Closing occurs, for a period of two years from
the Closing, without the prior written consent of the Purchaser, directly or
indirectly, solicit on a specific or targeted basis for employment any person
who is or has agreed to become an employee of the Company, provided that this
Section 5.06 shall not prohibit any form of employment advertising or prevent
the hiring of any individual who contacts the Seller or any of its Affiliates.
SECTION 5.07. Use of Intellectual Property. (a) The Seller
acknowledges that as of the Closing the name "Galileo Nederland" and all similar
or related names, marks and logos and product names, marks and logos (all of
such names, marks and logos being the "Company Names") shall be owned by the
Company, that (except as provided in Section 5.07(b)) from and after the Closing
Date neither the Seller nor any of its Affiliates shall have any rights in the
Company Names, and that neither of the Seller nor any of its Affiliates will
contest the ownership or validity of any rights of the Purchaser or the Company
in or to the Company Names.
(b) Except as expressly agreed in writing by the Purchaser or
pursuant to any agreements and licenses between the Purchaser and the Seller, or
the Company and the Purchaser or any of its Affiliates, from and after the
Closing, neither the Seller nor any of its Affiliates shall use any of the
Company Intellectual Property.
(c) To the extent any of the Company Intellectual Property is
obtained from the Seller or one of its Affiliates pursuant to a Company License
or
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otherwise, effective on the Closing Date, the Seller or such Affiliate hereby
grants to the Company a perpetual, nonexclusive, royalty-free license to use
such Company Intellectual Property for so long as, in the sole discretion of the
Purchaser or the Company, the Company requires such Company Intellectual
Property in the conduct of its business.
SECTION 5.08. Monthly Financial Statements. The Seller agrees
that, between the date hereof and the Closing, promptly following the end of
each calendar month, but in no event later than 15 days following the end of
each calendar month, it will prepare or cause to be prepared, and will promptly
provide to the Purchaser, a balance sheet of the Company as of the end of the
preceding calendar month and statements of income of the Company for the
preceding calendar month. Such monthly financial statements shall be prepared in
accordance with the Accounting Principles and past practice.
SECTION 5.09. Audit of Net Asset Test Reference Balance Sheet.
No fewer than five Business Days prior to the Closing Date, the Purchaser shall
cause the Purchaser's Accountants to prepare and deliver to the Purchaser a
report on the Net Asset Test Reference Balance Sheet (the "Audited Net Asset
Test Reference Balance Sheet"). The Audited Net Asset Test Reference Balance
Sheet shall be prepared in accordance with the Accounting Principles and shall
exclude (i) any indebtedness for borrowed money of the Company and (ii) any Cash
other than cash in the amount of any checks outstanding. During the preparation
of the Audited Net Asset Test Reference Balance Sheet, the Company shall
provide, and the Seller shall cause the Company and its officers, employees and
agents to provide, full access to the books, records, facilities and employees
of the Company, in each case to the extent required by the Purchaser and its
representatives in order to prepare the Audited Net Asset Test Reference Balance
Sheet.
SECTION 5.10. Pre-Closing Balance Sheet. No fewer than five
Business Days prior to the Closing Date, the Company shall prepare an unaudited
consolidated balance sheet of the Company in accordance with this Section 5.10
(the "Pre-Closing Balance Sheet"). In the event that the Closing is scheduled to
occur after the fifteenth day of any particular calendar month, the Pre-Closing
Balance Sheet shall be prepared as of the last day of the immediately preceding
calendar month. If the Closing is scheduled to occur on or prior to the
fifteenth day of any particular calendar month, the Pre-Closing Balance Sheet
shall be prepared as of the last day of the second preceding calendar month. The
Pre-Closing Balance Sheet shall be prepared in accordance with Accounting
Principles applied on a basis consistent with the preparation of the Audited Net
Asset Test Reference Balance Sheet and shall exclude (i) any indebtedness for
borrowed money of the Company, and (ii) any Cash other than cash in the amount
of any checks outstanding. During the preparation of
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the Pre-Closing Balance Sheet and during the period of any review by the
Purchaser and its representatives of the Pre-Closing Balance Sheet, the Company
shall provide, and the Seller shall cause the Company and its officers,
employees and agents to provide, full access to the books, records, facilities
and employees of the Company, in each case to the extent required by the
Purchaser and its representatives in order to monitor the preparation of, and
review, the Pre-Closing Balance Sheet.
SECTION 5.11. Company Pension Fund. [TO COME.]
SECTION 5.12. Certain Services. (a) The Seller or one of its
Affiliates, as the case may be, will continue to provide to the Company the
network services described in Section 3.21(a) of the Seller's Disclosure
Schedule, upon the terms, and at the prices, set forth on Exhibit 5.12(a)
hereto; provided that the Company may terminate such services upon six months'
written notice to the Seller.
(b) After the Closing Date, the Company shall have no
obligation to purchase any services from the Seller or its Affiliates other than
the services described in Section 5.12(a).
SECTION 5.13. Certain Intercompany Payments. (a) All amounts,
other than amounts due in the ordinary course of business consistent with past
practice, owed by the Seller or any of its Affiliates to the Company prior to
the Closing Date shall be paid by the Seller or such Affiliate to the Company on
or prior to the Closing Date.
(b) All amounts, other than amounts due in the ordinary course
of business consistent with past practice, owed by the Purchaser or any of its
Affiliates to the Company prior to the Closing Date shall be paid by the
Purchaser or such Affiliate to the Company on or prior to the Closing Date.
(c) All amounts, other than amounts due in the ordinary course
of business consistent with past practice, owed by the Company to the Purchaser
(including the current account, to the extent it is negative) or the Seller
shall be paid by the Company to the Purchaser or the Seller, as the case may be,
prior to the first day of the Measuring Period.
SECTION 5.14. Further Action. Each of the Parties hereto shall
use all reasonable efforts to take, or cause to be taken, all appropriate
action, do or cause to be done all things necessary, proper or advisable under
applicable Law, and execute and deliver such documents and other papers as may
be required to carry out the provisions of this Agreement and consummate and
make effective the transactions contemplated by this Agreement.
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SECTION 5.15. Seconded Employees. (a) Section 5.15(a) of the
Seller's Disclosure Schedule lists all employees of the Seller who on the date
hereof are seconded to the Company (each an "Employee" and collectively the
"Employees"). As promptly as practicable after the Closing Date, the Company
will offer employment to each Employee at the monthly salary specified for such
Employee in Section 5.15(a) of the Seller's Disclosure Schedule and upon the
further terms and conditions set forth in the agreement dated ______, 19__,
between the Company and [the labor unions ______, ______ and ______], a copy of
which agreement is set forth in Section 5.15(a) of the Seller's Disclosure
Schedule. The Seller will offer to each Employee the benefits of the "Transition
Package", the terms and conditions of which are described in Section 5.15(a) of
the Sellers's Disclosure Schedule.
(b) The employment offer described in Section 5.15(a) (the
"Employment Offer") will be valid with respect to each Employee until the
occurrence of the earlier of (i) the date on which such Employee accepts the
Employment Offer, (ii) the date on which such Employee accepts an offer by the
Seller to be relocated within the Seller's organization, and (iii) the date that
is _____ months after the Closing Date.
(c) Set forth as Exhibit 5.15(c) is a copy of the secondment
agreement between the Seller and the Company relating to the secondment of
employees by the Seller to the Company and the terms related thereto. The Seller
will second to the Company those Employees with respect to whom an Employment
Offer remains outstanding. Upon the expiration of an Employment Offer with
respect to an Employee pursuant to Section 5.15(b), the secondment of such
Employee will continue to be in effect up to and including the last day of the
month in which the expiration of such Employee's Employment Offer occurred. The
Company will reimburse the Seller in accordance with the terms set forth in
Exhibit 5.15(c) with respect to each employee seconded by the Seller to the
Company for the period of his or her secondment to the Company; provided,
however, that the Company will not be under any obligation to reimburse the
Seller for any other costs (including, without limitation, any wage taxes or
social security premiums).
(d) During the secondment of Employees to the Company pursuant
to Section 5.15(c), (i) the Seller will not grant or promise to grant to any
Employee any salary increase, bonus or other emolument, other than those
required by law or collective bargaining agreements, and (ii) the Seller will
maintain in full force and effect all licenses required for the secondment of
such Employees.
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SECTION 5.16. Business Plan. The Purchaser agrees to conduct
the business of the Company in a manner broadly consistent with the Company's
business plan attached hereto as Exhibit 5.16 (the "Business Plan") until March
31, 1998.
ARTICLE VI
TAX MATTERS
SECTION 6.01. Tax Indemnity. (a) Except to the extent of
Ordinary Course Taxes, the Purchaser and its Affiliates, officers, directors,
employees, agents, successors and assigns (each an "Indemnified Party") shall be
indemnified and held harmless by Seller for any and all Losses arising out of or
resulting from:
(i) the breach of any representation or warranty made in
Section 3.17; or
(ii) Liabilities of the Company for Taxes or Liability claims
or settlement of tax debt by Dutch Internal Revenue pursuant to Article
24 of the Tax Collection Act of 1990 or similar regulations (including
any Liability resulting from joint liability for Taxes reported on a
consolidated, combined or unitary basis) with respect to the period
before the Closing Date; provided, however, that such indemnity shall
be reduced by any Tax Benefit to the Company with respect to such
Losses or Liabilities or the items or adjustments resulting in such
Losses or Liabilities; provided, further, that amounts under clause (i)
and clause (ii) shall be without duplication of the amount provided for
under the other clause.
To the extent that any of the Seller's undertakings set forth in this Section
6.01 may be unenforceable, the Seller shall contribute the maximum amount that
it is permitted to contribute under applicable law to the payment and
satisfaction of all Losses and Liabilities incurred by the Indemnified Parties.
For purposes of this Article VI, the Liability of the Company for Taxes either
(y) arising out of or resulting from a breach of any representation or warranty
made in Section 3.18 or (z) described in Section 6.01(a)(ii) shall constitute a
Loss to the Purchaser.
(b) The Seller and the Purchaser agree to treat all payments
made under this Article VI and all indemnification payments made under Article
VIII of this Agreement as adjustments to the Purchase Price for Tax purposes
except to the extent that the laws of a particular jurisdiction provide
otherwise.
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SECTION 6.02. Apportionment of Taxes. (a) For purposes of
Section 6.01, Taxes with respect to the period before the Closing Date shall
mean: (i) Taxes imposed relating to the Company with respect to taxable periods
ending on or before the Closing Date; and (ii) with respect to taxable periods
beginning before the Closing Date and ending after the Closing Date, Taxes
imposed relating to the Company which are allocable, pursuant to Section
6.02(b), to the portion of such period ending on the Closing Date.
(b) In the case of Taxes that are payable with respect to a
taxable period that begins before the Closing Date and ends after the Closing
Date, the portion of any such Tax that is allocable to the portion of the period
ending on the Closing Date shall be:
(i) in the case of Taxes that are either (x) based upon or
related to income or receipts or turnover (including VAT), or (y)
imposed in connection with any sale or other transfer or assignment of
property (real or personal, tangible or intangible) (other than
conveyances pursuant to this Agreement, which are governed by Section
6.07), deemed equal to the amount which would be payable if the taxable
year ended with the Closing Date; and
(ii) in the case of Taxes imposed on a periodic basis other
than in (i) above with respect to the Company, deemed to be the amount
of such Taxes for the entire period (or, in the case of such Taxes
determined on an arrears basis, the amount of such Taxes for the
immediately preceding period) multiplied by a fraction the numerator of
which is the number of calendar days in the period ending on the
Closing Date and the denominator of which is the number of calendar
days in the entire period.
SECTION 6.03. Returns and Payments. (a) From the date of this
Agreement through the Closing Date, the Seller shall cause the Company to
prepare and file in proper form with the appropriate Tax Authority in a timely
manner all Returns relating to the Company that are due on or before the Closing
Date. The Seller shall cause the Company to pay Taxes prior to the Closing Date
in such amounts and at such times as are consistent with past practices employed
with respect to the Company. In the event that the Closing Date does not occur
prior to the due date (including any extension thereof) for the filing of the
corporate income tax Returns relating to the Company's taxable year ended March
31, 1997, the Seller will cause the Company to provide the Purchaser and its
authorized representative a copy of the Company's related tax books and records
pertaining to such Returns at least 10 Business Days prior to the earlier of the
due date (including any extension thereof) for the filing of such returns or the
date of filing. The Purchaser shall cause the Company to prepare and file in
proper form with the appropriate Tax authority in a
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timely manner all Returns relating to the Company that are due after the Closing
Date. With respect to Returns, other than Returns in respect of Income Taxes and
VAT, caused to be filed by the Purchaser for any period ending on or before the
Closing Date, the Purchaser shall cause the Company to pay the Taxes shown as
due and owing on such Returns. With respect to Income Taxes and VAT, with
respect to Returns caused to be filed by the Purchaser for any period ending on
or before the Closing Date, the Purchaser shall cause the Company to pay the
Taxes shown as due and owing on such Returns, and the Seller shall reimburse the
Purchaser on the due date for such Taxes. In the event that the Seller fails to
reimburse the Purchaser on the due date, the Purchaser shall be entitled to
interest on the amount paid by the Purchaser but in no event shall such failure
affect Purchaser's obligation to cause the Company to timely file any Return.
Returns of the Company not yet filed for any taxable period that ends on or
before the Closing Date shall be prepared in a manner consistent with past
practices employed with respect to the Company (except to the extent counsel for
the party preparing the return renders a legal opinion that there is no
reasonable basis in law therefore or determines that a Return cannot be so
prepared and filed without being subject to penalties).
(b) With respect to Returns, other than Returns in respect of
Income Taxes and VAT, caused to be filed by the Purchaser for any period
beginning before and ending after the Closing Date, the Purchaser shall cause
the Company to pay the Taxes shown as due and owing on such Returns. With
respect to Income Taxes and VAT, with respect to Returns caused to be filed by
the Purchaser for any period beginning before and ending after the Closing Date,
the Purchaser shall cause the Company to pay the Taxes shown as due and owing on
such Returns and Seller shall reimburse the Purchaser on the due date for such
Taxes for the amount of such Taxes determined to be properly apportioned under
Section 6.02(b) to the portion of such period ending on the Closing Date. In the
event that the Seller fails to reimburse the Purchaser on the due date, the
Purchaser shall be entitled to interest on the amount paid by the Purchaser but
in no event shall such failure affect the Purchaser's obligation to cause the
Company to timely file any Return. The Purchaser will notify or cause the
Company to notify the Seller of any position the Company will take on a Return
which would be inconsistent with that taken by the Seller on prior Returns. If
the Purchaser and the Seller disagree on the position taken and the position
would in any way alter the balance of Taxes owing or Tax refunds or credits
obtainable with respect to (i) any Tax period of the Company ending on or prior
to the Closing Date or (ii) in the case of Tax refunds or credits, any period up
to and including the Closing Date which is part of a Tax period of the Company
beginning prior to and ending after the Closing Date, then the parties shall
submit the matter to a mutually selected independent nationally recognized
accounting firm, other than KPMG Peat Marwick and its affiliates (the
"Independent Firm"), and the Independent Firm shall
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resolve the issue based on a standard of maximal fairness to both the Purchaser
and the Seller.
(c) With respect to any Return required to be caused to be
filed by the Purchaser with respect to the Company and as to which an amount of
Tax is allocable to the Seller under Section 6.02(b), the Purchaser shall cause
the Company to provide the Seller and its authorized representatives with a copy
of such completed Return and a statement certifying the amount of Tax shown on
such Return that is allocable to the Seller pursuant to Section 6.02(b),
together with appropriate supporting information and schedules at least 10
Business Days prior to the due date (including any extension thereof) for the
filing of such Return, in the case of Taxes other than wage Taxes, social
security premiums, and VAT, or five (5) days prior to the date on which such
Return is required to be filed (taking into account any extensions) in the case
of wage Taxes, social security premiums, and VAT, and the Seller and its
authorized representatives shall have the right to review and comment on such
Return and statement prior to the filing of such Return.
SECTION 6.04. Contests. (a) After the Closing, the Purchaser
shall promptly notify or cause the Company to notify the Seller in writing of
any written notice of a proposed assessment or claim in an audit or
administrative or judicial proceeding of the Purchaser or of the Company which,
if determined adversely to the taxpayer, would be grounds for indemnification
under this Article VI or could otherwise result in any Tax cost to the Seller;
provided, however, that a failure to give such notice will not affect the
Purchaser's right to indemnification under this Article VI except to the extent
such failure on the part of the Company prejudices the Seller by preventing the
avoidance of all or a portion of the Tax liability in question.
(b) In the case of an audit or administrative or judicial
proceeding that relates to periods ending on or before the Closing Date,
provided that the Seller acknowledge in writing its indemnification obligation
liability under Article VI of this Agreement with respect to the potential
liability of the Company as a result of such audit or administrative or judicial
proceeding, the Seller shall have the right, at its expense, to participate in
and control the conduct of such audit or proceeding; the Purchaser may also
participate in any such audit or proceeding and, if the Seller does not assume
the defense of any such audit or proceeding, the Purchaser, at its expense, may
defend the same in such manner as it may deem appropriate, including, but not
limited to, settling such audit or proceeding after giving five days' prior
written notice to the Seller setting forth the terms and conditions of
settlement. In the event that issues relating to a potential adjustment for
which the Seller has acknowledged its indemnification obligation are required to
be dealt with in the same proceeding as separate issues relating to a potential
adjustment for which the Purchaser would be liable, the Purchaser shall have the
right, at its expense, to control the audit or
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proceeding with respect to the latter issues, provided that the Purchaser
provides the Seller with a written acknowledgement of the Purchaser's liability.
(c) Notwithstanding Section 6.04(b), neither the Purchaser nor
the Seller shall enter into or cause the Company to enter into any compromise or
agree to settle or cause the Company to agree to settle any claim pursuant to
any Tax audit or proceeding, which would adversely affect the other party for
such year or any prior or subsequent year without the written consent of the
other party which consent may not be unreasonably withheld. If the Purchaser or
the Seller refuses to provide the respective other party with written consent to
settle any such claim, then the parties shall submit the matter to an
Independent Firm and the Independent Firm shall resolve the issue based on a
standard of maximal fairness to both the Purchaser and the Seller.
(d) The Purchaser and the Seller shall cooperate fully, as and
to the extent reasonably requested by the other party, in connection with (i)
the filing of Returns pursuant to Section 6.03 (including such amended Returns
for periods (or portions thereof) ending on or prior to the Closing Date that
the Seller may reasonably request the Purchaser to file; provided, however, that
if in the Purchaser's reasonable judgment the filing of the amended return would
be disadvantageous to the Purchaser, the Purchaser may deny the Seller's request
and the parties shall submit the matter to an Independent Firm and the
Independent Firm shall resolve the issue based on a standard of maximal fairness
to both the Purchaser and the Seller and (ii) any audit, litigation or other
proceeding with respect to Taxes.
SECTION 6.05. Survival of Obligations. Notwithstanding any
provision in this Agreement to the contrary, obligations of the Seller to
indemnify and hold harmless the Indemnified Parties pursuant to this Article VI,
and the representations and warranties contained in Section 3.17, shall
terminate at the close of business on the 180th day following the expiration of
the applicable statute of limitations with respect to the Tax liabilities in
question (giving effect to any waiver, mitigation or extension thereof).
SECTION 6.06. Conveyance Taxes. The Purchaser shall pay (or,
if the Seller pays, shall reimburse the Seller for) any real property transfer
or gains, sales, use, transfer, value added, stock transfer, and stamp taxes,
any transfer, recording, registration, and other fees, and any similar Taxes
(but specifically not including Taxes on or with respect to income) that become
payable in connection with the transactions contemplated by this Agreement. The
Company shall prepare in a timely manner for the review and approval of the
parties and file such applications and documents as shall permit any such Tax to
be assessed and paid on or prior to the Closing Date in accordance with any
available presale filing procedure. The parties
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shall execute and deliver all instruments and certificates necessary to enable
the Company to comply with the foregoing.
SECTION 6.07. Tax Refunds, Credits and Other Payments. (a) The
Company shall, within 10 days of receipt of any Tax refund or credit actually
received by or on behalf of the Company or successor thereto (other than a
refund or credit with respect to Taxes paid by the Company or successor thereto
on or after the Closing Date and not previously indemnified by the Seller
pursuant to Section 6.01(a)) (A) for or attributable to any Tax period of the
Company ending at or prior to the Closing Date or (B) for or attributable to any
period up to and including the Closing Date which is part of a Tax period of the
Company beginning prior to and ending after the Closing Date, pay such Tax
refund or credit (a "Returnable Refund or Credit") on an After-Tax Basis
(including any interest or addition actually received thereon). If the amount of
any Returnable Refund or Credit is applied against any other liability of any of
the Company or successor thereto for Taxes for any Tax period after the Closing
Date, the Purchaser shall, within 10 days of the date of such application, pay
to the Seller an amount equal to the Returnable Refund or Credit on an After-Tax
Basis (including any interest or addition actually received thereon). The
Purchaser shall deliver with payment to the Seller a copy of any written
explanation of the facts surrounding the Returnable Refund or Credit and a copy
of any related notice or statement received from any Tax authority.
(b) Without duplication of any amounts paid to the Purchaser
pursuant to Section 6.01, to the extent the Seller receives a Tax Benefit that
is attributable to an adjustment of any income, gain, loss, deduction, credit,
refund or other Tax item made with respect to any Tax period of the Company
ending on or before the Closing Date or any period ending on or before the
Closing Date which is part of a Tax period of the Company beginning before and
ending after the Closing Date and in connection therewith the Purchaser or any
Affiliate or successor thereto suffers a Loss, the Seller will, within 10 days
of the receipt of such Tax Benefit by the Seller, pay to the Purchaser an amount
equal to the lesser of the amount of the Tax Benefit or the Loss.
SECTION 6.08. Performance of Acts. In any instance in this
Article VI in which a Party is required to perform an act, such requirement will
include, in the alternative and where applicable, such Party causing the Company
(or any other entity, if such entity is required by law to perform such act and
the Party has the power to so cause) to perform such act.
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ARTICLE VII
CONDITIONS TO CLOSING
SECTION 7.01. Conditions to Obligations of the Seller and the
Company. The obligations of the Seller and the Company to consummate the
transactions contemplated by this Agreement shall be subject to the fulfillment,
at or prior to the Closing, of each of the following conditions:
(a) Representations, Warranties and Covenants. The
representations and warranties of the Purchaser contained in this Agreement
shall have been true and correct in all material respects when made and shall be
true and correct in all material respects as of the Closing, with the same force
and effect as if made as of the Closing Date, other than such representations
and warranties as are made as of another date, which shall be true and correct
in all material respects as of such date (provided, however, if any portion of
any representation or warranty is already qualified by materiality, for purposes
of determining whether this Section 7.01(a) has been satisfied with respect to
such portion of such representation or warranty, such portion of such
representation or warranty as so qualified must be true and correct in all
respects), and the covenants and agreements contained in this Agreement to be
complied with by the Purchaser on or before the Closing shall have been complied
with in all material respects, and the Seller shall have received a certificate
from the Purchaser to such effect signed by a duly authorized officer thereof;
(b) No Proceeding or Litigation. No Action shall have been
commenced by or before any Governmental Authority against the Seller, the
Company or the Purchaser, seeking to restrain or prevent the consummation of the
transactions contemplated by this Agreement; provided, however, that the
provisions of this Section 7.01(b) shall not apply if the Seller, the Company or
any Affiliate thereof have directly or indirectly solicited or encouraged any
such Action;
(c) Resolutions. The Seller shall have received a true and
complete copy, certified by the Secretary of the Purchaser, of the resolutions
of the Purchaser's Supervisory Board evidencing its authorization of the
consummation of the transactions contemplated hereby;
(d) Incumbency Certificate. The Seller shall have received a
certificate of the Secretary of the Purchaser certifying the names and
signatures of the officers of the Purchaser authorized to sign this Agreement
and the other documents to be delivered hereunder;
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(e) Escrow Agreement. The Purchaser shall have duly executed
and delivered the Escrow Agreement in substantially the form of Exhibit 2.05(f)
hereto;
(f) Works Council Approval. The Works Council of the Seller
shall have given its unqualified positive advice concerning the Seller's
decision to enter into this Agreement and to consummate the transactions
contemplated hereby;
(g) Consummation of Transactions Contemplated by Transaction
Agreement. The transactions contemplated by the Transaction Agreement, a form of
which is attached as Exhibit 7.01(f) hereto (the "Transaction Agreement"), shall
have been consummated; and
(h) Completion of the IPO. The IPO shall have been
consummated.
SECTION 7.02 Conditions to Obligations of the Purchaser. The
obligations of the Purchaser to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, at or prior to the Closing, of
each of the following conditions:
(a) Representations, Warranties and Covenants. The
representations and warranties of the Seller contained in this Agreement shall
have been true and correct in all material respects when made and shall be true
and correct in all material respects as of the Closing with the same force and
effect as if made as of the Closing, other than such representations and
warranties as are made as of another date, which shall be true and correct in
all material respects as of such date (provided, however, that the
representations and warranties contained in Section 3.03 will be true and
correct in all respects and that if any portion of any representation or
warranty is already qualified by materiality, for purposes of determining
whether this Section 7.02(a) has been satisfied with respect to such portion of
such representation or warranty, such portion of such representation or warranty
as so qualified must be true and correct in all respects), and the covenants and
agreements contained in this Agreement to be complied with by Seller and the
Company on or before the Closing shall have been complied with in all material
respects, and the Purchaser shall have received a certificate from the Seller
and the Company to such effect signed by a duly authorized officer thereof;
(b) No Proceeding or Litigation. No Action shall have been
commenced by or before any Governmental Authority against the Seller or the
Purchaser, seeking to restrain or prevent the consummation of the transactions
contemplated by this Agreement; provided, however, that the provisions of this
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Section 7.02(b) shall not apply if the Purchaser has solicited or encouraged any
such Action;
(c) Consents and Approvals. The Purchaser, the Seller and the
Company shall have received, each in form and substance satisfactory to the
Purchaser all authorizations, consents, orders and approvals of all Governmental
Authorities and officials and all third party consents set forth on Schedule
7.02(c);
(d) Financing. The Purchaser shall have obtained financing on
terms acceptable to it, sufficient to enable it to consummate the transactions
contemplated by this Agreement;
(e) Completion of the IPO. The IPO shall have been
consummated;
(f) No Material Adverse Effect. No event or events shall have
occurred, or be reasonably likely to occur, which have, or are reasonably likely
to have, a Material Adverse Effect;
(g) No Debt. The Company shall have no indebtedness for
borrowed money as of the Closing Date;
(h) Net Asset Tests. (A) The Net Assets reflected on the Net
Asset Test Reference Balance Sheet shall not exceed the Net Assets reflected on
the Audited Net Asset Test Reference Balance Sheet by NLG500,000 or more, and
(B) the Net Assets reflected on the Seasonally Adjusted Net Asset Test Reference
Balance Sheet shall not exceed the Net Assets reflected on the Pre-Closing
Balance Sheet by NLG500,000 or more;
(i) Consummation of Transactions Contemplated by the
Transaction Agreement. The transactions contemplated by the Transaction
Agreement shall have been consummated.
(j) Certain Resolutions. The Purchaser shall have received a
true and complete copy, certified by the managing director of the Company, of
the shareholders' register evidencing the Purchaser as the new owner of all the
Shares; and
(k) Resignation Letters. The Purchaser shall have received a
resignation letter from each member of the Company's Board of Supervisory
Directors.
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ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. Survival of Representations and Warranties. The
representations and warranties of the parties contained in Sections 3.11, 3.14,
3.15, 3.16 and 3.18, and Article IV (other than Section 4.05), and the covenants
of the parties set forth in Article V (other than Sections 5.02(b) and (c),
5.03, 5.06, 5.07, 5.11, 5.12, 5.13 and 5.14) shall terminate at Closing. The
representations and warranties of the parties contained in Sections 3.01, 3.02,
3.03, 3.04, 3.05, 3.06, 3.07, 3.09, 3.10, 3.12, 3.13, 3.19, 3.20, 3.21, 3.22,
3.23 and 3.24 and Section 4.05 shall survive the Closing until the second
anniversary of the Closing Date. The representations and warranties dealing with
Tax matters shall survive as provided in Article VI, and the representations and
warranties set forth in Section 3.08 shall survive the Closing until the first
anniversary of the Closing Date. The covenants of the parties set forth in
Sections 5.02(b) and (c), 5.03, 5.06, 5.07, 5.11, 5.12, 5.13 and 5.14 shall
survive the Closing, and the other covenants set forth in this Agreement that
expressly survive the Closing shall survive the Closing in accordance with their
respective terms. Notwithstanding the foregoing or anything to the contrary in
this Article VIII, in the event that the Purchaser has actual knowledge prior to
the Closing Date that any of the representations and warranties of the Seller to
survive the Closing in accordance with this Section 8.01 were not true and
correct as of the date hereof or are not true and correct as of the Closing Date
or that the agreements of the Seller contained in Section 5.03(b) have not been
complied with, the sole and exclusive remedy of the Purchaser with respect to
such breaches will be to not consummate the transactions contemplated by this
Agreement if any such breach results in the nonsatisfaction of the condition
contained in Section 7.02(a). For purposes of the foregoing sentence, the term
"actual knowledge" means the actual knowledge of an officer of the Purchaser,
including, without limitation, as a result of (A) the delivery to the Purchaser
by the Seller not fewer than three Business Days prior to the Closing (other
than in a case in which an event occurs within such three Business Day period
which could not have been anticipated, in which case written notice of such
event must be provided to the Purchaser promptly after the Seller becomes aware
of it) of a written notice specifically identifying in detail the nature of the
breach and the provisions of this Agreement that have been breached; (B),
without duty of any other due or specific inquiry, a written survey of (i)
employees of the Purchaser who are reasonably likely, because of their
substantive and significant contacts with the Company, to have knowledge as to
the truth and correctness of the representations and warranties of the Seller to
survive the Closing or whether the Seller has complied with Section 5.03(b),
(ii) the accountants at KPMG Peat Marwick LLP, (iii) the investment bankers at
XX Xxxxxx and (iv) the attorneys at Shearman & Sterling, Xxxxx Dutilh and Xxxxx
Xxxx & Xxxxxxxx, who, in the case of (ii), (iii) and
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(iv), actually participated in the Purchaser's due diligence investigation of
the Company; (C) the Seller's Disclosure Schedule; (D) the Seller's written
responses to the Purchaser's request for certain due diligence information,
copies of which responses are set forth on Schedule 8.01 hereto (which written
responses shall not be deemed to be a part of the Seller's Disclosure Schedule
for purposes of this Agreement); (E) the Audited Net Asset Test Reference
Balance Sheet; and (F) the Pre-Closing Balance Sheet. Subject to the foregoing,
neither the period of survival nor the liability of the parties hereto with
respect to their representations and warranties and covenants shall be reduced
by any investigation made at any time by or on behalf of any such party. If
written notice of a claim has been given prior to the expiration of the
applicable representations and warranties and covenants by the parties hereto,
then the relevant representations and warranties and covenants shall survive as
to such claim until such claim has been finally resolved.
SECTION 8.02. Indemnification by the Seller. (a) The
Purchaser, its Affiliates, including the Company, and their successors and
assigns, and the officers, directors, employees and agents of the Purchaser, its
Affiliates and their successors and assigns (each a "Purchaser Indemnified
Party") shall be indemnified and held harmless, as and to the extent set forth
in this Section 8.02, by the Seller for any and all Liabilities, losses,
damages, claims, costs and expenses, interest, awards, judgments and penalties
(including, without limitation, attorneys' and consultants' fees and expenses)
actually suffered or incurred by them (including, without limitation, any Action
brought or otherwise initiated by any of them) on an After-Tax Basis
(hereinafter a "Loss"), arising out of or resulting from:
(i) the breach of any representation or warranty made by the
Seller contained in any of Sections 3.01, 3.02, 3.03, 3.04, 3.05, 3.06,
3.07, 3.09, 3.10, 3.12, 3.13, 3.19, 3.20, 3.21, 3.22, 3.23 or 3.24 of
this Agreement; or
(ii) the breach of any covenant or agreement by the Seller
contained in Section 5.03(b) of this Agreement;
(iii) Liabilities of the Company, whether arising before or
after the Closing Date, arising from or relating to any of [specified
items listed in the Seller's Disclosure Schedule];]
(iv) any shortfall in the Cash of the Company that is not
covered by the amount held by the Escrow Agent, together with interest
thereon, as determined by the parties in accordance with Section
2.05(f)(iii); or
(v) any claim brought by any employee or Employee, as the case
may be, seconded to the Company, relating to such employee's or
Employee's
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employment by the Seller, including such employee's or Employee's
secondment by the Seller to the Company, whether prior to or after the
Closing Date.
(b) The obligation of the Seller to indemnify a Purchaser
Indemnified Party shall be subject to the limitation set forth in the fifth
sentence of Section 8.01 and to the following limitations: (i) no
indemnification by the Seller (other than an indemnification pursuant to Section
8.02(a)(iv) or (v)) shall be made unless the aggregate amount of Losses relating
to breaches or otherwise subject to indemnification hereunder exceeds US$75,000,
and then indemnification shall be made solely in the amount of such excess; (ii)
in no event shall the aggregate obligation of all the Seller to indemnify the
Purchaser Indemnified Parties (other than an indemnification pursuant to Section
8.02(a)(iv) or (v)) exceed US$1,000,000, except for a breach of the
representations and warranties contained in Section 3.03 in which case the
obligation to indemnify the Purchaser Indemnified Parties shall not exceed
US$2,000,000; (iii) any recovery of a Loss due to breach of one representation
will preclude recovery of such Loss due to breach of any other representation,
and all indemnification shall be without duplication of any other recovery; (iv)
a Purchaser Indemnified Party shall not be entitled to be indemnified for breach
of the representations and warranties set forth in Section 3.08 or Section 3.12
unless it establishes that (A) a reasonably prudent business person would have
concluded, based on the information available to such person at the time of
taking the action that caused such breach or, in the case of Section 3.12, at
the time of entering into the contract that caused such breach, that the Losses
associated with such action or such contract, as the case may be, would exceed
the benefits associated therewith, and (B) in the case of Sections 3.12(a)(vi)
and (a)(viii) only, that such breach has had a materially negative effect on the
Company; (v) a Purchaser Indemnified Party shall not be entitled to be
indemnified for any breach of the representations and warranties set forth in
Section 3.10 if and to the extent such breach also constitutes a breach of any
of the representations and warranties set forth in Sections 3.11 or 3.16; and
(vi) for purposes of determining whether a Purchaser Indemnified Party is
entitled to be indemnified for any breach of the representations and warranties
contained in Section 3.12, the term "Material Contracts" shall be deemed to
refer solely to (A) any contracts or agreements under which the Company can be
reasonably expected to pay or be paid at least NLG 25,000 over any five year
period during the life of the contract following the Closing Date, (B) any
contracts or agreements that limit or purport to limit the ability of the
Company to compete in any line of business or with any Person or in any
geographic area or during any period of time, or (C) any contracts the presence
or absence of which would have a Material Adverse Effect.
(c) Each Purchaser Indemnified Party shall use its reasonable
efforts to mitigate any Losses for which it seeks indemnification hereunder.
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(d) To the extent that the Seller's undertakings set forth in
this Section 8.02 may be unenforceable, the Seller shall contribute (in the same
proportion as it would otherwise have indemnified the Purchaser Indemnified
Party in accordance with Section 8.02(b)(iii)) the maximum amount that it is
permitted to contribute under applicable law to the payment and satisfaction of
all Losses incurred by the Purchaser and the Company.
SECTION 8.03. Tax Matters. Anything in this Article VIII to
the contrary notwithstanding, the rights and obligations of the parties with
respect to indemnification for any and all Tax matters shall be governed solely
by Article VI.
SECTION 8.04. Indemnification by the Purchaser. (a) The
Seller, its Affiliates and their successors and assigns, and the officers,
directors, employees and agents of the Seller, their Affiliates and their
successors and assigns (each a "Seller Indemnified Party") shall be indemnified
and held harmless, as and to the extent set forth in this Section 8.04, by the
Purchaser for any and all Losses on an After-Tax Basis arising out of or
resulting from:
(i) the breach of any representation or warranty made by the
Purchaser contained in Section 4.05 of this Agreement;
(ii) Liabilities of the Company, other than any Liabilities
for which the Purchaser is entitled to be indemnified pursuant to
Section 8.02; or
(iii) any Cash that the Purchaser is required to pay to the
Seller, together with interest thereon, as determined by the parties in
accordance with Section 2.05(f)(iii).
(b) Each Seller Indemnified Party shall use its reasonable
efforts to mitigate any Losses for which it seeks indemnification hereunder.
(c) To the extent that the Purchaser's undertakings set forth
in this Section 8.04 may be unenforceable, the Purchaser shall contribute the
maximum amount that it is permitted to contribute under applicable law to the
payment and satisfaction of all Losses incurred by the Parent Entities.
SECTION 8.05. Indemnification Procedures. A Purchaser
Indemnified Party or a Seller Indemnified Party, as the case may be (in each
case, the "Indemnified Party"), shall give the Seller, or the Purchaser, as the
case may be (in each case, the "Indemnifying Party"), notice of any matter which
an Indemnified Party has determined has given or could give rise to a right of
indemnification under this Agreement, within 60 days of such determination,
stating the amount of the Loss,
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if known, and method of computation thereof, and containing a reference to the
provisions of this Agreement in respect of which such right of indemnification
is claimed or arises. The obligations and Liabilities of an Indemnifying Party
under this Article VIII with respect to Losses arising from claims of any third
party which are subject to the indemnification provided for in this Article VIII
(a "Third Party Claim") shall be governed by and contingent upon the following
additional terms and conditions: if an Indemnified Party shall receive notice of
any Third Party Claim, the Indemnified Party shall give the Indemnifying Party
notice of such Third Party Claim within 30 days of the receipt by the
Indemnified Party of such notice; provided, however, that the failure to provide
such notice shall not release the Indemnifying Party from any of its obligations
under this Article VIII except to the extent the Indemnifying Party is
materially prejudiced by such failure and shall not relieve the Indemnifying
Party from any other obligation or Liability that it may have to any Indemnified
Party otherwise than under this Article VIII. If the Indemnifying Party
acknowledges in writing its obligations to indemnify the Indemnified Party
hereunder against any Losses (subject to the limitations set forth in Section
8.02(b)) that may result from such Third Party Claim, then such Indemnifying
Party shall be entitled to assume and control the defense of such Third Party
Claim at its expense and through counsel of its choice if it gives notice of its
intention to do so to the Indemnified Party within five Business Days of the
receipt of such notice from the Indemnified Party; provided, however, that if
there exists or is reasonably likely to exist a conflict of interest that would
make it inappropriate in the reasonable judgment of the Indemnified Party for
the same counsel to represent both the Indemnified Party and the Indemnifying
Party, then the Indemnified Party shall be entitled to retain its own counsel,
in each jurisdiction for which the Indemnified Party determines counsel is
required to participate in such defense, at the expense of the Indemnifying
Party. In the event the Indemnifying Party exercises the right to undertake any
such defense against any such Third Party Claim as provided above, the
Indemnified Party shall cooperate with the Indemnifying Party in such defense
and make available to the Indemnifying Party, at the Indemnifying Party's
expense, all witnesses, pertinent records, materials and information in the
Indemnified Party's possession or under the Indemnified Party's control relating
thereto as is reasonably required by the Indemnifying Party, subject to
reimbursement of reasonable out-of-pocket expenses. Similarly, in the event the
Indemnified Party is, directly or indirectly, conducting the defense against any
such Third Party Claim, the Indemnifying Party shall cooperate with the
Indemnified Party in such defense and make available to the Indemnified Party
all such witnesses, records, materials and information in the Indemnifying
Party's possession or under the Indemnifying Party's control relating thereto as
is reasonably required by the Indemnified Party, subject to reimbursement of
reasonable out-of-pocket expenses. No such Third Party Claim may be settled by
the Indemnifying Party without the prior written consent of the Indemnified
Party.
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ARTICLE IX
TERMINATION AND WAIVER
SECTION 9.01. Termination. This Agreement may be terminated at
any time prior to the Closing:
(a) by the mutual written consent of the Seller and the
Purchaser;
(b) by either the Seller or the Purchaser if the Closing shall
not have occurred by December 31, 1997;
(c) by either the Purchaser or the Seller in the event that
any Governmental Authority shall have issued an order, decree or ruling or taken
any other action restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree, ruling or
other action shall have become final and nonappealable;
(d) by the Purchaser if, between the date hereof and the time
scheduled for the Closing: (i) there shall have been a breach of any material
representation or warranty of the Seller contained in this Agreement; (ii) the
Seller shall not have complied with any material covenant or agreement to be
complied with by it and contained in this Agreement; or (iii) the Seller or the
Company make a general assignment for the benefit of creditors, or any
proceeding shall be instituted by or against the Seller or the Company seeking
to adjudicate either of them bankrupt or insolvent, or seeking liquidation,
winding up or reorganization, arrangement, adjustment, protection, relief or
composition of its debts under any Law relating to bankruptcy, insolvency or
reorganization; or
(e) by the Seller if, between the date hereof and the time
scheduled for the Closing: (i) there shall have been a breach of any material
representation or warranty of the Purchaser contained in this Agreement; (ii)
the Purchaser shall not have complied with any material covenant or agreement to
be complied with by it and contained in this Agreement; or (iii) the Purchaser
makes a general assignment for the benefit of creditors, or any proceeding shall
be instituted by or against the Purchaser seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding up or reorganization, arrangement,
adjustment, protection, relief or composition of its debts under any Law
relating to bankruptcy, insolvency or reorganization.
SECTION 9.02. Effect of Termination. (a) In the event of
termination of this Agreement as provided in Section 9.01, this Agreement shall
forthwith become void and there shall be no liability on the part of any party
hereto
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except that the provisions of Sections 5.03(a), 9.02(a), 9.02(b), 10.0l, 10.02,
10.03, 10.06, 10.08, 10.10, 10.11, 10.12, 10.13 and 10.14 shall survive any such
termination.
(b) Notwithstanding the foregoing, if the Closing does not
occur because of a breach by a party, such party will reimburse the other
parties (as their sole and exclusive remedy hereunder) for their out-of-pocket
costs and expenses, including, without limitation, fees and disbursements of
counsel, financing sources (other than bank commitment fees paid by the
Purchaser prior to June 15, 1997 or paid by the Purchaser after June 15, 1997
without consulting the Seller) and accountants, and disbursements (but not fees)
of financial advisors, incurred in connection with the preparation, negotiation
and performance of this Agreement and the transactions contemplated hereby.
SECTION 9.03. Waiver. A party to this Agreement may (a) extend
the time for the performance of any of the obligations or other acts of the
other parties, (b) waive any inaccuracies in the representations and warranties
of the other parties contained herein or in any document delivered by the other
parties pursuant hereto or (c) waive compliance with any of the agreements or
conditions of the other parties contained herein. Any such extension or waiver
shall be valid only if set forth in an instrument in writing signed by the party
to be bound thereby. Any waiver of any term or condition shall not be construed
as a waiver of any subsequent breach or a subsequent waiver of the same term or
condition, or a waiver of any other term or condition of this Agreement. The
failure of any party to assert any of its rights hereunder shall not constitute
a waiver of any of such rights.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01. Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses, whether or not the Closing
shall have occurred.
SECTION 10.02. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by courier service, by cable, by telecopy, by telegram, by
telex or by registered or
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certified mail (postage prepaid. return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 10.02):
(a) If to the Purchaser:
Galileo International Partnership
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000, XXX
Attention: General Counsel
Telecopy: (000) 000 0000
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with a copy to:
Xxxxx Dutilh
Postbus 7113
1007 JC Amsterdam
Xxxxxxx Xxxxxxxxxxx 00
0000 XX Xxxxxxxxx
Attention: Gerlof X.X. Xxxxxx, Esq.
Telecopy: x00 (00) 000 0000
a copy to:
The Galileo Company
Galileo Centre Europe
Xxxxxxxx Xxxx
Xxxxxxx
Xxxxx XX0 0XX, XX
Attention: Company Secretary
Telecopy: x00 (0)0000 000000
and a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx XXX
Attention: Xxxxx X'Xxxxx, Esq.
Telecopy: (000) 000-0000
(b) If to the Seller:
__________________
__________________
__________________
Attention: ___________
Telecopy: ___________
with a copy to:
__________________
__________________
__________________
__________________
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(c) If to the Company:
__________________
__________________
__________________
Attention: ___________
Telecopy: ___________
with a copy to:
__________________
__________________
__________________
__________________
SECTION 10.03. Public Announcements. Except as may be required
by Law, no party to this Agreement shall make, or cause to be made any press
release or public announcement in respect of this Agreement or the transactions
contemplated hereby or the existence of discussion or negotiations between the
parties or otherwise communicate with any news media without the prior consent
of the other parties, and the parties shall cooperate as to the form, timing and
contents of any such press release or public announcement.
SECTION 10.04. Headings. The descriptive headings contained in
this Agreement are for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
SECTION 10.05. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
SECTION 10.06. Entire Agreement. This Agreement (including the
Exhibits and the Seller's Disclosure Schedule which are hereby incorporated
herein and made a part hereof for all purposes as if fully set forth herein) and
the
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Non-Disclosure Agreement constitute the entire agreement of the parties hereto
with respect to the subject matter hereof and thereof and supersede all prior
agreements and undertakings, both written and oral, between the Seller and the
Purchaser with respect to the subject matter hereof and thereof.
SECTION 10.07. Assignment. This Agreement may not be assigned
by operation of law or otherwise without the express written consent of the
Seller and the Purchaser (which consent may be granted or withheld by the Seller
or the Purchaser); provided, however, that the Purchaser may assign all or any
portion of its rights and obligations under this Agreement to one or more
Affiliates of the Purchaser without the consent of the Seller; provided further
that in the event of such assignment, Purchaser will remain liable for any
obligations hereunder not performed by such assignee or assignees.
SECTION 10.08. No Third Party Beneficiaries. This Agreement
shall be binding upon and inure solely to the benefit of the Parties and their
permitted assigns and nothing herein, express or implied, is intended to or
shall confer upon any other Person any legal or equitable right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
SECTION 10.09. Amendment. This Agreement may not be amended or
modified except (a) by an instrument in writing signed by, or on behalf of, the
Seller and the Purchaser or (b) by a waiver in accordance with Section 9.03.
SECTION 10.10. Arbitration. (a) Subject to Section 10.10(b),
any dispute arising between the Parties hereto involving the subject matters
covered by this Agreement shall be submitted to arbitration under this Section
10.10. A Party asserting a breach of this Agreement by the other Party shall
notify the other Party of such alleged breach (a "Dispute Notice") and the
Parties shall attempt to resolve such dispute amicably and if they shall fail to
resolve it within thirty (30) days of the date of the Dispute Notice, either
Party may notify the other Party that it wishes to commence an arbitration
proceeding under this Section 10.10 (an "Arbitration Request"). In any
arbitration proceeding the Party commencing the arbitration (the "Petitioner")
shall include in the Arbitration Request (a) a statement of the facts
constituting the alleged breach or dispute, (b) a written statement of position
("Statement") regarding the dispute and (c) the name of an elector designated by
it. The Statement shall state the facts and arguments in support of the position
taken by the Party submitting such Statement and shall detail that Party's
proposed solution and relief sought (if any). Copies of any Arbitration Request
shall be furnished at the same time to the other Party hereto. The Party with
whom the Petitioner has its dispute (the "Respondent") shall within five (5)
Business Days after the date of the Arbitration Request designate a second
elector by notice to the Petitioner (copies of
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which shall be furnished to the other Party), but if it shall fail to do so
within such period the Petitioner may designate an elector on Respondent's
behalf. The electors chosen by the Petitioner and the Respondent shall attempt
to agree upon an arbitrator (the "Arbitrator"), but if they are unable to do so
within twenty (20) Business Days after the designation of the second elector,
then either elector thereafter may apply to the American Arbitration Association
(the "Association") for the selection of the Arbitrator in accordance with the
Commercial Arbitration Rules of such Association. The Arbitrator so selected
shall have full power to decide any dispute referred to in this Section 10.10.
The arbitration proceedings shall be conducted in the English language, and the
place of arbitration and the making of the Award (as defined below) shall be
Paris, France. The UNCITRAL rules of commercial arbitration shall apply to any
arbitration commenced pursuant to this Section 10.10, as modified by the
following procedure:
(i) Within five (5) Business Days of the selection of the
Arbitrator (the "Commencement Date"), the Respondent shall deliver its
Statement regarding the dispute to the Arbitrator and to the
Petitioner.
(ii) Within fifteen (15) Business Days from the Commencement
Date, each of the Petitioner and Respondent shall deliver to the
Arbitrator and to the other Party, a response ("Response") to the other
Party's Statement setting forth opposing facts and arguments and
limited in length to ten (10) typed, single spaced pages (excluding any
evidentiary exhibits included therein).
(iii) Within twenty (20) Business Days from the Commencement
Date, each of the Petitioner and the Respondent may deliver to the
Arbitrator and to the other Party, a reply to the Response limited to
setting forth facts and arguments in rebuttal to the Statement and
Response of the other Party and limited in length to five (5) typed,
single spaced pages (excluding any evidentiary exhibits included
therein).
(iv) Within twenty-five (25) Business Days from the
Commencement Date, each of the Petitioner and Respondent shall present
an oral summation of its position to the Arbitrator in the presence of
the other Party in accordance with such rules of procedure including,
without limitation, length of presentation and right of
cross-examination, as the Arbitrator shall determine in writing and
deliver to the Parties not less than three (3) Business Days prior to
such hearing; provided, however, that such hearing shall not exceed
eight (8) hours in total and may not be adjourned except for
extraordinary circumstances beyond the control of the Parties.
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(v) The Arbitrator shall either issue his or her decision and
award ("Award") or request a further meeting of the Parties within
fifteen (15) days of the hearing.
(vi) Any such further meeting of the Parties shall take place
within five (5) Business Days of the request therefor and shall be
conducted as determined by the Arbitrator. The Arbitrator shall issue
his or her Award no later than fifteen (15) days after any such further
meeting of the Parties.
(vii) The Award shall be in writing and shall be limited to a
decision either completely in favor of Petitioner's request for relief
or completely in favor of Respondent's. The Award shall be final and
binding upon the Parties hereto and judgment may be entered thereon in
any court of competent jurisdiction and the costs and expenses of such
arbitration (and of enforcing any Award) shall be borne by the Party
losing such arbitration.
(b) This Section 10.10 shall in no way affect the right of any
Party to seek such interim relief, and only such relief, as may be required to
maintain the status quo in aid of the arbitration in any court of competent
jurisdiction.
SECTION 10.11. Governing Law. This Agreement shall be
construed in accordance with and be governed by the laws of The Netherlands,
excluding (to the greatest extent permissible by law) any rule of law that would
cause the application of the laws of any jurisdiction other than The
Netherlands. To the greatest extent possible, all terms used in this Agreement
shall be construed to have the meaning ascribed to such terms under the laws of
The Netherlands.
SECTION 10.12. Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement. This
Agreement is drawn up in the English language and may be translated into any
language other than English provided however that the English text shall
prevail.
SECTION 10.13. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at law or equity.
SECTION 10.14. No rescission. The Parties hereto waive their
rights under Sections 6:265 et seq of the Netherlands Civil Code to claim
rescission
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("ontbinding") of this Agreement; provided, however, that nothing in this
Section 10.14 shall prevent any party from exercising its right to terminate
this Agreement in accordance with the provisions of Section 9.01.
IN WITNESS WHEREOF, the Purchaser, the Seller and the Company
have caused this Agreement to be executed as of the date first written above by
their respective officers thereunto duly authorized.
GALILEO INTERNATIONAL
PARTNERSHIP
By:___________________________
Name:
Title:
KONINKLIJKE LUCHTVAART
MAATSCHAPPIJ N.V.
By:___________________________
Name:
Title:
By:___________________________
Name:
Title:
GALILEO NEDERLAND BV
By:___________________________
Name:
Title:
