1
EXHIBIT 10.3
AGREEMENT FOR THE TRANSFER OF
OMNICOM SHARES
BY AND AMONG:
XXXXX XXXXXXXXX
FLORENT MARTENNE-XXXXXX
XXXXXXXX AIT YAHIA
(The "Founders")
AND VARIOUS OTHER OMNICOM SHAREHOLDERS
(The "Sellers")
AND
ESPRIT TELECOM HOLDINGS, LIMITED
(The "Purchaser")
and
Global TeleSystems Group, Inc. ("GTS")
Date: 14 April 1999
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AGREEMENT FOR THE TRANSFER OF OMNICOM SHARES
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BY AND AMONG
Xx. XXXXX XXXXXXXXX, an individual of French nationality, residing at 00, xxx
xxx Xxxxxxx, 00000 Xxxxxxx xxx Xxxxx, Xxxxxx,
(hereinafter referred to as "Xx. Xxxxxxxxx"),
NICOM INVESTISSEMENTS ("Company A"), a French societe civile with an issued
capital of 69,978,300 Euros having its registered office at 00 xxx xxx Xxxxxxx,
00000 Xxxxxxx xxx Xxxxx, Xxxxxx, registered with the Trade and Company Registry
of Versailles under number D422439448 represented by Xx. Xxxxxxxxx in his
capacity as "gerant", duly authorized for that purpose,
Xx. Xxxxx Xxxxxxxxx, a child of Xx. Xxxxxxxxx and an individual of French
nationality, residing at 00, xxx xxx Xxxxxxx, 00000 Xxxxxxx xxx Xxxxx, Xxxxxx,
represented by her parents, Xx. Xxxxxxxxx and Xxx. Xxxxxxx Xxxxxxxxx, Nee Xxxx,
AND
Xx. Xxxxxxx Xxxxxxxxx, a child of Xx. Xxxxxxxxx and an individual of French
nationality, residing at 00, xxx xxx Xxxxxxx, 00000 Xxxxxxx xxx Xxxxx, Xxxxxx,
represented by her parents, Xx. Xxxxxxxxx and Xxx. Xxxxxxx Xxxxxxxxx, nee Xxxx,
AND
Xx. Xxxx Xxxxxxxxx, a child of Xx. Xxxxxxxxx and an individual of French
nationality, residing at 00, xxx xxx Xxxxxxx, 00000 Xxxxxxx xxx Xxxxx, Xxxxxx,
represented by his parents, Xx. Xxxxxxxxx and Xxx. Xxxxxxx Xxxxxxxxx, nee Xxxx,
(Xx. Xxxxxxxxx, Company A, and the Xxxxxxxxx children collectively are referred
to hereafter as the "Xxxxxxxxx Group")
Mr. FLORENT MARTENNE-XXXXXX, an individual of French nationality, residing at
12, villa Memoris, 94120 Fontenay sous Bois, France,
(hereinafter referred to as "Mr. Martenne-Xxxxxx")
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FINANCIERE DU MARAIS, ("Company B"), a French societe civile with an issued
capital of 12,915,500 Euros having its registered office at 00 xxxxxx Xxxxx xx
Xxxxx, 00000 XXXXX XXXXX, Xxxxxx, registered with the Trade and Company Registry
of Nanterre under number D422474890 represented by Mr. Martenne-Xxxxxx in his
capacity as "gerant", duly authorized for that purpose,
Mr. Sebastien Martenne-Xxxxxx, a child of Mr. Martenne-Xxxxxx and an individual
of French nationality, residing at 12, villa Memoris, 94120 Fontenay sous Bois,
France, represented by his parents, Mr. Martenne-Xxxxxx and Mrs. Xxxxxx
Martenne-Xxxxxx nee Nanni,
AND
Mr. Xxxxxxx Martenne-Xxxxxx, a child of Mr. Martenne-Xxxxxx and an individual of
French nationality, residing at 12, villa Memoris, 94120 Fontenay sous Bois,
France, represented by his parents, Mr. Martenne-Xxxxxx and Mrs. Xxxxxx
Martenne-Xxxxxx nee Nanni,
AND
Ms. Magali Martenne-Xxxxxx, a child of Mr. Martenne-Xxxxxx and an individual of
French nationality, residing at 12, villa Memoris, 94120 Fontenay sous Bois,
France, represented by her parents, Mr. Martenne-Xxxxxx and Mrs. Xxxxxx
Martenne-Xxxxxx xxx Xxxxx,
(Mr. Martenne-Xxxxxx, Company B, and the Martenne-Xxxxxx children collectively
are referred to hereafter as the "Martenne-Xxxxxx Group")
Mr. PHILIPPE AIT YAHIA, an individual of French nationality, residing at 00, xxx
xxx Xxxxx Xxxxxxxx 00000, Xxxxxx, Xxxxxx,
(hereinafter referred to as "Mr. Ait Yahia"),
HESPERIA ("Company C"), a French societe civile with an issued capital of
7,372,400 Euros having its registered office at 00 xxx xxx Xxxxx Xxxxxxxx 00000,
Xxxxxx, Xxxxxx, registered with the Trade and Company Registry of Nanterre under
number D422474176 represented by Mr. Ait-Yahia in his capacity as "gerant", duly
authorized for that purpose,
Xx. Xxxxxx Ait Yahia, a child of Mr. Ait Yahia and an individual of French
nationality, residing at 00 xxx xxx Xxxxx Xxxxxxxx 00000, Xxxxxx, Xxxxxx,
represented by his parents, Mr. Ait Yahia and Ms. Sandrine Nicourd,
AND
(Mr. Ait Yahia, Company C, and the Ait Yahia child collectively are referred to
hereafter as the "Ait Yahia Group")
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(Xx. Xxxxxxxxx, Mr. Martenne-Xxxxxx and Mr. Ait Yahia being hereinafter
collectively referred to as the "Founders")
(The Xxxxxxxxx Group, the Martenne-Xxxxxx Group, the Ait Yahia Group, being
hereinafter collectively referred to as the "Sellers")
(Any of the Xxxxxxxxx Group, the Martenne-Xxxxxx Group or the Ait Yahia Group,
being hereinafter sometimes referred to singularly as a "Group")
AND
Esprit Telecom Holdings, Limited, a corporation duly registered in England with
an authorized capital of 1,00,000 pounds sterling, having its registered office
at Xxxxxxx Xxxxx, Xxxxx Xxxxxx, Xxxxxxx, XX0 0XX, represented by Xx. Xxxxxx
Xxxxxxxxxxx, duly authorized for that purpose,
(hereinafter referred to as the "Purchaser")
Global TeleSystems Group, Inc. ("GTS"), a Delaware corporation having its
offices at 0000 Xxxxxxxx Xxxxx, Xxxxx Xxxxx, 00xx Xxxxx, XxXxxx, Xxxxxxxx 00000,
represented by Mr. Xxxxxx Schreisheim in his capacity as Executive Vice
President and Chief Corporate Development Officer, duly authorized for that
purpose.
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RECITALS
WHEREAS, Edison is a French corporation ("societe anonyme") with, as of December
31, 1998, an authorized capital of 9,500,205 French francs consisting of
1,900,041 shares with a par value of 5 French francs per share, having its
registered office at 00 xxx xx Xxxxxx, 00000, Xxxxxxxx Billancourt, registered
with the Nanterre Trade and Company Registry under number B392 156485
(hereinafter referred to as the "Company");
WHEREAS, the Sellers own and hold 927,357 shares of common stock in the Company
(hereinafter referred to as the "Shares"), representing, as of December 31,
1998, 48.81% of the issued and outstanding capital of the Company;
WHEREAS, the Company is listed on the Nouveau Marche of the Paris Bourse
("Nouveau Marche");
WHEREAS, the Purchaser has informed the Sellers of its intent to acquire the
Shares and any of the Company's common stock and convertible bonds and will
undertake to make an offer (an "Offer") to all of the minority shareholders of
the Company and all of the holders of the Company's convertible bonds to
purchase the remaining common stock and convertible bonds of the Company;
WHEREAS, in connection with the purchase of the Shares, the Purchaser also
intends to purchase common stock of the Company owned by Xx. Xxxxxxx Xxxxxxxxx
pursuant to a separate agreement of even date herewith;
WHEREAS, the Purchaser has informed the Sellers of its intent to transfer all of
the Shares and any of the Company's common stock acquired pursuant to the Offer
to a subsidiary of the Purchaser, Esprit Telecom France S.A.; and
WHEREAS, the Sellers have agreed to transfer the Shares to the Purchaser
pursuant to the terms and subject to the conditions set forth in this Agreement
and the Purchaser has agreed to acquire the Shares pursuant to the terms and
subject to the conditions set forth in this Agreement.
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IT HAS BEEN AGREED AS FOLLOWS
ARTICLE 1. TRANSFER
1.1 Sale of the Shares
Subject to the terms and conditions set forth in this Agreement, each
Seller hereby undertakes to transfer, on the Transfer Date (as defined
below), all of the Shares it owns and holds in the Company (the number
of Shares in the Company held by each Seller is set forth in Appendix
1.1) to the Purchaser who hereby undertakes to acquire such Shares, on
the Transfer Date, in consideration of which each Seller will receive
the purchase price as set forth in Article 1.2.
The Purchaser shall acquire the interest in and title to the Shares and
all the rights and dividends deriving therefrom and shall be subrogated
in all the rights and obligations relating to the Shares as of the
Transfer Date (as defined below). Accordingly, the Purchaser shall be
entitled to be paid any dividend paid after the Transfer Date.
The Sellers and the Purchaser shall take any action required for such
transfer to be possible in compliance with French stock exchange
regulations. The Purchaser and the Sellers shall appoint any brokers in
connection with the transfer of the Shares.
1.2 Purchase Price
(i) The consideration for the sale of the Shares shall be equal to
a per Share price (the "Purchase Price") of 195 Euros composed
of: (a) 97.50 Euros per Share in immediately available funds
and (b) 97.50 Euros per Share in the to be newly issued common
shares ("GTS Shares") of Global TeleSystems Group, Inc.
("GTS"). GTS undertakes on behalf of the Purchaser to issue
the GTS Shares to each Seller as part of the consideration
payable by the Purchaser. The value of the GTS Shares is
53.5842 Euros, which has been determined by taking the average
of each of the daily closing quotations of GTS Shares on the
NASDAQ market as published in The Wall Street Journal for the
period March 26, 1999 through and including April 9, 1999,
converted to Euros at the exchange rate of 1.0778 Euros per
U.S. dollar.
The aggregate purchase price shall be divided among the
Sellers in the following manner:
- 27,786,295.96 Euros and 172,852 GTS Shares shall be the
purchase price of the shares held by Xx. Xxxxxxxxx;
- 5,849,886.39 Euros and 109,176 GTS Shares shall be the
purchase price of the shares held by Mr.
Martenne-Xxxxxx;
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- 9,396,666.43 Euros and 105,662 GTS Shares shall be the
purchase price of the shares held by Mr. Philippe Ait
Yahia;
- 2,744,072.06 Euros and 5,691 GTS Shares shall be the
purchase price of the shares held by Xx. Xxxxx
Xxxxxxxxx;
- 2,744,072.06 Euros and 5,691 GTS Shares shall be the
purchase price of the shares held by Xx. Xxxxxxx
Xxxxxxxxx;
- 2,744,072.06 Euros and 5,691 GTS Shares shall be the
purchase price of the shares held by Xx. Xxxx Xxxxxxxxx;
- 1,669,260.13 Euros and 27,074 GTS Shares shall be the
purchase price of the shares held by Mr. Sebastien
Martenne-Xxxxxx;
- 1,669,260.13 Euros and 27,074 GTS Shares shall be the
purchase price of the shares held by Mr. Xxxxxxx
Martenne-Xxxxxx;
- 1,669,260.13 Euros and 27,074 GTS Shares shall be the
purchase price of the shares held by Ms. Magali
Martenne-Xxxxxx;
- 2,808,032.52 Euros and 5,822 GTS Shares shall be the
purchase price of the shares held by Xx. Xxxxxx Ait
Yahia;
- 24,058,906.60 Euros and 931,275 GTS Shares shall be the
purchase price of the shares held by Company A;
- 6,497,009.22 Euros and 133,476 GTS Shares shall be the
purchase price of the shares held by Company B;
- 779,979.46 Euros and 130,838 GTS Shares shall be the
purchase price of the shares held by Company C;
it being understood that the cash and GTS Shares received in
consideration for the Company Shares held in "nue propriete"
by the children of the Founders will be held by them in "nue
propriete".
(ii) The GTS Shares (a) shall be unregistered, validly
issued, and fully paid-up and (b) shall have the same
rights and obligations as other shares of GTS on the
Transfer Date, including but not limited to the right to
receive any dividends declared by GTS on and after the
Transfer Date.
Each of the Sellers hereby undertakes that:
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(a) immediately after the Transfer Date, he shall be
permitted to transfer to third parties up to fifty
percent (50%) of the GTS Shares (the "Transferable
GTS Shares") in accordance with applicable
securities law, including those referenced in
Article 1.2(ii)(d); and
(b) on the Transfer Date (as defined below), he shall
cause each of the Guarantors (as defined below) to
escrow with an independent escrow agent selected by
Purchaser pursuant to three (3) escrow agreements
(the "Escrow Agreements") to be negotiated in good
faith before the Transfer Date, GTS Shares (the
"Escrowed Shares") in the following manner: Company
A shall escrow 248,003 GTS Shares representing
66.45% (the "Xxxxxxxxx Percentage"); Company B
shall escrow 71,640 GTS Shares, representing 19.19%
(the "Martenne-Xxxxxx Percentage"); and Company C
shall escrow 53,601 GTS Shares, representing 14.36%
(the "Ait Yahia Percentage") (sometimes referred to
hereafter generally as a "Guarantor Percentage").
On the Transfer Date, the Escrowed Shares have a
value of twenty million (20,000,000 Euros) based on
the value of each GTS Share of 53.5842 Euros. The
Escrowed Shares shall be treated respectively in
accordance with the Escrow Agreements which shall
provide, inter alia, that, until the later of June
30, 2000 and thirty days after the filing by GTS of
its 1999 Form 10-k, the Guarantors shall not
transfer the Escrowed Shares; and
(c) with respect to the remaining GTS Shares (i.e., the
GTS Shares minus the sum of the Transferable GTS
Shares and the Escrowed Shares; the "Remaining GTS
Shares"), no Seller shall transfer any such GTS
Shares until six months after the Transfer Date
provided, however, that the Remaining Shares may be
transferred in accordance with applicable
securities laws, including those referenced in
Article 1.2(ii)(d); and
(d) prior to the registration, it will not sell or
transfer all or any part of the GTS Shares unless
and until it shall first have given notice to GTS
describing in reasonable detail such sale or
transfer and have furnished to GTS either (i) an
opinion of U.S. legal counsel, (selected by such
Seller and in form and substance reasonably
satisfactory to Purchaser) to the effect that the
proposed sale or transfer may be made without
registration under the Securities Act of 1993, as
amended (the "Securities Act") or (ii) an
interpretative letter from the staff of the
Securities and Exchange Commission ("SEC") to the
effect that no enforcement action will be
recommended if the proposed sale or transfer is
made without registration under the Securities Act.
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Notwithstanding the foregoing, no restriction on
the right of the Sellers to transfer their
respective GTS Shares shall apply to:
(i) Sales or transfers of GTS Shares by a
Seller to an affiliate or relative of such
Seller; provided that such affiliate or
relative agrees to be bound by the terms and
conditions of this Agreement to the same
extent as the transferor Seller;
(ii) Sales or transfers of GTS Shares made
in reliance upon Rule 144 or 145 (or any
successor provision) under the Securities
Act;
(iii) Sales or transfers of GTS Shares by
operation of law, whether pursuant to a
statutory merger or consolidation or
otherwise;
(iv) Sales or transfers of GTS Shares
pursuant to and following the commencement
of any tender offer or exchange offer by GTS
or any third party to purchase outstanding
GTS Shares or pursuant to any business
combination transaction or other transaction
approved by the shareholders of GTS;
(v) pledges or hypothecations of GTS Shares
to one or more bona fide financial
institutions and any foreclosure thereof;
and
(vi) Sales or transfers of GTS Shares
pursuant to an effective registration
statement filed under the Securities Act;
provided, however, that in no event shall Escrowed
Shares be transferred prior to the end of the six
month escrow period unless they are replaced by
assets of an equivalent value and in form acceptable
to Purchaser in its sole discretion; provided,
however, that the Purchaser agrees that Euros, U.S.
dollars or French francs in an amount equal to the
then-current market value of the Escrowed Shares or
the securities offered in connection with the offer
shall be acceptable to the Purchaser.
Purchaser shall, subject to the restrictions of this
Article, and upon request of the Sellers, assist and
cooperate with the Sellers for the purpose of any
transfer of their respective GTS Shares.
Prior to the Registration Date, Purchaser may cause
GTS to place legends as follows on the certificates
for the GTS Shares concerning the restrictions set
forth in the preceding paragraphs of this Article 1.2
and may refuse to transfer any of such GTS Shares on
its books should the holder thereof attempt to
transfer any of them otherwise than in compliance
with the preceding paragraphs of this Article 1.2:
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Each of the Transferable GTS Shares, the Escrowed
Shares and the Remaining GTS Shares shall be legended
as follows:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF
1993, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE OR OTHER SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE TRANSFERRED
UNLESS SUCH TRANSFER IS MADE IN CONNECTION
WITH AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH
ACT OR SUCH ACT DOES NOT APPLY."
In addition, the Escrowed Shares shall be legended as
follows:
"THE SECURITIES EVIDENCED HEREBY ARE SUBJECT
TO THE TERMS OF THAT CERTAIN ESCROW
AGREEMENT DATED AS OF APRIL 21, 1999 WHICH,
INTER ALIA, PROHIBITS TRANSFER OF THESE
SECURITIES UNTIL THE LATER OF JUNE 30, 2000
AND THIRTY (30) DAYS AFTER THE FILING BY
ISSUER OF ITS 1999 FORM 10-K."
In addition, the Remaining GTS Shares shall be legended as
follows:
"THE SECURITIES EVIDENCED HEREBY MAY NOT BE
TRANSFERRED UNTIL OCTOBER 21, 1999."
1.3 Transfer Date
(i) The transfer of the Shares will take place as soon as
possible, but in any event no later than five (5) business
days from the date of execution of this Agreement (the
"Transfer Date").
(ii) On the Transfer Date:
(a) the Purchaser and the Sellers shall take any action
necessary for the transfer of the Shares in
compliance with the French stock exchange
regulations;
(b) concurrent with, and subject to, Purchaser's receipt
of the items set forth in Section 1.3(ii) (d), the
Purchaser shall:
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- deliver to each of the Sellers the cash part
of the Purchase Price set forth in Article
1.2(i) in immediately available funds, by
wire transfer or bank check as requested by
such Seller;
- deliver all documents evidencing the issue
and allotment to the Sellers of the GTS
Shares, including, without limitation,
legended share certificates;
- provide to each of the Sellers a legal
opinion in a form reasonably satisfactory to
Sellers;
- provide to the Guarantors the duly executed
(by Purchaser) Escrow Agreements;
- provide to the Sellers a duly executed (by
Purchaser) original of the Consultancy
Agreements (as defined below);
- provide to the Sellers a certificate duly
executed by the Purchaser (the "Purchaser's
Certificate") affirming that, to the best
knowledge of the Purchaser, no material
adverse change in the situation of GTS has
occurred from and after the date of execution
of this Agreement through and including the
Transfer Date;
(c) concurrent with, and subject to, Purchaser's
receipt of the items set forth in Section
1.3(ii) (d), GTS shall:
- provide to the Sellers an officer's
certificate of good standing of GTS in a form
reasonably acceptable to Sellers; and
- provide to the Sellers a duly executed (by
GTS) original of the Registration Rights
Agreement (as defined below).
(d) concurrent with and subject to the Seller's
receipt of the items set forth in 1.3(ii)(b)
and (c), the Sellers shall deliver the
following documents to the Purchaser:
- the duly executed share transfer forms in
respect of the Shares;
- a certificate duly executed by the Guarantors
(the "Guarantors' Certificate") affirming
that, to the best knowledge of the Founders,
no material adverse change in the situation
of the Company has occurred from and after
the date of execution of this Agreement
through and including the Transfer Date;
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- a true and correct copy of the "avis de
reunion" to be published in the BALO and the
minutes of the board meeting convening an
ordinary general meeting of the shareholders
of the Company (I) appointing four (4)
additional board members (Messrs. Xxxx Xxxxx
Kohlhamer, Xxxxxx Xxxxx Xxxxxx, Xxxx-Xxxxxx
Xxxxxxxxx, and Xxxxxxx Xxxxxxxx) nominated by
Purchaser to the Company's board of directors
and (II) giving the advice of the board as to
the Offer and (III) amending the Stock Option
Plan;
- the minutes of a board meeting recording the
resignation of Mr. Ait Yahia and Mr.
Martenne-Xxxxxx as managing directors
("directeurs generaux") and nominating one
substitute managing director (Pierre-Xxxxx
Xxxxxx) ;
- certificate of the Founders, acting as
directors of the Company, stating that they
shall not take without prior approval of the
Purchaser, any action out of the ordinary
course of business, except for actions deemed
by the Founders to be reasonably required to
preserve the going concern value of the
Company, beginning on the date of execution
of this Agreement until the shareholders'
meeting;
- the legal opinion of (I) Sellers' counsel,
(II) "Notaire", and (III) special counsel to
the Sellers, each in a form reasonably
satisfactory to the Purchaser; - the duly
executed (by the Founders) Consultancy
Agreements (as defined below); and
- the duly executed (by the Guarantors) Escrow
Agreements to be negotiated in good faith
prior to the Transfer Date.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF THE GUARANTORS
Each of Company A, Company B, and Company C (each, a "Guarantor"; collectively,
the "Guarantors") severally and not jointly ("responsabilite conjointe et
non-solidaire") represents and warrants to the Purchaser as of the date hereof
as follows:
2.1 Organization of the Company
The Company is a corporation duly organized and validly existing under
the laws of France and has all necessary corporate power and authority
to own, operate and lease its properties and to conduct its business as
presently conducted.
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The Company has delivered to the Purchaser true and correct copies of
its Articles of Incorporation ("statuts"), and all amendments thereto,
and has delivered or provided for the Purchaser's review true and
correct copies of all of the minutes of all directors' and
shareholders' meetings held prior to the date hereof.
The Company and the Subsidiaries of the Company (as defined below) have
not ceased making payments to creditors nor are they insolvent or
unable to pay their debts ("cessation de paiement").
2.2 Capital Structure
As of December 31, 1998, the issued capital stock of the Company
consists of 1,900,041 shares of common stock of which 1,900,041 shares
were issued and outstanding. All of such outstanding shares have been
validly issued and are fully paid and nonassessable. No Shares are
subject to preemptive rights, rights of first refusal, or any other
similar rights and, to the best knowledge of the Guarantors, no shares
of common stock of the Company are subject to preemptive rights, rights
of first refusal, or any other similar rights.
129,894 convertible bonds and 55,620 stock options are outstanding, and
the Company has not issued any other convertible bonds or stock
options. Beginning on December 31, 1998 through and including the date
immediately preceding the execution of this Agreement, two thousand
nine hundred fifty-three (2,935) bonds have been converted into common
shares of the Company and the Company has not otherwise issued capital
stock of the Company in addition to that set forth in the immediately
preceding paragraph. Except as provided herein, the Company has not
issued any other securities or rights giving access to capital or
voting rights.
There exists no contract or commitment of any nature, whether signed or
unsigned, with a view to allocating or issuing shares, or giving any
person the right to buy or pre-empt, in whole or in part, the Shares of
the Company.
Save as provided herein and as set forth in Appendix 2.2.1, there are
no outstanding options, warrants, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or
rights convertible into, any shares of common stock of the Company or
arrangements by which the Company is or may become bound to issue
additional shares of common stock of the Company.
Stock options have been granted to the Company's employees set forth in
Appendix 2.2.2 hereto and in accordance with that certain Reglement du
Plan d' Options de Souscriptions 1997/1999 (the "Stock Option Plan").
The Company has not received any notice from a shareholder stating that
it owns two percent (2%) or more of the common stock of the Company.
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The Shares represent no less than 48.73% of the issued share capital
and each Share represents at least one voting right in the Company as
of the date of execution of this Agreement.
2.3 Shareholders in other companies
All shares or other shareholdings or rights that the Company owns and
holds in any other company, partnership or legal entity (hereinafter
referred to as the "Subsidiaries of the Company") are set forth in
Appendix 2.3. These shareholdings or other rights are held free of any
liens, privileges, charges, guarantees, options, or other rights.
2.4 Licenses
The Company and the Subsidiaries of the Company have obtained all
licenses, permits, authorizations and approvals necessary to conduct
its business. In particular, the Company (a) has received in France
from the Autorite de Regulation des Telecommunications ("l'ART") the
authorization to use a 5 prefix number, short numbers ("3060" and
"3055") and validly owns French national network and service operator's
license ("L33-1" and "L34-1") and (b) is the beneficiary of a "regime
d'annonce" in Switzerland.
2.5 Financial Statements
The consolidated accounts (and their appendices) as of December 31,
1998 (hereinafter referred to as the "Financial Statements of the
Company"), a copy of which is set forth in Appendix 2.5.1, have been
certified true and correct by the statutory auditors, comply with
French GAAP and fairly present the assets and liabilities, financial
situation and results of the Company as of December 31, 1998. In
addition, the unaudited total revenue, revenue breakdown, and number of
minutes figures provided with respect to the period beginning on
January 1, 1999 through and including February 28, 1999, attached as
Appendix 2.5.2 hereto, fairly represented as of the date thereof, and
fairly represent as of the date hereof, the total revenue, revenue
breakdown and number of minutes of the Company.
2.6 Intermediary Period
Except as set forth on Appendix 2.6., from December 31, 1998 through
and including the date of execution of this Agreement, (i) the
management of the Company has been carried out using the same methods
and in a manner consistent with the former management thereof, so as to
ensure the continuity of the running of the business, (ii) there has
been no change in the assets and liabilities (whether accrued,
absolute, contingent, off balance sheet or otherwise), financial
situation or results of the Company or of the Subsidiaries of the
Company constituting or that, with the passage of time, would
constitute a material adverse impact and (iii) the Company has neither
declared nor paid a dividend with respect to its common stock.
Moreover, except as set forth in Appendix 2.6., the
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Company has not entered into any agreement or made any decision outside
the ordinary course of business.
2.7 Taxes
The Company and the Subsidiaries of the Company have (i) duly filed all
required tax returns in accordance with the applicable laws and
regulations and (ii) have paid all taxes which are due and payable,
other than those presently payable without penalty or interest and
other than those which are subject of a good faith contest.
2.8 Litigation
Except as set forth in Appendix 2.8 hereto, neither the Company nor the
Subsidiaries of the Company are engaged in any judicial, criminal,
administrative or arbitral proceedings, as plaintiff or defendant, in
which the claim exceeds on fifteen thousand (15,000) Euros and, to the
best of the Guarantors' knowledge, no such proceedings have been
threatened.
2.9 Intellectual Property
The Company and the Subsidiaries of the Company own or are entitled to
the exclusive use of all trademarks, trade names, software, domain name
and more generally all intellectual property rights, if any, that they
use in the course of their business. None of these rights infringes the
rights of any party, except to the extent such infringement would not
have a material adverse effect on the rights of such party. The
documentation pertaining to trademark and trade names is set forth in
Appendix 2.9 hereto.
Except as set forth in Appendix 2.8 hereto, no claims, actions or
litigation with respect to the aforesaid intellectual property rights
have been asserted or are, to the Sellers' knowledge, threatened by any
litigation, arbitration or administrative proceeding the outcome of
which could reasonably be expected to have a material adverse effect on
the ownership and use of such intellectual property rights by the
Company or the Subsidiaries of the Company.
2.10 Lock-up
As of the date hereof, la Societe du Nouveau Marche ("SNM") has
expressly released the Sellers from their undertakings not to transfer
their respective Shares for a three (3) year period starting from the
date the Company's Shares were listed on the Nouveau Marche.
2.11 Form Contracts
The unexecuted contracts provided by Sellers to Purchaser for its
review during the due diligence period do not differ in any material
respects from the contracts executed and delivered by the Company.
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2.12 Change of Control
On and after the Transfer Date, all contracts and agreements made
available to Purchaser to which the Company was a party and which were
in force prior to the Transfer Date shall continue to be in full force
and effect in accordance with the terms thereof, except those contracts
and agreements capable of being terminated of right by the counterparty
on account of a change in control of the Company and those set forth in
Appendix 2.12. All material contracts and agreements to which the
Company is a party have been made available to the Purchaser.
ARTICLE 3. FURTHER REPRESENTATIONS AND WARRANTIES OF THE
GUARANTORS
Each of the Guarantors further represents and warrants, but only as to itself
and each of the members of its Group, to the Purchaser that, on the date hereof,
the representations and warranties set forth below are true and correct:
3.1 Power and authority
Neither the Guarantor nor any member of its Group is subject to any
contractual or other restriction or impediment which in any way
restricts his rights or capacity to validly enter into and be bound by
the terms of this Agreement or on the execution of the agreements to be
executed by any of the Sellers referenced in Article 1.3(ii)(d)
(collectively, the "Seller Agreements"), and to carry out all of his
obligations hereunder and thereunder. Each Guarantor and each member of
the Guarantors' Group has the full power, authority and capacity to
enter into and sign this Agreement and the other Seller Agreements.
Upon execution and delivery of this Agreement and the other Seller
Agreements by all parties, the Seller Agreements shall be enforceable
against each Guarantor and each member of its Group in accordance with
their terms and the obligations of each Guarantor and each member of
its Group set forth in the Seller Agreements shall be binding on it.
3.2 Ownership of the Shares
The Shares of each member of the Guarantor's Group are freely
negotiable and are free from any liens, pledges or other rights
whatsoever. On the Transfer Date, provided that the Purchaser shall not
have taken any action adverse to the granting of good and marketable
title, the Purchaser shall own good and marketable title to the Shares
and the Shares of each member of the Guarantor's Group, and the Shares
of each member of the Guarantor's Group shall be free from any liens,
pledges, or other rights whatsoever.
The transfer of title of the Shares of the Guarantor's Group does not
require any administrative or public consent and does not breach any of
the Sellers' contractual or other obligations and is not contrary to
any laws or regulations.
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3.3 Securities law
Each of the Sellers acknowledges that (a) the GTS Shares are not being
registered under the Securities Act on the ground that the issuance
thereof is exempt from registration under Section 4(2) of the
Securities Act as not involving any public offering and (b) GTS's
reliance on such exemption is predicated in part on the representation
made to it by the Sellers that each (i) has such knowledge and
experience in financial and business matters that he is capable of
evaluating the merits and risks of acquiring the GTS Shares and is
capable of bearing the economic loss of this entire investment and (ii)
is acquiring the GTS Shares for investment for his own account with no
present intention of dividing its participation with others or
reselling or otherwise distributing the same.
3.4 Disclaimer
The Purchaser hereby acknowledges that, except as expressly set forth
in Articles 2 and 3, the Guarantors make no representations or
warranties with respect to the subject matter of this transaction,
including, without limiting the foregoing, any representations or
warranties with respect to the information contained in the data room.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to each of the Sellers on the date hereof,
as follows:
4.1 Organization of the Purchaser
The Purchaser is a corporation duly organized and validly existing
under the laws of the jurisdiction of its incorporation and has all
necessary corporate power and authority to own, operate and lease its
properties and to conduct its business as presently conducted.
The Purchaser has not ceased making payments to creditors nor is it
insolvent or unable to pay its debts.
4.2 Power and authority
Neither the Purchaser nor GTS is subject to any contractual or other
restriction or impediment which in any way restricts its rights or
capacity to validly enter into and be bound by the terms of this
Agreement and, on the execution of the agreements to be executed by
Purchaser or GTS referenced in Article 1.3(ii)(b) and (c)
(collectively, with this Agreement, the "Purchaser Agreements"), and to
carry out all of his obligations hereunder and thereunder. The
Purchaser and GTS have the full power, authority and capacity to enter
into and sign the Purchaser Agreements. Upon the execution and delivery
of the Purchaser Agreements by all parties, the Purchaser Agreements
shall be enforceable against the Purchaser, and all provisions
specifically applicable to GTS shall be enforceable against GTS, in
accordance with their terms and the obligations of each of the
Purchaser and GTS shall be binding upon it.
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4.3 Disclosure
GTS has made public disclosure of all material information with respect
to GTS in accordance with applicable SEC rules and regulations.
4.4 Disclaimer
Sellers hereby acknowledge that, except as expressly set forth in
Article 4, Purchaser makes no representation or warranty with respect
to the subject matter of this transaction.
ARTICLE 5. REPRESENTATION AND WARRANTY OF GTS
GTS represents and warrants to each of the Sellers, as of the date hereof, the
following:
5.1 Title
On the Transfer Date, provided that the Sellers shall not have taken
any action adverse to the granting of good and/or marketable title to
the GTS Shares, the Sellers shall have good title to the GTS Shares
and, subject to the terms of the Registration Rights Agreement and U.S.
securities laws, marketable title to the GTS Shares and GTS shall
indemnify the Sellers in the event GTS breaches this representation.
5.2 Disclaimer
Seller hereby acknowledges that, except as expressly set forth in
Article 5, GTS makes no representation or warranty with respect to the
subject matter of this transaction.
ARTICLE 6. INDEMNIFICATION
6.1 Indemnification obligation
(i) Subject to the terms and conditions set forth hereafter and
provided for herein, each Guarantor hereby undertakes,
severally and not jointly ("responsabilite conjointe et
non-solidaire") (the "Purchaser Indemnity") to indemnify and
pay:
(a) 100% of any direct and non-contingent and liquidated damages
incurred and paid for by the Purchaser including, without
limitation, amounts related to any claim, action, proceeding,
litigation or similar actions (including reasonable attorneys'
fees and expenses) as a result of the breach or violation of,
a misstatement in, an omission with respect to, any
representations and warranties by such Guarantor set forth in
Article 3 of this Agreement;
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(b) an amount corresponding to its Guarantor Percentage of 100% of
any direct and non-contingent and liquidated damages incurred
and paid for by the Purchaser including, without limitation,
amounts related to any claim, action, proceeding, litigation
or similar actions (including reasonable attorneys' fees and
expenses) as a result of litigation pending before the
Tribunal de Commerce de Nanterre with respect to Intrad Inc.;
and
(c) an amount corresponding to its Guarantor Percentage of 100% of
any direct and non-contingent liquidated damage actually
incurred and paid for by the Company or any Subsidiaries of
the Company as a result of the breach of, a misstatement in,
an omission with respect to, any warranty or representation
set forth in Article 2 of this Agreement including, without
limitation, amounts related to any claim, action, proceeding,
litigation or similar actions (including reasonable attorneys'
fees and expenses) with respect to facts in existence before
the date hereof,.
The amount of any Purchaser Loss or Intrad Loss (each as defined below)
under Article 6.1(i)(b) or (c) shall be reduced by
- any increase in the value of any of the Company's assets, including
the amount of any provisions which are recovered ("reprise sur
provisions") and/or decrease of any of the Company's liabilities
appearing prior to 31 December 1998 compared to their respective value
accounted for in the Financial Statements of the Company;
- the amount of any tax savings, including the increase of the loss
carried forward, or any benefit accrued to the Company in connection
with the recording of such Purchaser Loss or Intrad Loss.
- any amount payable by a third party including (a) any payments due to
the Company by an insurance company to indemnify the Company for such
Purchaser Loss or Intrad Loss and (b) any indemnification obligation of
any third party to the Company. In the event that any Purchaser Loss or
Intrad Loss may be covered by insurance or indemnified by a third
pursuant to an indemnity, the Purchaser shall not have any right to
Purchaser Indemnity until the Purchaser shall have exhausted all
insurance claims or claims for indemnification that may exist against
any such third party, and
- the amount of any provision or reserve relating to the Purchaser Loss
or Intrad Loss as recorded in the Financial Statements of the Company.
(ii) Subject to the terms and conditions set forth hereafter and
provided for herein, the Purchaser hereby undertakes to
indemnify and pay to the Sellers (the "Seller Indemnity"),
100% of any direct non-contingent and liquidated damages
incurred and paid for by the Sellers as a result of the breach
or violation of a misstatement in, an omission with respect
to, representations and warranties set forth in Article 4 of
this Agreement, including, without limitation, amounts related
to any claim,
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action, proceeding, litigation or similar actions (including
reasonable attorneys' fees and expenses).
(iii) For the purposes of this Article 6, any amount referenced to
in Article 6.1(i)(a) and 6.1(i)(c) shall be referred to as a
"Purchaser Loss" , any amount referenced in Article 6.1(i)(b)
shall be referred to as an "Intrad Loss", and any amount
referenced in Article 6.1(ii) shall be referred to as a
"Seller Loss."
6.2 Limitation and mitigation of liability
(i) Guarantors' liability
For the purposes of this Article 6, it is understood that:
(a) the Purchaser shall undertake to mitigate or reduce
all claims which could give rise to Guarantors'
liability under this Agreement. Purchaser Losses that
have been incurred as a result of the Purchaser's
failure to use its bests efforts to mitigate such
Purchaser Losses shall not be taken into
consideration;
(b) a Purchaser Loss that results from a change in the
laws, regulations, interpretations or practices
applicable to the Company with effect after the date
hereof shall not give rise to the payment of a
Sellers Indemnity;
(c) with respect to Purchaser Losses resulting from
claims made by third parties, only the amount which
has been definitively and finally determined and paid
according to a final, non-appealable and binding
decision of any competent court, arbitral tribunal or
administrative authority shall be taken into account
for the calculation of the Sellers Indemnity;
(d) the Guarantors shall not be liable with respect to a
claim for any Purchaser Loss to the extent that such
Purchaser Loss is actually recovered by the Purchaser
from any third party (including insurance companies)
or could have been recovered by the Purchaser had the
Purchaser used its best efforts to mitigate such
Purchaser Loss;
(e) the Purchaser shall not be entitled to recover
damages for any misrepresentation or for the breach
of any of the representations and warranties under
Articles 2 and 3 or otherwise obtain reimbursement or
restitution more than once in respect of the same
facts or matters giving rise to such
misrepresentation or breach;
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(f) no warranty in favor of the Purchaser, whether
statutory or contractual, other that those contained
in this Agreement, may be invoked by the Purchaser
against the Guarantors;
(g) Purchaser Losses that only result in (a) a charge
being deferred (including but not limited to the
following, a reassessment by the relevant authorities
of depreciation allowances or reserves), (b) a profit
being deferred from one tax year to another or (c) a
tax credit being imputable will not be taken into
account for the calculation of the Sellers Indemnity;
(h) the Purchaser shall not be entitled to recover any
Purchaser Loss or Losses for any misrepresentation
and/or for any breach of any of the representations
and warranties or otherwise obtain any reimbursement
or restitution in respect of any information which is
accurately disclosed in this Agreement and any
Appendices hereto. For the avoidance of doubt, any
disclosure made with respect to any representation of
warranty made by the Guarantors hereunder shall apply
to all other representations and warranties as if
such disclosure was specifically made in respect
thereof;
(i) the Purchaser represents that it is not aware, at the
date of this Agreement, of any matter which could
give rise to a claim against the Guarantors.
The provisions of this Article 6.2 (i) shall not be applicable
to Purchaser Loss resulting from any misrepresentation and/or
for any breach of the representations and warranties set forth
in Article 3.
(ii) Liability of Purchaser
For the purposes of this Article 6, it is understood that:
(a) the Guarantors undertake to mitigate or reduce all
claims which could give rise to Purchaser's or GTS's
liability under this Agreement. Only Seller Losses in
excess of Seller Losses that would have been incurred
as a result of the Guarantors' failure to use their
respective best efforts to mitigate such Seller
Losses shall not be taken into consideration;
(b) a Seller Loss that results from a change in the laws,
regulations, interpretations or practices applicable
to the Purchaser or GTS with effect after the date
hereof shall not give rise to the payment of the
Seller Indemnity;
(c) with respect to Seller Losses resulting from claims
made by third parties, only the amount which has been
definitively and finally determined and paid
according to a final, non-appealable and binding
decision of any
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competent court, arbitral tribunal or administrative
authority shall be taken into account for the
calculation of the Indemnity;
(d) neither the Purchaser nor GTS shall be liable with
respect to a claim for any Seller Loss to the extent
that such Seller Loss is actually recovered by the
Guarantors from any third party (including insurance
companies) or could have been recovered by the
Guarantors had the Guarantors used their best efforts
to mitigate such Seller Loss;
(e) the Guarantors shall not be entitled to recover
damages for any misrepresentation or for the breach
of any of the representations and warranties under
Articles 4 and 5 or otherwise obtain reimbursement or
restitution more than once in respect of the same
facts or matters giving rise to such
misrepresentation or breach;
(f) no warranty in favor of the Guarantor, other than
those contained in this Agreement, may be invoked by
the Guarantor against the Purchaser;
(g) Seller Losses that only result in (a) a charge being
deferred (including but not limited to the following,
a reassessment by the relevant authorities of
depreciation allowances or reserves), (b) a profit
being deferred from one tax year to another or (c) a
tax credit being imputable will not be taken into
account for the calculation of the Indemnity;
(h) the Guarantors shall not be entitled to recover any
Seller Loss or Losses for any misrepresentation
and/or for any breach of any of the representations
and warranties or otherwise obtain any reimbursement
or restitution in respect of any information which is
accurately disclosed in this Agreement and any
Appendixes hereto;
(i) the Guarantors shall not be entitled to recover any
Seller Loss or Losses for any misrepresentation
and/or for any breach of any of the representations
and warranties or otherwise obtain any reimbursement
or restitution in respect of any information which is
accurately disclosed in this Agreement and any
Appendices hereto. For the avoidance of doubt, any
disclosure made with respect to any representation or
warranty made by the Purchaser hereunder shall apply
to all other representations and warranties as if
such disclosure was specifically made in respect
thereof;
The provisions of this Article 6.2 (ii) shall not be applicable to Seller Loss
resulting from any misrepresentation and/or for any breach of the
representations and warranties set forth in Articles 4.1, 4.2, and 5.
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6.3 Notification by the Purchaser
Within thirty (30) days of the occurrence of any event which shall give
rise to a Purchaser Loss or Intrad Loss under the terms of the
Agreement, but the amount of which has not been definitively and
finally determined as provided for in Article 6.1 (i) of this
Agreement, such event shall be notified to the representative of the
Guarantors (except for Purchaser Loss or Intrad Losses relating to
taxes and social security, for which such delay shall be reduced to ten
(10) days after receipt of written notification from the relevant
government authority) (hereinafter the "Notice").
The Notice shall contain the details which are required for the
application of Article 6.4 hereinafter.
6.4 Procedures in case of litigation
In the event a written claim or proceeding is initiated by a third
person against the Company with respect to which it is reasonably
foreseeable that such claim or proceeding would result in a breach of
Article 2 or Article 3, the Purchaser shall use and cause the Company
to use its best efforts to provide the representative of the Guarantors
with such information and/or documents as are reasonably necessary to
keep the Guarantors informed of all material, non-confidential matters
relating to the progress of such claim or proceeding. During the
proceeding, the Guarantors shall be authorized to advise the Purchaser
and the Purchaser is required to follow such advice at the sole cost
and expense of the Guarantors unless, in the reasonable opinion of the
Purchaser, such advice is unreasonable or would compromise any defense.
Any claim made by or against a third party with respect to the
litigation shall not be settled or compromised without the prior
written approval of the representative of the Guarantors which approval
shall not be unreasonably withheld.
6.5 Threshold applicable to each claim and deductible
(i) Threshold.
(a) Purchaser Indemnity. If any Purchaser Indemnity is less
than fifteen thousand (15,000) Euros, then such Guarantors
shall not have have any indemnification obligation with
respect to the Purchaser. (b) Seller Indemnity. If any Seller
Indemnity is less than fifteen thousand (15,000) Euros, then
the Purchaser shall not have any indemnification obligation
with respect to the Guarantors.
(ii) Deductible.
(a) Purchaser Indemnity. The indemnification obligation of
each Guarantor with respect to a Purchaser Indemnity shall
only exist when and to the extent that the aggregate amount of
Purchaser Indemnities (m) are notified by the Purchaser to
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the Guarantors pursuant to this Article 6 and (n) exceed for
each Guarantor its Guarantor Percentage of one million
(1,000,000) Euros.
(b) Seller Indemnity. The indemnification obligation of the
Purchaser with respect to a Seller Indemnity shall only exist
when and to the extent that the aggregate amount of Seller
Indemnities exceed for the Guarantors one million (1,000,000)
Euros.
(c) Intrad Loss. The indemnification obligations of each
Guarantor with respect to an Intrad Loss shall only exist when
and to the extent that the aggregate amount of the Intrad Loss
exceeds for each Guarantor its Guarantor Percentage of one
hundred fifty thousand (150,000) Euros. Any Intrad Loss in
excess of one hundred fifty thousand (150,000) Euros shall be
applied against the deductible set forth in Article
6.5(ii)(a).
6.6 Maximum amount of Indemnity
(i) Purchaser Indemnity. The total amount of all sums that may be
due and payable to the Purchaser by a Guarantor pursuant to
all claims for Purchaser Indemnity notified by the Purchaser
pursuant to Article 6 of this Agreement shall in no event
exceed for each Guarantor its Guarantor Percentage of the
value of (a) the Escrowed Shares as such value may increase or
decrease on and after the Transfer Date for Purchaser
Indemnities resulting from a misrepresentation and/or from a
breach of the representations and warranties set forth in
Article 2, and (b) the aggregate purchase price for Purchaser
Indemnities resulting from a misrepresentation and/or from a
breach of the representations and warranties set forth in
Article 3. The Purchaser acknowledges and agrees that it
solely shall have recourse to the Escrowed Shares and to no
other assets of the Sellers with respect to any Purchaser
Indemnity.
(ii) Seller Indemnity. The total amount of all sums that may be due
and payable to the Guarantors by the Purchaser or GTS pursuant
to all claims for Sellers Indemnity notified by the
representative of the Guarantors pursuant to Article 6 of this
Agreement shall in no event exceed the aggregate purchase
price for Seller Indemnities resulting from a
misrepresentation and/or from a breach of the representations
and warranties set forth in Articles 4 or 5.
6.7 Claim for Indemnity
(i) Within thirty (30) days of the determination of the amount of
a Purchaser Indemnity, the Purchaser shall notify Escrow Agent
of the Purchaser Indemnity.
The Guarantors shall pay the Purchaser Indemnity to the
Purchaser, within thirty (30) days of the date the Guarantors
and the Purchaser agree in writing on the amount of such
Purchaser Indemnity or, in the event the Guarantors and the
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Purchaser fail to reach a written agreement, the date on which
a competent court or arbitral tribunal has, in a final,
non-appealable and binding decision, determined the amount of
such Purchaser Indemnity. Pursuant to the terms of the Escrow
Agreement, the Purchaser may seek payment of the Purchaser
Indemnity.
(ii) The Purchaser shall pay the Sellers Indemnity to the Sellers,
within thirty (30) days of the date the Sellers and the
Purchaser agree in writing on the amount of the Indemnity or,
in the event the Guarantors and the Purchaser fail to reach a
written agreement, the date on which a competent court or
arbitral tribunal has, in a final, non-appealable and binding
decision, determined the amount of such Indemnity.
6.8 Expiration Date
The representations and warranties made by the Sellers, Guarantors, and
the Purchaser hereunder shall remain in full force and effect until 30
June 2000 (the "Expiration Date"), provided however that the
representations and warranties set forth in Articles 3 and 5 will
remain in full force and effect five (5) years after the Expiration
Date.
Only Notices received by the appropriate party hereto prior to the
Expiration Date shall give rise to a Purchaser Indemnity or a Sellers
Indemnity under the terms and conditions of Article 6 of this
Agreement.
As an exception to the aforesaid, all claims for Purchaser Indemnity or
for Sellers Indemnity in relation to tax matters may be validly
notified up to one (1) month after the expiry of the statute of
limitations applicable to the facts or actions in question.
ARTICLE 7. COMPLIANCE BY PURCHASER WITH STOCK EXCHANGE
REGULATIONS
The Purchaser shall, as soon as practicable after the execution of this
Agreement, file with the Conseil des Marche Financiers (the "CMF") an Offer to
purchase all of the remaining shares of the Company and the Company's
convertible bonds.
ARTICLE 8. UNDERTAKINGS OF GTS TO REGISTER GTS SHARES
GTS hereby undertakes to file in order to register the GTS Shares owned by the
Sellers with the SEC in a reasonable period of time but no later than October 1,
1999 pursuant to a registration rights agreement (the "Registration Rights
Agreement") to be negotiated by the parties in good faith before the Transfer
Date.
GTS hereby undertakes, that in the event unregistered shares of GTS are issued
as a result of an exercise of any of the GTS stock options granted to Company
employees pursuant to this Agreement, to include such unregistered shares in the
immediately succeeding Form S-8 Registration Statement filed with the SEC in
which such inclusion is possible.
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ARTICLE 9. ACKNOWLEDGMENT AND UNDERTAKINGS OF THE PURCHASER WITH
REGARDS TO THE STOCK OPTION PLAN AND OF GTS WITH
REGARDS TO EMPLOYEE BENEFITS
The Purchaser acknowledges that the Stock Option Plan has been amended prior to
the execution of this Agreement to provide that the vesting period has been
reduced to one (1) year, although the stock options may not be exercised before
two (2) years after the granting thereof. Purchaser further undertakes not to
amend the Stock Option Plan as it exists as of the date of execution of this
Agreement and to permit the conversion of options in the Company to options on
GTS Shares.
GTS undertakes to implement and to cause the Company to implement, as soon as
reasonably practicable, after the Transfer Date, the provisions of the term
sheet (the "Retention Plan") which is annexed hereto as Appendix 9.
ARTICLE 10. UNDERTAKINGS OF THE PURCHASER WITH REGARDS TO FRENCH
REGULATIONS
The Purchaser hereby (i) acknowledges the undertakings set forth in Appendix 10
hereto which have been taken by the Company as a condition to the granting by
the Autorite de Regulation des Telecommunications of (a) the authorization to
use the 5 prefix and (b) the network and service operator's license ("L33-1" and
"L34-1"), and (ii) undertakes to fully and unconditionally comply with all such
undertakings.
ARTICLE 11. UNDERTAKINGS OF THE FOUNDERS
11.1 Each of Xx. Xxxxxxxxx, Mr. Martenne-Xxxxxx and Mr. Ait Yahia agree to
(a) continue as Company board members for a term as mutually agreed
upon and (b) enter into the consultancy agreements (the "Consultancy
Agreements") substantially in the form of the agreements annexed hereto
as Appendix 11.
11.2 For a two (2) year period starting from the Transfer Date, each of the
Founders undertakes not to associate himself with, or collaborate in,
directly or indirectly, in France, Italy, Spain or Switzerland, any
activity, enterprise or company having activities similar or identical
to the activity of the Company or contemplated by the Company as of the
Transfer Date, including, without limitation, any activity encompassing
the provision of internet services or goods. For clarification
purposes, such undertaking shall include but not be limited to (i)
incorporating a company, (ii) obtaining at least a five per cent (5%)
share or voting participation (excluding existing ones) in, or
modifying the activity of, an existing company, or (iii) becoming a
director, employee, representative of, or consultant for, such company.
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11.3 For a two (2) year period starting from the Transfer Date, each of the
Founders undertakes not to solicit, directly or indirectly, or entice
or endeavor to solicit or entice away from employment with the
Purchaser or an affiliate of the Purchaser, the Company or any
Subsidiary of the Company any person employed thereby as an employee,
director, representative, consultant unless the prior written approval
of the Purchaser has been obtained.
11.4 Each of the Founders undertakes to use his best efforts to assist
Purchaser in the successful purchase of all of the shares of the
Company and the Company's convertible bonds.
ARTICLE 12. CONFIDENTIALITY AND ANNOUNCEMENTS
12.1 Each party, undertakes to keep confidential and to cause its directors,
employees and representatives to keep confidential all information of
any kind whatsoever obtained pursuant to this Agreement or relating to
the transactions hereto. Each party undertakes not to disclose such
information to any third party without the prior written approval of
the other parties hereto, unless it is ordered to do so by law or by a
decision or a judgment rendered by a competent court, and in which case
the party concerned shall notify the other parties hereto before
disclosing said information.
12.2 Notwithstanding the provisions contained in Article 12.1 above, the
Purchaser shall be authorized to disclose this Agreement in order to
implement the Offer, including to disclose this Agreement to the CMF.
The form and the contents of such disclosure shall be subject to the
prior written approval of the representative of the Guarantors, which
approval shall not be unreasonably withheld. The Purchaser and the
Founders jointly shall issue any press release(s) with respect to this
Agreement and the transactions contemplated hereby.
ARTICLE 13. GUARANTORS' REPRESENTATIVE
The Guarantors hereby agree to appoint Xx. Xxxx Xxxxxxxxx as the representative
of the Guarantors for the purposes of this Agreement. The Guarantors have the
right to appoint someone other than Xx. Xxxxxxxxx or replace Xx. Xxxxxxxxx,
provided that they notify the Purchaser in writing.
ARTICLE 14. ACKNOWLEDGMENT OF THE PURCHASER
As of December 31, 1998, the value of the equity of the Company was less than
half of the issued capital of the Company, entailing the obligation of the
Purchaser (assuming the occurrence of the Transfer Date) to augment the value of
the equity of the Company up to half of the issued capital or to wind up the
Company.
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ARTICLE 15. MISCELLANEOUS
15.1 Notices
All notices, claims and other communications made as a result of this
Agreement shall be sent by certified letter, return receipt requested,
or by facsimile or telex confirmed by certified letter, to the
addresses set forth on the signatures pages of this Agreement, which
addresses may be amended at any time by delivery to all parties hereto
a written change of address notification.
The date of receipt of the notice or communication shall be the date of
receipt of the certified letter, return receipt requested.
15.2 Appendixes and Recitals
All of the Appendixes and recitals of this Agreement constitute an
integral part hereof and together form a single, indivisible whole.
15.3 Entire Agreement
This Agreement constitute and express the entire understanding of the
parties hereto with regard to the subject matter contained herein and,
save for the confidentiality agreement executed as of February 25,
1999, the confidentiality letters executed as of March 31, 1999 and the
data room guides executed by representatives of the Purchaser and its
advisors, supersedes all prior and contemporaneous contracts,
agreements, negotiations, understandings and drafts entered into by the
parties for the same subject matter. With respect to the
above-mentioned confidentiality agreements, confidentiality letters,
any restrictions on the trading of securities contained therein hereby
is deemed to be of no further force or effect as of the Transfer Date.
15.4 Amendments and modifications
No amendment or modification of this Agreement shall be valid unless
made in writing and signed by all of the parties hereto. No waiver of
any provision hereof shall be valid unless it is in writing and signed
by the parties hereto.
15.5 Assignment
No assignment by one of the Parties of all or any of its rights or
obligations hereunder shall be authorized without the prior written
consent of all the other parties hereto.
15.6 Applicable law
This agreement shall be governed by, and construed in accordance with,
the laws of the Republic of France.
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15.7 Arbitration
(a) Resolution of Disputes by Arbitration. All disputes,
controversies or claims arising out of, in relation to, or in
connection with this Agreement or the validity,
interpretation, performance or breach thereof, shall be
finally settled by ad hoc arbitration, to be conducted as set
forth below.
(b) Conduct of Arbitration. The arbitration shall be conducted as
provided by this Article and in accordance with the Rules of
Conciliation and Arbitration of the International Chamber of
Commerce then in effect (currently as set forth in ICC
Publication No. 447, revised and in force from January 1,
1988), except that, in the event of any conflict between those
rules and the arbitration provisions of this Agreement, the
provisions of this Agreement shall govern. The arbitration
shall be conducted in accordance with the following
procedures:
(i) A party seeking arbitration shall deliver to the
other parties and to the Company a written notice of
an arbitral claim (an "Arbitration Notice").
(ii) The number of arbitrators shall be either one, if the
Purchaser and the Sellers mutually select an
arbitrator within fifteen (15) days after receipt of
an Arbitration Notice or three (3) arbitrators if the
Purchaser and Sellers are unable mutually to select
one (1) arbitrator. In the event the parties are
unable mutually to select one arbitrator in
accordance with this Article, the Sellers shall
appoint one (1) arbitrator and the Purchaser shall
appoint one (1) arbitrator, with the appointed
arbitrators mutually to select the third arbitrator.
If, within thirty (30) days after the delivery of the
Arbitration Notice, the Sellers shall not have
appointed one (1) arbitrator, or the Purchaser shall
not have appointed one (1) arbitrator, or the two
arbitrators shall not have selected a third
arbitrator, each as contemplated above, then the
second and/or third arbitrator (or, if applicable,
all arbitrators) shall be appointed by the
International Chamber of Commerce within thirty (30)
days thereafter from the list of arbitrators of the
International Chamber of Commerce.
(iii) If any arbitrator is unable to perform his duties as
a member of the tribunal due to death, resignation,
refusal or incompetence, the vacancy shall be filled
by the same procedure by which the non-performing
arbitrator was appointed.
(iv) The languages used in arbitration, including the
language of the proceedings, the language of the
award and the reasons supporting it, shall be English
or French.
(v) The place of the arbitration shall be Paris, France.
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Executed in Paris
This 14th day of April, 1999
In 15 counterparts
THE SELLERS
By: /s/ XXXXX XXXXXXXXX
---------------------------------
Name: Xx. Xxxxx Xxxxxxxxx
Address:
00, xxx xxx Xxxxxxx
00000 Xxxxxxx xxx Xxxxx
Xxxxxx
NICOM INVESTISSEMENTS
By: /s/ XXXXX XXXXXXXXX
---------------------------------
Name: Xx. Xxxxx Xxxxxxxxx
Title: Gerant
Address:
00, xxx xxx Xxxxxxx
00000 Xxxxxxx xxx Xxxxx
Xxxxxx
By: /s/ XXXXX XXXXXXXXX
---------------------------------
Name: Xx. Xxxxx Xxxxxxxxx
Address:
00, xxx xxx Xxxxxxx
00000 Xxxxxxx xxx Xxxxx
Xxxxxx
By: /s/ XXXXXXX XXXXXXXXX
---------------------------------
Name: Xx. Xxxxxxx Xxxxxxxxx
Address:
00, xxx xxx Xxxxxxx
00000 Xxxxxxx xxx Xxxxx
Xxxxxx
By: /s/ XXXX XXXXXXXXX
---------------------------------
Name: Xx. Xxxx Xxxxxxxxx
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Address:
00, xxx xxx Xxxxxxx
00000 Xxxxxxx xxx Xxxxx
Xxxxxx
By: /s/ FLORENT MARTENNE-XXXXXX
---------------------------------
Name: Mr. Florent Martenne-Xxxxxx
Address:
12, villa Memoris
94120 Fontenay sous Bois
France
FINANCIERE DU MARAIS
By: /s/ FLORENT MARTENNE-XXXXXX
---------------------------------
Name: Mr. Florent Martenne-Xxxxxx
Title: Gerant
Address:
12, villa Memoris
94120 Fontenay sous Bois
France
By: /s/ SEBASTIEN MARTENNE-XXXXXX
---------------------------------
Name: Mr. Sebastien Martenne-Xxxxxx
Address:
12, villa Memoris
94120 Fontenay sous Bois
France
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32
By: /s/ XXXXXXX MARTENNE-XXXXXX
---------------------------------
Name: Mr. Xxxxxxx Martenne-Xxxxxx
Address:
12, villa Memoris
94120 Fontenay sous Bois
France
By: /s/ XXXXXX MARTENNE-XXXXXX
---------------------------------
Name: Ms. Magali Martenne-Xxxxxx
Address:
12, villa Memoris
94120 Fontenay sous Bois
France
By: /s/ PHILIPPE AIT YAHIA
---------------------------------
Name: Mr. Philippe Ait Yahia
Address:
00, xxx xxx Xxxxx Xxxxxxxx
00000 Xxxxxx
Xxxxxx
HESPERIA
By: /s/ PHILIPPE AIT YAHIA
---------------------------------
Name: Mr. Philippe Ait Yahia
Title: Gerant
Address:
00, xxx xxx Xxxxx Xxxxxxxx
00000 Xxxxxx
Xxxxxx
By: /s/ XXXXXX AIT YAHIA
---------------------------------
Name: Xx. Xxxxxx Ait Yahia
Address:
00, xxx xxx Xxxxx Xxxxxxxx
00000 Xxxxxx
Xxxxxx
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THE PURCHASER
ESPRIT TELECOM HOLDINGS, LIMITED
By: /s/ XXXXXX XXXXXXXXXXX
---------------------------------
Name: Xx. Xxxxxx Xxxxxxxxxxx
Title: Its authorized representative
GTS
GLOBAL TELESYSTEMS GROUP, INC.
By: /s/ XXXXXX SCHREISHEIM
---------------------------------
Name: Xx. Xxxxxx Xxxxxxxxxxx
Title: Executive Vice President &
Corporation Development Office
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