EXHIBIT 10.1
Translation
Agreement
Regarding the Sale and Transfer of Shares
between
1 a) Y.A.C. Finance Holding S.A.
0, xxx Xxxxx Xxxxxxxxxx/Xxxxxxxxxx
(hereinafter referred to as "YAC")
and
1 b) Xx. Xxxx Xxxxxxxx
(hereinafter referred to as "Xxxx Xxxxxxxx")
and
1 c) Xx. Xxxxxxx Xxxxxxxx
(hereinafter referred to as "Xxxxxxx Xxxxxxxx")
(the parties 1 [a] to [c] hereinafter referred to collectively as "the sellers")
and
2. BROKAT Infosystems AG,
Xxxxxxxxxxxxxxxx 0, 00000 Xxxxxxxxx
(hereinafter referred to as "BROKAT")
(the sellers and BROKAT hereinafter referred to collectively as "the parties")
Recitals
I. Capital increase (step I) 3
(S) 1 Capital increase, subscription 5
(S) 2 Contribution, surcharge 5
(S) 3 Change in the FFS articles of incorporation 6
II. Granting of the option to purchase all shares remaining with the sellers
after step I 8
(S) 4 Granting of the option 8
(S) 5 Targets 9
(S) 6 Acceptance of the purchase offer 10
(S) 7 Purchase price, substitution authorization 11
(S) 8 Transfer of the step II shares 12
(S) 9 Purchasing right 12
(S) 10 Preemptive right 13
III. Employee participation 14
(S) 11 Employee participation 14
IV. WarrantiesWarranties and representations representation 16
(S) 12 General 16
(S) 13 Warranties with regard to the corporate relationships of Xxxxxxxx
Company and the sellers' freedom of disposal 17
(S) 14 Warranties with regard to the enterprise and asset status of the
Xxxxxxxx companies 18
(S) 15 Warranties with regard to contractual and legal relationships and
conditions 20
(S) 16 Tax and social-welfare insurance release 23
(S) 17 Enterprise continuation 24
(S) 18 Legal consequences of violating a guarantee or representation 25
(S) 19 Limitation period 26
V. Measures before or after the signing date 26
(S) 20 Changes to the articles of incorporation of FFS, appointment of
a new member to the administrative board, sale of shares in Xxxxxxxx
Software Ireland Ltd. 26
(S) 21 Employment relationship of Xxxxxxx Xxxxxxxx 27
VI. Rights and duties of the parties for the period after the end of step II 28
(S) 22 Restructuring 28
(S) 23 Lock-up 28
(S) 24 Restraint of competition 28
VII. General provisions 30
(S) 25 Taxes, costs 30
(S) 26 Statements and declarations 30
(S) 27 Changes to the agreement 31
(S) 28 Assignments 31
(S) 29 Interpretation of the agreement 31
(S) 30 Applicable law 32
(S) 31 Arbitration 32
Recitals
1. BROKAT is a stock corporation registered under record HRB 19292 in the
commercial register for companies kept at the Local Court of Stuttgart. The
share capital of BROKAT is DM 44,747,955.00 (forty-four million seven
hundred forty-seven thousand nine hundred fifty-five German marks), and is
divided into 8,949,591 no par shares.
The managing board of BROKAT is authorized under (S) 4 paragraph 2 of the
company's articles of incorporation to increase the company's share capital
with the approval of the Supervisory Board during the period up to June 30,
2003, by issuing new shares against cash contributions or non-cash
contributions once or several times, but not by more than DM 11,476,975.00
in total ("authorized capital I"). The managing board shall decide regarding
a preclusion of subscription rights with the approval of the Supervisory
Board.
Since September 16, 1998, BROKAT stock has been approved for the organized
market with the start of trading at the New Market of the Frankfurt
securities exchange. Listing on the New Market began on September 17, 1998.
BROKAT develops and markets software and hardware solutions, particularly
for secure data transmission in heterogeneous internal and inter-company
data networks. The company's business has developed positively in recent
years, and achieved market leadership in Germany in the market segment it is
active in. BROKAT desires to expand the competitive position it has achieved
domestically and abroad.
2. Xxxxxxxx Financial Software S.A. (hereinafter referred to as ,,FFS") is
registered under B 70830 in the commercial and corporate register of the
District Court of Luxembourg. The share capital of FFS is 288,500.00 euros,
divided into 57,700 shares with a par value of 5 euros each. The shares are
registered shares. According to article 5 of the articles of incorporation,
the administrative board is authorized to increase the corporation's capital
to bring it from 288,500.00 euros to 1 million euros by issuing 142,300
shares with a par value of 5 euros each, to enjoy the same rights as
existing shares. This authorization must be renewed every five years.
2.1 YAC and Xxxxxxx Xxxxxxxx hold the 57,700 shares of FFS as follows:
(1) YAC 57,697 shares
(2) Xxxxxxx Xxxxxxxx 3 shares
2.2 FFS is the holding company of the following companies with the
following shareholding interests:
(1) Xxxxxxxx Software S.A. (hereinafter referred to as "FS"): 5998
shares @ LUF 1000 each of 6000 shares (one each of the other two
shares is held by Xxxxxxx Xxxxxxxx and Xxxx Xxxxxxxx)
(2) Xxxxxxxx Software AG (Germany) (hereinafter referred to as "FSD"):
19,999 shares @ DM 5.00 of 20,000 shares (the remaining share is
held by Xxxxxxx Xxxxxxxx)
(3) Xxxxxxxx-Software AG (Switzerland) (hereinafter referred to as
"FSC"): all 1000 shares @ SFR 100.00
(Companies [1] to [3] and FFS are referred to hereinafter
collectively as "the Xxxxxxxx companies")
(4) Xxxxxxxx Software Ireland Ltd., which no longer exists as an
operating company.
The Xxxxxxxx companies likewise develop and market software and
hardware solutions for administering transactions, especially in
the field of banking software.
3. BROKAT and the Xxxxxxxx companies see considerable synergistic effects in
cooperation, including and particularly from a geographic point of view. The
sellers and BROKAT have further agreed that BROKAT shall acquire a
shareholding interest in FFS as the holding company for the Xxxxxxxx
companies by way of stock acquisition in a first step (step I) to solidify
the partnership, to demonstrate cooperation on the market, and to promote
and finance further growth of the Xxxxxxxx companies, and BROKAT shall be
given an option, irrevocable for the sellers, to purchase all shares of FFS
as well as the shares of the Xxxxxxxx companies, to the extent they are not
held by FFS.
In consideration of the foregoing, the parties hereby agree as follows:
I. Capital increase (step I)
(S) 1
Capital increase, subscription
1.1 The sellers hereby undertake to resolve as quickly as possible after
conclusion of the present agreement to increase, by 96,700 euros, from
288,500 euros to 385,200 euros, the share capital of FFS in exchange for a
cash contribution, issuing 19,340 shares with a par value of 5 euros each,
in accordance with the document enclosed as annex E, to preclude
shareholder subscription rights, and to permit only BROKAT to subscribe and
purchase the new shares (hereinafter referred to as "step I shares").
1.2 BROKAT shall be obligated to purchase the step I shares immediately after
confirmation of the credit extension by NordLB/HypoVereinsbank, and to
transfer the price named in (S) 2 to account (11424957491) of FFS at Banque
Internationale a Luxembourg prior to the capital increase, so that the
capital increase can take place on schedule.
The sellers hereby undertake as joint and several debtors to transfer 25.1
percent of all shares of FFS to BROKAT for security, in case the capital
increase has not been effectively completed after no more than one week
after payment of the price named in (S) 2. The shares must be transferred
back to the sellers immediately after the capital increase becomes
effective and BROKAT has purchased the step I shares.
(S) 2
Contribution, surcharge
2.1 BROKAT purchases the step I shares in exchange for payment to FFS
(1) of a contribution of 5 euros per share, i.e., a total of 96,700 euros
and
(2) of a surcharge of 100.75 euros per share, i.e., a total of 1,948,505
euros.
2.2 The contribution and surcharge in the total amount of 2,045,205 euros
(hereinafter referred to as "issue amount") shall be due and payable to FFS
in accordance with (S) 1.1.2 so that the resolution regarding the capital
increase according to (S) 1 (the day the resolution is adopted, hereinafter
referred to as "effective date") may then be adopted without delay.
2.3 The sellers shall be obligated to make sure that the surcharge is used with
senior priority to reduce payable loan repayment claims of NordLB
Luxembourg S.A. and HypoVereinsbank Luxembourg S.A. in accordance with
annex C 13 (6), and with junior priority to increase the liquidity of the
Xxxxxxxx companies.
(S) 3
Change in the FFS articles of incorporation
3.1 The sellers warrant and represent:
After the step I shares are purchased and subscribed by BROKAT, the
Xxxxxxxx companies shall hold a shareholders' meeting at which the articles
of incorporation shall be changed to the effect that a majority of 75
percent of the share capital of FFS shall be necessary at the Xxxxxxxx
companies for basic transactions, i.e.:
(1) Changes in the articles of incorporation
(2) Change in the purpose and subject matter of the business
(3) Capital increases
(4) Appointment or dismissal of members of the administrative board and
setting the number of members of the administrative board
(5) Appointing the financial auditor
(6) Concluding, changing, or terminating employment agreements with members
of the administrative board.
3.2 The sellers warrant and represent:
BROKAT shall be entitled to appoint a member of the administrative board of
FFS. The sellers shall cooperate at all times with all their votes in
appointing or dismissing that member of the administrative board, on demand
and according to the instructions of BROKAT. YAC and Xxxxxxx Xxxxxxxx shall
appoint Mr. Xxxxxxx Xxxxxxxxxx as member of the administrative board of FFS,
with effect as of the effective date, as the first member of the
administrative board appointed in accordance with this paragraph.
Furthermore, the sellers shall appoint Xxxxxx Xxxxxxxx as financial auditor
of the Xxxxxxxx companies.
3.3 The sellers warrant and represent:
The articles of incorporation of the Xxxxxxxx companies shall be changed,
with effect as of the date this agreement is signed, to the effect that
unanimous resolutions of the administrative board of FFS shall be necessary
for transactions by the Xxxxxxxx companies relating to matters outside
normal business operations, i.e.:
(1) any form of capital increase or other issue of new shares, even within
the bounds of authorized capital
(2) acquisition, establishment, encumbrance, or sale of an enterprise or of
shareholding interests, including company agreements and joint contracts
(3) adding new lines of business and abandoning old areas of activity or
discontinuing business operations
(4) establishing and dissolving branch offices and operating locations
(5) acquisition, encumbrance, or sale of real property and equivalent rights
(6) granting credit, negotiating bills, promising warranties, and granting
other kinds of security
(7) developing and commencing distribution of new software products outside
normal business operations
(8) acquisition, utilization, or sale of own or outside license rights or
copyrights to software products outside normal business operations
(9) concluding, changing, or terminating distribution or license agreements
or other agreements regulating the utilization or exploitation of
software outside normal business operations
(10) appointing and dismissing managing directors, members of the managing
board, or holders of full power of commercial representation [Prokura]
of the subsidiaries
(11) concluding, changing, or terminating employment agreements with holders
of full power of commercial representation [Prokura] and managers
(12) concluding, changing, or terminating agreements with shareholders or an
enterprise affiliated with them (affiliated enterprises are enterprises
considered to be affiliated according to the rules set down in (S)(S)
15 et seq. Corporation Law)
(13) and any and all comparable matters.
3.4 Finally, the sellers warrant and represent and shall be obligated to make
sure that
(1) the Xxxxxxxx companies prepare quarterly and annual financial statements
according to the US GAAP as individual financial statements and
consolidated financial statements and
(2) the annual financial statements (individual financial statements and
consolidated financial statements) shall be audited.
3.5 BROKAT assures that it will render reasonable support when preparing
financial statements according to US GAAP.
II. Granting the option to purchase all shares remaining with the sellers after
step I
(S) 4
Granting of the option
The sellers hereby make BROKAT the irrevocable offer (though limited according
to (S) 6) of the purchase and transfer of the following shares held by them
(hereinafter referred to as "purchase offer"):
4.1 YAC: 57,697 shares of FFS
4.2 Xxxxxxx Xxxxxxxx: 3 shares of FFS, 1 share of FS, and 1 share of FSD
4.3 Xxxx Xxxxxxxx: 1 share of FS
(hereinafter collectively referred to as "step II shares")
(S) 5
Targets
Continuing the operative business of the Xxxxxxxx companies and achieving the
targets discussed between the contracting parties and recorded in annex A have
foremost priority during the further continuation of the Xxxxxxxx companies,
according to the mutually agreed intention of the contracting parties.
Achievement of the targets set forth in annex A by the Xxxxxxxx companies shall
be evaluated and determined as of December 31, 1999, March 31, 2000, and June
30, 2000 (hereinafter referred to as "option dates") according to the following
rules:
5.1 The companies shall have financial statements prepared as of the respective
option dates, conforming to the annual financial statements in their
content, scope, and form (hereinafter referred to as "option financial
statements"). Consolidated financial statements for the Xxxxxxxx companies
must be prepared for each option date (consolidated financial statements).
The sellers shall commission Xxxxxxxx Xxxxxxx Brosztl & Partner
Wirtschaftsprufungsgesellschaft Steuerberatungsgesellschaft, Stuttgart, to
preparing the option financial statements (,,Xxxxxxxx"). The sellers shall
be obligated to submit the necessary records to Xxxxxxxx within 15 days
after the particular option date, and to provide information. Preparation
costs shall be paid by BROKAT.
The option financial statements shall be prepared on the basis of and in
conformance with US GAAP, particularly with regard to delimiting incoming
orders and orders on hand. Actual figures and the basis of the financial
statements per December 31, 1998, shall be taken as the basis for the
purposes of determining the purchase price according to annex A. Any
special influences shall be neutralized (i.e., license payments made by
BROKAT or enterprises affiliated with BROKAT, payments of license fees
exceeding 1.0 million euros as a one-time license by customers and partners
that can be shown to have been arranged by BROKAT, capitalization of
development costs, and payment of prepaid licenses). The results of the
option financial statements that are substantial for annex A shall in each
case be updated in such a way that the result of the particular subsequent
option financial statements builds on the previous one. This applies to the
option financial statements per December 31, 1999, March 31, 2000, and June
30, 2000, which shall update the financial statements per September 30,
1999, December 31, 1999, and March 31, 2000.The costs of liquidating or
dissolving Xxxxxxxx Software Ireland Ltd. must be included when preparing
the option financial statements; saved expenses that would have been
incurred if this company's business operations were continued shall not be
included.
5.2 The option financial statements shall be submitted to both parties no more
than four weeks after the complete records are submitted according to
paragraph 5.1. They shall be consid-
ered approved in a binding manner for both parties unless one of the
parties files an objection with Xxxxxxxx within one week. If no agreement
on approval is reached between all parties within an additional two weeks
since the objection was received, KPMG Stuttgart shall decide as arbitrator
on request by a party, and shall approve the option financial statements
with binding effect for the parties. Half the arbitrator's costs shall be
paid by BROKAT and half by the sellers.
(S) 6
Acceptance of the purchase offer
6.1 BROKAT shall be entitled to accept the purchase offer in a written
statement to the sellers. The acceptance statement may only be made within
one week after receipt of option financial statements approved according to
(S) 5 (1) or (2) (hereinafter referred to as "exercise periods"), with
effect as of the option date underlying the particular option financial
statements (hereinafter referred to as "effective date of exercise"). The
acceptance shall not include the share of FSD held by Xxxxxxx Xxxxxxxx, to
the extent FSD is being liquidated, merged, or dissolved at the time of
acceptance. BROKAT may accept from the sellers the offer of purchasing the
shares only for all shares offered.
6.2 BROKAT shall be obligated to accept from the sellers the offer of
purchasing the shares if:
(1) the consolidated option financial statements of the Xxxxxxxx companies
show a positive result (after interest and depreciation but before
taxes) as of the option date June 30, 2000, for the period from January
1, 2000, until June 30, 2000, after neutralization of any special
influences (i.e., license payments made by BROKAT or enterprises
affiliated with BROKAT, payments of license fees exceeding 1.0 million
euros as a one-time license by customers and partners that can be shown
to have been arranged by BROKAT, capitalization of development costs,
and payment of prepaid licenses), and
(2) the sellers confirm in writing for BROKAT and assume the warranties and
representations under (S)(S) 12 to 16 of this agreement, effective June
30, 2000. The sellers shall be entitled to attach a disclosure schedule
updated as of June 30, 2000, to the above statement insofar as the facts
and risks disclosed therein do not affect future earnings expectations
of the Xxxxxxxx companies, and thus the basis for calculating the
purchase price, to a significantly negative degree.
(S) 7
Purchase price, substitution authorization
7.1 The purchase price to be paid by BROKAT on acceptance of the purchase offer
for the step II shares is DM 4 million, plus the amount resulting according
to annex A and annexes B1 to B3, but shall not exceed
DM 74,295,000 in case of acceptance as of option date December 31, 1999;
DM 71,100,000 in case of acceptance as of option date March 31, 2000;
DM 67,905,000 in case of acceptance as of option date June 30, 2000.
The purchase price shall be DM 13.9 million in case of acceptance as of
option date June 30, 2000, if the targets set forth in annex A are not
achieved on more than two option dates,
according to the option financial statements.
7.2 BROKAT shall be authorized to discharge its duty to pay the purchase price
in cash according to (S) 7.1 by way of performance of a fulfillment instead
of by transferring or issuing no-par shares from BROKAT to the sellers. The
number of shares to be transferred (hereinafter referred to as "BROKAT
shares") shall be determined according to the purchase price as set forth
in 7.1, divided by the market price of a no-par share of BROKAT. Here the
market price of a no-par share of BROKAT shall be the closing price of that
share noted in presence trading on the Frankfurt securities exchange on the
third-to-last banking day (Frankfurt am Main) before the start of the
exercise period.
7.3 If BROKAT does not accept the offer as of an option date even though the
targets were achieved according to annex A, and if BROKAT accept the offer
at a later date, then the purchase price shall be the purchase price to be
paid by BROKAT that would be the purchase price valid under this agreement
as of the option date when the targets according to annex A were first
achieved, regardless of whether or not the targets were achieved at such
later date. BROKAT shall have the substitution authorization as provided
for in (S) 7.2 in this case, as well. Section 7.2 shall apply by analogy
for determining the number of shares to be transferred.
(S) 8
Transfer of the step II shares
8.1 If BROKAT accepts the purchase offer and does not exercise the substitution
authorization as provided for in (S) 7.2, the step II shares shall be due
for transfer to BROKAT one week after receipt of the statement from BROKAT
to the sellers regarding acceptance of the purchase offer, concurrently
against payment to the sellers of the purchase price as provided for in (S)
7.1.
8.2 If BROKAT accepts the purchase offer and exercises the substitution
authorization as provided for in (S) 7.2, the step II shares shall, at the
election of BROKAT:
(1) become due for transfer to BROKAT, if the purchase offer is accepted,
no more than four weeks after receipt of the statement regarding
acceptance of the purchase offer, concurrently against transfer --
without cost for the sellers -- of the BROKAT shares according to (S)
7.2
or
(2) be immediately transferred to BROKAT by the sellers in the course of an
increase in share capital by BROKAT -- without cost for the sellers --
as a contribution in kind in exchange for granting the corresponding
BROKAT shares to the sellers.
8.3 Insofar and as soon as supplemental statements for public agencies or third
parties, such as the commercial register, and/or supplemental or altered
agreements are required for the purpose of transferring the step II shares
and/or the BROKAT shares according to 8.1 or 8.2, the parties shall perform
them without delay.
(S) 9
Purchasing right
If BROKAT does not accept the purchase offer within the last exercise period,
the sellers shall be entitled to purchase the step I shares as follows:
9.1 BROKAT hereby offers the step I shares for sale to the sellers (hereinafter
referred to as ,,option offer"). The purchase price to be paid to BROKAT by
the sellers in the event the above offer for purchase of the step I shares
is accepted is
DM 8 million (eight million German marks)
(hereinafter referred to as "option price").
9.2 Acceptance of the option offer by the sellers is permissible only until
December 31, 2000. Beyond this, the sellers shall be entitled to accept the
option offer only if BROKAT has not accepted the purchase offer for
purchase of the step II shares within the last exercise period according to
(S) 6.1.
9.3 Acceptance of the option offer must be stated in writing to BROKAT.
9.4 In the event of effective acceptance of the option offer according to
paragraphs 9.2 and 9.3, the option price shall become due for payment to
BROKAT two weeks after receipt of the acceptance statement, concurrently
against transfer of the step I shares without cost or charges.
(S) 10
Preemptive right
10.1 If the sellers or one from among them, on the one hand, or BROKAT, on the
other hand, intends to sell shares of FFS, those shares shall be subject to
the preemptive right of BROKAT in the event of sale by the sellers or by
one from among them, or shall be subject to the preemptive right of the
sellers in the event of sale by BROKAT. Immediately after concluding an
agreement regarding the sale, the selling party must send a complete copy
of that agreement to the entitled party. The entitled party may purchase
the shares designated in the agreement by making a statement in the valid
form to the selling party.
The preemptive right shall expire if it is not exercised within
six weeks after the entitled party receives the agreement regarding the
sale.
10.2 If the preemptive right as provided for in (S) 10.1 is exercised, the
shares subject to that right shall be transferred to the entitled party
concurrently against payment of the purchase price demanded in the
agreement on the sale according to the terms of payment named there.
10.3 If no use is made of the preemptive right according to (S) 10.1, or if use
is not made on time, the selling party shall be authorized to assign the
shares designated in the agreement on the sale to the interested purchasers
named there and on the conditions named there within six months after the
preemptive right expires.
10.4 Both parties shall be obligated not to sell their shares to any buyer
other than the other party before expiration of the exercise period ending
June 30, 2000.
III. Employee participation
(S) 11
Employee participation
11.1 In preparation for concluding this agreement, the sellers have promised the
employees of the Xxxxxxxx companies an opportunity to participate in the
share capital of FFS in order to give them a participating interest in the
FFS enterprise. The sellers shall therefore offer and transfer BROKAT
shares from its own holdings to those employees as provided for the
following provisions:
(1) the sellers shall keep 20 percent of BROKAT shares (hereinafter
referred to as "employee shares") for the purpose of acquisition by
employees of the Xxxxxxxx companies;
(2) offer and grant option rights for purchasing the employee shares to the
employees to be selected by Xxxxxxx Xxxxxxxx who have an employment
relationship with the Xxxxxxxx companies at the time this agreement is
concluded, with corresponding application of the option conditions in
effect for the employees of BROKAT and of the accounting requirements
of BROKAT existing in the interest of the Group;
(3) if and insofar as the employees make use of these option rights on
time, transfer the employee shares to the holders of those option
rights concurrently against payment of a sales price of 32.00 euros per
employee share;
4) if and insofar as the employees do not make use of their option rights
on time and/or the employee shares are not subject to any option rights
and/or the conditions on which the option rights may be exercised do
not occur, as well as in all other cases in which the employees do not
acquire the employee shares, utilize those shares for its own account
but following the instructions of BROKAT;
(5) refrain from exercising and asserting any and all administrative rights
associated with the employee shares during the period in which the
sellers hold them, particularly voting rights and purchasing rights, or
transfer such rights to third parties on the instructions of BROKAT.
11.2 Sellers shall pay any and all costs and taxes arising in implementation of
paragraph 11.1, including any taxes or social-welfare charges incurred or
payable by the Xxxxxxxx companies or BROKAT (hereinafter referred to
collectively as "costs"). The costs may not exceed the share proceeds. The
share proceeds correspond to the total of sales prices received by the
sellers for the employee shares according to paragraph 11.1 (3) and the
utilization prices received according to paragraph 11.1 (4) (hereinafter
referred to as "share proceeds").
11.3 The sellers' obligation to offer and transfer the employee shares to the
employees as provided for in paragraph 11.1 cannot be asserted against the
sellers as long and insofar as the costs exceed the share proceeds.
Furthermore the sellers do not need to submit the costs.
If the sellers' obligation to offer and transfer the employee shares to
the employees as provided for in paragraph 11.1 cannot be asserted against
the sellers according to the provisions of this paragraph, the sellers
shall be entitled to demand assumption of the deficit amount and provision
of security (hereinafter referred to jointly as "cost security") in a
written statement to BROKAT. The cost security must be provided to the
sellers within three months after the statement is received by BROKAT; in
any case, a written representation from BROKAT that it will assume the
deficit amount on first request shall be sufficient as cost security.
Here, too, submission of the costs by the sellers is not required.
BROKAT shall not be obligated to assume the deficit amount; however, if
the cost security is not evidenced within the above period, the
obligations of the sellers under paragraph 11.1 (1) to (3), (5), and (6)
[sic] shall expire.
11.4 To secure compliance with the obligations assumed in accordance with
paragraphs 11.1 to 11.3 above, the sellers shall transfer the employee
shares to
BROKAT Beteiligungs GmbH
as trustee immediately after they are purchased, and irrevocably instruct
this trustee to hold and utilize the employee shares according to
paragraphs 11.1 to 11.3, and to fulfill the obligations assumed towards
the employees and BROKAT for the account of the sellers.
11.5 The sellers shall be entitled to transfer the obligations under the
present (S) 11 to a third party with the approval of BROKAT.
IV. Warranties and representations
(S) 12
General
12.1 The following warranties and representations by the sellers ((S)(S) 12 to
16) relate to the date this agreement is signed and to the effective date.
The warranties and representations of the sellers do not cover
circumstances, facts, or events whose occurrence or nonoccurrence are due
to instructions, actions, measures, or omissions that were made,
performed, or caused by BROKAT or enterprises affiliated with it,
particularly liquidation or any other dissolution of FSD and FSC.
12.2 To the extent the sellers make exceptions to the warranties and
representations, they are recorded in the disclosure schedule underlying
this agreement (annex C). However, information in the disclosure schedule
is fundamentally not suitable for precluding liability from violation of
one of the warranties or representations given here, unless the disclosure
schedule describes the exception with reasonable accuracy. The disclosure
schedule is arranged in sections corresponding to the sequence of sections
in this agreement. To the extent information is provided for a specific
section, it does not apply to other sections, unless a corresponding
explicit reference is made in the disclosure schedule.
12.3 If there are changes to the disclosure schedule attached to this agreement
as annex C with effect as of the date this agreement is signed, the
sellers have the opportunity to provide corresponding information in the
disclosure schedule and provide it to BROKAT as an additional annex (annex
C 1, C 2, etc.); delivery after this agreement is signed does not
interfere with liability from violation of a guarantee made here.
12.4 To the extent the sellers have provided or provide representations "to the
best of the sellers' knowledge", the sellers shall have no liability for
noncompliance only if the sellers have performed, to a reasonable extent,
investigations of the facts and circumstances on which the warranties or
representations are based, and only if neither the sellers nor any major
adviser nor any executive of the Xxxxxxxx companies have positive
knowledge of a fact, an event, or a circumstance making the guarantee or
representation incorrect.
(S) 13
Warranties with regard to the corporate relationships of Xxxxxxxx Company
and the sellers' freedom of disposal
The sellers warrant:
13.1 The Xxxxxxxx companies are properly established and legally existing
companies whose share capital is fully paid and no repayments of share
capital have been performed or obligations to that effect have not been
undertaken; there is no obligation to make further contributions,
regardless of the cause in law, including due to insufficient or hidden
contributions in kind;
13.2 None of the Xxxxxxxx companies is insolvent as of payment targets and the
like, taking into account the information provided in annex C 13.2;
13.3 The articles of incorporation of the Xxxxxxxx companies are valid in the
version delivered to BROKAT in draft form on August 6, 1999, for FS, FSD,
FSC, and FFS, and shall remain unchanged until the effective date, with
the exception of necessary changes on the basis of the acquisition by
BROKAT of the Xxxxxxxx companies;
13.4 The commercial-register abstracts submitted for the Xxxxxxxx companies
accurately reflect the status of the Xxxxxxxx companies;
13.5 No other major resolutions have been adopted by the shareholders, the
supervisory boards, the administrative board, or the managing board than
those disclosed to BROKAT;
13.6 The step I and step II shares (hereinafter referred to as "the shares")
are the unencumbered property of the sellers, are not subject to any
disposal limitations, and there are no third-party rights to them,
particularly
-- none of the shares has been attached, pledged, or assigned by way of
security or for any other reason,
-- there are no third-party option or other rights for purchase or
encumbrance of the shares,
-- none of the shares is the object of a trust relationship,
-- none of the shares and no right from any of the shares is the object
of third-party usufructuary rights, subordinate participating
interests, silent partnerships, or other corporate relationships;
13.7 Subject to annex [...], there are no participating interests in any of the
Xxxxxxxx companies than those of the sellers, in particular there are no
silent partnerships, interests in the purchase of shares or participating
interests or other rights, such as loans with profit participation that
could establish an interest in the earnings or assets of the Xxxxxxxx
companies or a codetermination right for decisions by the shareholders.
(S) 14
Warranties with regard to the enterprise and asset status of the Xxxxxxxx
companies
The sellers warrant that
(1) the annual financial statements of the Xxxxxxxx companies submitted to
BROKAT on August 3, 1999, for the fiscal year ending December 31, 1998
(hereinafter referred to as "annual financial statements") present a picture
of the asset, financial, and earnings situation of the Xxxxxxxx companies
corresponding to actual circumstances as of the particular reporting date,
the annual financial statements and the consolidated financial statements
were completely and correctly prepared in observance of the applicable
statutory provisions in the particular legal systems and in application of
the principles of proper and orderly bookkeeping and accounting generally
recognized there, and that in particular
-- carefully prepared inventories were used as the basis;
-- the liabilities were stated completely and with full coverage at the
time the balance sheet was prepared and within the bounds of
identification possibilities, particularly with regard to pension
accruals, with the exception of the liabilities stated in annex C 14
(1);
-- the stated assets have value content;
-- updating of balance sheet sets over the last balance sheet date has
occurred using identical, legally permissible valuation principles and
the accounting and valuation elective rights have continuously been
exercised in a consistent manner, subject to valuation changes on the
basis of tax audits or such as have been pointed out to BROKAT; and
-- all legally required depreciation and valuation adjustments have been
performed and all legally required provisions have been created.
(2) no change in the asset, financial, or earnings situation of the Xxxxxxxx
companies not disclosed to BROKAT has occurred, to the best of the sellers'
knowledge, since the particular reporting date for the annual financial
statements;
(3) the assets indexed in the asset indices to the annual financial statements
are the property of the particular Xxxxxxxx company and are in its
possession, insofar as they have not been replaced in the context of the
proper and orderly course of business and are not listed in annex C.14 (3).
Subject to the limitations in annex C.14 (3), those assets and all further
assets listed in the annual financial statements or counting among the
balance sheet assets of the particular Xxxxxxxx company are the sole
property of the particular Xxxxxxxx company in whose annual financial
statements they are listed. Such sole ownership is not encumbered by any
rights whatsoever of third parties or by restraints on disposal, with the
exception of the usual reservations of ownership;
(4) the objects specified in annex C.14 (4) and leased or rented by the
particular Xxxxxxxx company are in the possession of the particular Xxxxxxxx
company and freely available for its use;
(5) except for the objects designated in annex C.14 (5), none of the Xxxxxxxx
companies have leased or rented other objects whose monthly financial burden
exceeds DM 15,000 net in an individual case;
(6) all concessions, approvals, and licenses, as well as other public approvals,
including any and all building approvals and investment approvals required
for the business of the Xxxxxxxx companies are available, and revocation
thereof has neither been threatened nor is likely; all requirements,
restrictions, and conditions specified in the concessions, approvals, and
licenses that have been granted have largely been completely fulfilled
without additional investments or other special measures being necessary;
(7) subject to annex C 14 (7), the computer systems and products of all Xxxxxxxx
companies and all parts thereof are year-2000 compliant, and guarantee
secure and fault-free functioning before and after January 1, 2000, without
even partial replacement or retrofitting;
(8) the industrial property rights designated in annex C.14 (8) (patents,
utility models, copyrights, brands and trademarks, expertise), including the
registrations made by the effective date, as well as any and all utilization
rights therefrom:
(a) unless otherwise stated in annex C.14 (8a), belong to the Xxxxxxxx
companies alone and without restriction, and there are no third-party
rights to such industrial property rights or utilization rights or with
regard to utilization thereof;
(b) are legally valid and in effect, to the best of the sellers' knowledge,
and no attacks by third parties against them are present or threatened,
nor is there any danger of cancellation or voidance of the industrial
property rights, and no industrial property rights of third parties are
violated by the property rights or use thereof, to the best of the
sellers' knowledge;
(c) are secured to the effect that all payable fees have been paid and any
other measures that may be necessary to uphold and maintain the
industrial property rights have been performed completely and on time;
(d) all industrial property rights, including brands of Xxxxxxxx companies
that are necessary for continuing the business operations of the
Xxxxxxxx companies unchanged, are listed in annex C.14 (8b);
(e) with the exception of the agreements named in annex C.14 (8a), there are
no agreements relating to the business purpose of Xxxxxxxx companies
that contain the utilization of industrial property rights, including
brands;
(9) all real property and equivalent rights of Xxxxxxxx companies are listed in
annex C.14 (9).
(S) 15
Warranties with regard to contractual and legal relationships and conditions
15.1 The sellers warrant that implementation and fulfillment of this agreement
will not result in a breach of contract by any of the Xxxxxxxx companies
or represent an opportunity permitting a contract partner to terminate a
major agreement concluded with one of the Xxxxxxxx companies.
15.2 The sellers warrant that there are no obligations of any of the Xxxxxxxx
companies from the following legal relationships at the time this
agreement is concluded, with the exception of the agreements and
obligations disclosed in annex C.15.2;
(1) employment or work agreements granting annual base compensation of
more than DM 100,000, or providing for termination notice periods
greater than 1 year;
(2) obligations or commitments for old-age, disability, early-retirement,
or survivors' benefits not stated completely and with complete
coverage (base interest rate 6 percent) in the annual financial
statements;
(3) plant agreements or other collective-bargaining obligations in
connection with employment relationships (including claims by third
parties, particularly the social-welfare insurance carriers and the
Labor Office), obligations arising from social plans, agreements for
the accommodation of conflicting interests, plant practices or overall
commitments with regard to rendering social-welfare benefits or other
benefits to employees;
(4) consultancy agreements of all kinds having an individual volume
exceeding DM 100,000 per annum;
(5) agreements with commercial representatives, authorized dealers, or
other distribution agents;
(6) suretyships, guarantee obligations, cumulative assumptions of debt,
letters of support, or provisions of security of all kinds
individually exceeding DM 15,000, as well as obligations vis-a-vis
third parties individually exceeding DM 15,000 which have provided
suretyships, warranties, or other security of any kind for one of the
Xxxxxxxx companies;
(7) obligations to grant and/or arising from the use of credit of any kind
with a volume exceeding DM 15,000 per annum;
(8) rental or lease agreements not ending on or before July 31, 2000,
and/or whose monthly financial burden or monthly earnings exceeds DM
15,000 in an individual case;
(9) agreements on the purchase or sale of real property or rights to real
property that have not been fulfilled or have not been completely
fulfilled;
(10) agreements regarding investments (purchase of fixed assets)
establishing an obligation for one of the Xxxxxxxx companies exceeding
DM 30,000 in an individual case;
(11) competition-restricting arrangements of any kind, particularly
agreements precluding or limiting the right of one of the Xxxxxxxx
companies to do business in certain fields or areas or to use
"Xxxxxxxx" in its name;
(12) agreements regarding industrial property rights or expertise or other
intangible rights or license agreements covering industrial property
rights or expertise or other intangible rights, regardless of whether
one of the Xxxxxxxx companies is the seller, buyer, licensor, or
licensee;
(13) agreements with suppliers and/or customers that exceed the context of
ordinary business operations and that obligate one of the Xxxxxxxx
companies beyond July 31, 2000, or with regard to which one of the
Xxxxxxxx companies is more than four weeks in arrears with
performance, and/or compensation for delay exceeding DM 50,000 must be
paid in an individual case;
(14) agreements or other obligations towards the sellers or towards
enterprises in which the sellers hold a participating interest
directly or indirectly;
(15) obligations towards retired shareholders and/or their heirs;
(16) affiliation agreements within the meaning of (S)(S) 291 et seq.
Corporation Law, and cooperation agreements of any kind;
(17) contract and agreements with regard to participation by one of the
Xxxxxxxx companies in joint ventures or consortia;
(18) agreements that have not been fulfilled regarding the purchase or sale
of enterprises, participating interests in enterprises, operation
locations, or operating units;
(19) public-law agreements that have not been fulfilled.
15.3 Unless otherwise disclosed in annex C.15.3, the sellers warrant that
(1) all fixed and current assets and all enterprise risks of all Xxxxxxxx
companies that are usually insured or which one of the Xxxxxxxx
companies is obligated to insure (to-
wards landlords or lessors, for instance) are insured as customary in
the industry or in accordance with the particular obligations towards
third parties;
(2) no product liability, warranty, or damage compensation claims have been
asserted against any of the Xxxxxxxx companies with a risk exceeding DM
50,000 in an individual case, and no such claims are threatening, to
the best of the sellers' knowledge;
(3) none of the Xxxxxxxx companies is involved in any legal dispute,
arbitration proceedings, administrative proceedings, or any other
public-agency proceedings with a risk exceeding DM 10,000 in an
individual case;
(4) none of the business operations of any of the Xxxxxxxx companies
violate regulations, guidelines, or orders by public agencies under
trade laws, foreign-trade laws, public construction laws, laws
concerning the interests between neighbors, public or private
securities-issuing rights, or other environmental laws, antitrust laws,
the law against unfair competition, criminal law, or the corresponding
foreign legal regulations;
(5) no court or public-agency proceedings are pending or threatening due to
major violations of public-law regulations or orders or due to
suspicion of criminal acts or administrative offenses.
(S) 16
Tax and social-welfare insurance release
16.1 Each of the Xxxxxxxx companies has submitted or shall submit all tax
returns, statements of public charges etc. on time that are required by
the effective date, and shall pay by the due date taxes and public charges
due by the effective date -- with the exception of those disclosed in
annex C 16.1.
16.2 Receivables relating to taxes, levies, customs duties, and ancillary tax
charges such as interest, penalties for the period up to the particular
balance sheet date that are not entered as liabilities in the annual
financial statements per December 31, 1998, shall be paid by the sellers
and must be reimbursed to the affected Xxxxxxxx company. The compensation
shall be gross for net, taking into account the taxes payable on it.
Back tax payments resulting from changes in valuation shall remain
excepted from the above warranted responsibility of the sellers, to the
extent they are canceled out in subsequent years or result in lower taxes
or the resulting profit remains with one of the Xxxxxxxx companies.
Changes in the tax capital accounts maintained by one of the
Xxxxxxxx companies up to the effective date on the basis of a tax audit
shall not result in withdrawal rights for the sellers nor any subsequent
adjustment in the purchase price.
16.3 The sellers shall pay taxes on the income and earnings they incur on the
basis of this agreement being concluded, and any stock transfer
transaction taxes incurred in Luxembourg.
16.4 BROKAT shall give the sellers the opportunity to be involved in all
meetings and any legal remedies.
(S) 17
Enterprise continuation
17.2 [sic] The sellers warrant that the business of the Xxxxxxxx companies
shall be continued exclusively within the bounds of ordinary business
operations in conformance with cautious business practices and with the
diligence of a prudent businessman during the period between the date on
which this agreement is signed and the effective date, with the goal of
maintaining real-asset values and earning power, to the extent this is
reconcilable. In particular, but without restriction to these measures,
the sellers shall not perform the following measures nor cause them to be
performed at or for any of the Xxxxxxxx companies:
-- capital increase or other issuance of new shares
-- issuing bonds
-- concluding agreements or entering into other obligations that either
establishes an obligation of more than DM 25,000 and [sic] lies
outside normal business activities
-- making an investment that is either greater than DM 25,000 and [sic]
lies outside normal business activities
-- delaying or postponing payments of obligations in a manner that is
outside normal business activities, unless the delay or postponement
is announced to BROKAT in advance
-- issuing license or sub-licenses to third parties (except to BROKAT and
enterprises affiliated with BROKAT) with regard to rights and
industrial property rights, outside normal business activities
-- changes in the company agreements of the Xxxxxxxx companies
-- concluding loan agreements with the sellers, members of their managing
boards, shareholders, employees, and consultants; disbursement of
profits reducing capital, resulting in favor of such disbursement,
payment of funds to the sellers or associated persons, except for the
administrative-board compensation disclosed to BROKAT
-- expansion of the administrative board or managing board of one of the
Xxxxxxxx companies.
(S) 18
Legal consequences of violating a warranty or representation
18.1 The following shall apply if one of the representations or warranties made
in this agreement is inaccurate:
(1) If the inaccuracy of warranties or representations becomes evident,
BROKAT shall be entitled to rescind the entire agreement
-- if the shares to be transferred by the sellers are subject to sale
restrictions or there are third-party rights to the shares that
cannot be corrected even within a reasonable additional period of
time.
-- in case of fraudulent misrepresentation.
-- in case of a change to the company agreement of one of the
Xxxxxxxx companies made without approval from BROKAT.
In these cases, BROKAT shall be entitled only within three months
after learning of the reason for rescission, but no later than
October 31, 2000.
Section 352 of the German Civil Code shall not be applicable.
(2) If the inaccuracy of warranties or representations becomes evident but
there is no right of rescission within the meaning of paragraph 1, the
sellers shall have the right to remedy the violation, insofar as the
violation does not demand an immediate remedy. If the sellers do not
remedy the violation within a reasonable period of time not to exceed
four weeks, the sellers shall place BROKAT or the Xxxxxxxx companies,
ac-
cording to the judgment of BROKAT, in the same financial situation
BROKAT or the Xxxxxxxx companies would be in if the warranty or
representation made in this agreement had been accurate or had not been
violated (damages). All other rights, claims for remedy, or claims
against the sellers are precluded.
(3) BROKAT can demand damage compensation only in such case and only to such
extent as the damage exceeds DM 100,000 in total. The claim of damage
compensation by BROKAT shall be limited to the damage amount, not to
exceed DM 7 million for all damage occurrences, however.
(4) To the extent a third party raises a claim against BROKAT or the
Xxxxxxxx companies, BROKAT shall give the sellers the opportunity to
proceed against such claim at their own expense. BROKAT and the Xxxxxxxx
companies shall permit the sellers to participate in all talks and
correspondence with the third party at their own expense. On request by
the sellers, BROKAT and the Xxxxxxxx companies shall conduct litigation
against the third party or have the affected company conduct litigation
at the sellers' expense and in accordance with their instructions,
subject to the proviso that the sellers provide BROKAT or the Xxxxxxxx
companies with security in the amount of the expected costs or
expenditures that could arise from the litigation.
18.2 The sellers shall be liable to BROKAT as joint and several debtors for
violations of the warranties and representations.
(S) 19
Limitation period
19.1 Claims by BROKAT due to violation of obligations, warranties, or
representations by the sellers in accordance with (S)(S) 13 to 18 above
shall be subject to a limitation period of two years, starting on the
effective date, subject to the provisions of (S) 18.1.
19.2 Claims according to (S) 16 shall become time-barred with regard to the
taxes or levies concerned six months after receipt of a valid assessment
not subject to a reservation of subsequent examination that contains the
determination of the tax or levy concerned, but no later than the time of
expiration for the particular determination period for the tax or levy
covered by (S) 16.
V. Measures before or after the signing date
(S) 20
Changes to the articles of incorporation of FFS, appointment of a new member to
the administrative board, sale of shares in Xxxxxxxx Software Ireland Ltd.
20.1 As soon as possible after this agreement is signed, the shareholders of
FFS shall change the articles of incorporation of that company to the
effect that fundamental resolutions named in (S) 3 shall require the
approval of a 75-percent majority of share capital. The sample of such a
resolution is attached to this agreement as annex E.
20.2 As soon as possible after this agreement is signed, the shareholders of
FFS shall change the articles of incorporation of that company to the
effect that the administrative board can consist of up to 4 members and
that decisions of the administrative board lying outside usual business
operations shall require a unanimous vote. The sample of such a resolution
is attached to this agreement as annex E.
20.3 As soon as possible after this agreement is signed, the shareholders of
FFS shall adopt a resolution that Mr. Xxxxxxx Xxxxxxxxxx shall become a
member of the FFS administrative board. The sample of such a signed
resolution and of such an appointment is attached to this agreement as
annex E.
20.4 Before this agreement is signed, FFS shall, at the request of the sellers,
have transferred to one of the sellers or another enterprise not belonging
to the Xxxxxxxx companies the shares it holds in Xxxxxxxx Software Ireland
Ltd. and all rights and responsibilities associated therewith, including
but not limited to security, letters of support, warranties, provisions,
loss assumption duties, with agreement of at least a three-year
prohibition against entering into competition with BROKAT or the Xxxxxxxx
companies.
(S) 21
Employment relationship of Xxxxxxx Xxxxxxxx
Before this agreement is signed, Xx. Xxxxxxx Xxxxxxxx shall sign an agreement
with FFS and FS regarding his activities as member of the administrative board
and administrateur delegue, a draft of which is attached to this agreement as
annex F.
VI. Rights and duties of the parties for the period after the end of step II
(S) 22
Restructuring
By exercising voting rights or other instruction authority, the sellers shall
cause companies they control directly or indirectly to perform or cause to be
performed the measures to restructure business operations and the corporate
structure, yet to be arranged in detail between the parties. Measures that
result in an effect on purchase price determination according to (S) 7.1 that is
unfavorable for the sellers and that were not arranged with BROKAT before this
agreement was signed shall not be made nor implemented. If necessary, this also
includes liquidation, merger, or other dissolution of subsidiaries, and the
transfer of business activities to a company specified by BROKAT.
(S) 23
Lock-up
The sellers shall be obligated for a period of two years, starting upon
acquisition of the BROKAT shares as the purchase price for transfer of the FFS
shares, not to pledge the BROKAT shares, sell them to third parties, nor offer
them for acquisition by third parties without prior approval from BROKAT. BROKAT
shall not oppose sale of up to 50 percent of the BROKAT shares even during the
course of this time period, after deduction of the employee shares left with the
sellers, a maximum of shares with an equivalent value of DM 15 million, in the
course of a private placement. Moreover, the sellers shall be considered to a
reasonable degree in this context in the event of a secondary placement.
(S) 24
Competition prohibition
24.1 The sellers shall be obligated, each for himself, not to practice,
operate, or promote any business activity, neither directly nor
indirectly, that is in direct competition with the business activities
conducted by the Xxxxxxxx companies, for a period of two years starting on
the effective date. In particular, the sellers shall not establish,
acquire, participate in, advise, or otherwise promote any enterprises that
are in competition in the above sense. The prohibition competition shall
apply for the activity territory for the business activities conducted by
the Xxxxxxxx companies on the effective date.
24.2 In the event the purchase offer is accepted by BROKAT, the sellers shall be
obligated, each for himself, not to practice, operate, or promote any
business activity, neither directly or
indirectly, that is in direct competition with the business activities
conducted by the Xxxxxxxx companies on the effective takeover date, for a
period of two years starting on the effective exercise date. In
particular, the sellers shall not establish, acquire, participate in,
advise, nor otherwise promote any enterprises that are in competition in
the above sense. The prohibition competition shall apply for the activity
territory for the business activities conducted by the Xxxxxxxx companies
on the effective exercise date.
24.3 Activity for or promotion of a business activity of an enterprise
controlled by BROKAT with a majority of votes or capital is not
competition.
24.4 If a judgment by a court determines that the provision of this competition
prohibition is invalid or unenforceable in toto or in parts, the parties
are in agreement that the particular court shall have the authority to
change or eliminate the scope, term, or other provisions, and to replace
such invalid or unenforceable provisions with provisions that are valid
and enforceable and that most closely approximate the objective pursued by
the agreement from the aspect of its economic purpose.
24.5 For Xxxxxxx Xxxxxxxx, the above competition prohibition shall apply with
the proviso that, after his agreement mentioned in (S) 21 ends on the
basis of circumstances for which Xxxxxxx Xxxxxxxx is not responsible, he
shall only be subject to the competition prohibition set forth in such an
agreement.
24.6 For a period of five years after the date on which this agreement is
signed, the sellers and BROKAT (as long as BROKAT has not exercised the
option for step II shares and has not acquired the majority of FFS shares)
shall not recruit any employees of the Xxxxxxxx companies nor cause third
parties to recruit employees of the Xxxxxxxx companies.
24.7 Even after acquisition of all step II shares by BROKAT, the sellers shall
treat as confidential the confidential information that becomes known to
them from their activities or their shareholder status with the particular
Xxxxxxxx companies and in connection with their activities for those
companies or their shareholder status, and not disclose it to third parties
unless such disclosure is required by law. To the extent third parties or
public agencies request confidential information from the sellers, the
sellers shall notify BROKAT at once so that BROKAT can take appropriate
actions or waive compliance with the present (S) 24.7.
24.8 Until acquisition of the step II shares by BROKAT, BROKAT shall
(1) treat as confidential and not disclose to third parties any and all
confidential information connected with the Xxxxxxxx companies, unless
such disclosure is mandatory and required by law or securities exchange
guidelines and
(2) to the extent third parties or public agencies request confidential
information from BROKAT, BROKAT shall notify the sellers at once so that
the sellers can take appropriate actions or waive compliance with the
present (S) 24.8.
VII. General regulations
(S) 25
Taxes, costs
Each party shall pay the costs incurred in connection with concluding and
implementing this agreement, and the particular company shall pay any taxes
incurred on capital.
(S) 26
Statements and declarations
The following parties are hereby authorized to receive any and all notices or
statements of will to be made to the sellers or BROKAT in accordance with the
present agreement or in connection therewith:
For the sellers:
Xx. Xxxxxxx Xxxxxxxx
Y.A.C. Finance Holding S.A.
0, xxx Xxxxx Xxxxxxxxxx/Xxxxxxxxxx
Copy to:
Xxxx Xxxxxx, Attorney at Law
Beghin Xxxxxx Loeff Xxxxxx Xxxxxxx
00, xxx Xxxxxxx Xxxxxx
X-0000 Xxxxxxxxxx
Telephone: x000-000000-0
Fax: x000-000000-000
For BROKAT:
BROKAT Infosystems AG
Attn.: Xx. Xxxxxxx Xxxxxx
Xxxxxxxxxxxxxxxx 0
00000 Xxxxxxxxx
Telephone: x00-000-000-00-0
Fax: x00-000-000-00-000
Copy to:
Xxxxx & Mailaender, Attorneys at Law
Lenzhalde 83-85, 70192 Stuttgart
Telephone: x00-000-000000
Fax: x00-000-0000000
(S) 27
Changes to the agreement
To be valid, changes and supplements to this agreement, including the present
clause itself, must be made in writing or in notarized form, if this is
required.
(S) 28
Assignments
Rights and claims under this agreement may not be assigned by the sellers nor by
BROKAT, unless the assignment is made in favor of an enterprise affiliated with
BROKAT within the meaning of (S)(S) 15 et seq. Corporation Law. In the event of
assignment, BROKAT shall remain obligated to fulfill the obligations under this
agreement.
(S) 29
Interpretation of the agreement
Should provisions of this agreement be legally invalid or unenforceable in toto
or in part, the validity of the remaining provisions of this agreement shall
remain unaffected thereby. In lieu of the invalid or unenforceable provisions, a
reasonable arrangement shall apply that most closely approximates the economic
purpose which the parties wished to achieve.
(S) 30
Applicable law
This agreement is governed by and shall be construed in accordance with the laws
of the Federal Republic of Germany, unless Luxembourg law is applicable on the
basis of mandatory provisions of Luxembourg law or the private international law
of the Federal Republic of Germany.
(S) 31
Arbitration
Any and all disputes arising from or in connection with this agreement shall be
regulated by an arbitration procedure, to the exclusion of courts of general
jurisdiction. The arbitration procedure is regulated in an arbitration agreement
attached to this agreement as annex D.
Stuttgart, date:
For BROKAT Infosystems AG
Stuttgart, November 2, 1999
For the sellers
Xxxxxxx Xxxxxxxx
Annex A
1. Valuation dates: 9/30/99 12/31/99 3/31/00 6/30/00
Weighting of reporting dates 4.30 1.15 1.10 1.05 1.00
Base price in Weighted base prices in thousands of DM
thousands of DM
2. Base prices 22,000 25,300 24,200 23,100 22,000
3. Targets Plan results in thousands of DM (cumulative from 1/1/99 to
valuation date)
Sales 14,500 20,000 26,500 33,000
Result -4,418 -5,891 -6,208 -6,525
Orders on hand 8,000 8,000 8,000 8,000
4. Actual results (example) Imputed actual results in thousands of DM (cumulative from
1/1 to valuation date)
Sales according to U.S. GAAP 14,500 20,000 26,500 33,000
Result according to U.S. -4,418 -5,891 -6,208 -6,525
GAAP
Orders on hand according to 8,000 8,000 8,000 8,000
U.S. GAAP
5.a. Degree of target Unweighted
achievement (actual/target)
Sales according to U.S. GAAP 100.00% 100.00% 100.00% 100.00%
Result according to U.S. 100.00% 100.00% 100.00% 100.00%
GAAP
Orders on hand according to 100.00% 100.00% 100.00% 100.00%
U.S. GAAP
5.b. Weighting Weighting of Weighted
valuation criteria 5.25
Sales according to U.S. GAAP 2.00 200.00% 200.00% 200.00% 200.00%
Result according to U.S. 3.00 300.00% 300.00% 300.00% 300.00%
GAAP
Orders on hand according to 0.25 25.00% 25.00% 25.00% 25.00%
U.S. GAAP
Degree of target 100.00% 100.00% 100.00% 100.00%
achievement
6. Purchase price Thousands of DM 25,300 24,200 23,100 22,000
Agreement
Regarding the Sale and Transfer of Shares
between
1 a) Y.A.C. Finance Holding S.A.
0, xxx Xxxxx Xxxxxxxxxx/Xxxxxxxxxx
(hereinafter referred to as "YAC")
and
1 b) Xx. Xxxx Xxxxxxxx
(hereinafter referred to as "Xxxx Xxxxxxxx")
and
1 c) Xx. Xxxxxxx Xxxxxxxx
(hereinafter referred to as "Xxxxxxx Xxxxxxxx")
(the parties 1 [a] to [c] hereinafter referred to collectively as "the sellers")
and
2. BROKAT Infosystems AG,
IndustriestraBe 3, 70565 Stuttgart
(hereinafter referred to as "BROKAT")
(the sellers and BROKAT hereinafter referred to collectively as "the parties")
Preamble
The parties have concluded an agreement (hereinafter referred to as "the
agreement") dated November 2, 1999/December 20, 1999, for the purchase and
transfer of shares in Xxxxxxxx Financial Software S.A. (hereinafter referred to
as "FFS"), Xxxxxxxx Software S.A. (hereinafter referred to as "FS"), and
Xxxxxxxx Software AG (Germany) (hereinafter referred to as "FSD").
Section 4 of the named agreement provided that the sellers should offer the
following shares held by them for transfer to BROKAT:
YAC: 57,697 shares of FFS
Xxxxxxx Xxxxxxxx: 3 shares of FFS, 1 share FS, and 1 share of FSD
Xxxx Xxxxxxxx: 1 share of FS
hereinafter referred to collectively as "step II shares".
This option was able to be exercised by BROKAT as of certain option dates.
1. Exercising the option
BROKAT states that the option granted in (S) 4 is exercised as of
the exercise date December 31, 1999, as provided for in (S) 6.1 of the
agreement.
2. Purchase price
The purchase price to be calculated in accordance with (S) 7.1 of the
agreement, taking into account achievement of the targets in excess of
obligations, increased earnings potential, and the high level of engagement
by executives to achieve the targets, is
DM 35,760,000
(thirty-five million seven hundred sixty thousand German marks)
According to (S) 7.2 of the agreement, BROKAT has the authority to discharge
its duty to pay the purchase price in cash by way of performance of a
fulfillment instead of by transferring or issuing no-par shares from BROKAT
to the sellers.
BROKAT hereby states that it is exercising this substitution authority.
Accordingly, the step II shares are to be transferred according to (S) 8.2
(2) by the sellers to BROKAT without delay in the course of an increase in
the share capital of BROKAT, free of cost to the sellers, as a non-cash
contribution of the corresponding BROKAT shares to the sellers. In
--
accordance therewith, BROKAT shall concurrently transfer the 182,838 BROKAT
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shares to the sellers. The transfer of the BROKAT shares to the sellers
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shall be performed to the sellers no later than March 22, 2000, to a
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securities account still to be named.
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3. Number of shares going to the sellers
For the purchase price of DM 35,760,000, a total of 182,838 BROKAT
shares go toward the purchase price according to (S) 7.2 and the
determination of the numbers of shares to be transferred regulated in that
rule (hereinafter referred to as "BROKAT shares").
These are distributed among the sellers as follows:
YAC: 182,820 BROKAT shares
Xxxxxxx Xxxxxxxx: 15 BROKAT shares
Xxxx Xxxxxxxx: 3 BROKAT shares
4. Effective transfer date
The transfer of shares in the Xxxxxxxx companies FFS, FS, and FSD shall be
with effect as of January 1, 2000.
5. Employee participation
As a supplement to (S) 11.1 of the agreement, it is hereby agreed that the
sellers will additionally keep a total of 14,767 BROKAT shares from
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their own holdings of BROKAT shares for the employees of FFS and FS to
implement a success-related employee participation program. They shall be
offered for takeover by the employees of FFS and FS according to a separate
agreement, insofar as the goals defined in a joint business plan prepared by
BROKAT and FFS or FS are fulfilled. Thirty percent of these shares offered
for takeover shall be offered for takeover upon reaching the target in the
2000 fiscal and calendar year, the remaining 70 percent of shares upon
reaching the target in the 2001 fiscal and calendar year. Distribution of
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the 29,524 employee shares under (S) 11 of the agreement shall not be
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affected by fulfillment or achievement of the targets under the business
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plan.
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If and insofar as the goals are not achieved, the sellers shall utilize
14,757 shares from the employee participation program according to
instructions from BROKAT, and pay the sales proceeds to a recipient
specified by BROKAT after deducting any applicable costs, in accordance with
more specific instructions from BROKAT.
The provisions of (S) 11 of the agreement shall apply by analogy for this
quantity of
14,767 BROKAT shares, with the exception of the allotment arrangements. In
particular, the sellers shall refrain from exercising and asserting any
administrative rights associated with those shares during the period they
are held by the sellers, or shall transfer such rights to third parties on
the instructions of BROKAT.
Furthermore, the sellers shall transfer these shares to BROKAT Beteiligungen
GmbH (or its legal successor) as trustee immediately after acquiring them,
and shall instruct the latter to hold and utilize the shares in accordance
with this agreement and the participation agreement yet to be concluded, and
to fulfill the obligations undertaken vis-a-vis the employees and BROKAT.
The provisions of (S) 11 of the agreement for the BROKAT shares named in (S)
11.1 (1) there shall remain unchanged.
Stuttgart/Luxembourg, February 22, 2000
For BROKAT Infosystems AG For the sellers
Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxxxx
CFO/Managing Board
Xxxxxxx Xxxxxxxxxx
Translation
Agreement
Regarding the Sale and Transfer of Shares
between
1 a) Y.A.C. Finance Holding S.A.
0, xxx Xxxxx Xxxxxxxxxx/Xxxxxxxxxx
(hereinafter referred to as "YAC")
and
1 b) Xx. Xxxx Xxxxxxxx
(hereinafter referred to as "Xxxx Xxxxxxxx")
and
1 c) Xx. Xxxxxxx Xxxxxxxx
(hereinafter referred to as "Xxxxxxx Xxxxxxxx")
(the parties 1 [a] to [c] hereinafter referred to collectively as "the sellers")
and
2. BROKAT Infosystems AG,
Xxxxxxxxxxxxxxxx 0, 00000 Xxxxxxxxx
(hereinafter referred to as "BROKAT")
(the sellers and BROKAT hereinafter referred to collectively as "the parties")
Preamble
The parties have concluded an agreement (hereinafter referred to as "the
agreement") dated November 2, 1999/December 20, 1999, for the purchase and
transfer of shares in Xxxxxxxx Financial Software S.A. (hereinafter referred to
as "FFS"), Xxxxxxxx Software S.A. (hereinafter referred to as "FS"), and
Xxxxxxxx Software AG (Germany) (hereinafter referred to as "FSD").
Section 4 of the named agreement provides that the sellers should offer the
following shares held by them for transfer to BROKAT:
YAC: 57,697 shares of FFS
Xxxxxxx Xxxxxxxx: 3 shares of FFS, 1 share FS, and 1 share of FSD
Xxxx Xxxxxxxx: 1 share of FS
This option can be exercised by BROKAT as of certain option dates.
1. Extension of the exercise period
The parties agree that the period for exercising the option granted in (S) 4
shall be extended as of the exercise date December 31, 1999, until
Wednesday, February 23, 2000, inclusive, in accordance with (S) 6.1 of the
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agreement.
2. Authoritative share price on exercise of the option
The closing price in presence trading at the Frankfurt securities
exchange on February 2, 2000, in the amount of 300.00 euros is hereby
determined as the authoritative share price on exercise of the option, in
accordance with (S) 7.2 of the agreement. Taking into account the 1:3 stock
split for BROKAT stock executed on July 7, 2000, a price of 100.00 euros for
the new BROKAT stock (with a proportional amount of 1.00 euro of the share
capital after the stock split) is authoritative for the calculation
according to (S) 7.2 of the agreement.
3. Continuation in effect for all further content of the agreement
The remaining provisions of the agreement for purchase and
transfer of shares dated November 2, 1999/December 20, 1999, shall remain
unchanged.
Stuttgart/Luxembourg, February 11, 2000
For BROKAT Infosystems AG For the sellers
Xxxxxxx Xxxxxxx/CFO Xxxxxxx Xxxxxxxx
Xxxxx Xxxxxx/VP Finance Group EMEA
