EXHIBIT 2.1
18 January 2001
TRANSWITCH III, Inc.
and
XXXXXX XXXXXXXX
and
XXXX XXXXXX
and
BAUDOUCIN XXXXXXX
and
XXXXXX XXXXXXXX
and
XXXXXX XXXXXXXXXX
and
XXXXXXXXX XXXXXXXXXX
and
XXXXXXXX XXXXX
Share Purchase Agreement
in respect of ADV Engineering
SHARE PURCHASE AGREEMENT
BETWEEN THE UNDERSIGNED:
(1) TRANSWITCH III, Inc., a Delaware Corporation having its principal place
of business at 0 Xxxxxxxxxx Xxxxx, Xxxxxxx, XX 00000, XXX, represented by
Xxx Xxxx, (the "Purchaser");
(2) Xxxxxx Xxxxxxxx, a French citizen, married under the matrimonial regime
of the "communaute legale reduite aux acquets" born on 28 February 1959
in Maison Caree, Algeria and resident at 00 xxxxx xx Xxxx x'Xxxxx, 00 000
Xxxxxxxx Xxxxx, Xxxxxx;
(3) Xxxx Xxxxxx, a French citizen, married under the matrimonial regime of
the "separation de biens" born on 24 February 1936 in Xxxxxxx Xxx,
Algeria and resident at 000, xxxxxx Xxxxxxx, 00000 Xxxxx, Xxxxxx;
(4) Baudouin Xxxxxxx, a French citizen, widowed, born on 25 May 1938 in
Strasbourg, France and resident at 00, xxx xx Xxxxxxx Xxxxxxx, 00000 Xxxx
Compte Xxxxxx, France;
(5) Xxxxxx Xxxxxxxx nee Benichou, a French citizen, married under the
matrimonial regime of the "communaute legale reduite aux acquets" born on
11 July 1958 in Paris, Franceand resident at 00 xxxxx xx Xxxx x'Xxxxx,
00000 XxxxxxxxXxxxx, Xxxxxx;
(6) Xxxxxx Xxxxxxxxxx, a French citizen, married under the matrimonial regime
of the "communaute legale universelle" born on 11 May 1928 in Cavaillon,
France and resident at 000, xxxxxx xx xx Xxxxxxxx, 00000 Xxxxxx;
(7) Xxxxxxxxx Xxxxxxxxxx, a French citizen, married under the matrimonial
regime of the "communaute legale universelle" born on 24 August 1927 in
Xxxx xxx Orgues, France and resident at 000, xxxxxx xx xx Xxxxxxxx, 00000
Xxxxxx; and
(8) Xxxxxxxx Xxxxx a Belgian citizen, married under the matrimonial regime of
the "separation de biens" born on 19 February 1962 in Brussels, Belgium
and resident at 00, Xxxxxxxxxxxx, 0000 Xxxxxxxxx, Xxxxxxx (together with
Xxxxxx Xxxxxxxx, Xxxx Xxxxxx, Baudouin Xxxxxxx, Xxxxxx Xxxxxxxx, Xxxxxx
Xxxxxxxxxx and Xxxxxxxxx Xxxxxxxxxx, the "Vendors").
WHEREAS:
(A) ADV Engineering is a societe anonyme organised under the laws of France,
having its registered office at Parc Technologique du Canal, 00 Xxxxxx xx
x'Xxxxxx, 00000 Xxxxxxxxxx-Xx-Xxxx, Xxxxxx, registered under number 417
950 854 RCS Toulouse.
(B) The Purchaser is a part of the corporate group of TranSwitch Corporation,
a corporation organised and existing under the laws of Delaware with its
principal place of business at 0 Xxxxxxxxxx Xxxxx, Xxxxxxx, XX 00000,
XXX.
(C) The Vendors wish to sell and the Purchaser wishes to purchase 5,000
shares of FRF 100 being the whole of the share capital of the Company
upon the terms and subject to the conditions hereinafter set out.
(D) Simultaneously with the execution of this Agreement, the Purchaser,
Xxxxxx Xxxxxxxx and Xxxxxxxx Xxxxx have signed a warranty agreement
pursuant to which these Vendors have made certain representations and
given certain warranties to the Purchaser in respect of the Company
(E) Simultaneously with the execution of this Agreement, the parties have
signed an accord de confidentialite, a Registration Rights Agreement and
an Escrow Agreement. The accord de confidentialite replaces the accord de
confidentialite signed by the Company and TranSwitch Corporation on 22
November 2000.
(F) On the date hereof, TranSwitch shall grant stock options to all employees
of the Company, such employees as consideration signing an amendment to
their employment agreement in relation mainly to (i) future employee
inventions or other intellectual property rights developed by employees
and (ii) non-competition matters.
IT IS HEREBY AGREED AS FOLLOWS:
1 Definitions / Interpretation
1.1 The Recitals and the Schedules constitute an integral part of this
Agreement.
1.2 In this agreement the following expressions shall have the following
meanings unless the context otherwise requires:
"Agreement" means this sale and purchase agreement;
"Business Day" means any day (other than Saturday) upon which banks
are open for business in Paris and New York;
"Company" means ADV Engineering, details of which are set out in
Schedule 1;
"Closing Date Anniversary" means the date falling one year after the
date hereof;
"Escrow Agreement" means the escrow agreement to be entered into
between the Vendors, TranSwitch Corporation and State Street Bank and
Trust Company on the date hereof ;
"NNM" means the NASD National Market;
"Parties" means the parties to this Agreement and "Party" means any of
them;
"Payment 1" means the price to be paid by the Purchaser to the Vendors
pursuant to Clause 3.2;
"Payment 2" means the price to be paid by the Purchaser to the Vendors
pursuant to Clause 3.3;
"Security" includes for the purpose of this Agreement any "surete"
"reelle" or "personnelle", "droit reel accessoire", "droit de
retention", "reserve de propriete", "delegation", "subrogation",
"fiducie", "cession fiduciaire" "en propriete" or "a titre de
garantie" or any "mesure conservatoire" or "voie d'execution", as well
as agreement, option, undertaking, offer or other real or personal
right ("droit reel ou personnel") or other obligation which has the
purpose or effect of restricting in any manner the ownership or the
transferability of the relevant asset or right;
"Shares" means 5,000 shares being the whole of the share capital of
the Company, each held as specified in Schedule 1;
"TranSwitch Common Stock" means the shares of common stock in
TranSwitch Corporation to be issued pursuant to this Agreement;
"Warranty Agreement" means the warranty agreement to be entered into
between Xxxxxx Xxxxxxxx, Xxxxxxxx Xxxxx and the Purchaser on the date
hereof.
2 Sale and Purchase of the Shares
Each of the Vendors hereby sells the Shares specified against his name in
Schedule 1 free from any Security to the Purchaser who hereby purchases
such Shares.
3 Price
3.1 The price for the Shares, is expressed in shares of common stock in
TranSwitch Corporation in the case of Payment 1 and assuming that the
conditions set out in Schedule 3 are fulfilled, either in shares of
common stock in TranSwitch Corporation or cash, at the option of the
Purchaser in the case of Payment 2. The price will be payable in two
instalments as set out below in proportion to the Vendors' ownership
in the Company as set out in Schedule 1.
3.2 Payment 1
3.2.1 On the date hereof, the Purchaser has transferred (or caused
the transfer of) a number of shares of common stock of
TranSwitch Corporation calculated in accordance with Clause
3.2.2 below (the "Payment 1 Shares") to the Vendors in
proportion to their shareholdings as set out in Schedule 1.
The exact number of shares transferred to each Vendor,
rounded up to the nearest whole share, is set out in
Schedule 2.
3.2.2 The number of Payment 1 Shares has been calculated as USD
5,000,000 divided by the average of closing prices of
TranSwitch Corporation's publicly traded common stock as
reported on the NNM during the period of 30 Business Days
ending two Business Days prior to the date hereof rounded up
to the nearest whole share.
3.3 Payment 2
3.3.1 Subject to Clause 4 below, on the date which is 30 days
after the Closing Date Anniversary and subject to the
fulfilment of the conditions set out in Schedule 3, the
Purchaser shall in its sole discretion elect to transfer
either:
(i) USD 5,000,000 in cash; or
(ii) a number of shares of common stock of TranSwitch
Corporation (rounded up to the nearest whole share)
calculated in accordance with Clause 3.3.2 below (the
"Payment 2 Shares")
to the Vendors in proportion to their shareholdings as set
out in Schedule 1. The exact number of shares being
transferred to each Vendor shall be rounded up to the
nearest whole share.
3.3.2 The number of Payment 2 Shares shall be calculated as USD
5,000,000 divided by the average of closing prices of
TranSwitch Corporation's publicly traded common stock as
reported on the NNM during the period of 20 Business Days
ending two Business Days prior to the Closing Date
Anniversary rounded up to the nearest whole share.
3.3.3 The Purchaser has on the date hereof delivered to the
Vendors a guarantee by TranSwitch Corporation in favour of
the Vendors as security interest for Payment 2. For the
avoidance of doubt, such security interest shall be without
prejudice to the Purchaser's right to satisfy Payment 2 in
either common stock or cash as set out in Clause 3.3.1
above.
4 Escrow
4.1 Provided that the conditions for the payment of Payment 2 as set out
in Schedule 3 are satisfied on the Closing Date Anniversary, on the
date which is 30 days after the Closing Date Anniversary an amount
equal to the lower of:
4.1.1 the aggregate amount of claims made under the Warranty
Agreement and not finally settled as at the date 30 days
after the Closing Date Anniversary; and
4.1.2 USD 1,000,000
represented either by (i) common stock of TranSwitch issued to the
Vendors, if the Purchaser has elected to make Payment 2 in shares of
common stock or (ii) cash, if the Purchaser has elected to make
Payment 2 in cash shall be withheld by the Purchaser from Payment 2
and held in escrow by State Street Bank and Trust Company as escrow
agent in accordance with the Escrow Agreement as security for the
Vendors' obligations under the Warranty Agreement. If no claims have
been made under the Warranty Agreement or no such claims remain
unsettled as at the date 30 days after the Closing Date Anniversary,
Payment 2 will be paid to the Vendors in full in accordance with
Clause 3.3 above.
4.2 For the avoidance of doubt, the number of shares of common stock of
TranSwitch Corporation, to be withheld by the Purchaser and held in
escrow shall be determined taking into account the average of closing
prices set out in clause 3.3.2 above, rounded upwards to the nearest
whole number.
5 Investment Representations of the Vendors
5.1 Each of the Vendors is an "accredited investor" as that term is
defined in Rule 501(a) of Regulation D promulgated by the United
States Securities and Exchange Commission ("Commission") pursuant to
the Securities Act of 1933 as amended (the "Act").
5.2 The Vendors understand and acknowledge that the TranSwitch Common
Stock to be received by the Vendors under this Agreement has not been
registered with the Commisson, is illiquid in nature and cannot be
transferred except pursuant to a registration statement declared
effective by the Commission or pursuant to an exemption from such
registration. None of the Vendors has any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to
the TranSwitch Common Stock.
5.3 Each of the Vendors is able to fend for himself or itself, can bear
the economic risk of the investment in TranSwitch Common Stock and
has such knowledge and experience in financial or business matters
that he or it is capable of evaluating the merits and risks of the
investment in the TranSwitch Common Stock. Each Vendor that is not a
natural person has not been organized solely for the purpose of
acquiring the TranSwitch Common Stock.
5.4 Each of the Vendors understands that the shares of TranSwitch Common
Stock are characterized as "restricted securities" under the federal
securities laws of the United States inasmuch as such shares are
being acquired from Purchaser in a transaction not involving a public
offering, and that under such laws and applicable regulations such
securities may be resold without registration under the Act only in
certain limited circumstances.
5.5 No offer to purchase the TranSwitch Common Stock was made in the
United States, nor was any selling effort made to any of the Vendors
or otherwise in the United States with respect to the TranSwitch
Common Stock.
5.6 At the time this Agreement and all other documents relating to
Vendors' purchase of the TranSwitch Common Stock were executed and
delivered, each of the Vendors was outside the United States.
5.7 None of the Vendors is a "U.S. person" as defined in Regulation S
("Regulation S") promulgated by the Commission under the Act, or a
resident of or otherwise located in the United States, or acquiring
the TranSwitch Common Stock for the account or benefit of any U.S.
person.
5.8 Vendors will resell the TranSwitch Common Stock only (i) in accordance
with the provisions of Regulation S, (ii) pursuant to an effective
registration statement under the Act, or (iii) pursuant to an
available exemption from registration under the Act; and otherwise in
accordance with this Agreement.
5.9 None of the Vendors has offered, sold, or entered into any transaction
(e.g., the purchase of any put or sale of any call) involving the sale
or potential sale of any shares of TranSwitch common stock in the
United States or to U.S. persons.
5.10 Each of the Vendors understands agrees and acknowledges that his or
its purchase of the TranSwitch Common Stock is contingent upon the
express condition that TranSwitch be required to refuse to register
any transfer of the TranSwitch Common Stock not made in accordance
with the provisions this Agreement and either the provisions of
Regulation S or an effective registration statement under the Act.
5.11 Each of the Vendors understands that the TranSwitch Common Stock is
being offered and sold to it in reliance upon specific exemptions from
the registration requirements of United States Federal and state
securities laws and that TranSwitch is relying upon the truth and
accuracy of the representation, warranties, agreements,
acknowledgments and understanding of Vendors set forth herein in order
to determine the applicability of such exemptions and the suitability
of the Vendors to acquire the TranSwitch Common Stock. Each of the
Vendors is familiar with and understands the terms and conditions
contained in Regulation S.
5.12 It is understood that the certificates evidencing the shares of
TranSwitch Common Stock will bear a legend substantially similar to
the following:
"The Securities represented hereby have not been registered under the
Securities Act of 1933, as amended, and may not be sold, transferred
or otherwise disposed of except in accordance with the terms thereof
and unless registered with the Securities and Exchange Commission of
the United States and the securities regulatory authorities of certain
states or unless an exemption from such registration is available."
6 Closing
6.1 The Vendors have on the date hereof delivered to the Purchaser:
6.1.1 share transfer forms, duly established, dated and signed in
favour of the Purchaser relating to the Shares;
6.1.2 the share register and the shareholder accounts of the
Company evidencing that each Vendor is the owner of all the
Shares which he/she is transferring, such register and
shareholder accounts containing no mention of any Security
on the shares;
6.1.3 the minutes of the meeting of the board of the Company
approving the Purchaser as a new shareholder pursuant to its
statuts;
6.1.4 the minutes of the shareholders meeting of the Company
having appointed such directors as have been proposed by the
Purchaser with effect on the date hereof;
6.1.5 letters of resignation, with effect on the date hereof, of
existing directors of the Company, whereby each director
acknowledges that its rights against the Company, the
Purchaser. and TranSwitch Corporation are fully satisfied
and that he waives any right to make a claim or bring any
action of any nature whatsoever against the Company,
TranSwitch Corporation or the Purchaser, except as may arise
out of a breach of this Agreement by Purchaser.
6.1.6 letters addressed to the Company and Purchaser and signed by
each selling shareholder who is not a Director of the
Company acknowledging that his or her rights against the
Company, the Purchaser and TranSwitch Corporation are fully
satisfied and that he or she waives any right to make a
claim or bring any action of any nature whatsovever against
the Company, TranSwitch Corporation or the Purchaser, except
as may arise out of a breach of this Agreement by Purchaser.
6.2 The Purchaser has on the date hereof delivered to the Vendors:
6.2.1 a copy of TranSwitch Corporation's instruction to State
Street Bank to deliver the shares referred to in Schedule 2
to the Vendors;
6.2.2 the guarantee by TranSwitch Corporation referred to in
Clause 3.3.3 above; and
6.2.3 the resolution appointing Xx. Xxxxxxxx as managing director
(Directeur General) of the Company to be considered at a
meeting of the board of directors of the Company as soon as
possible after the execution of this Agreement.
6.3 Immediately following Closing, the Purchaser shall issue options of
TranSwitch Corporation common stock under TranSwitch Corporation's
Non-qualified Stock Option Plan as modified by an addendum approved by
the board of directors of TranSwitch Corporation on the date hereof to
those employees of the Company selected by the Purchaser and Xxxxxx
Xxxxxxxx.
7 Representation and Warranties
7.1 Capacity
Each Party to this Agreement, acting for his own account, has full
capacity and is duly authorised to enter into this Agreement and to
enter into and perform the obligations hereunder. In particular, each of
the Vendors, acting for his/her own account, is duly authorised to sign
this Agreement and to transfer the Shares, free of any Security.
7.2 Warranties of the Vendors
The sale and purchase of the Shares is subject to all applicable
statutory warranties as well as those contained in the Warranty
Agreement.
7.3 Warranties of the Purchaser
7.3.1 The Purchaser warrants that it is entitled to transfer to the
Vendors the full ownership of the TranSwitch Common Stock on the
terms of this Agreement without the consent of any third party.
The TranSwitch Common Stock has been duly and validly allotted
and issued and is fully paid.
7.3.2 The Purchaser warrants that the terms and conditions of
TranSwitch Corporation's Non-qualified Stock Option Plan for
2001 are on the date hereof similar in all material respects to
those of the Non-qualified Stock Option Plan in place for 2000
with the exception of the addendum referred to in Clause 6.3
above.
8 Miscellaneous
8.1 Notices
Any demand, notice or communication under this Agreement shall be in
writing and delivered by hand with acknowledgement of receipt or sent
by registered post with acknowledgement of receipt or sent by
facsimile transmission:
8.1.1 in the case of the Purchaser to TranSwitch III, Inc. at 0
Xxxxxxxxxx Xxxxx, Xxxxxxx, XX 00000, XXX, marked for the
attention of Xxx Xxxx;
8.1.2 in the case of the Vendors to the Vendors' addresses as
indicated in this Agreement or, at the option of the Purchaser,
to the Vendors' Agent's address;
or such other address notified by any party to the others as provided
above. Notifications shall be deemed to be made when received.
8.2 Agent
The Vendors hereby irrevocably appoint Xx Xxxxxx Xxxxxxxx, who accepts
this appointment, as agent to give and receive all notices, to give
all consents, to exercise the rights and fulfil all obligations of the
Vendors on their behalf under this Agreement and that any decision of
such agent shall bind the Vendors. It is expressly agreed that the
expression "the Vendors" shall be construed as meaning "the
representative of the Vendors" for any notice to be given or received
under this Agreement.
In the event that Xx Xxxxxx Xxxxxxxx should for any reason become
incapable of fulfilling his duties as agent of the Vendors under this
Agreement while this Agreement is still in force, the Vendors or their
successors agree to appoint another agent with the same powers and
responsibilities as provided herein within 30 Business Days of such
event and promptly give written notice thereof to the Purchaser.
8.3 Announcements
Without prejudice to the press release to be published by the
Purchaser following the execution of this Agreement and to
announcements or disclosures required by US and French laws or stock
exchange regulations or practices, the Vendors (taken together) and
the Purchaser agree not to make any public announcement with respect
to the
transaction contemplated by this Agreement nor to disclose its terms
without the prior consent of the other party, such consent not to be
unreasonably withheld.
8.4 Assignment
None of the parties hereto shall be entitled to assign its rights or
obligations hereunder without the prior written consent of the other
parties save that the Purchaser shall be entitled to assign the benefit
of all of its rights and obligations under this Agreement to one of its
group companies, namely a company of which more than 50 per cent. of the
share capital and voting rights is controlled, directly or indirectly,
by the Purchaser. It shall notify such assignment to the Vendors or
their respective successors within 8 Business Days.
8.5 Reorganisation
The rights and obligations of the parties to this Agreement shall not be
affected by any amalgamation, merger, demerger or "apport partiel
d'actif", or the transfer of all or part of the assets and liabilities
of the Company or the Purchaser.
8.6 Waivers
A waiver by any party of any of its rights under this Agreement must, in
order to be valid, be made in writing.
8.7 Expenses
Each party hereto shall bear its own fees and expenses in connection
with this Agreement and the transactions contemplated herein as well as
any taxes required by law to be paid by such Party.
8.8 Successors
All rights and obligations of each Party shall be binding and incur to
the benefit of their respective successors, indivisibly (de facon
indivisible) with the Party concerned and among themselves. In the event
of the decease of any of the Vendors, any payment due to that person
pursuant to Clause 3.3 above will automatically be made to its
respective successor.
9 Governing Law
This Agreement is governed by and shall be construed in accordance with
French law, with the exception of the provisions relating to the escrow
(Clause 4), which shall be governed and construed in accordance with the
law of Massachusetts.
10 Arbitration/Expert
10.1 All disputes arising out of or connected with this Agreement,
including a dispute as to the validity or existence of the agreement,
shall be resolved by arbitration in Brussels conducted in English by a
sole arbitrator of Belgian nationality pursuant to the rules of the
United Nations Commission on International Trade Law ("UNCITRAL"). The
appointing authority for the purposes of the UNCITRAL rules shall be
the International Chamber of Commerce ("ICC") acting in accordance
with the rules adopted by the ICC for that purpose.
The decision of the sole arbitrator will be final, the parties hereby
formally waiving their right to appeal the decision. The sole
arbitrator is authorised to carry out whatever
investigation it deems necessary. The sole arbitrator will decide as
to how expenses, legal fees and other costs arising out of the
arbitration will be borne by the parties.
Unless otherwise agreed by both parties, the arbitrator' s decision
shall be made within six months of the date of appointment of the
arbitrator.
10.2 Unless the parties agree in writing otherwise (and in particular
decide, without recourse to a third party expert, that the condition
set out in Schedule 3 has or has not been satisfied), the decision as
to whether such condition has been satisfied on the Closing Date
Anniversary (and hence the final determination of the consideration
for the purchase of the Shares), shall be made by an expert within the
meaning of article 1592 of the Civil Code. The parties agree that the
expert shall be a person appointed as set out in Clause 10.1 above. If
for any reason no such person could be appointed or make a decision,
the expert shall be appointed by the President of the Tribunal de
Grande Instance de Paris at the request of either party. Prior to
making a final decision, the expert shall meet with the parties and
hear their arguments, provided however that the principe du
contradictoire shall at all time be complied with by the expert.
Signed in Paris
On 18 January 2001
In 10 originals
THE PURCHASER
-------------
TRANSWITCH III Inc.
Represented by:
/s/ Xxxxxx Xxxx
---------------
Name: Xxxxxx Xxxx
Title: Attorney-in-fact
THE VENDORS
-----------
/s/ Xxxxxx Xxxxxxxx
-----------------------
Name: Xxxxxx Xxxxxxxx
Represented by: Xxxxxx Xxxxxxxx
as Attorney-in-fact
/s/ Xxxxxx Xxxxxxxx
-----------------------
Name: Xxxx Xxxxxx
Represented by : Xxxxxx Xxxxxxxx,
as Attorney-in-fact
/s/ Xxxxxx Xxxxxxxx
-----------------------
Name: Baudouin Xxxxxxx
Represented by : Xxxxxx Xxxxxxxx,
as Attorney-in-fact
/s/ Xxxxxx Xxxxxxxx
-----------------------
Name: Xxxxxx Xxxxxxxx
Title:
Represented by : Xxxxxx Xxxxxxxx,
as Attorney-in-fact
/s/ Xxxxxx Xxxxxxxx
------------------------
Name: Xxxxxx Xxxxxxxxxx
Title:
Represented by : Xxxxxx Xxxxxxxx,
as Attorney-in-fact
/s/ Xxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxxxxx Xxxxxxxxxx
Title:
Represented by : Xxxxxx Xxxxxxxx,
as Attorney-in-fact
/s/ Xxxxxx Xxxxxxxx
-------------------------
Name: Xxxxxxxx Xxxxx
Title:
Represented by : Xxxxxx Xxxxxxxx,
as Attorney-in-fact
