SHARE EXCHANGE AGREEMENT
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DATED SEPTEMBER 29, 1998
by and between
ACTIVISION, INC.
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and
Xx. Xxxxx d'OLEIRE
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and
Mrs. Xxxxxxx d'OLEIRE
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and
Ms. Fiona d'OLEIRE
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and
Ms. Alexa d'OLEIRE
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acting as
DR. d'OLEIRE BETEILIGUNGSGESELLSCHAFT bR
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and
Xx. Xxxxxxxx X.X. XXXXXXX
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and
Xx. Xxxxxx X. XXXX
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Acquisition of the whole of the
issued share capital of:
CD-CONTACT DATA GmbH
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CONTENTS
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ARTICLE HEADING PAGE
1 Definitions 6
2 Sale and Purchase 13
3 Consideration 13
4 Conditions Precedent 14
5 Completion 17
6 The Stock Retention 20
7 Tax Indemnity 22
8 Warranties 23
9 Restrictions on Sale of the Consideration
Stock Activision 28
10 Registration of the Consideration
Stock Activision 29
11 Restrictions 36
12 Announcements and Confidentiality 39
13 Costs 40
14 Assignment 40
15 General 41
16 Applicable Law and Jurisdiction 42
LIST OF SCHEDULES
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1 : Escrow Agreement
2 : The Warranties
3 : Notarial Deed of Transfer of Shares
4 : Description of Consideration Stock Activision and allocation
thereof
5 : Employment Agreements with Key Personnel
6 : Form of opinion to be rendered by US counsel regarding the issuance
of Consideration Stock Activision
7 : Resignation letter from Xx. Xxxxx d'Oleire and
Xx. X. Xxxxxx
8 : d'Oleire Loans and confirmation of the full funding thereof
9 : Terms of the Merck Xxxxx & Co. and Rabobank blocked accounts
10 : KPMG Pooling Letter
LIST OF EXHIBITS
1.4 List of shareholders and share ownership
1.5 Ownership of Subsidiaries
1.8 : Accountants Certificates
1.11 : Pooling Representation lettter
2.1 : Articles of association of the Companies
2.2 : Extracts from the Trade Register of the Chamber of Commerce
2.3 : Powers of Attorney
3.1 : The Accounts
3.2 : Interim Financial Statements
3.6 : List of bank accounts and signatories
5.1 : List of Employees, Managing Directors, Consultants, etc.
6.3 : Intellectual Property Rights
7.1 : Overview of Insurance Policies
8.2 Description of Properties
9.1 : Listing of contracts
11.1 : Overview of the Facilities
THE UNDERSIGNED:
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1. the corporation established under the laws of the State of
Delaware, ACTIVISION, INC., having its principal office at 0000
Xxxxx Xxxx Xxxxxxxxx, Xxxxx Xxxxxx, Xxxxxxxxxx, 00000, Xxxxxx
Xxxxxx of America, to be referred to hereinafter as: the "Buyer";
and
2.(a) Xx. Xxxxx d'Oleire, a citizen of Germany, and
Mrs. Xxxxxxx d'Oleire, a citizen of Germany, and
Ms. Fiona d'Oleire, a citizen of Germany, and
Ms. Alexa d'Oleire, a citizen of Germany,
the aforementioned persons all residing at Am Tanneneck in 40667
Meerbusch, acting as Dr. d'Oleire Beteiligungsgesellschaft bR, to
be referred to hereinafter as: "Vendor A";
and
2.(b) Xx. Xxxxxxxx X.X. Xxxxxxx, a citizen of the Netherlands, residing
at Xxxxxxxxxxxxxx 00 X-XX xx 0000 Xxxxxxxx, Xxxxxxx, to be referred
to hereinafter as: "Vendor B";
and
2.(c) Xx. Xxxxxx X. Xxxx, a citizen of the Netherlands, residing at
Xxxxxxxxxxxxxx 000 xx 0000 Xxxxxxx, Xxxxxxx, to be referred to
hereinafter as: "Vendor C";
the parties under 2.(a), 2.(b) and 2.(c) to be referred to hereinafter
collectively as: the "Vendors";
WHEREAS:
(A) The Vendors are the sole shareholders of the private company with
limited liability CD-Contact Data GmbH, having its registered office at
Meerbusch in Germany, (the "Company");
(B) The Company and its Subsidiaries (as defined hereinafter) are engaged in
the development, analysis, design, implementation, sale and distribution
of software and interactive information systems as well as in the
preparation of sound studios;
(C) The issued and outstanding share capital of the Company amounts to DM
150,000 (in words: one hundred and fifty thousand German Marks). All of
the issued and outstanding ordinary shares in the Company are
individually and collectively referred to as the "Shares";
(D) The Company in its turn fully owns (i) 100% of the shares of the
private company with limited liability Contact Data Belgium N.V.
established at Berchem, (ii) 50% of the shares of the German limited
liability company Speed Entertainment Systems GmbH, and (iii) 79.6% of
the shares of the German limited liability company Ton- und
Studiotechnik GmbH (both subsidiaries established, respectively, at
Krefeld and Kaarst in Germany).
The subsidiaries under D to be referred to collectively as the
"Subsidiaries";
(E) On August 6, 1998 the parties hereto concluded a letter of intent with
respect to the contemplated acquisition of the Shares;
(F) The Vendors have now agreed to sell to the Buyer and the Buyer has
agreed to acquire the Shares, on the terms of this Agreement.
IT IS HEREBY AGREED AS FOLLOWS
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Article 1: DEFINITIONS
1.1 The following expressions used in this Agreement and the Schedules
hereto shall, unless the context indicates otherwise, have the following
meanings: "Account Date" December 31, 1997;
"Accountants" Gantefuhrer, Xxxxxxxxx & Partners or such
other firm of chartered accountants as
appointed by the Company to perform its
audits;
"Accounts" the consolidated accounts, including the
balance sheet and profit and loss account of
the Company and its Subsidiaries for the
financial year ended December 31, 1997 with
the explanatory notes thereto as set forth in
Exhibit 3.1 attached hereto;
"Activision
Warranties" the warranties to be given by the Buyer to
the Vendors with respect to the Consideration
Stock Activision;
"Agreement" this Agreement including the Schedules and
exhibits hereto;
"Companies" the Company and the Subsidiaries;
"Completion" the completion of this Agreement by the
parties hereto in accordance with article 5
below;
"Completion Date" the date on which Completion shall take
place, being September 29, 1998 or such other
date as the parties hereto may agree but in
no event later than September 30, 1998;
"Consideration" the consideration for the Shares as referred
to in article 3 hereof;
"Consideration
Stock Activision" 1,900,000 shares of new common stock par
value $0.000001 per share of Activision;
"Damages" has the meaning as defined in article 10.6
hereof;
"Disclosure Letter" the letter of the same date as this Agreement
which discloses matters that are exceptions
to the Warranties;
"d'Oleire" Xx. Xxxxx d'Oleire;
"d'Oleire Loans" the subordinated, fully funded loan granted
by d'Oleire to the Company in an amount of
DM 7,283,407 under the conditions described
in Schedule 8 hereto, such loan to be
assigned to the Buyer at Completion, pursuant
to articles 2 and 3 of this Agreement;
"Escrow Agent" City National Bank, Beverly Hills,
California, who will hold 10% of the
Consideration Stock Activision in escrow, in
accordance with the Escrow Agreement;
"Escrow Agreement" the agreement between the parties hereto and
the Escrow Agent pursuant whereto the
Retained Stock is put in escrow with the
Escrow Agent;
"Exchange Act" the Securities Exchange Act of 1934, as
amended;
"Final Claim Date" has the meaning as defined in article 8.5
hereof;
"Hold Back Period" the duration of time that Retained Stock is
held in escrow to serve as security for the
compliance by the Vendors with their
obligations under the Warranties;
"Indemnification
Claims" a claim of the Buyer against the Vendors
under the Tax Indemnity referred to in
article 7 hereof;
"Interim Financial
Statements" the unaudited, consolidated accounts,
including the balance sheet and profit and
loss account of the Company and its
Subsidiaries for the period ending August 31,
1998, as prepared by the Company and reviewed
by the Buyer as set forth in Exhibit 3.2
attached hereto;
"Key Employees" the employees of the Company identified and
selected by the Buyer and as further
specified in Schedule 5;
"Pooling Arrangement" has the meaning set forth in article 4.2(d)
hereof;
"Properties" has the meaning set forth in article 8 of the
Warranties;
"Prospectus" has the meaning set forth in article 10.2
hereof;
"Retained Stock" 10% of the Consideration Stock Activision, to
be held in escrow pursuant to article 6
hereof;
"SEC" United States Securities and Exchange
Commission;
"Securities Act" has the meaning set forth in article 9.1
hereof;
"Shares" the issued shares of the Company as
specified in Exhibit 1.4 hereto;
"Statutes" all Dutch, Belgian and German laws, statutes
and orders or regulations made thereunder,
which are in force per the date hereof or
have at any time prior to the date hereof
been in force;
"Subsidiaries" Contact Data Belgium N.V. established at
Berchem, Speed Entertainment Systems GmbH
established at Krefeld and Ton- und
Studiotechnik GmbH established at Kaarst;
"Subsidiary Shares" the issued shares of the Subsidiaries;
"Taxation Statutes" all Dutch, Belgian and German laws, statutes,
and insofar as applicable all other foreign
laws, decrees, orders and regulations,
providing for or imposing any Tax;
"Taxation" or "Tax" any tax, and any duty, impost, levy or
governmental charge in the nature of tax,
whether domestic or foreign, and any fine,
penalty or interest connected therewith,
imposed by Dutch and/or Belgian and/or German
and/or other (tax) authorities all in the
broadest sense;
"Tax Claims" any liability for Tax for any of the
Companies imposed upon any of the Companies
through additional tax or social security
contribution assessments by Dutch and/or
Belgian and/or German (tax) authorities,
including but not limited to assessments
relating to corporate income tax, turnover
tax, VAT, wage tax (including social security
premiums) and dividend tax, and any and all
interest payable by and penalties imposed
upon any of the Companies in connection
therewith over the fiscal years 1995 through
1997 (both years included) and over the
period commencing on January 1, 1998 and
ending on the date of Completion, except as
specifically provided or reserved for in the
Interim Financial Statements;
"Third Party
Warranty Claim" has the meaning as defined in article
8.4(iii);
"Warranties" the representations, warranties, covenants
and undertakings of the Vendors set out in
Schedule 2 hereto;
"Warranty Claim" a claim of the Buyer against the Vendors as a
result of a breach of the Warranties.
1.2 Except to the extent the context requires otherwise, any references in
this Agreement to:
- a business day means any day which is not a Saturday or Sunday nor
a public holiday in The Netherlands;
- Statutes or statutory provisions and orders or regulations made
thereunder include that Statute, provision, order or regulation as
amended, modified, re-enacted or replaced from time to time, and to
any previous Statute, statutory provision, order or regulation
amended, modified, re-enacted or replaced by such Statute provision
order or regulation.
1.3 Headings to articles and descriptive notes in brackets relating to
provisions of Taxation Statutes in this Agreement used in any way in
construing or interpreting the provisions of the Agreement are for
information only and shall not be construed as forming part of this
Agreement or the Schedules hereto.
1.4 The recitals and Schedules form part of this Agreement and shall have
the same force and effect as if expressly set out in the body of this
Agreement and any reference to this Agreement shall include the recitals
and Schedules.
1.5 Unless the context requires otherwise, terms defined in the plural
include the singular and vice versa.
Article 2: SALE AND PURCHASE
2.1 Subject to the terms and conditions of this Agreement, the Vendors
herewith sell to the Buyer, and the Buyer herewith buys from the Vendors
the Shares, free from any and all liens, charges and encumbrances and
together with all accrued benefits and rights attaching thereto.
2.2 Subject to the terms and conditions of this Agreement, d'Oleire herewith
sells and assigns all of his rights and interests with respect to the
d'Oleire Loans to the Buyer which rights and interests the Buyer hereby
accepts, the d'Oleire Loans being free from any and all liabilities,
liens, charges and encumbrances and together with all accrued benefits
and rights attaching thereto. The Company herewith acknowledges this
assignment by countersigning this Agreement.
Article 3: CONSIDERATION
The consideration payable to the Vendors on Completion in accordance with
article 6 hereof in exchange for (i) the sale of the Shares and (ii) the
assignment of the d'Oleire Loans, is the issuance by the Buyer to the Vendors
of 1,900,000 (in words: one million and nine hundred thousand) new common
stock par value US$0.000001 per share of the Buyer and as further set out in
Schedule 4 (the "Consideration Stock Activision").
Article 4: CONDITIONS PRECEDENT
4.1 The obligations of the Vendors under this Agreement are in all respects
conditional upon the following:
(a) as at the date of Completion, the Buyer having performed all
obligations and complied with all terms, conditions and covenants
on its part agreed to be performed under this Agreement on or prior
to the date of the Completion;
(b) the respective representations and warranties of the Buyer
contained in article 5.2(iii) to this Agreement (the "Activision
Warranties") being true and correct as of the date of Completion;
(c) having received a legal opinion from Xxxxxxxx Xxxxxxxxx Xxxxxx
Aronsohn & Xxxxxx LLP, counsel to Buyer, in the form attached as
Schedule 6;
(d) the Buyer having received from KPMG Peat Marwick LLP, independent
auditors for the Buyer, a letter dated the date of Completion,
attached hereto as Schedule 10, (which may contain customary
qualifications and assumptions) to the effect that KPMG Peat
Marwick LLP concurs with the Buyer's management's conclusion that
no conditions exist relating to the Buyer, the Company or the
transactions contemplated by this Agreement that would preclude the
Buyer from accounting for the share exchange as a pooling of
interests for U.S. accounting purposes under United States
generally accepted accounting principles.
4.2 The obligations of the Buyer under this Agreement are in all respects
conditional upon the following:
(a) the respective representations and warranties (the "Warranties") of
the Vendors contained in this Agreement and Schedule 2 being true
and correct and the information set forth in any Schedule to this
Agreement being true and correct at the date of Completion;
(b) since the Accounts Date and as of the date of Completion there
being no material adverse change in the condition of the Companies
or their respective businesses (financial or otherwise), results of
operations, assets, net worth, prospects, properties or litigation;
(c) as of the date of Completion, the Company and the Vendors having
performed all obligations and complied with all terms, conditions
and covenants on their part agreed to be performed hereunder on or
prior to the date of Completion;
(d) the Buyer having received from KPMG Peat Marwick LLP, independent
auditors for the Buyer, a letter dated the date of Completion,
attached hereto as Schedule 10, (which may contain customary
qualifications and assumptions) to the effect that KPMG Peat
Marwick LLP concurs with the Buyer's management's conclusion that
no conditions exist relating to the Buyer, the Company or the
transactions contemplated by this Agreement that would preclude the
Buyer from accounting for the share exchange as a pooling of
interests for U.S. accounting purposes under United States
generally accepted accounting principles (the "Pooling
Arrangement");
(e) having received consents of all banks who are parties to loan
arrangements with any of the Companies that they will continue
their currently existing arrangements with the Companies under the
same terms after Completion, it being understood that in order to
obtain these consents the guarantees given by d'Oleire, Mr. M.J.C.
Bubbert and Xx. X.X. Xxxx shall have to be replaced by Buyer by
other forms of security as may be requested by the banks;
(f) having obtained any other approvals or consents as may be required
under any of the agreements to which any of the Companies is a
party or under any Statutes;
(g) the d'Oleire Loans having been fully funded, as follows:
(i) the Company and the Vendors shall confirm in writing that
DM 2,447,000 has been funded into the Company, and
(ii) DM 4,836,407 of the d'Oleire Loans shall have been funded into
a blocked account in the name of the Company, subject to the
terms of Schedule 9, at Merck Xxxxx & Co., Privatbankiers.
4.3 Except as provided in articles 4.4 and 4.5, this Agreement is dissolved
in case one of the conditions precedent mentioned in article 4.1 has not
been fulfilled on or prior to the date set for Completion.
4.4 The Buyer has the right to declare no later than on the date set for
Completion that it waives one or more of the conditions precedent
mentioned in article 4.2 in which case such conditions will be
considered not to have been stipulated.
4.5 The Vendors have the right to declare no later than on the date set for
Completion that they waive one or more of the conditions precedent
mentioned in article 4.1 in which case such conditions will be
considered not to have been stipulated.
4.6 The Vendors agree that they will use their reasonable endeavours to
fulfil the conditions precedent referred to in article 4.2 prior to the
date set for the Completion. The Buyer agrees that it will use
reasonable endeavours to fulfil the conditions precedent referred to in
article 4.1 and 4.2(e) prior to the date set for Completion.
Article 5: COMPLETION
5.1 Completion shall take place at the offices of De Brauw Blackstone
Westbroek in Amsterdam at "Tripolis 300", Xxxxxxxxxxxxxxxxx 000, 0000 XX
Xxxxxxxxx, Xxx Xxxxxxxxxxx on September 29, 1998, or on such date, as
soon as possible after the satisfaction of the conditions referred to in
article 4 as the Vendors and the Buyer may agree, but in any event not
later than September 30, 1998.
5.2 At Completion the following actions shall be taken:
(i) Buyer and the Vendors shall execute the Deed of Transfer of
Shares before a Dutch civil law notary as set out in
Schedule 3;
(ii) the Company shall acknowledge the transfer of the Shares in
the form as provided in the Deed of Transfer of Shares and
shall record the said transfer in the register of shareholders
of the Company;
(iii) subject to compliance with article 5.2(i) and (ii) by the
Vendors, the Buyer shall procure the allotment and issue of
the Consideration Stock Activision to the Vendors in the
proportions set out in Schedule 4, free from all liens,
options, charges, encumbrances, rights of pre-emption, rights
of pledge, usufruct or any other third party rights and
deliver certificates in respect of the Retained Stock (as
defined in article 6 hereof) to the Escrow Agent to be held in
the Escrow Account, in satisfaction of the Consideration for
the Shares and the d'Oleire Loans;
(iv) subject to compliance with article 5.2(i) and (ii) by the
Vendors, the Buyer and the Vendors shall enter into the Escrow
Agreement;
(v) conclusion of employment agreements with Xx. X.X. Xxxx, Mr.
M.J.C. Bubbert and five other Key Employees, on the terms of
the agreements attached hereto in Schedule 5;
(vi) Vendors shall deliver consents in writing from the banks
referred to in article 4.2 under (e) confirming that they will
continue their current existing agreement with the Company on
the same terms after Completion and that they will not invoke
the change of ownership clauses as referred to in such
respective agreements.
(vii) Vendors shall deliver copies of other documentation or other
information reasonably requested by the Buyer.
(viii) Vendors shall deliver the Accounts and the Interim Financial
Statements as prepared by the Company and reviewed by, and
acceptable to, the Buyer prior to Completion;
(ix) d'Oleire and Xx. X. Xxxxxx shall each resign as managing
director of the Companies, granting the Companies and the
Buyer full and final quittance, in the form of the declaration
referred to in Schedule 7 and all other resignations from
others to be so requested by the Buyer;
(x) d'Oleire, Mr. M.J.C. Bubbert and Xx. X.X. Xxxx shall have been
released from their guarantee obligations towards the banks,
in as far as these guarantees have been given as security for
the Facilities (as defined hereinafter) granted to the
Companies;
(xi) Vendors and the Company shall have confirmed in writing the
full funding of the d'Oleire Loans as contemplated in article
4.2(g), such confirmation to be attached in Schedule 8 hereto;
(xii) d'Oleire shall have executed and delivered to Buyer such
instruments of transfer as may be reasonably requested by
Buyer to effect the transfer and assignment of the d'Oleire
Loans and all rights associated with the d'Oleire Loans.
5.3 If for any reason the provisions of articles 5.1 and 5.2 are not
complied with in full at Completion the Buyer shall be entitled (in
addition and without prejudice to all other rights and remedies
available to it) to rescind this Agreement, no court action being
required, or to determine a new date for Completion.
5.4 If for any reason the provisions of articles 5.1 and 5.2 under (iii) and
(x) are not complied with in full at Completion the Vendor shall be
entitled (in addition and without prejudice to all other rights and
remedies available to it) to rescind this Agreement, no court action
being required, or to determine a new date for Completion.
5.5 Buyer shall not be obliged to complete the purchase of any of the Shares
unless the purchase of all of the Shares is completed simultaneously in
accordance with the provisions of this Agreement.
Article 6: THE STOCK RETENTION
6.1 In order to ensure that the Warranties made by the Vendors under this
Agreement (which are surviving Completion) are not breached, and in
order to provide a source of indemnification to the Buyer pursuant to
any Warranty Claims and/or Indemnification Claims, the Vendors agree
that the certificates representing 10% of the total number of shares of
Consideration Stock Activision issued to the Vendors pursuant to article
5 (the "Retained Stock") shall be deposited with the Escrow Agent in an
escrow account (the "Escrow Account") pursuant to the Escrow Agreement
on the date of Completion to provide a source from which the Buyer can
be reimbursed for any Warranty Claim and/or Indemnification Claim.
6.2 Such Retained Stock shall be held in the Escrow Account during such
period of time as set forth in the Escrow Agreement (the "Hold Back
Period"). Any dividends and distributions with respect to such Retained
Stock while held in the Escrow Account shall also be retained in the
Escrow Account until the expiration of the Hold Back Period. Any
offsets or deductions made from Retained Stock held in the Escrow
Account on account of any breach shall be made on the last business day
of the Hold Back Period, or at such other time as set forth in the
Escrow Agreement, and shall be based upon a market price per share of
Consideration Stock Activision equal to the closing price of Activision
Common Stock on NASDAQ on the date of Completion and the dollar /
guilder exchange rate on the date of Completion. All Retained Stock
subject to such offset or deduction shall be cancelled by the Buyer and
the remaining Retained Stock together with any dividends paid or
distributions made with respect to such Retained Stock that have not
been cancelled shall be then delivered to the Vendors in accordance with
their respective interests.
6.3 The cancellation by the Buyer of any Retained Stock contained in the
Escrow Account in respect of any Warranty Claim and/or Indemnification
Claim shall not prejudice its right to recover any further sum due to it
for that or any other Warranty Claim and/or Indemnification Claim not
satisfied by the Escrow Account and the Retained Stock and other
property held in the Escrow Account shall not be the exclusive recourse
of the Buyer in respect of Warranty Claims and/or Indemnification
Claims.
Article 7: TAX INDEMNITY
7.1 The Vendors will indemnify the Buyer and the Vendors will hold the Buyer
harmless ("vrijwaren") against and fully reimburse the Buyer for any and
all Tax Claims.
7.2 The liabilities of the Vendors under the aforegoing Tax Indemnification
shall be limited in accordance with article 8.5 and is otherwise subject
to the limitations referred to in article 8 hereof.
7.3 For as long as legally required pursuant to applicable law, from
Completion d'Oleire on behalf of the Vendors commits itself towards the
Companies to keep all of the books and records of the Companies relating
to the period prior to December 31, 1994. The Vendors commit themselves
towards the Buyer and the Companies to provide within 21 (twenty-one)
days of a written request being given to them, Buyer and/or the Company
and/or their respective representatives and professional advisors full
access to all of their books and records relating to the period until
December 31, 1994 and with all such information, cooperation,
assistance, copy documents and extracts relating to the carrying on of
the business of the Companies prior to the Completion Date and/or the
Shares as may be reasonably required for any purpose including in
connection with or incidental to the preparation or review of any tax
returns or computations, any annual accounts or financial statements or
any prospectus, or any other similar document. All books and records of
the Companies relating to the period January 1, 1995 through Completion
shall be retained by the Companies under the custody and control of
Buyer and, to the extent not currently in the possession of the
Companies, shall be turned over to the Buyer or its designee at
Completion.
Article 8: WARRANTIES
8.1 The Vendors severally represent and warrant to and covenant and
undertake with the Buyer in the terms of the Warranties such that the
remedies, subject to the terms and conditions of this article 8, of the
Buyer in respect of any breach of any of the Warranties shall continue
to subsist notwithstanding Completion of the sale and purchase
hereunder.
8.2 Without restricting the obligations of the Buyer to limit damages:
(i) in the event that any of the Warranties proves to be untrue or
misleading or is broken (as the case may be) the Vendors shall pay
to the Buyer the amount necessary to put the Companies into the
position which would have existed if the Warranties had been true
and not misleading together with all costs and expenses incurred by
the Buyer or the Companies as a result of such breach, and/or
(ii) where as a result of or in connection with any breach of the
Warranties the value of the net assets of the Companies is
diminished or is less than they would have been had there been no
breach, or any payment is made or required to be made by the
Companies or the Buyer, the Buyer shall be entitled to elect that
the amount of such diminution or shortfall or payment, together
with any reasonable costs incurred in connection therewith, shall
be taken to be the loss suffered by the Buyer by reason of such
breach;
provided, however,
(a) that any obligation of the Vendors to make a payment pursuant to
article 7 and/or paragraph (i) and (ii) of this article 8 shall be
reduced by any compensation received or receivable directly in that
respect by the Buyer or the Companies be it under an insurance-
policy, as a tax credit or deduction or otherwise, and
(b) that each of the Vendors can only be held liable in accordance with
its percentage of Consideration Stock Activision issued to such
Vendors, as set forth in Schedule 4, and
(c) the aggregate maximum liability of the Vendors pursuant to article
7 and/or paragraph (i) and (ii) of this article 8 shall never
exceed 25% of the amount represented by the value of the
Consideration Stock Activision on the Completion Date provided that
this limitation does not apply with respect to the warranties
relating to the title of ownership of the Vendors or the Companies
respectively as to the Shares or the Subsidiary Shares, the
ownership by d'Oleire of the d'Oleire Loans, the valid existence of
the Companies and the absence of liens or encumbrances on the
Shares or the Subsidiary Shares, or the d'Oleire Loans, and
(d) the Vendors shall only be liable in respect of a Warranty Claim or
Warranty Claims or a Tax Claim or Tax Claims, if and in sofar as
the aggregate amount of all Warranty Claim(s) and Tax Claim(s)
exceeds NLG 200,000.--, and
(e) the parties agree that Warranty Claims or Tax Claims which, in the
aggregate, exceed the value of the Retained Stock shall be settled
by the delivery to the Buyer of shares of Consideration Stock
Activision, the number of such shares to be determined based upon a
market price per share of Consideration Stock Activision equal to
the closing price of Activision Common Stock on NASDAQ on the date
of Completion and the dollar/guilder exchange rate on the date of
Completion.
8.3 Each of the Warranties shall be construed as a separate representation,
warranty, covenant or undertaking (as the case may be) and (save as
expressly provided to the contrary) shall not be limited nor extended by
the terms of any of the other Warranties or by any other term of this
Agreement.
8.4 In the event of a Tax Claim or a Warranty Claim:
(i) the Buyer shall notify the Vendors as soon as reasonably
possible after such Tax Claim and/or Warranty Claim shall come
to the attention of the Buyer;
(ii) negotiations and correspondence with any (tax) authority or
other person relating to such Tax Claim and/or Warranty Claim
shall be conducted with the Buyer or by the Company under
supervision of the Buyer but only after prior consultation
with the Vendors and as long as the Vendors shall not have
selected to dispute such claim in accordance with subparagraph
(iii) below;
(iii) within 14 days of such notice pursuant to subparagraph (i)
hereof the Vendors shall notify the Buyer of its decision to
either indemnify the Buyer or to dispute the Tax Claim or, to
the extent a Warranty Claim arises out of any negotiation,
dispute or litigation with any third party (a "Third Party
Warranty Claim"), the Warranty Claim shall be conducted by the
Buyer in accordance with the written instructions of the
Vendors or their advisor(s) entirely at the cost of the
Vendors who shall indemnify the Buyer against all costs,
expenses and losses that it may suffer as a result of the
conduct of the dispute;
(iv) the Buyer shall keep the Vendors fully informed of such
dispute and take full account of the Vendors' views concerning
the conduct of the same;
(v) the Buyer shall not settle or otherwise compromise any such
Tax Claim or Third Party Warranty Claim without the prior
written consent of the Vendors;
(vi) if the Buyer shall not have settled or agreed any such Tax
Claim or Third Party Warranty Claim within six months of such
dispute arising, the Vendors shall be entitled to take over
from the Buyer the conduct of any such dispute, but without
prejudice to the obligation of the Vendors to indemnify the
Buyer under this article 7;
(vii) the Buyer shall render such assistance without charge for use
of its own standard internal resources unless put to
additional and unavoidable cost.
8.5 All Tax Claims and/or Warranty Claims, except those referred to in
article 8.6 hereof, must be notified to the Vendors prior to the earlier
of (i) the date of the completion of the first audit of the financial
statements of the combined operations of the Companies and the Buyer or
(ii) one year from the Completion Date (the "Final Claim Date"),
provided, however, that such notice shall not be invalid for the sole
reason that it has not reached all Vendors if it has reached any of the
Vendors. Notice of a Warranty Claim and/or Tax Claim shall be deemed
given prior to the Final Claim Date if the recorded delivery slip bears
a postmark date of at least two business days prior to the Final Claim
Date. All Warranty Claim(s) and /or Tax Claim(s) must be duly
substantiated giving relevant particulars of the grounds on which it (or
they) is (are) based.
8.6 In as far as Warranties relate to the title of ownership of the Vendors
or the Companies respectively as to the Shares, the Subsidiary Shares or
the d'Oleire Loans (Warranties numbered 1.4, 1.5, 1.6, 1.8 and 1.10),
the valid existence of the Companies and the absence of liens or
encumbrances on the Shares, the Subsidiary Shares, or the d'Oleire
Loans, the liability of the Vendors resulting therefrom shall be limited
in time in accordance with applicable law.
8.7 The Vendors acknowledge that Buyer has conducted due diligence
investigations regarding the financial and legal affairs of the
Companies and agree with Buyer that such investigations do not, other
than as set forth in the Disclosure Letter, in any way limit the
Warranties of the Vendors or the rights of Buyer to file any claims
against Vendors pursuant to article 7 and/or this article 8.
Article 9: RESTRICTION ON SALE OF THE CONSIDERATION STOCK ACTIVISION
9.1 The Vendors acknowledge and agree that the Consideration Stock
Activision will be issued to the Vendors without registration under the
United States Securities Act of 1933, as amended (the "Securities Act"),
based upon the "private offering exemption", in reliance upon
appropriate written representations from the Vendors, further evidenced
by the restrictive wording on the certificates representing the
Consideration Stock Activision and "stop transfer" instructions to the
Buyer's transfer agent. The Consideration Stock Activision will
constitute "restricted securities" within the meaning of the Securities
Act and related rules and regulations. Notwithstanding the provisions
of the Securities Act, the Vendors acknowledge and agree that, by reason
of the Pooling Arrangement, the Vendors shall not have the right to
sell, pledge, gift, hypothecate or otherwise dispose of the
Consideration Stock Activision until the issuance by the Buyer of its
first earnings press release containing at least thirty (30) days of
post-Completion combined operations of the Buyer and the Companies.
9.2 The Buyer shall upon declaration of the effectiveness of the
Registration Statement (as defined in sub-clause 10.1(b) of this
Agreement) procure that its corporate legal counsel issue an opinion and
instructions to the Buyer's transfer agent to register for transfer,
free of restrictive legends, certificates representing the Consideration
Stock Activision upon sale or transfer thereof by the Vendors pursuant
to the Registration Statement and compliance by the selling Vendors with
the prospectus delivery requirements of the Securities Act and
certification to the transfer agent of such compliance.
Article 10: REGISTRATION OF THE CONSIDERATION STOCK ACTIVISION
10.1 The Buyer acknowledges that the Vendors may seek to sell some or
all of their Consideration Stock Activision at the earliest time
permitted. The Buyer therefore undertakes to file with the SEC:
(a) notification of the acquisition of the Company on Form 8-K on
or before 10 days after the Completion Date;
(b) a registration statement on Form S-3 or on such other
available form which may be mutually acceptable to the parties
as soon as reasonably practicable after Completion and in any
case prior to November 30, 1998, registering under the
Securities Act, pursuant to Rule 415 thereunder, if available,
for the offer and sale in the future of up to all of the
Consideration Stock Activision issued by the Buyer pursuant to
this Agreement.
10.2 The Buyer agrees:-
(a) to use its commercially reasonable best efforts to cause a
registration statement to be declared effective as soon as
reasonably practicable after the filing thereof;
(b) to maintain the effectiveness of a registration statement or
successor registration statement filed by the Buyer for the
purpose of registering the Consideration Stock Activision
until each Vendor is eligible to sell all of its Consideration
Stock Activision in a three month period under the applicable
provisons of Rule 144 and Rule 145 under the Securities Act;
(c) to update the prospectus included in the registration
statement (the "Prospectus") from time to time as may be
necessary to ensure that the Prospectus does not contain any
untrue statement of material fact or omit to state a material
fact necessary in order to make the Prospectus not misleading;
and
(d) that prior to filing any registration statement, Prospectus,
amendment or supplement with the SEC in connection with any
registration contemplated by this Agreement, the Buyer shall
furnish to one counsel selected by the Vendors holding a
majority of the shares of the Consideraton Stock Activision
copies of all such documents proposed to be filed, which
documents will be subject to review of such counsel.
(e) that the Buyer shall notify each Vendor of any stop order
issued or threatened by the SEC and will take all reasonable
actions required to prevent the entry of such a stop order or
to remove it if entered.
(f) to provide each Vendor such number of copies of each
registration statement filed pursuant to this Agreement, each
amendment and supplement thereto, and the Prospectus including
each preliminary prospectus in conformity with the
requirements of the Securities Act, and such other documents
as a Vendor may reasonably request in order to facilitate the
disposition of the Consideration Stock Activision covered by
such registration statement.
(g) that the Buyer shall immediately notify each Vendor of the
happening of any event which comes to the Buyer's attention
if, as a result of such event, the Prospectus included in a
registration statement filed under this Agreement contains any
untrue statement of material fact or omits to state any
material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, and the Buyer shall promptly prepare and furnish
to each Vendor and file with the SEC a supplement or amendment
to such Prospectus so that such Prospectus will no longer
contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
(h) that the Buyer shall take all such other reasonable and
customary actions as each Vendor may reasonably request in
order to expedite or facilitate the disposition of the
Consideration Stock Activision in accordance with the terms of
this Agreement.
(i) that the Buyer shall make available for inspection by the
Vendors and any attorney, accountant or other agent retained
by such Vendors, financial and other records, pertinent
corporate documents and properties of the Buyer and its
subsidiaries, as such person may reasonably request that may
be reasonably necessary for the purpose of confirming that
such registration statement does not contain any untrue
statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading,
provided that the Buyer obtains reasonably satisfactory
assurances that such information will be used solely for such
purpose and will be held in confidence (except to the extent
that it is included in the registration statement). The Buyer
shall cause the officers, directors and employees of the Buyer
and each of its subsidiaries to supply such information and
respond to such inquiries as any Vendor may reasonably request
or make for the purpose of confirming that such registration
statement does not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading, provided that the Buyer
obtains reasonably satisfactory assurances that such
information will be used solely for such purpose and will be
held in confidence (except to the extent that it is included
in the registration statement).
(j) that the Buyer shall comply with all applicable rules and
regulations of the SEC, and make generally available to the
Vendors, as soon as reasonably practicable, an earnings
statement covering a period (which may begin with the first
fiscal quarter ending after the effective date of the
registration statement) of at least twelve months after the
effective date of the registration statement (as the term
"effective date" is defined in Rule 158(c) under the
Securities Act), which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.
10.3 The Buyer shall bear the costs incurred for its legal counsel,
accounting and all other costs and expenses arising from a
registration, excluding costs for legal counsel for the Vendors
which may be incurred in connection with the preparation and filing
of a registration statement pursuant to this article 10. The
Vendors shall be responsible for all costs associated with selling
or disposing of the Consideration Stock Activision (including
brokers' commissions and underwriting fees) and all fees and
expenses for their counsel, accountants and other advisors.
10.4 The rights in this article 10 are assignable by any Vendor to any
transferee of Consideration Stock Activision acquired by the
Vendors in connection with this Agreement. Upon assignment, the
term "Vendor" as used in this article 10 shall mean and include any
such transferee for all intents and purposes.
10.5 The Vendors severally agree that they will provide all required co-
operation and furnish all necessary information and enter into such
agreements customarily required of selling stockholders in
connection with the preparation of a registration statement filed
under the terms of sub-article 10.1. In addition, the Vendors,
severally, will represent and warrant the accuracy and completeness
of all written information furnished by them for inclusion in the
registration statement and will indemnify and hold the Buyer, and
its directors, officers, shareholders, controlling persons (within
the meaning of the Securities Act) and underwriters harmless from
and against any liability, loss, damage or expense (including costs
and attorney's fees), incurred by or sustained by, or asserted
against any of them, arising out of or based on any claim of an
untrue statement of material fact contained in the information
provided by the Vendors or based on any omission (or alleged
omission) to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
10.6 The Buyer will indemnify and hold the Vendors (and the controlling
persons), if any, within the meaning of the Securities Act)
harmless from and against any liability, loss, damage or expense
(including costs and attorney's fees), incurred or sustained by, or
asserted against, any of them ("Damages") arising out of or based
on any untrue statement (or alleged untrue statement) of a material
fact in a registration statement, or based on any omission (or
alleged omission) to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
or any violation by the Buyer of the Securities Act, the Exchange
Act, state securities law or any rule or regulation promulgated
under such laws applicable to the Buyer in connection with any such
registration, and the Buyer will reimburse each such Vendor for any
legal and other expenses reasonably incurred, as such expenses are
incurred, in connection with investigating, preparing or defending
any such claim, loss, damage, liability or action, other than in
respect of any such Damages arising out of any written information
furnished to the Buyer in writing pursuant to article 10.5 by or on
behalf of such Vendor specifically for use in the registration
statement.
10.7 Each party entitled to indemnification under this article 10 (the
"Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying
Party to assume the defense of any such claim or any litigation
resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall
not unreasonably be withheld), and the Indemnified Party may
participate in such defense at such party's expense, and provided
further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its
obligations under this Agreement unless the failure to give such
notice is materially prejudicial to an Indemnifying Party's ability
to defend such action and provided further, that the Indemnifying
Party shall not assume the defense for matters as to which there is
a conflict of interest or there are separate and different
defenses. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified
Party (whose consent shall not be unreasonably withheld), consent
to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation.
10.8 With a view to making available the benefits of certain rules and
regulations of the SEC which may permit the sale of the
Consideration Stock Activision to the public without registration
the Buyer agrees to use its commercially reasonable best efforts
to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) file with the SEC in a timely manner all reports and other
documents required of the Buyer under the Securities Act and
the Exchange Act; and
(c) so long as a Vendor owns any Consideration Stock Activision,
furnish to the Vendor promptly upon request a written
statement by the Buyer as to its compliance with the reporting
requirements of said Rule 144 and of the Securities Act and
the Exchange Act, a copy of the most recent annual or
quarterly report of the Buyer, and such other reports and
documents of the Buyer and other information in the possession
of or reasonably obtainable by the Buyer as the Vendor may
reasonably request in availing itself of any rule or
regulation of the SEC allowing the Vendor to sell any such
securities without registration.
Article 11: RESTRICTIONS
11.1 In consideration of the Buyer agreeing to enter into this
Agreement, each of the Vendors hereby covenants with the Buyer that
(except as otherwise agreed in writing with the Buyer) he or she
will not, for a period of four years from Completion, either solely
or jointly with any other person:
(i) carry on or be engaged or concerned or (save as the
holder of shares or debentures in a listed company which
confer not more than five per cent of the votes which
could be cast at a general meeting of the Company)
interested, directly or indirectly, in any business same
as or competitive to the business carried on by any of
the Companies at Completion;
(ii) solicit or accept (either on his own account or as the
agent of any other person or company) the custom of any
person in respect of goods or services similar to those
supplied by any of the Companies, during the period of
twelve months prior to Completion, such person having
been a customer of any of the Companies, in respect of
such goods or services during such period;
(iii) enter into any trading arrangement (either on his own
account or as the agent of any other person or company)
with any supplier of goods or services which has been a
supplier to any of the Companies, during the period of 12
months preceding Completion and/or to induce or seek to
induce any such supplier to cease trading with any of the
Companies;
(iv) induce, solicit or endeavour to entice any person to
leave the service or employment of any of the Companies.
11.2 Each of the Vendors hereby covenants with the Buyer that he will
not at any time hereafter divulge to any third party whatsoever or
use to his own or another advantage any of the formulae, inventions
or improvements relating to products or prospective products or
services or prospective services supplied by any of the Companies,
or any other trade secrets or confidential know-how or confidential
financial or trading information as to customers or suppliers or in
relation to the business, finances, dealings or affairs of any of
the Companies, save only (i) insofar as a Vendor may prove the same
has become a matter of public knowledge (otherwise than by reason
of a breach of this article 11.2) or (ii) insofar as may be
required by law.
11.3 The Vendors agree that the covenants and undertakings contained in
this article 11 are reasonable and are entered into for the purpose
of protecting the goodwill of the business of the Companies.
11.4 Each covenant and/or undertaking contained in this article 11 shall
be construed as a separate covenant and/or undertaking and if one
or more of the covenants and/or undertakings contained in this
article 11 is held to be against the public interest or unlawful or
in any way an unreasonable restraint of trade the remaining
covenants and/or undertakings shall continue to bind the Vendors.
11.5 If any covenant or undertaking contained in this article 11 were
void but would be valid if the period of application were reduced
or if some part of the covenant or undertaking were deleted, the
covenant or undertaking in question shall apply with such
modification as may be necessary to make it valid and effective.
11.6 In the event of a Vendor infringing any of the provisions of
articles 11.1 and/or 11.3 he shall forfeit for the benefit of the
Buyer without any prior notice or Court action being required, an
immediately payable penalty amounting to NLG 1,000,000 (one million
guilders) for each infringement, without any damage or loss
requiring to be proved and without prejudice to the rights of the
Buyer and/or any of its subsidiaries to claim additional damages if
there are grounds for so doing.
Article 12: ANNOUNCEMENTS AND CONFIDENTIALITY
12.1 Neither the terms of this Agreement nor any transaction
contemplated hereby shall be disclosed by any party without the
prior consent of the other parties, except that after Completion
the Buyer may make such filings with the SEC and issue such press
releases and other public announcements as may be required under
applicable law and regulation. Buyer shall consult with the Vendors
prior to issuing any such press release or similar public
announcements.
12.2 Pending Completion, the Buyer undertakes to keep secret and
confidential and not to disclose to any third party any and all
information and data concerning the business and affairs of the
Companies disclosed to it by the Vendors, their agents, directors,
employees and advisers in as far as the disclosure of such
information and data is not required under the notification under
the "Fusiegedragsregels".
Article 13: COSTS
Each of the parties hereto shall bear his or its own legal and accountancy
costs, charges and other expenses connected with the negotiation, preparation
and implementation of this Agreement and any other agreement incidental to or
referred to in this Agreement or any other activities in relation hereto. The
Companies shall not be liable for any of the said costs, charges and other
expenses. The Dutch notary fees owed in connection with the transfer of the
Shares shall be borne by the Buyer.
Article 14: ASSIGNMENT
14.1 It is hereby agreed and declared that this Agreement (including any
claim under any of the Warranties or the Tax Indemnity) may without
the consent of any of the Vendors be assigned (or transferred) by
the Buyer to any company of which it is from time to time a
subsidiary or to any other subsidiary of any such company or to any
of its own subsidiaries. Buyer agrees that it shall not transfer
the Shares for as long as the Consideration Stock Activision is not
yet freely negotiable by reason of the Pooling Arrangement
restrictions set forth in article 9.1 hereof, except that the Buyer
may assign the Shares to a 100% Dutch subsidiary to be incorporated
after the Closing Date, of which the Vendors are aware and to which
they consent.
14.2 Any assignment (or transfer) of this Agreement and/or the Shares
shall be subject to the condition that the Buyer and the assignee
(transferee) shall be jointly and severally liable towards the
Vendors for any and all of the Buyer's obligations arising out of
and in connection with this Agreement.
Article 15: GENERAL
15.1 The terms of this Agreement shall, insofar as not performed at
Completion, continue in force notwithstanding such Completion. A
petition to annul, to rescind or dissolve this Agreement cannot be
instituted and nullity, rescission and dissolution thereof cannot
be invoked, in whole or in part, after the Shares shall have been
transferred to the Buyer.
15.2 This Agreement (together with any documents referred to herein)
constitutes the entire agreement between the parties hereto in
connection with the sale and purchase hereby agreed and no
variation to this Agreement shall be effective unless made in
writing and signed by all the parties.
15.3 There shall be no waiver of any term, provision or condition of
this Agreement unless such waiver is evidenced in writing and
signed by the waiving party.
15.4 In the event that one or more provisions of this Agreement would
appear to be non-binding, the other provisions of this Agreement
will continue to be effective, and the parties shall consult with
each other to replace the non-binding provisions with other
provisions that are binding, in such a way that the new provisions
differ as little as possible from the non-binding provisions,
taking into account the object and the purpose of this Agreement.
15.5 Any notice or demand to be served under this Agreement may be
served upon a party at the address indicated above or such other
address as they may have notified to the other parties as being
their address for service or to their last known place of residence
or business and may be served personally, by registered mail or by
facsimile transmission.
15.6 This Agreement may be executed in any number of counterparts and by
the several parties hereto on separate counterparts, each of which
when so executed and delivered shall be an original, but all the
counterparts shall together constitute one and the same instrument.
In order for this Agreement to be binding on the Buyer, it must
have been signed by all Vendors.
Article 16: APPLICABLE LAW AND JURISDICTION
16.1 This Agreement is construed under and shall be governed by
Netherlands law. All disputes arising in connection with this
Agreement or other agreements entered into in connection herewith
shall be exclusively submitted to the competent court in Amsterdam,
and each of the parties submits to the exclusive jurisdiction of
such court.
Thus signed and agreed upon on September 29, 1998 at Amsterdam.
/s/ Xxxxxxxx Xxxxxxxx /s/ Martinus X.X. Xxxxxxx
--------------------- -------------------------
Activision, Inc. Xx. Xxxxxxxx X.X. Xxxxxxx
/s/ Xxxxxx X. Xxxx
-------------------------
Xx. Xxxxxx X. Xxxx
/s/ Xxxxx x'Xxxxxx
--------------------------
Xx. Xxxxx x'Xxxxxx
/s/ Xxxxx x'Xxxxxx, as attorney-in-fact
---------------------------------------
Mrs. Xxxxxxx d'Oleire
/s/ Xxxxx x'Xxxxxx, as attorney-in-fact
---------------------------------------
Ms. Fiona d'Oleire
/s/ Xxxxx x'Xxxxxx, as attorney-in-fact
---------------------------------------
Ms. Alexa d'Oleire
In as far as necessary in accordance with Article 1:88 Civil Code, Xxx. X.X.
Xxxxxxx-Xxxxxxxx and Mrs. Xxxxxxx d'Oleire-Xxxxxxx and Xx. Xxxxx d'Oleire,
spouses and husband respectively of Vendors, grant their approval to their
respective husbands and spouse.
/s/ Xxxxx x'Xxxxxx, as
/s/ X.X. Xxxxxxx-Xxxxxxxx attorney-in-fact
------------------------- -----------------------------
Xxx. X.X. Xxxxxxx-Xxxxxxxx Mrs. Xxxxxxx d'Oleire-Xxxxxxx
/s/ Xxxxx x'Xxxxxx
--------------------------
Xx. Xxxxx x'Xxxxxx
In evidence of its acknowledgment of the assignment of the d'Oleire Loans
pursuant to article 2.2 hereof.
/s/ Xxxxx x'Xxxxxx
-------------------------
CD Contact Data GmbH
