Exhibit G
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT ("Agreement") is entered into as of
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July 17, 1998 by and between LEHA, a Netherlands Foundation ("LEHA"), Oldco
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N.V., a Belgian corporation ("Oldco"), L&H Holding III S.A. ("Holding"), a
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Luxembourg corporation, Jo Lernout and Xxx Xxxxxxx, jointly and severally (LEHA,
Oldco, Holding and Messrs. Lernout and Hauspie are each a "Seller" and are
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collectively referred to herein as "Sellers") and GE Capital Equity Investments,
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Ltd., a Cayman Islands company (the "Purchaser").
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RECITALS
A. The Sellers and the Purchaser are executing and delivering this
Agreement as a private sale in reliance upon the exemption from securities
registration afforded by the Securities Act of 1933, as amended (the "Securities
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Act"). In connection with the transactions contemplated hereby, the Sellers and
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the Purchaser are entering into a Stock Pledge Agreement, a Registration Rights
Agreement and an Escrow Agreement (each as defined below and collectively with
this Agreement, the "Transaction Documents").
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B. The Sellers desire to enter into a forward sale with the Purchaser on
the Closing Date (as defined below) and to deliver to Purchaser on the Share
Transfer Date (as defined below), upon the terms and conditions stated in this
Agreement, a number of common shares, no par value (the "Common Shares") of LHSP
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determined pursuant to the terms hereof. Sellers beneficially own, directly or
indirectly, the Common Shares as set forth in Schedule 3.3, and each Seller
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hereby acknowledges that it will derive substantial benefit from the forward
sale of the Common Shares as contemplated in this Agreement.
C. The Purchaser desires to enter into a forward purchase of the Common
Shares on the Closing Date upon the terms and conditions stated in this
Agreement, and to obtain the Sellers' irrevocable commitment to deliver such
Common Shares to the Purchaser on the Share Transfer Date pursuant to the terms
hereof. In consideration of the forward sale and delivery of the Common Shares,
the Purchaser shall pay to the Sellers an aggregate purchase price (the
"Purchase Price") equal to Ten Million U.S. Dollars ($10,000,000).
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AGREEMENTS
NOW, THEREFORE, in consideration of their respective promises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, each Seller, jointly and severally, and the
Purchaser hereby agree as follows:
ARTICLE I
CLOSING, COMMITMENT TO DELIVER COMMON SHARES, AND
DELIVERY OF COMMON SHARES
1.1 Forward Purchase of Common Shares by the Purchaser. Subject to the
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terms and conditions of this Agreement, on the Closing Date (as defined below),
(i) LEHA, Oldco and Holding shall enter into a forward sale with the Purchaser
(and Jo Lernout and Xxx Xxxxxxx agree to cause such Sellers to enter into a
forward sale with the Purchaser) of the number of Common Shares of LHSP
determined in accordance with Article V hereof, and (ii) the Purchaser shall
enter into a forward purchase of the Common Shares from the Sellers by paying
the Purchase Price (less certain obligations of the Sellers specified in the
Escrow Agreement) to the Escrow Agent for the account of LEHA (for the rateable
benefit of each Seller in proportion to the
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number of Common Shares being sold hereunder by such Seller) by wire transfer of
the Purchase Price (less such obligations) into the account designated by the
Escrow Agent in the Escrow Agreement. Upon satisfaction of the closing
conditions set forth in Articles VI and VII hereof, the Escrow Agent shall be
instructed to transfer the Purchase Price into the account of LEHA, and the
payment of the Purchase Price by the Purchaser into the account of LEHA as
described above shall constitute satisfaction in full of the Purchaser's
obligation to pay consideration to any Seller for the forward sale and delivery
of the Common Shares. The Common Shares that are the subject of the forward
purchase effected at the Closing hereunder shall be delivered to the Purchaser
on the Share Transfer Date (as such term is defined in Section 5.2 hereof).
1.2 Closing Date. Subject to the satisfaction (or waiver) of the
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conditions set forth in Articles VI and VII below, and further subject to the
terms and conditions of the Escrow Agreement, the date and time of the closing
of the forward purchase of the Common Shares hereunder and the commitment of the
Sellers to deliver Common Shares on the Share Transfer Date, and the payment
therefor by the Purchaser pursuant to this Agreement (the "Closing") shall be at
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10:00 a.m., Eastern Standard Time, on July 17, 1998 or such other time as the
Sellers and the Purchaser shall mutually agree (the "Closing Date").
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ARTICLE II
PURCHASER'S REPRESENTATIONS AND
WARRANTIES
The Purchaser represents and warrants to the Sellers as of the date hereof
(except for representations and warranties that speak as of a specific date,
which representations shall be true and correct as of such date) as set forth in
this Article II. The Purchaser makes no other representations or warranties,
express or implied, to the Sellers in connection with the transactions
contemplated hereby (except as may be contained in any documents or agreements
executed jointly by the Sellers and the Purchaser in connection with the
transactions contemplated hereby) and any and all prior representations and
warranties, if any, which may have been made by the Purchaser to the Sellers in
connection with the transactions contemplated hereby shall be deemed to have
been merged in this Agreement and any such prior representations and warranties,
if any, shall not survive the execution and delivery of this Agreement.
2.1 Investment Purpose. The Purchaser is purchasing the Common Shares
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for its own account for investment only and not with a present view toward or in
connection with the public sale or distribution thereof in violation of the
applicable securities laws. The Purchaser will not, directly or indirectly,
offer, sell, pledge or otherwise transfer the Common Shares or any interest
therein except pursuant to transactions that are exempt from the registration
requirements of the Securities Act and/or an effective registration statement
under the Securities Act, the rules and regulations promulgated pursuant thereto
and applicable state securities laws in the United States. The Purchaser
understands that the Common Shares are not currently registered under the
Securities Act and, unless the Common Shares are registered hereafter pursuant
to the Securities Act and any applicable state securities laws or an exemption
from such registration is available, the Purchaser must bear the economic risk
of this investment indefinitely. By making the representations in this Section
2.1, the Purchaser does not agree to hold the Common Shares or the rights
thereto for any minimum or other specific term and reserves the right, subject
to the terms of this Agreement and any other documents or agreements executed by
it in connection herewith and the transactions contemplated hereby, to dispose
of the Common Shares at any time in accordance with or pursuant to a
registration statement effective under the Securities Act and any applicable
state securities laws or an exemption therefrom. The Sellers have agreed to
cause LHSP, and LHSP has agreed, pursuant to the terms of the Registration
Rights Agreement, to file a Registration Statement with the United States
Securities and Exchange Commission (the
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"SEC") registering the resale of the Common Shares by the Purchaser, and have
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such Registration Statement be declared effective by the time specified in the
applicable section of the Registration Rights Agreement. The Sellers have agreed
to compensate the Purchaser for the illiquidity of the Common Shares in the
event that the Common Shares are not duly registered throughout the Registration
Period (as defined in the Registration Rights Agreement).
2.2 Accredited Investor Status. The Purchaser is an "Accredited
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Investor" as that term is defined in Rule 501(a) of Regulation D of the
Securities Act and the Purchaser has indicated on a duly executed Purchaser
Questionnaire and Representation Agreement in the form attached hereto as
Exhibit A and delivered to the Sellers that it so qualifies as an "Accredited
Investor."
2.3 Reliance on Exemptions. The Purchaser understands that the Common
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Shares are being offered and sold to it hereunder in reliance upon specific
exemptions from the registration requirements of United States federal and state
securities laws and that the Sellers are relying upon the truth and accuracy of,
and Purchaser's compliance with, the representations, warranties, agreements,
acknowledgements and understandings of the Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of the
Purchaser to acquire the Common Shares.
2.5 Governmental Review. The Purchaser understands that no United
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States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Common Shares.
2.6 Transfer or Resale. The Purchaser understands that: (i) except as
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provided in this Agreement and the Registration Rights Agreement, the Common
Shares have not been and are not being registered under the Securities Act or
any state securities laws, and may not be offered, sold, pledged or otherwise
transferred unless (x) first registered thereunder or an exemption from such
registration is available, (y) the shares are sold or transferred to an
"affiliate" of the Purchaser as permitted pursuant to Section 8.8 hereof, or (z)
are sold pursuant to Rule 144 under the Securities Act (or a successor rule)
("Rule 144"); (ii) any sale of such Common Shares made in reliance on Rule 144
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may be made only in accordance with the terms of Rule 144 and further, if Rule
144 is not applicable, any resale of such Common Shares without registration
under the Securities Act under circumstances in which the Purchaser may be
deemed to be an underwriter (as that term is defined in the Securities Act) may
require compliance with some other exemption(s) under the Securities Act or the
rules and regulations of the SEC thereunder; and (iii) except as provided in the
Registration Rights Agreement, neither the Sellers nor any other person is under
any obligation to register such Common Shares under the Securities Act or any
state securities laws or to comply with the terms and conditions of any
exemption thereunder (in each case, other than pursuant to this Agreement).
Notwithstanding the foregoing or anything else contained herein to the contrary,
the Purchaser shall have the right, to the extent permitted by applicable law,
to borrow funds and grant liens, options, pledges or other interests or
encumbrances, against the rights granted to it hereunder; provided, however,
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that any remedies exercised by a counterparty to any such transaction are
subject to the provisions for assignment of such rights provided in Section 8.8.
Except for transfers to affiliates of the Purchaser pursuant to Section 8.8
hereof, all transfers and resales of the Common Shares hereunder are subject to
the rights of first refusal granted to Messrs. Lernout and Hauspie set forth in
Section 4.5 hereof.
2.7 Legends. The Purchaser understands that, subject to Article V
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hereof, until such time as (i) the Common Shares have been registered under the
Securities Act as contemplated by this Agreement and the Registration Rights
Agreement, (ii) the Purchaser provides to LHSP an opinion of counsel, such
counsel to be reasonably satisfactory to LHSP, in form, substance and scope
reasonably satisfactory to LHSP, to the effect that a public resale or transfer
of such
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Common Shares may be made without registration under the Securities Act, or
(iii) the Common Shares may otherwise be sold by the Purchaser pursuant to Rule
144(k) (or any successor thereto), the certificate(s) representing the Common
Shares will bear a restrictive legend (the "Legend") in substantially the
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following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES. THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED OR SOLD
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS OR UNLESS OFFERED, SOLD OR
TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THOSE LAWS.
2.8 Authorization; Enforcement. The Transaction Documents have been
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duly and validly authorized, executed and delivered on behalf of the Purchaser
and are valid and binding agreements of the Purchaser, enforceable in accordance
with their respective terms except to the extent that such validity or
enforceability may be subject to or affected by any bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to or affecting
the enforcement of creditors' rights or remedies generally, or by other
equitable principles of general application.
2.9 Residency. The Purchaser is a resident of the jurisdiction set
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forth under its name on the signature page hereto.
2.10 Information. The Purchaser and its counsel have been furnished all
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publicly available materials and information relating to the business, finances
and operations of LHSP which have been specifically requested by it or its
counsel. No due diligence investigation conducted by the Purchaser or its
counsel or any of its representatives or agents shall modify, amend or affect
the Purchaser's right to rely on the Sellers' representations and warranties
contained in this Agreement. The Purchaser understands that its investment in
the Common Shares involves a high degree of risk.
2.11 No Brokers; Consultants. The Purchaser has taken no action,
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directly or indirectly, which would give rise to any claim by any person for
brokerage commissions, finder's fees or similar payments by the Sellers relating
to this Agreement, any other Transaction Document or the transactions
contemplated hereby or thereby, except for dealings with Shoreline Pacific
Institutional Finance, the Institutional Division of Financial West Group
("Shoreline") and M&A International ("M&A"), the fees and/or expenses of which,
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if any shall be due, shall be paid in full by the Sellers at the Closing as
specified in the Escrow Agreement. The Sellers acknowledge that the Purchaser
has incurred certain fees and expenses in connection with obtaining consulting
services from the Gartner Group (Europe) ("Gartner") relating to the Purchaser's
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decision to invest in the Common Shares, and the Sellers agree that they shall
reimburse the Purchaser for all such fees and expenses at the Closing as
specified in the Escrow Agreement. The Purchaser will indemnify the Sellers
from and against any fees and expenses (including without limitation reasonable
attorneys' fees and expenses) sought or other claims made by any person or
entity in the nature of brokerage commissions, finder's fees and consulting fees
based solely on any actions of the Purchaser with respect to entering into this
Agreement, any other Transaction Document and the transactions contemplated
hereby and thereby, except with respect to the fees and/or expenses, if any, due
to Shoreline, M&A or Gartner.
2.12 Transfers to LEHA. The Purchaser acknowledges and agrees that each
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of Oldco and Holding may be liquidated prior to the Share Transfer Date, and any
such liquidation shall
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not be considered a breach of this Agreement provided that, prior to or upon the
consummation of such liquidation, (i) all of the interests held by such entities
in Common Shares in an amount up to the Permitted Maximum Number (as defined in
Section 5.3 hereof), shall be transferred to LEHA, subject to the continuing
pledge on such Common Shares arising under the Stock Pledge Agreement, and (ii)
all material and uncontested creditors of Oldco or Holding shall be satisfied or
provided for prior to or simultaneously with such liquidation. Any liquidation
of Oldco and/or Holding shall in no way relieve any other party of its
respective obligations hereunder or under the other Transaction Documents.
ARTICLE III
REPRESENTATION AND WARRANTIES OF THE SELLERS
Each Seller, jointly and severally, represents and warrants to the
Purchaser as of the date hereof (except for representations and warranties that
speak as of a specific date, which representations shall be true and correct as
of such date), as set forth in this Article III and in each exhibit or schedule
attached to this Agreement relating to the statements made in this Article III.
Each Seller makes no other representations or warranties, express or implied, to
the Purchaser in connection with the transactions contemplated hereby (except as
may be contained in any documents or agreements executed jointly by the Sellers
and the Purchaser in connection with the transactions contemplated hereby) and
any and all prior representations and warranties, if any, which may have been
made by the Sellers to the Purchaser in connection with the transactions
contemplated hereby shall be deemed to have been merged in this Agreement and
any such prior representations and warranties, if any, shall not survive the
execution and delivery of this Agreement.
3.1 Organization and Qualification. Each of LHSP, Oldco, Holding and
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each of their respective subsidiaries is a corporation, in each case duly
organized and existing and (where applicable in the relevant jurisdictions) in
good standing under the laws of the jurisdiction in which it is formed, and has
the requisite power and authority to own its properties and to carry on its
business as now being conducted. An organizational chart accurately reflecting
the ownership interests in each of the Sellers and LHSP is attached hereto as
Exhibit C. Each of LHSP, Oldco, Holding and their respective subsidiaries is
duly qualified as a foreign entity to do business and is in good standing in
every jurisdiction where the failure so to qualify or be in good standing would
have a Material Adverse Effect. "Material Adverse Effect" means any effect
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which, individually or in the aggregate with all other effects, is or could
reasonably be expected to be materially adverse to (a) the business, operations,
properties, financial condition, operating results or prospects of LEHA, LHSP,
Oldco, Holding and their respective subsidiaries, as the case may be, in each
case taken as a whole on a consolidated basis, (b) the transactions contemplated
by the Transaction Documents or the Purchaser's rights thereunder or (c) any
interest in, or the value of, the Common Shares. Each of Oldco and Holding may
be liquidated prior to the Share Transfer Date, and any such liquidation shall
not be considered a breach hereunder provided that, prior to or upon the
consummation of any such liquidation, (i) all of the interests held by such
entities in Common Shares in an amount up to the Permitted Maximum Number shall
be transferred to LEHA, subject to the continuing pledge on such Common Shares
arising under the Stock Pledge Agreement, and (ii) all material and uncontested
creditors of Oldco or Holding shall be satisfied or provided for prior to or
simultaneously with such liquidation. Any such liquidation shall in no way
relieve any other party of its respective obligations hereunder or under any
other Transaction Document.
3.2 Authorization; Enforcement. The Sellers have the requisite power and
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authority to enter into and perform the Transaction Documents, to sell the
Common Shares on the Closing Date and perform their respective obligations in
accordance with the terms hereof and thereof, and to deliver the Common Shares
on the Share Transfer Date. Except for certain filings with the
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SEC and the Nasdaq Stock Market ("Nasdaq") in connection with the forward sale
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of the Common Shares under this Agreement, the execution, delivery and
performance of this Agreement and the other Transaction Documents by the Sellers
and the consummation of the transactions contemplated hereby and thereby
(including without limitation the sale of the Common Shares) have been duly
authorized by all necessary action and, no further consent or authorization of
the Sellers, the board of directors of LEHA or any other person, body or agency,
and no filing with any person, body or agency, is required with respect to any
of the transactions contemplated hereby or thereby, except for such consents
which have previously been obtained or waived. The Transaction Documents have
been duly executed and delivered by each of the Sellers. The Transaction
Documents constitute legal, valid and binding obligations of each of the
Sellers, enforceable against it or him in accordance with their respective
terms, except to the extent that such validity or enforceability may be subject
to or affected by any bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to or affecting the enforcement of
creditors' rights or remedies generally, or by other equitable principles of
general application.
3.3 Common Shares. Except for the first priority security interest to be
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granted by the Sellers to the Purchaser pursuant to the Stock Pledge Agreement,
the Common Shares are and, as of the Share Transfer Date will be duly
authorized, validly issued, fully paid and non-assessable, free and clear of all
taxes, liens, claims, charges, options, warrants, calls, voting agreements,
proxies or powers-of-attorney or other rights of third parties or encumbrances
of any kind ("Liens") (other than restrictions on transfer imposed by applicable
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securities laws). On the Share Transfer Date, the Sellers shall convey to the
Purchaser good and marketable title to the Common Shares. Ownership of the
Common Shares confers all rights and preferences accorded to a holder of shares
of common stock of LHSP (the "Common Stock"). The Common Stock are listed for
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quotation on Nasdaq, and trading in the Common Stock has not been suspended or
limited by Nasdaq or the SEC or other regulatory authority for any reason and no
proceeding seeking suspension is currently pending. After the registration of
the Common Shares pursuant to the Registration Rights Agreement, the Common
Shares will be entitled to be traded on the same markets and exchanges as the
other shares of Common Stock of LHSP are traded. As of the date hereof, the
Sellers beneficially and of record own all of the Common Shares set forth on
Schedule 3.3 hereof. As a result of interests in the Common Stock held by the
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Sellers and their affiliates, the Sellers Control (as defined in Section 5.1
hereof) LHSP. The Sellers have an unqualified right to pledge the Common Shares
to the Purchaser pursuant to the Stock Pledge Agreement and to grant the
Purchaser a first priority security interest in the Common Shares.
3.4 Characteristics of the Common Shares. All of the Common Shares are
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registered shares (i.e., "aandelen op naam") within the meaning of Articles 41
1, 42 and 43 of the Belgian Coordinated Laws on Commercial Companies (the
"CLCC"). LHSP has issued certificates (which are currently being held by a
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security agent in the United States) representing evidence of the registration
of the owners of all Common Shares in the share register of LHSP within the
meaning of Article 43, second alinea CLCC (i.e., "certificaten van nominatieve
inschrijving"). On the Share Transfer Date, the Sellers shall cause such
certificates to be cancelled or, in the discretion of the Purchaser, to be
replaced by certificates evidencing the registration of the Purchaser as owners
of the Common Shares in LHSP's share register. There exist no other
certificates representing the Common Shares, whether or not representing any
legal ownership or other interest therein. Oldco and Holding have full
ownership rights (i.e., "volle eigenaar") over the Common Shares and are
registered in the share register of LHSP as owners of all of the Common Shares.
The registration in LHSP's share register of the pledge of the Common Shares
under the terms of the Stock Pledge Agreement, without any further action by or
obligation on any party or person (including, without limitation, any need to
deliver the above-mentioned
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certificates) shall be sufficient to make such pledge fully enforceable (i.e.,
"tegenwerpelijk") against LHSP and all other entities and third parties.
3.5 No Conflicts. The execution, delivery and performance of this
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Agreement and the other Transaction Documents by each of the Sellers and LHSP
(as is a party thereto), and the consummation by each of them of the
transactions contemplated hereby and thereby will not (a) result in a violation
of the Articles of Association (or other organizational documents) of LEHA,
Oldco, Holding or LHSP or (b) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Sellers,
LHSP, or any of their respective subsidiaries is a party, or result in a
violation of any law, rule, regulation, order, judgment or decree (including
U.S. federal and state securities laws and regulations, the laws and regulations
of Belgium, the laws and regulations of the Netherlands, the laws and
regulations of Luxembourg and the rules and regulations of Nasdaq) applicable to
the Sellers, LHSP or any of their respective subsidiaries, or by which any
property or asset of the Sellers, LHSP or any of their respective subsidiaries,
or the Common Shares, may be bound or affected (except for such possible
conflicts, defaults, terminations, amendments, accelerations, cancellation and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect or that are related to any material inaccuracies or omissions in
any representation or warranty of the Purchaser set forth herein). Except for
such consents which have previously been obtained or waived on or before the
Closing, neither the Sellers nor LHSP is required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency or any regulatory or self-regulatory agency in order for the
Sellers and LHSP to execute and deliver any of the Transaction Documents or to
perform their obligations in accordance with the terms hereof or thereof. LHSP
is not currently in violation of the listing requirements of Nasdaq, and the
execution, delivery and performance of this Agreement and the other Transaction
Documents will not result in a violation hereof or thereof, and none of the
Sellers knows of or anticipates any event which could be grounds for delisting
of the Common Stock of LHSP, nor do any of them reasonably anticipate that the
Common Stock will be delisted by Nasdaq in the foreseeable future. No approval
of the shareholders of LHSP is required or will be necessary under any
organizational document of LHSP, any law to which it is subject or under the
rules and regulations of Nasdaq, as a condition to the execution, delivery and
performance by LHSP of the Transaction Documents.
3.6 Acknowledgement Regarding Purchaser's Purchase of the Common Shares.
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The Sellers acknowledge and agree that (i) the Purchaser (including, for the
avoidance of doubt, any of its affiliates) is not acting as a financial advisor
or fiduciary (or in any similar capacity) of the Sellers or LHSP with respect to
this Agreement or any of the other Transaction Documents, or the transactions
contemplated hereby or thereby, (ii) the transactions contemplated by this
Agreement and the other Transaction Documents, and the relationship between the
Purchaser and the Sellers, are "arm's-length", and (iii) any statement made by
the Purchaser (except as set forth in Article II), or any of its
representatives, affiliates or agents in connection with this Agreement and the
other Transaction Documents and the transactions contemplated hereby and thereby
is not advice or a recommendation, is merely incidental to Purchaser's purchase
of the Common Shares and has not been relied upon as such in any way by the
Sellers, LHSP or the directors of LEHA. The Sellers further represent to the
Purchaser that the Sellers' decision to enter into this Agreement and the other
Transaction Documents and the transactions contemplated hereby and thereby have
been based solely on an independent evaluation by the Sellers and their
representatives.
3.7 No Integrated Offering. Neither the Sellers, nor any of their
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respective affiliates, nor any person acting on their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would either require registration of
any of the Common Shares under the Securities Act or prevent the parties hereto
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from consummating, or delay or interfere with the consummation of the
transactions contemplated hereby pursuant to an exemption from registration
under the Securities Act. The transactions contemplated hereby are exempt from
the registration requirements of the Securities Act, assuming the accuracy of
the relevant representations and warranties herein contained of the Purchaser to
the extent relevant for such determination.
3.8 No Brokers. The Sellers have taken no action, directly or indirectly,
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which would give rise to any claim by any person for brokerage commissions,
finder's fees or similar payments by the Purchaser relating to this Agreement,
any other Transaction Document or the transactions contemplated hereby or
thereby, except for dealings with Shoreline and M&A, the fees and/or expenses of
which, if any shall be due, shall be paid in full by the Sellers. The Sellers
will indemnify the Purchaser from and against any fees and expenses (including
without limitation reasonable attorneys' fees and expenses) sought or other
claims made by any person or entity in the nature of brokerage commissions,
finder's fees and consulting fees based solely on any actions of the Sellers
with respect to entering into this Agreement, any other Transaction Document and
the transactions contemplated hereby and thereby.
3.9 Disclosure. All information relating to or concerning Sellers and,
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to the best knowledge of the Sellers, relating to or concerning LHSP, set forth
in this Agreement or provided by the Sellers to the Purchaser in connection with
the transactions contemplated hereby and by the other Transaction Documents
(including, without limitation, information relating to intellectual property
and all of the information set forth in the Annual Report on Form 20-F of LHSP
for the fiscal year ended December 31, 1997 as of such date) is true and correct
in all material respects as of the date hereof and Sellers have not omitted to
state any material fact necessary in order to make the statements made herein or
therein, in light of the circumstances under which they were made, not
misleading. As of the date hereof, no material event or circumstance has
occurred or exists with respect to (i) LHSP or its subsidiaries, business,
properties, prospects, operations or financial condition which has not been
publicly disclosed but, under applicable law, rule or regulation, would be
required to be publicly disclosed, or (ii) the Sellers or their subsidiaries,
businesses, properties, prospects, operations or financial conditions which has
not been disclosed to the Purchaser and would be reasonably likely to materially
impact the ability of the Sellers to enter into and perform their obligations
under the Transaction Documents.
3.10 No General Solicitation. No Seller nor any person acting on behalf
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of any Seller in the transactions contemplated hereby or by the other
Transaction Documents (including Shoreline or M&A) has conducted any "general
solicitation," as such term is defined in Regulation D, with respect to any of
the Common Shares being offered hereby.
3.11 SEC Documents; Financial Statements. Since January 1, 1996, LHSP
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has timely filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements
of the Securities Exchange Act of 1934, as amended (the "1934 Act") (all of the
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foregoing filed prior to the date hereof and all exhibits included therein and
financial statements and schedules thereto and documents (other than exhibits)
incorporated by reference therein, being hereinafter referred to herein as the
"SEC Documents"). As of their respective dates, the SEC Documents complied in
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all material respects with the requirements of the 1934 Act or the 1933 Act, as
the case may be, and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. None of the statements made in any such SEC
Documents which is required to be updated or amended under applicable law has
not been so updated or amended. As of their
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respective dates, the financial statements of LHSP included in the SEC Documents
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto. Such financial statements have been prepared in accordance with
applicable U.S. generally accepted accounting principles, consistently applied,
during the periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto, or (ii) in the case of unaudited
interim statements, to the extent they may not include footnotes or may be
condensed or summary statements) and fairly present in all material respects the
consolidated financial position of LHSP as of the dates thereof and the results
of operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).
3.12 Absence of Certain Changes. To the best knowledge of Sellers,
--------------------------
except as disclosed in the SEC Documents, since December 31, 1996, there has
been no material adverse change and no material adverse development in the
assets, liabilities, business, properties, operations, financial condition,
prospects or results of operations of LHSP.
3.13 Solvency; No Impairment. Each of the Sellers represents that on the
-----------------------
date hereof, it is solvent and has sufficient capital for the continuation of
its business as currently conducted by such Seller. Each Seller further
represents that it will not be rendered insolvent or have insufficient capital
for the continuation of its business as currently conducted by such Seller as a
result of the transactions contemplated by this Agreement or the other
Transaction Documents. Each Seller represents that it will not take any actions
to impair its obligations, or the obligations of any other Seller or LHSP, under
this Agreement or with respect to any other Transaction Document. For purposes
of this Section 3.13, as of the date hereof, "solvent" shall mean, in addition
-------
to the meaning of such term under the laws applicable to each Seller, (i) the
fair value of the property of such Seller is not less than the total amount of
its liabilities, (ii) the present, fair saleable value of the assets of such
Seller is not less than the amount that will be required to pay the probable
liability of such Seller on its existing debts as they become absolute and
matured, (iii) such Seller is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (iv) such Seller does not presently
intend to, and does not presently believe that it will, incur debts or
liabilities beyond such Seller's ability to pay as such debts and liabilities
mature and (v) such Seller is not presently engaged in a business or a
transaction for which such Seller's property would constitute unreasonably small
capital. Except as set forth on Schedule 3.13 hereto, there are no material
-------------
liabilities (whether contingent or matured) of Oldco, LEHA or Holding, either
individually or in the aggregate.
3.14 Control of Sellers. Jo Lernout and Xxx Xxxxxxx Control (as defined
------------------
in Section 5.1 hereof) LHSP and LEHA, and, directly or indirectly, own at least
a majority of the outstanding shares of each of Oldco and Holding.
3.15 No Litigation. Except for the dispute between LHSP and Alpha
-------------
Software Corporation and such other matters as have been disclosed in LHSP's SEC
Documents, there is no material action, suit, claim, proceeding, inquiry or
investigation before or by any court, public board or body or any governmental
agency or self-regulatory organization pending or, to the knowledge of Sellers,
threatened, against any of the Sellers or involving the Common Shares.
3.16 LEHA. LEHA is duly incorporated and validly existing as a
----
foundation (stichting) under the laws of The Netherlands and has the power and
authority to perform the activities described in Article 3 of its articles of
association. LEHA is governed by a management board consisting of Messrs.
Lernout and Hauspie. Messrs. Lernout and Hauspie are authorized, in their sole
discretion, to negotiate and enter into contracts and to make all other legally-
binding decisions on behalf of LEHA (including all decisions relating to the
voting or
9
disposition of shares held by LEHA). All of the activities of LEHA are conducted
solely for the benefit of Messrs. Lernout and Hauspie, who are the beneficial
interest holders in LEHA (certificaathouders). The assets currently held by LEHA
are comprised solely of the shares of Oldco and Holding, and after the
liquidation of Oldco and Holding, the only assets of LEHA will be shares of LHSP
and L&H Holding N.V., a Belgian corporation ("Holding NV"). Under its
----------
organizational documents, the scope of permitted activities which may be
conducted by LEHA is restricted to owning, holding, investing, disposing of and
otherwise dealing in the shares of Oldco, Holding, LHSP and Holding N.V. held by
it, and it is prohibited from engaging in any other commercial activities or
operations. Under its organizational documents, LEHA is legally required to
immediately distribute to its beneficial interest holders all dividends,
distributions and proceeds received by it in respect of its shareholdings (other
than dividends, distributions or proceeds in the form of shares, which it is
permitted to retain). None of LEHA, Oldco or Holding is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
ARTICLE IV
COVENANTS
4.1 Securities Laws. The Sellers shall, on or prior to the date of
---------------
Closing, take such action as is necessary to qualify the Common Shares for sale
to the Purchaser in compliance with applicable securities laws of the states of
the United States or obtain exemption therefrom, and shall provide evidence of
any such action so taken to the Purchaser on or prior to the date of the
Closing. The Purchaser agrees to provide such information and take such other
actions as may be reasonably requested by Sellers in connection herewith.
4.2 Corporate Existence. On and following the Closing Date, and
-------------------
continuing throughout the Registration Period (as defined below), each of LEHA
and, (subject to the provisions of Section 3.1 hereof) Oldco and Holding, shall
maintain its corporate existence and, as applicable in the relevant
jurisdiction, in good standing, except that any such Seller may enter into a
merger, consolidation or sale of all or substantially all of its assets, as long
as the surviving or successor entity in such transaction (i) assumes in writing
the obligations of LEHA, Oldco and/or Holding (as the case may be) hereunder and
under the other Transaction Documents, (ii) all Common Shares transferred by
LEHA, Oldco and/or Holding to the surviving or successor entity pursuant to such
transaction, in an amount up to the Permitted Maximum Number, shall remain
subject to the continuing pledge under the Stock Pledge Agreement, and (iii) the
Purchaser shall have received an opinion of counsel in form and substance
reasonably satisfactory to the Purchaser, which shall include an opinion that
each of the Transaction Documents constitutes the legally valid and binding
obligation of the surviving or successor entity, enforceable against it under
applicable law. On and following the date of Closing, and continuing throughout
the Registration Period (as defined in the Registration Rights Agreement), the
Sellers shall use their best efforts to cause LHSP to maintain its corporate
existence in good standing, except that LHSP may enter into a merger,
consolidation or sale of all or substantially all of the assets of LHSP, as long
as the surviving or successor entity in such transaction (i) assumes in writing
LHSP's obligations hereunder and under the other Transaction Documents to which
it is a party (ii) the Purchaser receives written notice of any such action
prior to the applicable record date, and (iii) the Purchaser shall have received
an opinion of counsel in form and substance reasonably satisfactory to the
Purchaser, which shall include an opinion that the Registration Rights Agreement
constitutes the legally valid and binding obligation of the surviving or
successor entity, enforceable against it under applicable law.
4.3 Information and Reports. The Sellers shall cause LHSP to deliver to
-----------------------
the Purchaser any information delivered by LHSP to LHSP's shareholders. In
addition, the Sellers shall cause the Purchaser to receive copies of any
management accounts or other information
10
produced by or for the Sellers regarding Oldco, Holding or LEHA containing
information relevant to their financial position or their ability to perform
their obligations (including their indemnification obligations) hereunder and
under the other Transaction Documents.
4.4 Resale of Common Shares. The Purchaser covenants and agrees that in
-----------------------
connection with any sale of the Common Shares pursuant to a resale Registration
Statement, it will comply with the prospectus delivery requirements, to the
extent such requirement is applicable.
4.5 Right of First Refusal. The Purchaser agrees that following the
----------------------
Share Transfer Date, it will offer to both Messrs. Lernout and Hauspie the right
for each of them to purchase one-half of any Common Shares not previously sold
(including but not limited to derivative sales) which it intends to sell in a
block sale of at least 50,000 Common Shares (subject to adjustment pursuant to
Section 5.4) (a "Block Sale") on terms no less advantageous to the Purchaser
----------
than those available from a third party purchaser. Each of Messrs. Lernout and
Hauspie shall have three (3) Business Days following such offer to elect to
purchase the shares offered to him and an additional three (3) Business Days
following such election to complete the purchase thereof (the "Required Purchase
-----------------
Date"). To the extent either of Messrs. Lernout or Hauspie does not elect to
----
purchase all or any amount of the one-half portion offered to him within the
three Business Day offer period provided in the foregoing sentence, the
Purchaser shall immediately offer on the same terms to either Mr. Lernout or
Hauspie (who had elected to purchase his one-half portion) the remaining
unexercised amount, which offer shall remain open for three (3) Business Days,
and if accepted, shall be completed within two (2) Business Days following such
acceptance. Thereafter, the Purchaser shall have the right to sell the Common
Shares not purchased by Messrs. Lernout or Hauspie, or by either of them, to
such third party purchaser within eight (8) Business Days following the
expiration of such period, and such sale shall be on the same terms offered to
Messrs. Lernout and Hauspie. If the Purchaser fails to complete such sale to
the third party within such eight Business Day period, the Purchaser shall not
be permitted to sell such shares to such third party or enter into any other
Block Sale until it has complied again with the provisions of this Section 4.5.
In the event that either or both of Messrs. Lernout and Hauspie does not
complete the transaction within three (3) Business Days following an election to
purchase the shares offered to him as described in this Section 4.5, Illiquidity
Payments (as defined in Section 5.6 below) shall be paid to the Purchaser by
Messrs. Lernout or Hauspie or both, as the case may be, for the number of days
after the Required Purchase Date until such shares have been otherwise sold, up
to a total of five (5) Business Days.
4.6 Shareholder Covenants. Each Seller further covenants and agrees, in
---------------------
its or his capacity as direct or indirect shareholder of LHSP, including through
any person, corporation or other entity directly or indirectly Controlled by
such Seller, that it will abstain, and will procure that any other shareholder
of LHSP Controlled by such Seller will abstain, from proposing, approving or
voting (as a shareholder of LHSP) with respect to (i) any capital increase of
LHSP by way of a rights offering to existing LHSP shareholders on a pre-emptive
basis or (ii) any resolution to pay a cash dividend on the Common Stock;
provided, however, that the foregoing actions shall be permitted with the prior
written consent of the Purchaser. Further, each of the Sellers (to the extent
it now or hereafter is the legal owner of any Common Shares subject to the
pledge under the Stock Pledge Agreement, or to the extent it now or hereafter
controls any such legal owner) hereby irrevocably instructs LHSP that, at all
times after the Closing Date and through the Share Transfer Date, any cash
dividends declared and paid by LHSP in respect of the Common Shares, and any
distribution in any form other than cash made by LHSP in respect of the Common
Shares (including but not limited to distributions of assets or rights) shall be
paid and distributed directly by LHSP in accordance with the provisions of
Section 5.4 hereof, and in the event that any of the Sellers shall receive any
such cash dividends or other distribution proceeds, such Seller shall receive
and hold the same in the name of and as agent for the
11
Purchaser, and shall pay or transfer and assign over to the Purchaser such cash
dividends or distribution proceeds immediately upon its receipt thereof.
4.7 No Integrated Offering; No Solicitation. Neither the Sellers, nor any
---------------------------------------
of their respective affiliates, nor any person acting on their behalf, will,
through the Share Transfer Date, directly or indirectly make any offers or sales
of any security or solicit any offers to buy any security under circumstances
that would either require registration of any of the Common Shares being sold
hereunder under the Securities Act or prevent the parties hereto from
consummating, or delay or interfere with the consummation of, the sale of the
Common Shares hereby pursuant to an exemption from registration under the
Securities Act.
4.8 Cancellation of Depositary Receipts of LEHA. Messrs. Lernout and
-------------------------------------------
Hauspie acknowledge and agree that all depositary receipts of LEHA representing
beneficial interests in the Required Transfer Amount shall be automatically
cancelled (without requiring further action on the part of any Seller) no later
than the Share Transfer Date, and LEHA shall provide to the Purchaser written
evidence of such cancellation immediately upon the occurrence thereof.
4.9 Inscription of Pledge. No later than the close of business on the
---------------------
Closing Date, the Purchaser shall receive (i) a copy of an excerpt from the
shareholders register of LHSP maintained in Belgium, reflecting the inscription
of the pledge of the Common Shares to the Purchaser under the terms of the Stock
Pledge Agreement, and (ii) a copy of a letter from the Transfer Agent addressed
to its internal processing unit, instructing that the pledge of the Common
Shares to the Purchaser under the terms of the Stock Pledge Agreement be
inscribed with immediate effect on the LHSP shareholders register maintained in
the United States. No later than the first Business Day following the Closing
Date, the Purchaser shall receive a copy of an excerpt from the LHSP
shareholders register maintained in the United States, reflecting the
inscription of the pledge of the Common Shares to the Purchaser under the terms
of the Stock Pledge Agreement.
ARTICLE V
SHARE TRANSFER DATE; DELIVERY OF SHARES, REGISTRATION OF SHARES
5.1 Determination Date. The number of Common Shares to be delivered
------------------
by Sellers to the Purchaser hereunder shall be determined on a date (the
"Determination Date") that is the earliest to occur of: (i) August 31, 2001;
------------------
(ii) any date that Messrs. Jo Lernout and Xxx Xxxxxxx no longer Control LHSP,
directly or indirectly, for any reason; (iii) the date of any statement by any
Seller that it does not intend or is unable for any reason to honor its
obligations under any Transaction Document to which it is a party, or the date
of any repudiation by any Seller of its obligations hereunder if such
repudiation is not revoked within three (3) Business Days following written
notice from Purchaser requesting such revocation; (iv) the effective date of a
merger, consolidation or sale of all or substantially all of the assets of LEHA,
Oldco or Holding in violation of Section 4.2 hereof or merger, consolidation or
sale of all or substantially all of the assets of LHSP in violation of such
section or in any such case where the survivor is not listed on a national
securities exchange or market in the United States or the Sellers are not in
Control of such entity; (v) any date on which any of the Sellers or LHSP makes
an assignment for the benefit of creditors, or applies for consent to the
appointment of a receiver or trustee for it or for all or substantially all of
its property or business, or such a receiver or trustee shall otherwise be
appointed; (vi) any date that bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings for relief under any bankruptcy law
or any law for the relief of debtors shall be instituted by or against any of
the Sellers or LHSP (which, in the case of an involuntary
12
proceeding, is not dismissed within 90 days from the date of filing); (vii) the
date that the common stock of LHSP or any successor entity thereof ceases to be
listed on a national securities exchange or market in the United States; (viii)
the date that the Purchaser does not have a first priority, validly perfected
security interest in the "Pledged Shares" and the other "Pledged Collateral", in
each case as defined in the Stock Pledge Agreement (a "Non-Perfection Event"),
--------------------
provided that a Determination Date shall not be deemed to have occurred if,
within 10 days from such date, the Sellers have cured such Non-Perfection Event
and, at such time, the Purchaser has a first priority, validly perfected
security interest in the "Pledged Shares" and the other "Pledged Collateral".
For purposes of this Article V, "Business Day" means any day other than a
-------------
Saturday, Sunday or a day on which banks in New York, New York, the United
Kingdom and Brussels, Belgium are permitted or required by law to be closed.
For purposes of this Agreement, "Control" means the right to nominate for
-------
appointment the majority of the directors, trustees or equivalent fiduciary or
supervisory officers.
5.2 Transfer of Shares.
------------------
(a) At any time on or after the Determination Date (the "Share
-----
Transfer Date"), the Purchaser shall issue irrevocable instructions in the form
-------------
attached hereto as Exhibit F (the "Instructions"), to LHSP's transfer agent in
------------
the United States (the "Transfer Agent") and to Mr. David Dessers, a lawyer
--------------
with an address at Xx. xx Xxxxxxxxx 000X, 0000 Xxxxxxxx, Xxxxxxx and to Xx.
Xxxxxx Xxxxxxxx, a lawyer with an address at Sint-Krispijnstraat, B-8900, Ieper,
Belgium (each, the "Attorney-in-Fact"), specifying the Required Transfer Amount
----------------
(as defined below) and directing the Transfer Agent and the Attorney-in-Fact to
inscribe in the shareholder registers of LHSP maintained in the United States
and Belgium, respectively, such number of Common Shares in an amount equal to
the Required Transfer Amount into the name of the Purchaser, and to generally
undertake all other actions within their power to cause the legal and beneficial
ownership of such number of Common Shares to be transferred into the Purchaser's
name.
(b) Except as set forth below in Section 5.2(d), the Purchaser shall
provide a copy of the Instructions to the Sellers (by facsimile) simultaneously
with delivery thereof to the Transfer Agent and the Attorney-in-Fact. For the
period of three Business Days from the date of the Instructions, the Sellers
shall have the right to confirm or deny in writing to the Purchaser, the
Transfer Agent and the Attorney-in-Fact that the Determination Date shall have
occurred and the accuracy of the specified Required Transfer Amount. In the
event that the Sellers do not so confirm or deny the statements contained in the
Instructions in accordance with the preceding sentence, the Instructions shall
be deemed to have been confirmed by the Sellers. The Transfer Agent and the
Attorney-in-Fact shall not undertake to inscribe the Required Transfer Amount in
the name of the Purchaser or undertake any other action in respect of the
Instructions until the earlier of (i) the receipt of notice from the Sellers
confirming the information in the Instructions or (ii) the lapse of three
Business Days from the date of the Instructions without notice from the Sellers
with respect thereto. Not later than the first Business Day after the
occurrence of the earlier of the two events described in the preceding sentence,
the Transfer Agent and the Attorney-in-Fact shall make such inscriptions and
undertake all such actions within their power, and within the same time period,
the Sellers shall take any and all such other actions as may be necessary, to
vest in the Purchaser the legal and beneficial ownership of a number of Common
Shares in an amount equal to the Required Transfer Amount. Notwithstanding the
foregoing, in the event that the Sellers provide written notice to the Transfer
Agent and the Attorney-in-Fact within three Business Days of the date of the
Instructions, denying the accuracy of the information contained in the
Instructions or otherwise stating that there exists a dispute regarding the
Instructions, the Transfer Agent and the Attorney-in-Fact shall not undertake
any action in respect of the Instructions until furnished notice of the
resolution of such dispute in accordance with the provisions of this Agreement,
except that the Transfer Agent and the Attorney-in-Fact shall undertake to
inscribe in the name of the Purchaser and otherwise take action to vest legal
13
and beneficial ownership in the Purchaser of such number of Common Shares, if
any, as are not subject to the abovementioned denial or dispute. All Common
Shares subject to the pledge under the Stock Pledge Agreement in excess of the
Required Transfer Amount shall be released from such pledge without requiring
further action on the part of the Purchaser, and the Purchaser agrees to
undertake all reasonable actions within its control to facilitate the release of
such Common Shares from the pledge.
(c) In connection with the foregoing transfer of the Common Shares,
Sellers shall, no later than the Closing Date, issue irrevocable Instructions to
the Transfer Agent and the Attorney-in-Fact, a copy of which shall be
countersigned by and delivered to the Purchaser, that the Transfer Agent and the
Attorney-in-Fact must comply with the Instructions unless the Transfer Agent or
the Attorney-in-Fact has been notified of a dispute, as set forth above.
Disputes relating to the number of shares comprising the Required Transfer
Amount shall be resolved as set forth in Section 5.4(d).
(d) Notwithstanding anything in this Section 5.2 to the contrary, the
Purchaser shall have no obligation to deliver a copy of the Instructions to the
Sellers, and the Transfer Agent and the Attorney-in-Fact shall automatically
fulfill the directions set forth in the Instructions within one Business Day of
their receipt thereof without any notification to or from the Sellers, in the
case that the Determination Date occurs as a result of an event or circumstance
which is a Matter of Public Record. For purposes of this Section 5.2, "Matters
-------
of Public Record" shall be deemed to include the following: (1) any filing or
----------------
official disclosure by LHSP to a national securities exchange or market or
securities commission of the occurrence of any merger or consolidation involving
LHSP or the sale of all or substantially all of its assets where the survivor of
such transaction is not listed on a national securities exchange or market in
the United States (as described in Section 5.1(iv)); (2) any court filing
constituting the occurrence of any event described in Sections 5.1(v) and (vi);
(3) any filing or official disclosure by LHSP to a national securities exchange
or market or securities commission that the Common Stock of LHSP or the
successor thereof is not then listed on any national securities exchange or
market in the United States (as described in Section 5.1(vii)); and (4) the
entry of a final, non-appealable decision of a court of competent jurisdiction
of the occurrence of the event described in Section 5.1(viii) hereof. In order
to be acted upon by the Transfer Agent and the Attorney-in-Fact, any
Instructions delivered pursuant to this Section 5.2(d) shall attach a copy of
documentation providing support that a Determination Event constituting a Matter
of Public Record has occurred.
(e) All Common Shares transferred to the Purchaser in satisfaction of
Sellers' obligations hereunder shall be free and clear of all Liens, and the
Sellers shall pay any fees, taxes or assessments imposed by any governmental or
quasi-governmental authority in connection with such transfer (provided that the
Sellers shall not be obligated to pay any taxes related to any income
attributable to the Purchaser as a result of the transactions contemplated
hereby).
(f) Any disputes among the parties relating to the occurrence of a
Determination Date may be resolved by non-binding arbitration under the UNCITRAL
Arbitration Rules by three arbitrators appointed as to one by the Sellers and
one by the Purchaser, and the two arbitrators so appointed jointly appointing a
third arbitrator within five Business Days of their appointment. The seat of
the arbitration tribunal shall be in the Court of International Arbitration in
London, England, and the language of the arbitration shall be English.
Submission to this arbitration clause does not waive the right of any party
hereto to submit any dispute to any court of competent jurisdiction as set forth
in Section 8.2
5.3 Determination of Required Transfer Amount. The "Required Transfer
----------------------------------------- -----------------
Amount" shall be determined in accordance with the schedule attached hereto as
------
Exhibit E. For
14
purposes of such Exhibit E and this Section 5.3, the term "Quoted Price" means a
------------
price per Common Share of LHSP calculated by reference to the average of the
closing bid and closing asked prices of the Common Stock, as quoted on the
Principal Exchange as reported by Bloomberg ("Bloomberg") or a comparable
---------
reporting service of national reputation selected by the Sellers with the
Purchaser's consent, which consent shall not be unreasonably withheld, at the
close of regularly scheduled trading on each of the 30 days on which such
Principal Exchange is open for trading prior to the Determination Date, or if
the prices cannot be calculated for such security on such date on any of the
foregoing bases, the trading price of such security on such date as shall be
deemed to be the fair market value as reasonably determined by an investment
banking firm selected by the Purchaser, with the reasonable costs of such
appraisal to be borne by the Sellers. "Principal Exchange" means the principal
------------------
securities exchange or trading market where the Common Stock of LHSP are listed
or traded in the United States. To the extent that the Quoted Price (calculated
as described above) falls between two indicative Quoted Prices listed on Exhibit
E, the Required Transfer Amount shall be determined by interpolation between the
Required Transfer Amounts corresponding to the indicative Quoted Prices listed
on Exhibit E that are immediately higher and immediately lower than the actual
Quoted Price. Notwithstanding anything in this Section 5.3 or Exhibit E to the
contrary, if the Quoted Price is equal to or less than $20.00 (subject to
adjustment pursuant to Section 5.4 hereof), the Required Transfer Amount shall
be equal to 800,000 Common Shares, subject to adjustment pursuant to Section 5.4
hereof (the "Permitted Maximum Number").
------------------------
5.4 Adjustments to Required Transfer Amount and Permitted Maximum
-------------------------------------------------------------
Number.
------
(a) If, prior to the delivery of Common Shares on the Share Transfer
Date in accordance with the terms of this Agreement, LHSP makes any issue of
Common Stock by way of capitalization of profits or reserves, the number of
outstanding Common Stock is increased by a stock split, stock dividend, merger,
consolidation, business combination, conversion or exchange of other securities,
recapitalization, reorganization, reclassification or other similar event, or if
the number of outstanding shares of Common Stock is decreased by a reverse stock
split, business combination, recapitalization, reorganization, share redemption
or reclassification of shares or other similar event, or LHSP makes any other
variation to its capital structure having an effect similar to the events
described above (any of the foregoing, a "Stock Event"), (i) all shares of
-----------
Common Stock (if any) issued pursuant to such Stock Event shall constitute part
of the Pledged Collateral (as such term is defined in the Stock Pledge
Agreement) and (ii) the Required Transfer Amount and Permitted Maximum Number
will be equitably adjusted to ensure that the economic value of the Common
Shares to be acquired by the Purchaser hereunder will be equal to the value that
the Purchaser would have obtained absent such Stock Event.
(b) If, prior to the delivery of Common Shares on the Share Transfer
Date in accordance with the terms of this Agreement, LHSP declares or makes any
distribution of its cash or assets (or rights to acquire its assets) to holders
of Common Stock as a dividend, stock repurchase, by way of return of capital or
otherwise (including any dividend or distribution to LHSP's shareholders in cash
or shares (or rights to acquire shares) of capital stock of any subsidiary of
LHSP (i.e., a spin-off) (a "Distribution"), then after the date of record for
------------
determining shareholders entitled to participate in such Distribution, each of
the Sellers (to the extent it now or hereafter is the legal owner of any Common
Shares subject to the pledge under the Stock Pledge Agreement, or to the extent
it now or hereafter controls any such legal owner) shall irrevocably instruct
LHSP to distribute directly to the Purchaser (and the Purchaser shall be
entitled to receive) the amount of such securities, assets, cash or rights which
would have been payable to or receivable by the Purchaser had the Purchaser been
the holder of the Trailing Value Number (as defined below) of Common Shares on
the record date for the determination of shareholders entitled to participate in
such Distribution. The "Trailing Value Number" shall be
---------------------
15
equal to that number of Common Shares which the Purchaser would have been
entitled to receive pursuant to Section 5.3 hereof if the date on which such
Distribution is adopted by LHSP were deemed to be a Determination Date (solely
for purposes of calculating the Trailing Value Number) and the Quoted Price were
calculated as the average of the daily closing prices of the Common Stock (as
quoted on the Principal Exchange) for the thirty (30) trading days immediately
prior to (but not including) the date of adoption of the Distribution.
(c) If, prior to the delivery of Common Shares on the Share Transfer
Date in accordance with the terms of this Agreement, LHSP issues any convertible
or exchangeable securities or rights to purchase stock, warrants, securities or
other property of LHSP (the "Purchase Rights") pro rata to the record holders of
---------------
any class of Common Stock, then each of the Sellers (to the extent it now or
hereafter is the legal owner of any Common Shares subject to the pledge under
the Stock Pledge Agreement, or to the extent it now or hereafter controls any
such legal owner) shall cause LHSP to distribute directly to the Purchaser, and
the Purchaser will be entitled to receive or acquire upon the terms applicable
to such Purchase Rights, the aggregate Purchase Rights which the Purchaser could
have acquired if the Purchaser had held the Trailing Value Number of Common
Shares on the date on which a record is taken for the grant, issuance or sale of
such Purchase Rights, or, if no such record is taken, the date as of which the
record holders of Common Stock are to be determined to be eligible to
participate in the grant, issue or sale of such Purchase Rights.
(d) The Sellers shall irrevocably instruct LHSP to deliver any such
Distribution or Purchase Rights directly to the Purchaser promptly after the
issuance thereof, except that to the extent that the securities or proceeds
representing any such Distribution or Purchase Rights cannot be issued
separately from the underlying Common Shares in respect of which they are
distributed (e.g., unactivated stock purchase rights issued pursuant to a
shareholders' rights plan), such Distribution or Purchase Rights shall be
delivered directly to the Purchaser once transferable separately from the
underlying Common Shares. If the Sellers and the Purchaser are unable to reach
agreement on any such adjustment upon the occurrence of any Stock Event,
Distribution or Purchase Rights, the Sellers shall instruct LHSP to promptly
deliver to the Purchaser the amount which is not in dispute and the Purchaser
and the Sellers will together, within five Business Days of the record date of
such Stock Event, Distribution or Purchase Rights, select an internationally
recognised auditing firm to resolve the dispute. If they are unable to agree on
such a firm, each shall select one firm within such five Business Day period,
and such firms shall, within two Business Days after their selection, together
select the auditing firm to serve hereunder. The Sellers (jointly) and the
Purchaser will each submit their calculations and supporting data to such
auditors within five Business Days following appointment. The auditors shall
make a determination of the appropriate adjustment within ten Business Days of
such submission, which determination shall be final and binding on each Seller
and the Purchaser, and thereupon the amount of any Distribution or Purchase
Rights not previously delivered to the Purchaser will be delivered in accordance
with such determination. The costs of any such audit shall be borne by the
party or parties in a manner reasonably determined by the auditor.
(e) (i) The Sellers shall have the right at their election to
acquire from the Purchaser any non-cash Distribution or Purchase Rights
distributable to the Purchaser by LHSP pursuant to this Section 5.4. In the
event that the Sellers elect to acquire such non-cash Distribution or Purchase
Rights from the Purchaser, the Sellers will provide the Purchaser with written
notice of their election no later than 5 (five) Business Days prior to the date
on which LHSP is scheduled to make such distribution to its stockholders (the
"Distribution Date"). Within 4 (four) Business Days after the receipt of such
-----------------
notice by the Purchaser, the Sellers and the Purchaser shall agree on the
purchase price to be paid by the Sellers to the Purchaser in consideration of
the sale of the non-cash Distribution or Purchase Rights (based upon the fair
market value thereof), and the Sellers shall pay such agreed price to the
Purchaser in immediately
16
available funds on the Distribution Date. In the event that the Sellers and the
Purchaser fail to agree on a purchase price prior to the Distribution Date, the
Purchaser shall receive such non-cash Distribution or Purchase Rights from LHSP,
subject to the right of the Sellers for an additional 5 (five) Business Days
after the Distribution Date to acquire (and pay for) same from the Purchaser at
a price agreed to by the Sellers and the Purchaser during such additional five-
day period.
(ii) In the event that (A) the Sellers acquire any non-cash
Distribution or Purchase Rights from the Purchaser at any time prior to the
Share Transfer Date pursuant to Section 5.4(e)(i) above, and (B) the Required
Transfer Amount to be transferred to the Purchaser on the Share Transfer Date is
determined to be less than the Permitted Maximum Number, then the number of
shares comprising the Required Transfer Amount shall be reduced by an amount
necessary to reduce the fair market value of the shares to be received by the
Purchaser on the Share Transfer Date by an amount equal to (x) the payment made
by the Sellers to acquire such non-cash Distribution or Purchase Rights in
respect of all shares in excess of the Required Transfer Amount determined
pursuant to Section 5.3 hereof (the "Excess Payment"), plus (y) accrued interest
--------------
on such Excess Payment at a rate equal to the prime annual lending rate as
quoted from time to time by Citibank N.A. in the Wall Street Journal (or, if the
Wall Street Journal is no longer published, a replacement publication selected
by the Purchaser) from the date on which the Excess Payment was made.
5.5 Unrestricted Securities. The Sellers shall cause LHSP to file a
-----------------------
Registration Statement with the SEC registering the resale of the Common Shares
by the Purchaser pursuant to the terms of the Registration Rights Agreement, and
shall fully enforce LHSP's obligations under such Registration Rights Agreement.
The Sellers shall cause the Common Shares to be delivered to the Purchaser
hereunder to be freely tradable pursuant to an effective registration statement
at all times (subject to Permitted Blackout Periods) during the Registration
Period (as defined in the Registration Rights Agreement). None of the Common
Shares delivered to the Purchaser in satisfaction of Sellers' obligations under
this Article V (whether as a result of the occurrence of the Determination Date,
or otherwise) shall contain a restrictive legend or otherwise be subject to
restrictions on sale or transfer under the 1933 Act, other than to the extent
such restrictions would arise if the Purchaser were an affiliate (as defined
under the 0000 Xxx) of LHSP, or to the extent imposed during Permitted Blackout
Periods.
5.6 Illiquidity Payments. If a Determination Date shall have occurred
--------------------
and (i) the irrevocable Instructions or other mechanics of delivery to be taken
by the Sellers as set forth in Section 5.2 are not completed within two Business
Days of the date that any such actions are required hereunder, or (ii) any
portion of the Required Transfer Amount is subject to a restrictive legend
(including as a result of not having a Registration Statement effective if and
as required pursuant to the Registration Rights Agreement, but other than as
permitted pursuant to Section 5.5) or such shares are not otherwise freely
transferable, or (iii) at any time during the Registration Period, other than
during Permitted Blackout Periods, such Registration Statement lapses in effect
(or sales otherwise cannot be made thereunder, whether by reason of LHSP's
failure to amend or supplement the prospectus included therein in accordance
with the Registration Rights Agreement or otherwise), unless such lapse is the
result of the Purchaser's failure to timely deliver such information as may be
required pursuant to Section 4(a) of the Registration Rights Agreement, or (iv)
a payment shall be due to the Purchaser pursuant to Section 4.5 hereof (the
number of Common Shares not freely tradable from time to time as a result of any
of the foregoing being referred to herein as the "Illiquid Securities"), the
-------------------
Sellers shall be obligated to make cash payments to the Purchaser to compensate
for the lack of liquidity resulting therefrom for the period of such
illiquidity. Except with respect to clause (iv) of the preceding sentence, for
purposes of the foregoing provisions, such payment obligation shall not become
effective until after the date that the Registration Statement is required to be
declared effective pursuant to Section 5.5 hereof and the Registration Rights
Agreement. Such "Illiquidity
-----------
17
Payments" shall equal an amount per annum (calculated on a monthly basis for
--------
each day during such month during which the Illiquid Securities were illiquid),
equal to the Prime Rate (as reported by the Wall Street Journal or, if the Wall
Street Journal is no longer published, a replacement publication selected by the
Purchaser) plus 3% multiplied by the aggregate Current Price of all Illiquid
Securities, as determined on a weekly basis as of the first trading day of each
calendar week. "Current Price" means the five-day average closing bid price for
-------------
the Common Stock on the Principal Exchange reported by Bloomberg on the date of
determination or, if the foregoing does not apply, the last reported sale price
of such security in the over-the-counter market on the electronic bulletin board
of such security as reported by Bloomberg, or, if no sale price is reported for
such security by Bloomberg, the average of the bid prices of any market makers
for such security that are listed in the "pink sheets" by the National Quotation
Bureau, Inc. If the Current Price cannot be calculated for such security on such
date on any of the foregoing bases, the Current Price of such security on such
date shall be the fair market value as reasonably determined by an investment
banking firm selected by the Purchaser, with the reasonable costs of such
appraisal to be borne by the Sellers. "Permitted Blackout Periods" means not
--------------------------
more than 30 consecutive days or 60 days in any twelve-month period in which
LHSP may delay the disclosure of material non-public information concerning LHSP
(including updating a Registration Statement or prospectus), the disclosure of
which at the time is not, in the good faith opinion of LHSP and counsel to LHSP,
in the best interests of LHSP. All payments pursuant to this Section 5.6
relating to Illiquid Securities shall be payable at the end of each calendar
month during which such payments were applicable. Any compensation paid
hereunder shall be in addition to, and not in lieu of, any other rights and
remedies that the Purchaser may have hereunder, whether in law or in equity, as
a result of Sellers' failure to satisfy their obligations hereunder.
ARTICLE VI
CONDITIONS TO THE SELLERS' OBLIGATION TO CLOSE
6.1 The obligation of the Sellers to enter into the transactions
contemplated by this Agreement is subject to the satisfaction, as of the date of
the Closing Date, of each of the following conditions, provided that these
conditions are for the Sellers' sole benefit and may be waived by the Sellers at
any time in their sole discretion:
(a) The Purchaser shall have executed and delivered to the Sellers
this Agreement, the Stock Pledge Agreement among each of the Sellers and the
Purchaser in the form attached hereto as Exhibit F ("Stock Pledge Agreement"),
----------------------
the Escrow Agreement among each of the Sellers, the Purchaser and the escrow
agent designated therein (the "Escrow Agent") in the form attached hereto as
------------
Exhibit G (the "Escrow Agreement"), and the Registration Rights Agreement among
----------------
each of the Sellers, LHSP and the Purchaser in the form attached hereto as
Exhibit H (the "Registration Rights Agreement"). The Purchaser shall have
-----------------------------
completed and executed the Purchaser Questionnaire and Representation Agreement
and delivered the same to the Sellers.
(b) The Purchaser shall have wired the Purchase Price, less certain
obligations of the Sellers specified in the Escrow Agreement, to the account of
the Escrow Agent pursuant to the Escrow Agreement.
ARTICLE VII
CONDITIONS TO THE PURCHASER'S OBLIGATION TO CLOSE
7.1 The obligation of the Purchaser to enter into the transactions
contemplated hereby is subject to the satisfaction as of the date of the
Closing, of each of the following
18
conditions, provided that these conditions are for the Purchaser's sole benefit
and may be waived by the Purchaser at any time in the Purchaser's sole
discretion:
(a) The Sellers shall have executed and delivered to the Purchaser
this Agreement, the Registration Rights Agreement, the Stock Pledge Agreement
and the Escrow Agreement, and each of the Sellers (except for Messrs. Lernout
and Hauspie) shall have executed Incumbency Certificates and delivered the same
to Purchaser.
(b) LHSP shall have executed and delivered the Registration Rights
Agreement to the Purchaser. The Escrow Agent shall have executed and delivered
the Escrow Agreement to the Purchaser.
(c) The Purchaser shall have received the opinions of Sellers' U.S.,
Belgian, Dutch and Luxembourg counsel, dated as of the Closing, in the forms
attached hereto as Exhibit I.
(d) The Sellers shall have taken all steps necessary to create and
perfect a first priority security interest in the Permitted Maximum Number of
Common Shares in favor of the Purchaser.
(e) The Sellers shall have issued the Instructions (which shall have
been countersigned by the Transfer Agent and the Attorney-in-Fact), as specified
in Section 5.2 hereof.
ARTICLE VIII
MISCELLANEOUS
8.1 Indemnity
---------
(a) To the extent permitted by law, the Sellers will, jointly and
severally, indemnify, hold harmless and defend (i) the Purchaser and any legal
person controlling, controlled by or under common control with the Purchaser,
(ii) the directors, officers, partners, employees and agents of the Purchaser
and each legal person controlling, controlled by or under common control with
the Purchaser (within the meaning of the 1933 Act or the 1934 Act), if any,
(iii) any underwriter (as defined in the 0000 Xxx) for the Purchaser and any
such legal person, and (iv) the directors, officers, partners, employees and
each person who controls any such underwriter and any such legal person (within
the meaning of the 1933 Act or the 1934 Act), if any (each, an "Indemnified
-----------
Person"), against any joint or several losses, claims, damages, liabilities,
------
stamp, transfer, documentary or other taxes or expenses (collectively, together
with actions, proceedings or inquiries by any regulatory or self-regulatory
organization, whether commenced or threatened, in respect thereof, "Claims") to
------
which any of them may become subject as a result of entering into this Agreement
or the other Transaction Documents or any other document or instrument required
to be delivered hereunder or thereunder or the transactions contemplated hereby
or thereby, including breaches of representations, warranties and covenants
hereunder and thereunder; provided that no Seller nor any affiliate or related
party will have any obligation or liability in respect of a decrease in the
price or market value of the Common Shares to be delivered on the Share Transfer
Date (except in the case of any such breach directly resulting in a decrease in
the price or market value of the Common Shares that are transferred to or
submitted to the voting control of the Purchaser (including, but without
limitation, any breach in the obligation to deliver shares that are duly
registered and free and clear of all encumbrances, as required under Sections
5.2 and 5.5 hereof) and if the Sellers fail to deliver Common Shares on the
Share Transfer Date, and then only with respect to declines in the market value
of the Common Shares during the duration of such failure of Sellers to deliver
Common Shares). Subject to the restrictions set forth in Section 8.1(b) with
respect to the number of legal counsel,
19
the Sellers shall reimburse each Indemnified Person promptly as such expenses
are incurred and are due and payable, for any reasonable legal fees or other
reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification contained in this Section 8.1(a) shall not apply to
(i) amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Sellers, which consent shall not be
unreasonably withheld, and (ii) Claims related to actions or omissions of any
Indemnified Person determined by a court of competent jurisdiction to constitute
gross negligence or willful misconduct. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the transfer of the Common Shares by the
Purchaser.
(b) Promptly after receipt by an Indemnified Person under this Section
8.1 of notice of the commencement of any action (including any governmental
action or third-party notice of claim, action or lawsuit), or if such
Indemnified Person shall have a Claim against the Seller not involving a third
party, such Indemnified Person shall, if a Claim in respect thereof is to be
made against any indemnifying party under this Section 8.1, deliver to the
indemnifying party a written notice of such Claim or the commencement of a
proceeding relating to a Claim. With respect to proceedings, the indemnifying
party shall have the right to participate therein, and, to the extent the
indemnifying party so desires, jointly with any other indemnifying party
similarly notified, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party or parties and the Indemnified
Person; provided, however, that such indemnifying party or parties shall not be
-------- -------
entitled to assume such defense and an Indemnified Person shall have the right
to retain its own counsel with the fees and expenses to be paid by the
indemnifying party or parties, if, and only in the event that, in the reasonable
opinion of counsel retained by the indemnifying party, the simultaneous
representation by such counsel of the Indemnified Person and the indemnifying
party or parties would be inappropriate due to actual or potential differing
interests between such Indemnified Person and any other party represented by
such counsel in such proceeding. In such event, the indemnifying party shall pay
for only one separate legal counsel for the Indemnified Persons and such legal
counsel shall be selected by the Purchaser. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such indemnifying party of any liability to
the Indemnified Person under this Section 8.1, except to the extent that the
indemnifying party is actually prejudiced thereby in its ability to defend such
action. In the case of Claims made by an Indemnified Person hereunder not
involving a third party, the Indemnified Person shall submit evidence to the
indemnifying party substantiating its Claim. In the event that the indemnifying
party disputes any amount of such Claim, it shall pay such amount as is not in
dispute in accordance with the provisions of this Section 8.1 and resolution of
the disputed amount shall be submitted to the mediation of an internationally-
recognized auditing firm which shall be jointly chosen by the parties to the
dispute, or, if such parties cannot agree, by a third such firm that is chosen
by the two firms selected by each of the parties. The indemnification required
by this Section 8.1 shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as such expense, loss, damage
or liability is incurred and is due and payable.
(c) To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under this Section 8.1 to the fullest extent permitted by law; provided,
--------
however, that no contribution shall be made under circumstances where the maker
-------
would not have been liable for indemnification under the fault standards set
forth in Section 8.1(a).
8.2 Governing Law; Jurisdiction. This Agreement shall be governed by
---------------------------
and construed in accordance with the laws of the State of New York applicable to
contracts made and
20
to be performed in the State of New York. The parties hereto irrevocably consent
to the jurisdiction of the United States federal courts and state courts located
in the County of New York in the State of New York in any suit or proceeding
based on or arising under this Agreement or the transactions contemplated hereby
and irrevocably agree that all claims in respect of such suit or proceeding may
be determined in such courts; provided, however, that the Purchaser shall have
the option to bring any action in a court in Belgium or the Netherlands. Each
Seller and the Purchaser irrevocably waives the defense of an inconvenient forum
to the maintenance of such suit or proceeding in such forum. Each Seller and the
Purchaser further agrees that service of process upon such Seller or the
Purchaser, as applicable, delivered by express courier or by facsimile in
accordance with Section 8.7 shall be deemed in every respect effective service
of process upon such Seller or the Purchaser in any suit or proceeding arising
hereunder. Nothing herein shall affect the Purchaser's right to serve process in
any other manner permitted by law. Each Seller hereby appoints Brown, Rudnick,
Freed and Gesmer as its agent for service of process. The address for such
office is set forth in Section 8.7 hereof. The parties hereto agree that a final
non-appealable judgment in any such suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on such judgment or in any other
lawful manner. The parties hereto irrevocably waive any right to trial by jury
under applicable law.
8.3 Counterparts. This Agreement may be executed in two or more
------------
counterparts, including, without limitation, by facsimile transmission, all of
which counterparts shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each party and delivered
to the other party. In the event any signature page is delivered by facsimile
transmission, the party using such means of delivery shall promptly cause
additional original executed signature pages to be delivered to the other
parties.
8.4 Headings. The headings of this Agreement are for convenience of
--------
reference and shall not form part of, or affect the interpretation of, this
Agreement.
8.5 Severability. If any provision of this Agreement shall be invalid
------------
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement or
the validity or enforceability of this Agreement in any other jurisdiction.
8.6 Entire Agreement: Amendments. This Agreement, the Transaction
----------------------------
Documents and the instruments referenced herein contain the entire understanding
of the parties with respect to the matters covered herein and therein and,
except as specifically set forth herein or therein, neither the Sellers nor the
Purchaser makes any representation, warranty, covenant or undertaking with
respect to such matters. No provision of this Agreement may be waived other
than by an instrument in writing signed by the party to be charged with
enforcement and no provision of this Agreement may be amended other than by an
instrument in writing signed by the Sellers and the Purchaser.
8.7 Notices. Any notice herein required or permitted to be given shall
-------
be in writing and may be personally served or delivered by nationally-recognized
express courier or by facsimile machine confirmed telecopy, and shall be deemed
delivered at the time and date of receipt (which shall include telephone line
facsimile transmission) or, if the date of such receipt is not a Business Day,
then on the next succeeding Business Day. The addresses for such communications
shall be:
If to any Seller:
-----------------
c/o Lernout & Hauspie Speech Products
21
0 Xxxx - Xxxxxxxxxxxxxx,
X0000 Xxxxx, Xxxxxxx
Telephone: 000-00-0-000-0000
Telecopy: 011-32-5-720-8489
Attention: Messrs. Xxx Xxxxxxx and Xxxx Xxxxxxxxx
with a copy to:
Loeff Xxxxxx Xxxxxxx
Xxxxxx Xx Xxxxxxxxxxxx 000 X
Xxxxxxxx X-0000
Telephone: 000-00-0-000-0000
Telecopy: 011-32-2-778-2457
Attention: Xxxxxx Xxxxx, Esq.
Brown, Rudnick, Freed & Gesmer
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000/8372
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq. and Xxxxxxxx Xxxx, Esq.
If to the Purchaser:
GE Capital Equity Investments, Ltd.
c/o GE Capital Limited
Clarges House
0-00 Xxxxxxx Xxxxxx
Xxxxxx X0X 0XX
Xxxxxxx
Attn: Director and Risk Manager
Account reference 2329
Telephone: (44)(000) 000 0000
Telecopier: (44)(171) 302 6810
and with a copy to:
Weil, Gotshal & Xxxxxx XXX
Xxx Xxxxx Xxxxx
Xxxxxx, Xxxxxxx XX0X 0XX
Attn: Xxxxxxx Xxxxxxx, Esq.
Telephone: (44)(000) 000-0000
Telecopy: (44)(171) 903-0990
Each party shall provide notice to the other party of any change in
address.
8.8 Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the parties and their successors and assigns. None of
the Sellers or the Purchaser shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other.
Notwithstanding the foregoing, the Purchaser may subject to and in compliance
with Section 2.6 hereof, assign all or part of its rights and obligations
hereunder to any of its "affiliates," as that term is defined under the
Securities Act, without the consent of the Sellers so long as such affiliate is
an accredited investor (within the meaning of Regulation D
22
under the Securities Act) and agrees in writing to be bound by this Agreement.
This provision shall not limit the Purchaser's right to transfer the Common
Shares pursuant to the terms of this Agreement or to assign the Purchaser's
rights hereunder to any such transferee pursuant to the terms of this Agreement.
8.9 Third Party Beneficiaries. This Agreement is intended for the
-------------------------
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
8.10 Survival. The representations and warranties of the Sellers and
--------
the Purchaser and the agreements and covenants set forth herein shall survive
the Closing hereunder notwithstanding any due diligence investigation conducted
by or on behalf of the Sellers or the Purchaser as the case may be.
8.11 Further Assurances. Each party shall use its best efforts to do
------------------
and perform, or cause to be done and performed, all such further acts and
things, execute and deliver all such other agreements, certificates, instruments
and documents, and obtain all such authorizations and consents as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby including, but not limited to, perfecting the first priority security
interest in the Common Shares, filing all required documents, notices and
reports with the SEC and Nasdaq (and any other applicable exchange).
8.12 Remedies. No provision of this Agreement providing for any remedy
--------
to the Purchaser shall limit any remedy which would otherwise be available to
the Purchaser at law or in equity. Nothing in this Agreement shall limit any
rights the Purchaser may have under any applicable federal or state securities
laws with respect to the investment contemplated hereby. Each Seller and the
Purchaser acknowledges that a breach by it of its respective obligations
hereunder will cause irreparable harm, in the case of breaches by a Seller, to
the Purchaser, and in the case of the Purchaser, to a Seller. Accordingly, each
Seller and the Purchaser acknowledges that the remedy at law for a material
breach of its respective obligations under this Agreement will be inadequate and
agrees, in the event of a breach or threatened breach by a Seller or the
Purchaser, as the case may be, of the provisions of this Agreement, that the
Purchaser or a Seller, as the case may be, shall be entitled, in addition to all
other available remedies, to an injunction restraining any breach and requiring
immediate compliance, without the necessity of showing economic loss and without
any bond or other security being required.
8.13 Uniformity of Action by Sellers. Except as otherwise provided
-------------------------------
herein, all consents, waivers and other determinations made or to be made by the
Sellers pursuant to this Agreement shall be made by any one of the Sellers,
whose consents, waivers and other determinations shall be binding upon all of
the Sellers.
8.14 Expenses. Except as otherwise specifically provided herein, each
--------
party to this Agreement shall be responsible for paying all of its own costs and
expenses incurred in connection with transactions contemplated hereby.
8.15 Announcements; Confidentiality. Neither the Purchaser nor any
------------------------------
of the Sellers shall issue or cause the publication of any press release or
other public media announcement with respect to this Agreement, any other
Transaction Document or any of the transactions contemplated hereby or thereby
without the prior written approval of the other parties hereto unless the same
is required by law or regulation or the rules of any stock exchange (in which
case the party obligated to make, issue or publish such announcement shall
consult in advance with the other parties hereto as to the content, timing and
method of publication of such
23
announcement). Notwithstanding the foregoing, the Sellers shall not be required
to seek the approval of the Purchaser in connection with any regulatory filing
required to be made by any Seller under applicable law or regulation. Each of
the parties hereto shall, and shall cause their respective officers, directors,
employees, agents, representatives and affiliates to treat this Agreement and
each of the Transaction Documents and the transactions contemplated hereby and
thereby as strictly confidential, and shall not disclose the existence or
content of this Agreement or any other Transaction Document to any third person
without the prior written consent of each other party hereto unless the same is
required by law, rule or regulation (in which case the party obligated to make
such disclosure shall consult in advance with the other parties hereto as to the
content, timing and method of such disclosure).
IN WITNESS WHEREOF, the undersigned Purchaser and Sellers have caused this
Agreement to be duly executed as of the date first above written.
SELLERS:
/s/ Jo Lernout
----------------------------
JO LERNOUT
/s/ Xxx Xxxxxxx
----------------------------
XXX XXXXXXX
LEHA FOUNDATION
By: /s/ Jo Lernout
-------------------------
Name: Jo Lernout
Title: Director
By: /s/ Xxx Xxxxxxx
-------------------------
Name: Xxx Xxxxxxx
Title: Director
L&H HOLDING III S.A.
By:/s/ Jo Lernout
-------------------------
Name: Jo Lernout
Title: Director
OLDCO N.V.
By:/s/ Jo Lernout
-------------------------
Name: Jo Lernout
Title: Director
By:/s/ Xxx Xxxxxxx
-------------------------
Name: Xxx Xxxxxxx
Title: Director
24
PURCHASER:
GE CAPITAL EQUITY INVESTMENTS, LTD.
By:/s/ Xxxx Xxxxxx
-------------------------
Name: Xxxx Xxxxxx
Title: Attorney-in-fact
RESIDENCE: Cayman Islands
By:/s/ Xxxxx X. Xxxxx
-------------------------
Name: Xxxxx X. Xxxxx
Title: Attorney-in-fact
25
