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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
BY AND AMONG
CNET, INC.,
GDT S.A.
AND
THE SHAREHOLDERS OF
GDT S.A.
JULY 23, 1999
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") dated as of July 23,
1999 (the "Effective Date"), is by and among GDT S.A., a Swiss Societe Anonyme
(the "Company"), the shareholders of the Company listed on the signature page
hereto (collectively, the "Sellers") and CNET, Inc., a Delaware corporation
("CNET").
WHEREAS, the Sellers own all of the outstanding capital stock of the
Company;
WHEREAS, the Sellers desire to sell all of the outstanding capital
stock of the Company to CNET, and CNET desires to purchase all of the
outstanding capital stock of the Company from the Sellers, on the terms and
subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements contained herein, the parties hereto agree as
follows:
ARTICLE I
THE PURCHASE
1.1 Sale and Delivery of the Shares. Pursuant to the terms of, and
subject to the conditions set forth in, this Agreement, CNET hereby agrees to
purchase from the Sellers, and the Sellers hereby agree to sell to CNET, all of
their respectively owned outstanding capital stock of the Company for the
consideration set forth in Section 1.3.
1.2 Closing Date. Unless this Agreement is terminated pursuant to
Section 8.01, and subject to the satisfaction or waiver of the conditions set
forth in Article VI, the closing of the sale and purchase of the outstanding
capital stock of the Company (the "Closing") shall take place at a location
agreed to by the Buyer and the Sellers as soon as practicable (but in any event
within five business days) after the conditions set forth in Article VI have
been satisfied or waived, or at such other date, time and place as agreed upon
by the parties to this Agreement (such date and time of closing being herein
called the "Closing Date").
1.3 Consideration. As consideration in full for the sale and purchase
of all of the issued and outstanding capital stock of the Company, whose capital
stock is set forth in Exhibit A to this Agreement (collectively, the "Shares"),
CNET will pay to the Sellers an aggregate of Fifty Million Dollars U.S.
($50,000,000 U.S.) in the respective amounts set forth in Exhibit A
(collectively, the "Purchase Price"). The Purchase Price will be payable as
follows: (a) Thirty Million Dollars U.S. ($30,000,000 U.S.) of the Purchase
Price to be paid at the Closing in cash by wire transfer of immediately
available funds (to the account specified in writing by the Management
Shareholders to CNET at least two business days prior to the Closing) and (b)
Twenty Million Dollars U.S. ($20,000,000 U.S.) of the Purchase Price to be paid
by delivery of certificates representing shares of common stock of CNET (the
"CNET Stock") which will be
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delivered as soon as practicable following Closing. For such purposes, the CNET
Stock will be valued based on the average closing price of the common stock of
CNET on the Nasdaq National Market, as reported in the West Coast Edition of the
Wall Street Journal, for the five trading days immediately prior to (but not
including) the Effective Date which amount is $46.60 U.S. per share, resulting
in 429,185 shares of CNET Stock. The number of shares of CNET Stock to be issued
to each Seller receiving CNET Stock will be rounded to the nearest whole share.
The number of Shares of CNET Stock is subject to reduction pursuant to Section
5.8. Management Shareholders (as defined in Article II) shall cause the cash
portion of the purchase price to be distributed to the Sellers in accordance
with Exhibit A as soon as possible after the Closing.
1.4 Closing Deliveries. At the Closing,
(a) CNET will pay to the Sellers the Purchase Price specified
in Section 1.3 in the respective amounts specified in Exhibit A;
(b) the Sellers will deliver stock certificates representing
the Shares, duly endorsed for transfer or accompanied by stock powers
duly executed in the name of CNET, and any other documents that are
necessary to transfer to CNET good title to all such Shares;
(c) the Sellers will deliver to CNET the originals or copies
of any and all of the books, records, ledgers, disks, proprietary
information and other data and all other written or electronic
depositories of information of and relating to the Company, which
delivery will be take place at the Company's principal place of
business; and
(d) CNET, the Sellers and the Company will execute and deliver
the documents required to be delivered by each of them pursuant to
Article VI.
1.5 Further Assurances. At or after the Closing, and without further
consideration, the Sellers will execute and deliver to CNET such further
instruments of conveyance and transfer as CNET may reasonably request in order
to more effectively convey and transfer the Shares to CNET and to put CNET in
operational control of the Company, or for aiding, assisting, collecting and
reducing to possession any of the Shares and the assets of the Company and
exercising rights with respect thereto.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE MANAGEMENT SHAREHOLDERS
The Sellers listed on Exhibit F (the "Management Shareholders") hereby
jointly and severally represent and warrant to CNET that:
2.1 Organization and Qualification. The Company is a Societe Anonyme
duly organized, validly existing and in good standing under the laws of
Switzerland and has all requisite power and authority to own, lease and operate
its properties and to conduct its business as presently conducted. The Company
is duly authorized, qualified or licensed to do business and is in good
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standing in each state or other jurisdiction in which its assets are located or
in which its business or operations, as presently conducted, make such
qualification necessary. The Company is not required to be qualified to do
business as a foreign corporation in any jurisdiction. The Company does not
operate under any assumed names in any jurisdictions.
2.2 Authority. The Company has all requisite corporate power and
authority to execute, deliver and perform under this Agreement and all other
agreements, certificates and instruments to be executed by the Company in
connection with or pursuant to this Agreement (collectively, the "Company
Documents"). The execution, delivery and performance by the Company of each
Company Document to which it is a party has been duly authorized by all
necessary action on the part of the Company. This Agreement has been, and at the
Closing the other Company Documents will be, duly executed and delivered by the
Company. This Agreement is, and, upon execution and delivery by the Company at
the Closing, each of the other Company Documents will be, a legal, valid and
binding agreement of the Company, enforceable against the Company in accordance
with their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting the enforcement of creditors' rights generally and subject to general
principles of equity (regardless of whether enforcement is sought in a
proceeding of law or in equity).
2.3 Formation Documents. The Sellers and the Company have made
available to CNET true, correct and complete copies of the Company's Articles of
Incorporation, excerpt from the Registre du commerce de Vevey which reflects the
current status of the Company, Rules of Organization within the meaning of
Article 716(b) of the Swiss Code of Obligations (the "Rules of Organization")
and operating agreements, minute books, stock record books and all other
organizational documents of the Company. Such records include minutes or
consents reflecting all actions taken by the directors, committees and
stockholders of the Company. The Company is not in violation of its Articles of
Incorporation or of its Rules of Organization.
2.4 Capitalization of the Company. The capital stock of the Company
consists of issued and outstanding stock of CHF 333,830, which is divided into
33,383 fully paid-up registered shares of nominal value CHF 10 each. The Shares
constitute all of the issued and outstanding capital stock of the Company. The
Shares have been duly authorized and validly issued in compliance with all
applicable laws, and are fully paid and nonassessable and free of preemptive
rights. The Company does not hold any shares of its capital stock as treasury
shares, and has no shares of capital stock reserved for any purpose. There are
no outstanding options, warrants, convertible or exchangeable securities or
other rights, agreements, arrangements or commitments obligating any of the
Sellers or the Company, directly or indirectly, to issue, sell, purchase,
acquire or otherwise transfer or deliver any shares of capital stock or other
equity interest in, or any agreement, document, instrument or obligation
convertible or exchangeable therefore, the Company except an authorized capital
increase decided at an extraordinary general meeting of shareholders on July 5,
1999, of authorized stock of 450 shares of nominal value CHF 10 each which may
be issued at the discretion of the Company's board of directors within the
limits of Article 5 of the Articles of Incorporation and applicable law and
within two years from the registration with the commercial register of the
amendment on such authorized capital. There are no agreements, arrangements or
commitments of any character (contingent or otherwise) pursuant to which any
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Person (as defined in Section 2.14) is or may be entitled to receive any payment
based on the revenues or earnings, or calculated in accordance therewith, of the
Company. There are no voting trusts, proxies or other agreements or
understandings to which the Company is a party or by which the Company is bound
with respect to the voting of any equity capital of the Company. No Bons de
Jouissance have been issued by the Company.
2.5 Subsidiaries and Other Interests. The Company has no subsidiaries
and does not own any equity or debt interest or any form of proprietary interest
in any Person, or any obligation, right or option to acquire any such interest.
2.6 Title to Assets.
(a) Set forth in Schedule 2.6(a) is a complete list of all
assets of the Sellers or the Company used in or associated with the
business of the Company (the "Business"), including but not limited to
(i) all real property owned by the Company or used in or associated
with the Business (including the street address), (ii) all real
property leased or otherwise used in or associated with the Business
(including the street address), and (iii) each vehicle owned or leased
by the Company used in or associated with the Business.
(b) The Company has good and marketable title to all of the
assets it purports to own, and owns all of such assets free and clear
of any Liabilities (as defined in Section 2.11) and any Liens, other
than (i) statutory liens securing current taxes and other obligations
that are not yet delinquent and (ii) minor imperfections of title and
encumbrances that do not materially detract from or interfere with the
present use or value of such properties. The Company holds a valid
leasehold interest in all of the leased assets of the Company.
(c) The real property owned or leased by, or used in or
associated with the Business (the "Real Property") is zoned for a
classification that permits the continued use of the Real Property in
the manner currently used by the Company. None of the Real Property is
used for any residential purposes. The Closing will not result in a
violation of, or any action or claim arising under Xxx Xxxxxxxxx or Xxx
Xxxxxx. There are no actions pending or, to the knowledge of the
Company, threatened that would alter the current zoning classification
of the Real Property or alter any applicable laws, statutes,
regulations, codes, covenants, conditions or restrictions that would
adversely affect the use of the Real Property in the Business. The
Company has not received notice from any insurance companies or any
governmental or quasi-governmental agency, authority, commission, board
or other body (collectively, a "Governmental Body") of any defects or
inadequacies in the Real Property or the improvements thereon that
would adversely affect the insurability or usability of the Real
Property or such improvements or prevent the issuance of new insurance
policies thereon at rates not materially higher than present rates. To
the knowledge of the Company, no fact or condition exists that would
result in the discontinuation of necessary utilities or services to the
Real Property or the termination of current access to and from the Real
Property.
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(d) The Closing will not, by operation of law or otherwise,
result in the Company's forfeiture of its title to the Company's
assets, including, without limitation, the Real Property.
2.7 Condition of Assets. All of the assets of the Company, including
any assets held under leases or licenses, are in good condition and repair,
ordinary wear and tear excepted, and are in good working order and have been
properly and regularly maintained.
2.8 No Violation. The execution, delivery and performance of the Seller
Documents and the consummation of the transactions contemplated thereby,
including without limitation the sale of the Shares to CNET, will not (i)
conflict with or violate the Registre du Commerce and Articles of Association,
in each case as amended or restated, of the Company: (ii) conflict with or
violate any federal, state, foreign or local law, statute, ordinance, rule,
regulation, order, judgment, or decree (collectively, "Laws") applicable to the
Company or by which any of its properties or assets is bound or subject; or
(iii) result in any breach of or constitute a default (or an event that 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, or
require payment under, or result in the creation of any Lien or encumbrance on
any of the properties or assets of the Company pursuant to any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company is a party or by or to which
the Company or any of its properties or assets is bound or subject.
2.9 Consents.
(a) Except for the consent of the Company's Board of Directors
as described in Section 6.1(p), no consent, approval, order or
authorization of, or registration, qualification, designation,
declaration or filing with, any Governmental Body or any other Person
is required on the part of any of the Sellers or the Company in
connection with the sale and purchase of the Shares or any of the other
transactions contemplated by the Seller Documents.
(b) No consent, approval, or authorization is required on the
part of any party to a Material Contract (as defined in Section
2.17(a)) in connection with the sale and purchase of the Shares or any
of the other transactions contemplated by the Seller Documents.
2.10 Financial Statements; Statistics.
(a) Attached as Schedule 2.10(a) are true and complete copies
of (i) the unaudited balance sheet of the Company (the "Latest Balance
Sheet") as of June 30, 1999 (the "Latest Balance Sheet Date") and the
related unaudited statements of operations and cash flow for the six
(6) months then ended, and (ii) the audited balance sheet of the
Company as of December 31, 1998 and the related audited statements of
operations and cash flow for the year then ended (collectively, the
"Financial Statements"). The Financial Statements present fairly the
financial condition of the Company at the dates specified and the
results of its operations for the periods specified and have been
prepared in accordance
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with Swiss generally accepted accounting principles applied on a
consistent basis ("GAAP"), subject in the case of the unaudited
statements to the absence of footnote disclosure and other presentation
items and to changes resulting from normal period-end adjustments for
recurring accruals, which will not be material, individually or in the
aggregate. The Financial Statements do not contain any items of a
special or nonrecurring nature, except as expressly stated therein. The
Financial Statements have been prepared from the books and records of
the Company, which accurately and fairly reflect the transactions of,
acquisitions and dispositions of assets by, and incurrence of
Liabilities by the Company.
(b) All inventories reflected in the Latest Balance Sheet or
included in the assets of the Company are of good and merchantable
quality and are salable in the ordinary course of business (in the case
of inventory held for sale) or currently usable (in the case of other
inventory). The value of the inventories reflected in the Latest
Balance Sheet are stated in accordance with GAAP.
(c) All accounts receivable reflected in the Latest Balance
Sheet or generated since the Latest Balance Sheet arose in the ordinary
course of business and to the Company's knowledge, are fully
collectible in the ordinary course of business, without resort to
litigation, at the face amount thereof less any reserve reflected in
the Latest Balance Sheet, and will not be subject to counterclaim,
set-off or other reduction.
(d) The total Liabilities of the Company of the type that
would be reflected in a balance sheet of the Company prepared as of the
Closing Date in accordance with GAAP do not exceed One Million Six
Hundred Thousand U.S. Dollars ($1,600,000 U.S.) and the Company has
cash on hand of at least Four Hundred Thousand U.S.
Dollars ($400,000 U.S.).
2.11 Absence of Undisclosed Liabilities. The Company has no direct or
indirect debts, obligations or liabilities of any nature, whether absolute,
accrued, contingent, liquidated or otherwise, and whether due or to become due,
asserted or unasserted (collectively, "Liabilities") except for (i) Liabilities
reflected on the Latest Balance Sheet; (ii) current Liabilities incurred in the
ordinary course of business and consistent with past practice after the Latest
Balance Sheet Date; and (iii) Liabilities incurred in the ordinary course of
business and consistent with past practice under any Material Contract and under
other agreements entered into by the Company in the ordinary course of business
that are not included within the definition of Material Contracts set forth in
Section 2.17(a), which Liabilities are not required by GAAP to be reflected in
the Latest Balance Sheet. For purposes of this Agreement, ordinary course
Liabilities do not include, without limitation, any Liabilities under an
agreement or otherwise that result from any breach or default (or event that
with notice or lapse of time would constitute a breach or default), tort,
infringement or violation of any Law by the Company or any of the Sellers.
2.12 Absence of Certain Changes or Events. Except as set forth in
Schedule 2.12, since December 31, 1998, the Company has conducted its business
only in the ordinary course and in a manner consistent with past practice and
there has not been: (a) any damage, destruction or loss
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(whether or not covered by insurance) with respect to any material assets of the
Company; (b) any change by the Company in its accounting methods, principles or
practices; (c) any declaration, setting aside or payment of any dividends or
distributions in respect of shares of the capital stock of the Company or any
redemption, purchase or other acquisition by the Company of any of its
securities; (d) any increase in the benefits under, or the establishment or
amendment of, any bonus, insurance, severance, deferred compensation, pension,
retirement, profit sharing or other employee benefit plan, or any increase in
the compensation payable or to become payable to directors, officers or
employees of the Company, except for annual bonuses or merit increases in
salaries or wages in the ordinary course of business and consistent with past
practice; (e) any payment or other transfer of assets by the Company to any
Seller, other than compensation payments in the ordinary course of business and
consistent with past practice; (f) any revaluation by the Company of any of its
assets, including the writing down or off of notes or accounts receivable, other
than in the ordinary course of business and consistent with past practices; (g)
any entry by the Company into any commitment or transaction material to the
Company including, without limitation, incurring or agreeing to incur capital
expenditures in excess of Fifty Thousand Dollars U.S. ($50,000 U.S.), or the
local currency equivalent thereof; (h) any incurrence of indebtedness for
borrowed money other than trade payables incurred in the ordinary course of
business; (i) the termination of employment (whether voluntary or involuntary)
of any officer or key employee of the Company; or (j) any change, occurrence or
circumstance having or reasonably likely to have, individually or in the
aggregate, a material adverse effect on the business, operations, assets,
financial condition, results of operations or prospects of the Company.
2.13 Taxes. All required federal, cantonal, communal and other tax
returns, notices and reports (including without limitation income, capital,
property, sales, use, value added, franchise, withholding, social security and
unemployment tax returns) relating to or involving transactions with the Company
have been accurately prepared and duly and timely filed by the Company, and all
taxes required to be paid by the Company with respect to the periods covered by
any such returns have been timely paid. No tax deficiency has been proposed or
assessed against the Company, and the Company has not executed any waiver of any
statute of limitations on the assessment or collection of any tax. No tax audit,
action, suit, proceeding, investigation or claim is now pending or, to the
knowledge of the Company, threatened against the Company, and no issue or
question has been raised (and is currently pending) by any taxing authority in
connection with the Company's tax returns or reports or the failure of the
Company to file any tax return or report. The Company has withheld or collected
from each payment made to each of its employees the full amount of all taxes
required to be withheld or collected therefrom and has paid same to the proper
tax receiving officers or authorized depositaries. CNET will not be responsible
for any income, sales, use, excise or other tax that arises out of or results
from the sale of the Shares hereunder, the operation of the Company prior to the
Closing or any other transaction or activity of the Sellers or the Company,
excluding (in each case) taxes attributable to the income of CNET after the
Closing and to the ownership and operation of the Company after the Closing.
2.14 Absence of Litigation. There are currently no pending or, to the
knowledge of the Company, threatened lawsuits, administrative proceedings or
reviews, or formal or informal complaints or investigations by any individual,
corporation, partnership, Governmental Body or
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other entity (collectively, a "Person") against or relating to the Company or
any of its directors, officers, employees or agents (in their capacities as
such) or to which any of the assets of the Company is subject. The Company is
not subject to or bound by any currently existing judgment, order, writ,
injunction or decree.
2.15 Permits; Compliance. The Company does not require any franchises,
grants, authorizations, licenses, permits, easements, variances, exemptions,
consents, certificates, approvals and orders ("Permits") necessary to own, lease
and operate its properties and to carry on its business as it is now being
conducted. The Company and its assets and operations are currently and have at
all times been in compliance with all Laws applicable to the Company and its
operations or by or to which any of its assets is bound or subject, including
without limitation all Laws related to environmental protection, employee
benefits, labor and employment and occupational health and safety. The Company
has not received from any Governmental Body any written notification with
respect to possible violations of Laws.
2.16 Employee Matters. Set forth on Schedule 2.16 is a complete list of
all current employees of the Company, including date of employment, current
title and compensation, and date and amount of last increase in compensation.
Except as set forth on Schedule 2.16, the Company has no collective bargaining,
union or labor agreements, contracts or other arrangements with any group of
employees, labor union or employee representative and to the knowledge of the
Company there are no organization efforts currently being made or threatened by
or on behalf of any labor union with respect to employees of the Company. The
Company is in compliance with all provisions of each applicable collective
bargaining agreement, and no complaint alleging any violation of such provisions
has been filed or, to the knowledge of the Company, threatened to be filed with
or by any Governmental Body. The Company has not experienced, and the Company
does not know or have reasonable grounds to know of any basis for, any strike,
material labor trouble, work stoppage, slow down or other interference with or
impairment of the Business. The Company has not experienced, and the Company
does not know or have reasonable grounds to know of any basis for any strike,
material labor trouble, work stoppage, slow down or other interference with or
impairment of the Business. No claims or disputes exist between the Company and
any of its employees.
2.17 Material Contracts.
(a) Schedule 2.17(a) lists each agreement and arrangement
(whether written or oral and including all amendments thereto) to which
the Company is a party or a beneficiary or by which the Company is
bound that is material, directly or indirectly, to the business of the
Company (collectively, the "Material Contracts"), including without
limitation (i) any licensing, advertising, promotion, consulting or
services agreements pursuant to which the Company earns revenue; (ii)
any licensing, supply, or services agreements pursuant which the
Company is entitled or obligated to acquire any assets or services from
any person through payment(s) in the aggregate of more than Ten
Thousand Dollars U.S. ($10,000 U.S.), or the local currency equivalent
thereof in any twelve-month period; (iii) any insurance policies; (iv)
any employment, consulting, non-competition, separation, collective
bargaining, union or labor agreements or
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arrangements; (v) any agreement evidencing, securing, guarantying or
otherwise relating to any indebtedness for which the Company has any
Liability other than trade payables incurred in the ordinary course of
business that are Liabilities less than Ten Thousand Dollars U.S.
($10,000 U.S.), or the local currency equivalent thereof, (vi) any
agreement with or for the benefit of any stockholder of the Company, or
any affiliate or family member thereof (which agreements are
specifically identified as such in Schedule 2.17(a)); (vii) any real
property leases or any capital or operating leases or conditional sales
agreements relating to vehicles or equipment; and (viii) any other
agreement or arrangement pursuant to which the Company could be
required to make or be entitled to receive aggregate payments in excess
of Fifty Thousand Dollars U.S. ($50,000 U.S.), or the local currency
equivalent thereof. The contracts identified in Schedule 2.17(a)(i)
provide for revenues consistent with the GDT Effective and Forecasted
Revenues for 1999 attached hereto with Schedule 2.17.
(b) The Company has performed in all material respects all of
its obligations under each Material Contract and there exists no breach
or default (or event that with notice or lapse of time would constitute
a breach or default) on the part of the Company or, to the Company's
knowledge on the part of any other party thereto, under any Material
Contract.
(c) Each Material Contract is valid, binding and in full force
and effect and enforceable in accordance with its respective terms.
There has been no termination or, to the Company's knowledge,
threatened termination or notice of default under any Material
Contract. The Company has delivered to CNET a copy of each written
Material Contract and a written summary of the material terms of each
oral Material Contract.
2.18 Material Customers and Suppliers. Set forth in Schedule 2.18 is a
complete list of each customer of the Company that has accounted for revenues of
more than Fifty Thousand U.S. Dollars ($50,000 U.S.) or the local currency
equivalent thereof, in calendar year 1998 or Ten Thousand U.S. dollars ($10,000
U.S.) or the local currency equivalent thereof, during any month since January
1999 (the "Material Customers"), and indicating the amount of revenues
attributable to each Material Customer during the year ended December 31, 1998
and during the interim period ending on the Latest Balance Sheet. Also set forth
in Schedule 2.18 is a complete list of the Company's ten largest suppliers (the
"Material Suppliers") by dollar volume of supplied goods and/or services. None
of the Material Customers or Material Suppliers has threatened to, or notified
the Company or any of the Sellers of any intention to, terminate or materially
alter its relationship with the Company, and there has been no material dispute
with a Material Customer or Material Supplier since January 1, 1996.
2.19 Intellectual Property.
(a) For purposes of this Agreement, "Intellectual Property"
means all of the Company (i) patents, copyrights and copyrightable
works, trademarks, service marks, trade names, service names, brand
names, logos, trade dress, Internet domain names and all goodwill
symbolized thereby and appurtenant thereto; (ii) trade secrets,
inventions,
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technology, know-how, proprietary information, research material,
specifications, surveys, designs, drawings and processes; (iii)
computer software and related documentation, including without
limitation operating software, network software, firmware, middleware,
design software, design tools, management information systems, systems
documentation and instructions, databases and the tangible objects in
which the foregoing rights are embodied (collectively, "Software");
(iv) artwork, photographs, editorial copy and materials, formats and
designs, including without limitation all content currently or
previously displayed through Internet sites operated by the Company;
(v) customer, partner, prospect and marketing lists, market research
data, sales data and traffic and user data; (vi) registrations,
applications, recordings, common law rights, "moral" rights of authors,
licenses (to or from the Company) and other agreements relating to any
of the foregoing; (vii) rights to obtain renewals, reissues,
extensions, continuations, divisions or equivalent extensions of legal
protection pertaining to the foregoing; and (viii) claims, causes of
action or other rights at law or in equity arising out of or relating
to any infringement, misappropriation, distortion, dilution or other
unauthorized use or conduct in derogation of the foregoing occurring
prior to the Closing.
(b) Except as set forth in Schedule 2.19, there are no
registrations or applications for registration of any Intellectual
Property or any licenses (to or from the Company) with respect to any
registered Intellectual Property.
(c) The Company owns or has the right to use pursuant to
Material Contracts all Intellectual Property used by the Company in
connection with or necessary to the operation of its business, without
infringing on the rights of any person. The Company is not obligated to
pay any royalty or other consideration to any person in connection with
the use of any such Intellectual Property.
(d) No claim has been asserted against the Company to the
effect that the use of any Intellectual Property by the Company
infringes the rights of any person. To the Company's knowledge, no
other person is currently infringing upon the rights of the Company
with respect to the Company's Intellectual Property.
2.20 Competing Interests. Neither any of the Management Shareholders,
the Company, nor any director, officer, agent or employee of the Company, or any
affiliate or immediate family member of any of the foregoing (a) owns, directly
or indirectly, an interest in any Person that is a competitor, customer or
supplier of the Company or that otherwise has material business dealings with
the Company or (b) is a party to, or otherwise has any direct or indirect
interest opposed to the Company under, any Company Agreement or other business
relationship or arrangement material to the Company.
2.21 Illegal Payments. Neither any of the Sellers, the Company, nor any
of the Company's directors, officers, agents or employees, or any affiliate or
immediate family member of any of the foregoing has used any funds of the
Company for unlawful contributions, gifts, entertainment or other unlawful
expenses or payments. Neither the Company, nor any of the Company's directors,
or officers, or Xxxxxx xx Xxxx, Xxxxxx xx Xxxx, Xxxx Xxxxxxxxx, Constantin
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Zabrodine, Alexander Kviatkevitch, Xxxx Xxxxxxxxxx, or Xxx Xxxxxxxxxx, or to the
Company's knowledge, XXXX Electronics, has (a) made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns or violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; or (b) made any other unlawful payment.
2.22 Year 2000 Compliance. All hardware, firmware, software and
computer systems of the Company are, or will be by the Closing, Year 2000
Compliant (as defined below) and shall continue to function in accordance with
their intended purpose without material error or material interruption as a
result of the transition to the year 2000. The Company does not need to incur
any additional costs to become Year 2000 Compliant. As used herein, "Year 2000
Compliant" means, with respect to any Person, that the hardware, firmware,
software and computer systems of such Person (i) will completely and accurately
address, produce, store and calculate data involving dates before, on and after
January 1, 2000 and will not produce abnormally ending or incorrect results
involving such dates as used in any forward or regression dated based functions;
and (ii) will provide that date-related functionalities and data fields include
the indication of century and millennium and will perform calculations that
involve a four-digit year.
2.23 Brokers. Neither the Sellers nor the Company have incurred, nor
will they incur, any liability for brokers' or finders' fees or agents'
commissions in connection with this Agreement or the transactions contemplated
hereby.
2.24 Insurance. Set forth in Schedule 2.24 is a complete and accurate
list of all primary, excess and umbrella policies, bonds and other forms of
insurance currently owned or held by or on behalf of and/or providing insurance
coverage to the Company and its businesses, properties and assets (and its
directors, officers, salespersons, agents or employees). All such policies are
in full force and effect. The Company has not received a notice of default under
any such policy and has not received written notice of any pending or threatened
termination or cancellation, coverage limitation or reduction, or material
premium increase with respect to any such policy. Schedule 2.24 also sets forth
a complete and accurate summary of all of the self-insurance coverage provided
by the Company. No letters of credit have been posted and no cash has been
restricted to support any reserves for insurance. The Company's insurance
policies are issued by insurers of recognized responsibility and insure the
Company and its business, properties and assets against such losses and risks,
and in such amounts, as are customary in the case of corporations of established
reputation engaged in the same or similar businesses and similarly situated.
2.25 Investor Representations.
(a) The Sellers identified on Exhibit A as individuals
receiving shares of CNET Stock ("Shareholders Receiving CNET Stock")
understand that the CNET Stock to be issued to the Shareholders
Receiving CNET Stock pursuant to Section 1.03 hereof has not been
registered under the Securities Act of 1933, as amended (the
"Securities Act") in reliance upon the exemption provided by Section
4(2) of the Securities Act for transactions by an issuer not involving
a public offering and will constitute "restricted
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securities" under the Securities Act. Consequently, the Shareholders
Receiving CNET Stock will be able to resell such CNET Stock only (i)
pursuant to an effective registration statement covering such resale or
(ii) pursuant to an exemption from registration, such as the exemption
provided under rule 144 under the Securities Act ("Rule 144").
(b) Each of the Shareholders Receiving CNET Stock (i) has a
preexisting personal or business relationship with the Company, (ii) by
reason of such Shareholders Receiving CNET Stock business or financial
experience or the business or financial experience of such Shareholders
Receiving CNET Stock professional advisors who are unaffiliated with
and who are not compensated by CNET or any affiliate or selling agent
of CNET, directly or indirectly, could be reasonably assumed to have
the capacity to protect such Shareholders Receiving CNET Stock
interests in connection with this Agreement, (iii) is a citizen of the
country identified on Exhibit A, and (iv) is acquiring the CNET Stock
for investment for their accounts, not as nominees or agents, and not
with a view to the resale or distribution of any part thereof in a
manner that would violate the registration provisions of the Securities
Act or any other applicable securities laws.
(c) The Shareholders Receiving CNET Stock acknowledge that (i)
they have had access to CNET's filings with the U.S. Securities and
Exchange Commission, including, without limitation, as available on
xxx.xxx.xxx, and (ii) they have been given sufficient opportunity to
ask questions of representatives of CNET and to receive reasonable
additional information to the extent requested in connection with their
evaluation of an investment in the CNET Stock.
(d) The Shareholders Receiving CNET Stock acknowledge that the
CNET Stock will bear a restrictive legend in substantially the
following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS, AND THE HOLDER HEREOF CANNOT MAKE ANY SALE,
ASSIGNMENT, OR OTHER TRANSFER OF SUCH SECURITIES WITHOUT REGISTRATION
UNDER OR EXEMPTION FROM SUCH ACTS AND LAWS. THE ISSUER MAY REQUIRE
EVIDENCE OF SUCH REGISTRATION OR EXEMPTION PRIOR TO ANY SUCH TRANSFER."
2.26 Share Certificates. On the Effective Date, the Sellers have
deposited with Xxxxxxxx X. Xxxxx stock certificates representing all of the
Shares to be held in escrow and delivered on the Closing.
2.27 Powers of Attorney. All of the Powers of Attorney given by Sellers
to Xxxxxxxx X. Xxxxx or Xxxxxx xx Xxxx attached hereto as Exhibit H, provide
Xxxxxxxx X. Xxxxx or Xxxxxx xx Xxxx, as the case may be, authorization to
execute and perform this Agreement on behalf of the Sellers executing same and
are in full force and effect and have not been revoked.
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2.28 Environmental Matters.
(a) Without limiting the generality of the other
representations and warranties set forth in this Article II, (i) the
Company has conducted its business in compliance with all applicable
Environmental Laws (as herein defined), including without limitation by
having all Permits required under any Environmental Laws for the
operation of its business; (ii) none of the Real Property contains any
Hazardous Substance (as herein defined) in amounts exceeding the levels
permitted by applicable Environmental Laws; (iii) the Company has not
received any notices, demand letters or requests for information from
any Governmental Body or other Person indicating that the Company may
be in violation of, or liable under, any Environmental Law or relating
to any of its current or former assets; (iv) no reports have been
filed, or are required to be filed, by the Company concerning the
release of any Hazardous Substance or the threatened or actual
violation of any Environmental Law; (v) no Hazardous Substance has been
disposed of, released or transported in violation of any applicable
Environmental Law to or from any Real Property or as a result of any
activity of the Company; (vi) there have been no environmental
investigations, studies, audits, tests, reviews or other analyses
regarding compliance or noncompliance with any Environmental Law
conducted by or which are in the possession of the Company or the
Sellers relating to the activities of the Company or any of the Real
Property that have not been delivered to Buyer prior to the date
hereof; (vii) there are no underground storage tanks on, in or under
any of the Real Property, and no underground storage tanks have been
closed or removed from any of the Real Property; (viii) there is no
asbestos present in any of the Real Property, and no asbestos has been
removed from any of the Real Property; and (ix) neither the Company nor
any of its assets are subject to any Liabilities or expenditures
relating to any suit, settlement, court order, administrative order,
regulatory requirement, judgment or claim asserted or arising under any
Environmental Law.
(b) As used herein, "Environmental Law" means any law,
statute, ordinance, rule, regulation, Permit, order, judgment, decree,
requirement or agreement with any Governmental Body relating to (i) the
protection, preservation or restoration of the environment or (ii) the
use, storage, generation, transportation, processing, production,
release or disposal of Hazardous Substances, in each case as amended
and in effect on the date of the Closing.
(c) As used herein, "Hazardous Substance" means any substance
presently or hereafter listed, defined, designated or classified as
hazardous, toxic, radioactive or dangerous under any Environmental Law.
Hazardous Substance includes any substance to which exposure is
regulated by any Governmental Body or any Environmental Law.
2.29 Employee Benefit Plans.
(a) Set forth in Schedule 2.29 attached is a complete and
correct list of all employee benefit plans, all plans or policies
providing for fringe benefits (including but not limited to vacation,
paid holidays, personal leave, employee discounts, educational
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benefits or similar programs), and each other bonus, incentive
compensation, deferred compensation, profit sharing, stock, severance,
retirement, health, life, disability, group insurance, employment,
stock option, stock purchase, stock appreciation right, supplemental
unemployment, layoff, consulting, or any other similar plan, agreement,
policy or understanding (whether written or oral, qualified or
nonqualified, currently effective or terminated), and any trust, escrow
or other agreement related thereto, which (i) is or has been
established, maintained or contributed to by the Company or any Company
affiliate or with respect to which the Company or any Company affiliate
has any liability, or (ii) provides benefits, or describes policies or
procedures applicable, to any officer, employee, director, former
officer, former employee or former director of the Company or any
Company affiliate, or any dependent thereof, regardless of whether
funded (each, an "Employee Benefit Plan," and collectively, the
"Employee Benefit Plans").
(b) Each Employee Benefit Plan has been operated in compliance
with all applicable laws. There are no unfunded liabilities with
respect to any Employee Benefit Plan and no withdrawal liability has
been incurred that has not been satisfied; and all contributions to
each Employee Plan have been timely made.
(c) With respect to each Employee Benefit Plan, the Management
Shareholders have furnished to CNET true, correct and complete copies
of (i) the plan documents (including amendments and summary plan
descriptions); (ii) all related trust agreements, insurance contracts
or other funding agreements which implement such Employee Benefit Plan;
and (iii) all other documents, records or other materials related
thereto reasonably requested by Buyer.
(d) Other than as made in the written employment agreements
identified on Schedule 2.17, no written or oral representations have
been made to any employee or officer or former employee or officer of
the Company promising or guaranteeing any coverage under any Employee
Benefit Plan for any period of time beyond the end of the current plan
year.
(e) The consummation of the transactions contemplated by this
Agreement will not (i) accelerate the time of payment or vesting, or
increase the amount of compensation (including amounts due under an
Employee Benefit Plan) due to any employee, officer, former employee or
former officer of the Company; (ii) require the Company to make a
larger contribution to, or pay greater benefits or provide owner rights
under, any Employee Benefit Plan than it otherwise would, or (iii)
create or give rise to any additional vested rights or serve as credits
under any Employee Benefit Plan.
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(f) No condition exists that would subject CNET, any affiliate
or the Company to any excise tax, penalty tax or fine related to any
Employee Benefit Plan.
(g) Other than routine claims for benefits, there are no
actions, suits, claims, audits, or investigations pending or, to the
Sellers' knowledge, threatened against, or with respect to, any of the
Employee Benefit Plans or their assets; and all contributions required
to be made to the Employee Benefit Plans have been made timely.
(h) Each Employee Benefit Plan is in compliance with the
applicable requirements for reporting and disclosure to participants
under applicable laws with respect to that Employee Benefit Plan and
all required annual returns and other reports and disclosures that each
such Employee Benefit Plan is required to file or furnish to
governmental agencies, Employee Benefit Plan participants, or Benefit
Plan beneficiaries have been filed or furnished in accordance with
applicable law in a timely manner.
(i) All contributions and payments with respect to each
Employee Benefit Plan required pursuant to the terms of each Employee
Benefit Plan or applicable law have been made on a timely basis.
2.30 Right of First Refusal. The Sellers do not have any rights of
first refusal as previously provided in Article 10 of the Articles of
Incorporation of the Company.
2.31 AAA. Effective on the Closing, the Company shall not have any
obligations to A.A.A. Beteiligungs-Invest AG ("A.A.A."), including, without
limitation, related to the loan agreement identified on Schedule 2.12.
2.32 No Misrepresentations. The representations, warranties and
statements made by the Sellers in or pursuant to this Agreement are true,
complete and correct in all material respects and do not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make any such representation, warranty or statement, under the circumstances in
which it is made, not misleading. The Sellers and the Company have disclosed to
CNET all facts and information material to the proposed purchase of the Shares
hereunder that is known to such parties.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers each individually represent and warrant to CNET that:
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3.1 Authority. The Sellers have all requisite legal capacity, power and
authority to execute, deliver and perform under this Agreement and all other
agreements, certificates and instruments to be executed by the Sellers in
connection with or pursuant to this Agreement (collectively, the "Seller
Documents"). The execution, delivery and performance by the Sellers of each
Seller Document to which it is a party has been duly authorized by all necessary
action on the part of the Sellers. This Agreement has been, and at the Closing
the other Seller Documents will be, duly executed and delivered by the Sellers
(to the extent each is a party thereto). This Agreement is, and, upon execution
and delivery by the Sellers at the Closing, each of the other Seller Documents
will be, a legal, valid and binding agreement of the Sellers (to the extent each
is a party thereto), enforceable against each of the Sellers in accordance with
their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting the enforcement of creditors' rights generally and subject to general
principles of equity (regardless of whether enforcement is sought in a
proceeding of law or in equity).
3.2 Title to Shares. The Sellers own of record and beneficially the
Shares in the share amounts set forth next to their respective names on Exhibit
A to this Agreement, free and clear of any lien, pledge, security interest,
liability, charge or other encumbrance or claim of third parties (the "Liens").
Upon sale of the Shares and delivery of certificates therefor to CNET, CNET will
acquire the entire legal and beneficial interest in the Shares, free and clear
of any Liens and subject to no legal or equitable restrictions of any kind
(except any Liens created by CNET).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF CNET
CNET represents and warrants to the Sellers that:
4.1 Organization. CNET is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite power and authority to own, lease and operate its properties and
to conduct its business as presently conducted. CNET is duly authorized,
qualified or licensed to do business and is in good standing in each state or
other jurisdiction in which its assets are located or in which its business or
operations, as presently conducted, make such qualification necessary.
4.2 Authority. CNET has all requisite corporate power and authority to
execute, deliver and perform under this Agreement and the other agreements,
certificates and instruments to be executed by CNET in connection with or
pursuant to this Agreement (collectively, the "CNET Documents"). The execution,
delivery and performance by CNET of each CNET Document have been duly authorized
by all necessary action on the part of CNET. This Agreement has been, and at the
Closing the other CNET Documents will be, duly executed and delivered by CNET.
This Agreement is, and, upon execution and delivery by CNET at the Closing, each
of the other CNET Documents will be, a legal, valid and binding agreement of
CNET, enforceable against CNET in accordance with their respective terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting the enforcement of
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creditors' rights generally and subject to general principles of equity
(regardless of whether enforcement is sought in a proceeding of law or in
equity).
4.3 No Violation. The execution, delivery and performance of the CNET
Documents and the consummation of the transactions contemplated thereby will not
(i) conflict with or violate the charter or certificate of incorporation or the
bylaws, in each case as amended or restated, of CNET; (ii) conflict with or
violate any Laws applicable to CNET or by which any of its properties or assets
is bound or subject; or (iii) result in any breach of or constitute a default
(or an event that with notice or lapse of time or both would become a default)
under any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which CNET is a party or
by or to which CNET or any of its properties is bound or subject.
4.4 Governmental Consents. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
Governmental Body is required on the part of CNET in connection with the sale
and purchase of the Shares or any of the other transactions contemplated by the
CNET Documents.
4.5 Brokers. CNET has not incurred and will not incur any liability for
brokers' or finders' fees or agents' commissions in connection with this
Agreement or the transactions contemplated hereby.
4.6 CNET Stock. When issued to the Management Shareholders pursuant to
the terms hereof, the CNET Stock shall constitute duly authorized, validly
issued shares of CNET, fully paid and non-assessable, and the Management
Shareholders shall acquire good and marketable title to such CNET Stock, free
and clear of any Liens, except for the securities restrictions described in
Section 3.3 hereof or any other restrictions imposed by applicable law.
ARTICLE V
COVENANTS AND AGREEMENTS
5.1 Affirmative Covenants of the Company. The Company and the
Management Shareholders hereby covenant and agrees that, prior to the Closing,
unless otherwise expressly contemplated by this Agreement or consented to in
writing by CNET, the Company will and the Management Shareholders will cause the
Company to:
(a) operate its business only in the usual and ordinary course
consistent with past practices;
(b) use commercially reasonable efforts to preserve
substantially intact its business organization, maintain its Material
Contracts, and Intellectual Property and other material rights, retain
the services of its respective officers and key employees and maintain
its relationships with its Material Customers and Material Suppliers;
(c) use commercially reasonable efforts to maintain and keep
its assets in as good condition and repair as at present, ordinary wear
and tear excepted;
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(d) maintain and keep in full force and effect insurance
comparable in amount and scope of coverage to that currently in effect;
and
(e) from the date of this Agreement and to the Closing,
promptly supplement or amend the Schedules to this Agreement with
respect to any matter that arises or that is required to be set forth
or listed in the Schedules or is necessary to complete or correct any
information in the Schedules; provided, that for purposes of
determining the rights and obligations of the parties hereunder (other
than the obligation of the Company under this Section 5.1(e)), any such
supplemental or amended disclosure will not be deemed to have been
disclosed to CNET unless CNET otherwise expressly consents in writing.
CNET shall not unreasonably withhold its consent with respect to any
matter that arises after the date of this Agreement and is required to
be set forth or listed in the Schedules or is necessary to complete or
correct any information in the Schedules, provided however, that CNET's
failure to consent shall not be deemed unreasonable if such disclosures
would, individually or in the aggregate, impair the value or use of the
acquired business or the Company.
5.2 Negative Covenants of the Company. Except as expressly contemplated
by this Agreement or otherwise consented to in writing by CNET, from the date of
this Agreement until the Closing, the Company will not do, and the Management
Shareholders will prevent the Company from doing, any of the following:
(a) amend or otherwise modify any of the Material Contracts;
(b) (i) effect any reorganization or recapitalization; (ii)
issue any capital stock or any option, warrant or similar agreement
with respect to its capital stock; (iii) split, combine or reclassify
any of its capital stock or issue or authorize or propose the issuance
of any other securities in respect of, in lieu of or in substitution
for, shares of its capital stock; or (iv) adopt or propose to adopt any
amendments to its Registre du Commerce or Articles of Association;
(c) sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, or agree to sell, lease, exchange, mortgage,
pledge, transfer or otherwise dispose of, any of its assets, except for
dispositions of inventories and of assets in the ordinary course of
business and consistent with past practice;
(d) settle or compromise any claim, action, suit, litigation,
proceeding, arbitration, investigation, audit or controversy;
(e) take any action that would result in a breach (as of the
Closing) of any of the representations and warranties set forth in
Section 2.12;
(f) pay or agree to pay any dividend, distribution, or other
payment to any of its stockholders;
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(g) pay or agree to pay any bonus, incentive compensation, or
similar payment to any of its employees or increase the compensation of
any stockholder or other employee;
(h) make any material expenditure or commitment except in the
ordinary course of business consistent with past practice; or
(i) agree in writing or otherwise to do any of the foregoing.
5.3 Restrictive Covenant. The Management Shareholders acknowledge that
each was a beneficial owner of the goodwill of the Company. In consideration of
the purchase of all of Management Shareholders' stock in the Company and the
delivery of Confidential Information to the Management Shareholders, each of the
Management Shareholders hereby agrees that, for a period of two years from the
Closing Date, the Management Shareholders will not (except in the course of
performing authorized duties as an employee of CNET), directly or indirectly,
either as an employee, partner, owner, director, adviser or employee or in any
other capacity:
(a) engage in any business that directly or indirectly
involves (i) (A) the collection, organization, or distribution of data
related to technology products, (B) developing, designing, implementing
or operating (or providing any assistance with respect to the
foregoing) any on-line database related to the technology industry or
any technology products, or (C) the facilitation of electronic commerce
for any Person (collectively, a "Competing Business"), or (ii) the
creation of content or complementary services for, or the sale of
advertising for, such a Competing Business in any location.
(b) solicit or attempt to solicit any existing customer that
was a customer of CNET at any time during the two year period following
the Closing Date;
(c) solicit or attempt to solicit any potential customer that
CNET was actively soliciting, or preparing or planning to solicit, at
any time during the two year period following the Closing Date;
(d) recruit or solicit for employment any person who is, or
within the twelve month period preceding the date of such activity was,
an employee of CNET.
Notwithstanding the foregoing, the Management Shareholders may own,
directly or indirectly, solely as an investment, up to one percent (1%) of any
class of publicly traded securities of any entity that owns a Competing
Business. Each Management Shareholder represents to CNET that he is willing and
able to engage in businesses that are not Competing Businesses hereunder and
that enforcement of the restrictions set forth in this section would not be
unduly burdensome to him. CNET and each Management Shareholder acknowledge and
agree that the restrictions set forth in this section are reasonable as to time,
geographic area and scope of activity and do not impost a greater restraint than
is necessary to protect the legitimate business interests of CNET. Each
Management Shareholder acknowledges that the Company
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and CNET have an international presence and global market for the Company's
products and therefore have need of a worldwide geographic restriction.
If the provisions of this section are determined through arbitration to
contain limitations as to time, geographic area or scope of activity that are
not reasonable or not necessary to protect the legitimate business interests of
the Company or CNET, then such arbitrator(s) is hereby directed to reform such
provisions to the minimum extent necessary to cause the limitations contained
therein as to time, geographical area and scope of activity to be reasonable and
to impose a restraint that is not greater than necessary to protect the
legitimate business interests of the Company and CNET.
For purposes of this Section 5.3 only, "Management Shareholders" shall
not include Xxxxxxx Xxxx or Xxxxxxxx X. Xxxxx.
5.4 Confidential Information.
(a) The assets of the Company include certain commercially
valuable technical and non-technical confidential or proprietary
information of the Company (collectively, "Confidential Information").
Confidential Information means all information used by the Company in
connection with operating its business that is not generally known to
others in similar areas of business, including without limitation: (i)
trade secrets, software, work product, processes, analyses and know-how
related to the architecture and operation of the Business or the
submission, collection or organization of its contents; (ii) customer
and prospect lists and other marketing, advertising, pricing, strategic
and business plans and information related to the Business; and (iii)
information concerning traffic at the Company's Internet sites and
financial information concerning the operation of the Business.
(b) Each of the Sellers acknowledges and agrees that,
following the Closing, the Confidential Information will be the sole
and exclusive property of the Company and its affiliates. Following the
Closing, none of the Sellers will, directly or indirectly, use any
Confidential Information for his own benefit or disclose any
Confidential Information to any person, except in the course of
performing authorized duties for the Company and its affiliates. At
CNET's request after the Closing, the Sellers will promptly deliver to
CNET all documents, computer disks and other computer storage devices,
computer printouts, manuals and other papers and materials (including
all copies thereof in whatever form) containing or incorporating any
Confidential Information that are in his possession or under his
control.
5.5 Access and Information.
(a) The Company shall: (i) afford to CNET and its officers,
directors, employees, accountants, consultants, legal counsel, agents
and other representatives (collectively, the "CNET Representatives")
reasonable access at reasonable times, upon reasonable prior notice, to
the officers, employees, agents, properties, offices and other
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facilities of the Company and to the books and records thereof; (ii)
furnish promptly to CNET and the CNET Representatives such information
concerning the business, properties, contracts, records and personnel
of the Company (including, without limitation, financial, operating and
other data and information) as may be reasonably requested, from time
to time, by CNET; and (iii) authorize CNET to contact and obtain
relevant information from the Company's accountants, material customers
and suppliers and any governmental agencies having dealings with the
Company.
(b) No investigation by the parties hereto made heretofore or
hereafter shall affect the representations and warranties of the
parties which are herein contained and each such representation and
warranty shall survive such investigation.
5.6 Appropriate Action; Consents; Filings.
(a) Each of CNET, the Sellers and the Company shall use (and
shall cause each of their respective subsidiaries and affiliates to
use, as applicable) all reasonable efforts to (i) take, or cause to be
taken, all appropriate action, and do, or cause to be done, all things
necessary, proper or advisable under applicable Law or otherwise to
consummate and make effective the transactions contemplated by this
Agreement, and (ii) obtain from any Governmental Body or other third
parties any consents, licenses, permits, waivers, approvals,
authorizations or orders required to be obtained or made by CNET or the
Company or any of their subsidiaries or affiliates, as applicable, in
connection with the authorization, execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby.
The Sellers, the Company and CNET shall furnish all information
required for any application or other filing to be made pursuant to the
rules and regulations of any applicable Law in connection with the
transactions contemplated by this Agreement.
(b) Each of CNET, the Sellers and the Company shall give (or
shall cause their respective subsidiaries and affiliates, as
applicable, to give) any notices to third parties, and use (and cause
their respective subsidiaries and affiliates, as applicable, to use)
all reasonable efforts to obtain any third party consents (i)
necessary, proper or advisable to consummate the transactions
contemplated by this Agreement, or (ii) otherwise required under any
Material Contracts, or other agreements in connection with, or in order
to allow the Company to continue to be entitled to the benefits thereof
following, the consummation of the transactions contemplated hereby. In
the event that any party shall fail to obtain any third party consent
described above and the parties agree to consummate the transactions
contemplated by this Agreement without such consent, such party shall
use commercially reasonable efforts, and shall take any such actions
reasonably requested by the other parties, to limit the adverse effect
upon the Company and CNET, their respective subsidiaries, and their
respective businesses resulting, or which could reasonably be expected
to result after the Closing Date, from the failure to obtain such
consent.
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5.7 Public Announcements. CNET may issue a press release regarding the
consummation of the transactions contemplated by this Agreement and shall
consult with the Company before issuing any press release or otherwise making
any public statements with respect to the transactions contemplated by this
Agreement. Neither party shall issue any press release or make any public
statement prior to such press release, except as otherwise required by
applicable Law.
5.8 Fees, Expenses and Other Payments. At the Closing, CNET will pay
all transaction costs and expenses (including, without limitation, all fees and
expenses of counsel, accountants, investment bankers, experts and consultants to
any party hereto and its affiliates) incurred by the Company or the Sellers in
connection with or related to the authorization, preparation, negotiation,
execution and performance of this Agreement and the transactions contemplated
hereby (collectively, "Company Expenses"), up to a maximum amount of Fifteen
Thousand Dollars U.S. ($15,000 U.S.) (the "Maximum Allowed Expenses"). Any
Company Expenses in excess of the Maximum Allowed Expenses, shall be paid by the
Management Shareholders to CNET on the Closing by reducing the number of Shares
of CNET Stock to be delivered pursuant to Section 1.03 of this Agreement.
5.9 Release by the Sellers. For the benefit of the Company and CNET,
effective upon the Closing, each of the Sellers, for himself and his heirs,
executors, administrators, successors and assigns, hereby fully and
unconditionally release and forever discharge and hold harmless the Company and
its employees, officers, directors, successors and assigns from any and all
claims, demands, losses, costs, expenses (including reasonable attorneys' fees
and expenses), obligations, Liabilities and/or damages of every kind and nature
whatsoever, whether now existing or known, relating in any way, directly or
indirectly, to facts and circumstances that occurred or existed prior to the
Closing with respect to the Company, this Agreement or the transactions
contemplated hereby, that such Seller may now have or may hereafter claim to
have against the Company or any of its employees, officers, directors,
successors or assigns; provided, that the foregoing release will not affect any
obligations of the CNET to the Sellers under this Agreement or related
agreements, or to obligations of the Company arising after the Closing.
5.10 Affirmative Covenants of CNET. CNET covenants and agrees that:
(a) CNET will use commercially reasonable efforts to make all
filings in a timely manner which are or may be necessary under the
Securities Exchange Act of 1934 and the rules and regulations adopted
thereunder and to take such further action as any Management
Shareholders may reasonably request, all to the extent required to
enable such Management Shareholders to sell CNET Stock received as
consideration under Section 1.3 without registration under the
Securities Act pursuant to Rule 144.
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(b) Within thirty (30) days after the Closing Date, CNET will
cause to be granted to Xxxxxx xx Xxxx, Xxxxxx xx Xxxx, Xxxx Xxxxxxxxx,
Constantin Zabrodine and Alexander Kviatkevitch options to buy shares
of CNET Stock in the amounts set forth on Exhibit G, which grants shall
be effective as of the date each such individual first commences their
employment with the Company under their respective Amendment to
Employment Agreement (as defined in Section 6.1) and which options
shall be at an exercise price determined by the board of directors of
CNET, provided that such exercise price shall in no event be higher
than the fair market value of CNET's Stock on the Nasdaq National
Market as reported in the West Coast Edition of the Wall Street Journal
as determined in accordance with the CNET, Inc. 1997 Stock Option Plan.
5.11 Company Financials. Sellers acknowledge that the Company's
Financial Statements will be filed by CNET with the U.S. Securities and Exchange
Commission and Management Shareholders agree to assist CNET obtain any necessary
consents and take any other necessary actions to permit CNET to make such
filings.
5.12 Directors. The Sellers who are directors of the Company
immediately prior to the Closing agree to resign as a director of the Company
following Closing upon the request of CNET.
5.13 Delivery of Originals. Immediately following the Closing, each of
the Sellers shall send to CNET by an international courier, the original
signature pages, powers of attorney, certificates representing the Shares
endorsed as required by Section 1.4(b), and all other documents required
hereunder and CNET shall send to the Sellers by an international courier the
original signature page and all other documents required hereunder.
ARTICLE VI
CLOSING CONDITIONS
6.1 Conditions to Obligations of CNET. The obligations of CNET under
this Agreement are subject to the satisfaction at or prior to the Closing of the
following conditions, but compliance with any such conditions may be waived in
writing by CNET, in whole or in part:
(a) Each of the representations and warranties of the Sellers
contained in this Agreement shall be true and correct in all material
respects (if not qualified by materiality) or in all respects (if
qualified by materiality) as of the Closing Date as though made on and
as of the Closing Date (except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and
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warranties shall be true and correct in all material respects as of
such earlier date). CNET shall have received a certificate signed by
each of the Sellers, dated the Closing Date, to that effect.
(b) The Sellers and the Company shall have performed and
complied with all the covenants and agreements required by this
Agreement to be performed or complied with by them at or prior to the
Closing, including without limitation the delivery of all items
required to be delivered by them pursuant to Section 1.4. CNET shall
have received a certificate signed by each of the Sellers and by an
officer of the Company, dated the Closing Date, to that effect.
(c) All necessary contractual and governmental consents,
approvals, orders or authorizations have been obtained and all
necessary contractual or governmental notices have been given.
(d) The Company and each of Xxxxxx xx Xxxx, Xxxxxx xx Xxxx,
Xxxx Xxxxxxxxx, Constantin Zabrodine and Alexander Kviatkevitch will
have entered into the amendment to each of the Employment Agreements
between such individuals and the Company in effect immediately prior to
the Closing which amendment shall be substantially in the form of
Exhibit B attached to this Agreement with such changes as may be
necessary or appropriate based on Swiss law (the "Amendments to
Employment Agreements").
(e) There shall be no pending or threatened litigation in any
court or any proceeding before or by any Governmental Body to restrain
or prohibit or obtain damages or other relief with respect to this
Agreement or the consummation of the transactions contemplated hereby
or as a result of which CNET could be required to dispose of any assets
or operations of CNET, the Company, or their affiliates or to comply
with any restrictions on the manner in which CNET, the Company or their
affiliates conduct their operations.
(f) The Sellers have delivered to CNET executed releases
satisfactory to CNET to evidence the release of any Liens, if any, on
the assets of the Company other than Liens described in clauses (i) and
(ii) of Section 2.6(b), and releases satisfactory to CNET to evidence
the release of any Liens, if any, on the Shares.
(g) Since the Latest Balance Sheet Date, there has not
occurred any material adverse change in the condition (financial or
otherwise), results of operations, business, prospects, assets or
Liabilities of the Business.
(h) No Governmental Body or federal or state court of
competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary or
permanent) (an "Order") that is in effect and that has the effect of
making the transactions contemplated by this Agreement illegal or
otherwise prohibiting consummation of the
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transactions contemplated by this Agreement; and no such Governmental
Body or third party shall have initiated or threatened to initiate any
proceeding seeking an Order.
(i) Each of the Company and the Sellers shall have obtained
each consent and approval necessary in order that the transactions
contemplated hereby do not constitute a material breach or violation
of, or result in a right of termination or acceleration of any
encumbrance on any material portion of the Company's properties or
assets, any Material Contract, material arrangement or understanding.
(j) All proceedings taken by the Company and all instruments
executed and delivered by the Company and the Sellers, as applicable,
on or prior to the Closing Date in connection with the transactions
herein contemplated shall be reasonably satisfactory in form and
substance to CNET.
(k) CNET has completed its due diligence investigation of the
Company's technology and related Intellectual Property, and CNET is
satisfied with the results of its investigation in its sole discretion.
(l) CNET's Board of Directors has approved the execution and
delivery of this Agreement and the transactions contemplated hereby.
(m) The Management Shareholders have delivered to CNET a
certificate of the secretary of the Company, substantially in the form
of Exhibit C to this Agreement.
(n) Counsel to the Sellers and the Company shall have
delivered to CNET a legal opinion substantially in the form of Exhibit
D to this Agreement.
(o) The Company's Board of Directors has approved the
execution and delivery of this Agreement and the transaction
contemplated hereby, including without limitation, the transfer of the
Shares and the Company shall have delivered to CNET evidence of such
approval which shall be in a form and substance satisfactory to CNET.
(p) The Company and the Sellers shall deliver a Schedule
setting forth all of the Company Expenses through the Closing.
(q) The Management Shareholders shall have delivered to CNET
evidence satisfactory to CNET in form and substance, that all of the
Company's obligations to A.A.A. have been satisfied, including, without
limitation, related to the loan agreement identified on Schedule 2.12.
6.2 Conditions to Obligations of the Sellers. The obligations of the
Sellers under this Agreement are subject to the satisfaction at or prior to the
Closing of the following conditions, but compliance with any such conditions may
be waived in writing by the Sellers, in whole or in part:
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(a) Each of the representations and warranties of CNET
contained in this Agreement shall be true and correct in all material
respects as of the Closing Date as though made on and as of the Closing
Date (except to the extent such representations and warranties
specifically relate to an earlier date, in which case such
representations and warranties shall be true and correct in all
material respects as of such earlier date). The Sellers shall have
received a certificate of an officer of CNET, dated the Closing Date,
to that effect.
(b) CNET shall have performed and complied with the covenants
and agreements required by this Agreement to be performed or complied
with by it at or prior to the Closing, including without limitation the
delivery of all items required to be delivered by CNET pursuant to
Section 1.4. The Sellers shall have received a certificate of an
officer of CNET, dated the Closing Date, to that effect.
(c) All necessary governmental consents, approvals, orders or
authorizations have been obtained and all necessary governmental
notices have been given.
(d) CNET and each of Xxxxxx xx Xxxx, Xxxxxx xx Xxxx, Xxxx
Xxxxxxxxx, Constantin Zabrodine and Alexander Kviatkevitch will have
entered into the Amendments to Employment Agreements.
(e) No Governmental Body or federal or state court of
competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any Order that has the effect of making the
transactions contemplated by this Agreement illegal or otherwise
prohibiting consummation of the transactions contemplated by this
Agreement; and no such Governmental Body or third party shall have
initiated or threatened to initiate any proceeding seeking an Order.
(f) Counsel to CNET shall have delivered to the Shareholders
Receiving CNET Stock its written opinion substantially in the form of
Exhibit E attached hereto.
(g) All proceedings taken by CNET and all instruments executed
and delivered by CNET on or prior to the Closing Date in connection
with the transactions herein contemplated shall be reasonably
satisfactory in form and substance to the Company.
(h) Receipt of a Federal reference number for the wire of the
cash portion of the Purchase Price.
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ARTICLE VII
INDEMNIFICATION
7.1 Indemnification of CNET. Notwithstanding any investigation by CNET
or its representatives, the Management Shareholders, jointly and severally, will
indemnify and hold CNET, its affiliates and their respective directors,
officers, employees and agents (collectively, the "CNET Parties") harmless from
any and all Liabilities, obligations, claims, contingencies, damages, costs and
expenses, including all court costs and reasonable attorneys' fees
(collectively, "Losses"), that any CNET Party may suffer or incur as a result of
or relating to:
(a) the breach of any representation or warranty made by any
of the Sellers in this Agreement including, without limitation, in
Article II and Article III, or pursuant hereto or any allegation by a
third party that, if true, would constitute such a breach;
(b) the breach of any covenant or agreement of any of the
Sellers under this Agreement; or
(c) any lawsuit, claim or proceeding of any nature existing at
or prior to the Closing, or arising out of any act or transaction of
the Company occurring prior to the Closing, or arising out of facts or
circumstances that existed at or prior to the Closing that is related
to the Company, the assets of the Company or the operation of the
business of the Company; provided that the CNET Parties shall not be
entitled to indemnification for any Losses to the extent the Management
Shareholders are entitled to indemnification under Section 7.3 for such
Losses.
provided that, except with respect to the breach or the alleged breach of the
representations and warranties set forth in Sections 2.1, 2.2, 2.3, 2.4, 2.5,
2.6, 2.13, 3.1 and 3.2 for which no such limitation shall apply, the CNET
Parties will not be entitled to indemnification under paragraph (a) of this
Section 7.1 unless the aggregate amount of all Losses for which indemnification
is sought by the CNET Parties pursuant to such paragraph exceeds One Hundred
Thousand U.S. Dollars ($100,000, U.S.) in which case the CNET Parties will be
entitled to indemnification for the full amount of such Losses from the first
dollar of Loss.
7.2 Survival. The representations and warranties of the Sellers made in
or pursuant to this Agreement and the closing certificates attached as Exhibit I
will survive the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby until the second anniversary of the
Closing; provided that (a) the representations and warranties set forth in
Sections 2.4, 2.6, 2.13 and 3.2 will survive indefinitely; (b) if the violation
of any representation or warranty would constitute a violation of any statute,
law, ordinance, decree, order, rule or regulation of any Governmental Body, such
representation or warranty will survive until 30 calendar days after the
expiration of the statute of limitations applicable to such violation; and (c)
any representation or warranty, the violation of which is made the basis of a
claim for indemnification pursuant to Section 7.1(a), will survive until such
claim is finally resolved if CNET notifies the Sellers of such claim in
reasonable detail prior to the date on which such representation or warranty
would otherwise expire hereunder. No claim for indemnification pursuant to
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Section 7.1 based on the breach or alleged breach of a representation or
warranty may be asserted by CNET after the date on which such representation or
warranty expires hereunder.
7.3 Indemnification of the Management Shareholders. CNET will indemnify
and hold the Sellers and their respective directors, managers, employees and
agents (collectively, the "Seller Parties") harmless from any and all Losses
that any Seller Party may suffer or incur as a result of or relating to (a) the
breach of any representation or warranty made by CNET in this Agreement or
pursuant hereto or any allegation by a third party that, if true, would
constitute such a breach or (b) the breach of any covenant or agreement of CNET;
provided that the Management Shareholders will not be entitled to
indemnification for any Losses to the extent CNET is entitled to indemnification
under Section 7.1 for such Losses.
7.4 Notice. Any party entitled to receive indemnification under this
Article VII (the "Indemnified Party") agrees to give prompt written notice to
the party or parties required to provide such indemnification (the "Indemnifying
Parties") upon the occurrence of any indemnifiable Loss or the assertion of any
claim or the commencement of any action or proceeding in respect of which such a
Loss may reasonably be expected to occur (a "Claim"), but the Indemnified
Party's failure to give such notice will not affect the obligations of the
Indemnifying Party under this Article VII except to the extent that the
Indemnifying Party is materially prejudiced thereby. Such written notice will
include a reference to the event or events forming the basis of such Loss or
Claim and the amount involved, unless such amount is uncertain or contingent, in
which event the Indemnified Party will give a later written notice when the
amount becomes fixed.
7.5 Defense of Claims. The Indemnifying Party may elect to assume and
control the defense of any Claim, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of expenses related
thereto, if (a) the Indemnifying Party acknowledges its obligation to indemnify
the Indemnified Party for any Losses resulting from such Claim and provides
reasonable evidence to the Indemnified Party of its financial ability to satisfy
such obligation; (b) the Claim does not seek to impose any liability or
obligation on the Indemnified Party other than for money damages; and (c) the
Claim does not relate to the Indemnified Party's relationship with its customers
or employees. If such conditions are satisfied and the Indemnifying Party elects
to assume and control the defense of a Claim, then (i) the Indemnifying Party
will not be liable for any settlement of such Claim effected without its
consent, which consent will not be unreasonably withheld; (ii) the Indemnifying
Party may settle such Claim without the consent of the Indemnified Party; and
(iii) the Indemnified Party may employ separate counsel and participate in the
defense thereof, but the Indemnified Party will be responsible for the fees and
expenses of such counsel unless (A) the Indemnifying Party has failed to
adequately assume the defense of such Claim or to employ counsel with respect
thereto or (B) a conflict of interest exists between the interests of the
Indemnified Party and the Indemnifying Party that requires representation by
separate counsel, in which case the fees and expenses of such separate counsel
will be paid by the Indemnifying Party. If such conditions are not satisfied,
the Indemnified Party may assume and control the defense of the Claim.
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7.6 Appointment of Attorney-in-Fact. Each Seller hereby constitutes and
appoints Xxxx Xxxxxxxxx (the "Representative") its true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
to take any action for each Seller and in their name, place and xxxxx, in any
and all capacities, in connection with any matters related to the
indemnification obligations set forth in Article 7 of this Agreement. If Xxxx
Xxxxxxxxx is, for any reason, unable or unwilling to act or continue to act as
Representative, then the Sellers shall appoint another individual to act as
successor hereunder. The Representative is hereby fully empowered to determine
in its sole and absolute discretion the terms and conditions of any settlement
of a claim under this Agreement and any document, agreement or instrument that
the Representative may execute pursuant hereto, and it is understood that the
Representative may in its sole and absolute discretion determine whether the
action in question is in the best interests of each Seller. Each Seller
acknowledges and agrees that the powers and authority granted to the
Representative are coupled with an interest and shall be irrevocable and remain
in full force and effect until the expiration of the indemnification obligations
set forth in Article VII of this Agreement.
ARTICLE VIII
MISCELLANEOUS
8.1 Termination. This Agreement and the transactions contemplated
hereby may be terminated and abandoned (a) at any time prior to the Closing by
mutual written consent of CNET and the Sellers; or (b) by either CNET, on the
one hand, or the Sellers, on the other hand, if a condition to performance by
the terminating party hereunder has not been satisfied or waived prior to August
23, 1999, or (c) by CNET, at any time, if there is pending or threatened
litigation in any court or any proceeding before or by any Governmental Body to
restrain or prohibit or obtain damages or other relief with respect to this
Agreement or the consummation of the transactions contemplated hereby or as a
result of which CNET could be required to dispose of any assets or operations of
CNET, the Company, or their affiliates or to comply with any restriction on the
manner in which CNET, the Company or its affiliates conduct their operations,
provided that (i) CNET may not terminate this Agreement if the Closing has not
occurred because of CNET's willful failure to perform or observe any of its
covenants or agreements set forth herein or if CNET is, at such time, in breach
of this Agreement, and (ii) the Sellers may not terminate this Agreement if the
Closing has not occurred because of the willful failure of the Sellers to
perform or observe any of the covenants or agreements set forth herein or if any
of the Sellers is, at such time, in breach of this Agreement.
8.2 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
upon receipt, if delivered personally or by overnight delivery service or if
mailed by registered or certified mail (postage prepaid, return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like changes of address) or sent by
electronic transmission to the facsimile number specified below:
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if to CNET: with copies to:
CNET, Inc. Xxxxxx & Xxxx, L.L.P.
000 Xxxxxxxx Xxxxxx 0000 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000 Suite 2800
Attention: Chief Financial Officer Xxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000 Attention: R. Xxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
if to the Sellers:
Xxxxx-Xxxxxx Xxxxxxx Xxxxxx Meakin &
Associes
00, Xxx Xxxxxxx Xxxxxx
0000 Xxxxxx, Xxxxxxxxxxx
Attention: Xx. Xxxxxxxx X. Xxxxx
Telecopy: 00-00-000-00-00
Any such notice or other communication will be deemed to have been given and
received (whether actually received or not) on the day it is personally
delivered or delivered by courier or overnight delivery service or sent by
telecopy or, if mailed, when actually received.
8.3 Attorneys' Fees and Costs. If attorneys' fees or other costs are
incurred to secure performance of any obligations hereunder, or to establish
damages for the breach thereof or to obtain any other appropriate relief,
whether by way of prosecution or defense, the prevailing party will be entitled
to recover reasonable attorneys' fees and costs incurred in connection
therewith.
8.4 Counterparts. This Agreement may be executed in one or more
counterparts for the convenience of the parties hereto, all of which together
will constitute one and the same instrument.
8.5 Interpretation. The article and section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and shall not in any way affect the meaning or interpretation of
this Agreement.
8.6 Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder may be assigned or delegated by the Sellers or CNET
without the prior written consent of the other parties and any purported
assignment or delegation in violation thereof shall be null and void; except
that CNET may assign its rights and obligations under this Agreement to any
direct or indirect subsidiary of CNET or to CNET. This Agreement is not intended
to confer any rights or benefits on any Person other than the parties hereto,
except to the extent specifically provided in Section 5.9 and Article VII.
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8.7 Entire Agreement. This Agreement and the related documents
contained as Exhibits and Schedules hereto or expressly contemplated hereby
contain the entire understanding of the parties relating to the subject matter
hereof and supersede all prior written or oral and all contemporaneous oral
agreements and understandings relating to the subject matter hereof. This
Agreement may not be modified or amended except in writing signed by the party
against whom enforcement is sought. All statements of the Sellers contained in
any schedule, certificate or other writing required under this Agreement to be
delivered in connection with the transactions contemplated hereby will
constitute representations and warranties of the Sellers respectively under this
Agreement. The Exhibits and Schedules to this Agreement are hereby incorporated
by reference into and made a part of this Agreement for all purposes. Unless
otherwise expressly stated in this Agreement, no right or remedy described or
provided in this Agreement is intended to be exclusive or to preclude a party
from pursuing other rights and remedies to the extent available under this
Agreement, at law or in equity.
8.8 Specific Performance. The parties hereby acknowledge and agree that
the failure of any party to perform its agreements and covenants hereunder,
including its failure to take all required actions on its part necessary to
consummate the transactions contemplated hereby, will cause irreparable injury
to the other parties for which damages, even if available, will not be an
adequate remedy. Accordingly, each party hereby consents to the issuance of
injunctive relief by any court of competent jurisdiction to compel performance
of such party's obligations and to the granting by any court of the remedy of
specific performance of its obligations hereunder.
8.9 Knowledge. As used in this Agreement, a matter is within the
Company's "knowledge", is otherwise "known" to the Company and the Company is
"aware" of a matter if any Management Shareholder or officer of the Company has
actual knowledge of such matter or would reasonably be expected to have actual
knowledge of such matter following reasonable inquiry of the appropriate
employees and agents of the Company.
8.10 Governing Law. This Agreement will be governed by and construed
and interpreted in accordance with the substantive laws of the State of
Delaware, without giving effect to any conflicts of law rule or principle that
might require the application of the laws of another jurisdiction.
8.11 Drafting. Neither this Agreement nor any provision contained in
this Agreement shall be interpreted in favor of or against any party hereto
because such party or its legal counsel drafted this Agreement or such
provision.
8.12 Usage. Whenever the plural form of a word is used in this
Agreement, that word shall include the singular form of that word. Whenever the
singular form of a word is used in this Agreement, that word shall include the
plural form of that word. The term "or" shall not be interpreted as excluding
any of the items described. The term "include" or any derivative of such term
does not mean that the items following such term are the only types of such
items.
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8.13 Dispute Resolution.
(a) In the event of any dispute among the parties to this
Agreement arising out of or in any way related to this Agreement or the
breach, termination or validity thereof, in which the parties are
unable to come to a resolution, the parties hereby agree to submit the
dispute to final and binding arbitration pursuant to the then current
International Arbitration Rules of the American Arbitration Association
(AAA). The place of such arbitration shall be in New York, New York,
U.S.A., and the language of such arbitration shall be English.
(b) Any party to this Agreement may at any time initiate an
arbitration proceeding by delivering a notice in accordance with the
following procedure (an "Arbitration Notice"), within the statute of
limitations period which the limitations law of Delaware would apply to
the claims of such party. Any Arbitration Notice delivered must be
delivered in accordance with Section 8.2 of this Agreement. The
Arbitration Notice shall include a description of the dispute, the date
on which it first arose, the names of any persons with knowledge of the
dispute, and the relief requested by the party initiating the
arbitration proceeding hereunder.
(c) The arbitrator shall be selected by the parties, however,
if the parties are not able to agree on a single arbitrator within
fifteen days of the date the Arbitration Notice is received by the
other parties, CNET will select one arbitrator and any other parties to
such disputes shall collectively select a second arbitrator. CNET and
the other parties will each select their arbitrator before the end of
the thirteenth day after the first Arbitration Notice is received by
the party. The two arbitrators shall jointly select a third arbitrator
within fifteen days of the naming of the second arbitrator. The
arbitrator or panel of arbitrators is authorized to award any relief
which could be awarded by a Delaware court of law hearing the same
dispute.
(d) Nothing in this Section 8.13 shall preclude any party from
applying to a court of competent jurisdiction for interim relief
pending final resolution of the underlying dispute through arbitration.
(e) Each party hereby waives any right it might otherwise have
to a jury trial concerning any matters covered by this Section 8.13.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CNET:
CNET, Inc.
By: /s/ XXXXXXX X. XXXXXXX
------------------------------
Xxxxxxx X. Xxxxxxx
Chief Financial Officer
SELLERS:
/s/ XXXXXX XX XXXX
---------------------------------------
Xxxxxx xx Xxxx
/s/ XXXXXX XX XXXX
---------------------------------------
Xxxxxx xx Xxxx
/s/ XXXX XXXXXXXXX
---------------------------------------
Xxxx Xxxxxxxxx
/s/ CONSTANTIN ZABRODINE
---------------------------------------
Constantin Zabrodine
/s/ ALEXANDER KVIATKEVITCH
---------------------------------------
Alexander Kviatkevitch
/s/ XXXX XXXXXXXXXX
---------------------------------------
Xxxx Xxxxxxxxxx
/s/ XXX XXXXXXXXXX
---------------------------------------
Xxx Xxxxxxxxxx
[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
35
Longlands Group Limited
By: /s/ XXXXXX XXXXXXX
-----------------------------------------
Xxxxxx Xxxxxxx
Power of Attorney
/s/ XXXXXXXX X. XXXXX
--------------------------------------------
Xxxxxxxx X. Xxxxx
/s/ XXXXXXX XXXX
--------------------------------------------
Xxxxxxx Xxxx
A.A.A. Beteiligungs-Invest AG
By: /s/ XXXXXXX XXXXXX
-----------------------------------------
Xxxxxxx Xxxxxx
Managing Director
Initiative Capital SA, Xxxxx Xxxx, Xxxxxx
Xxxxxxx, Xxxxxx Xxxxx, Frits Van Dijk,
Marcuard Xxxx & Cie SA, Xxxxxx Xxxxxxx,
Xxxxx Xxxx, La Generale Fonciere SA, Xxxxxx
Xxxxxxxxxx, Xxxx and Xxxxxxxx Xxxxx, Xxxx
Xxxx and Xxx Xxxxxx, Xxxxxxx Xxxxxx, Xxx
Xxxxx, Xxxxxx Xxxx, Xxxxx Xxxx, Xxxxxx
Xxxxx, Xxxx and Xxxxxxxx Xxxxxxx, Xxxxxxxxxx
Brodard, Xxxxxx Xxxxxxxx, Xxxxxxx Xxxxx,
Pacific Orchid Holding, Xxxxx Xxxxxx,
Xxxxxxx Xxxxxxxx, Tradevcogen SA
By: /s/ XXXXXXXX X. XXXXX
-----------------------------------------
Xxxxxxxx X. Xxxxx
Power of Attorney
Xxxx Xxxxxxxxx
By: /s/ XXXXXX XX XXXX
-----------------------------------------
Xxxxxx xx Xxxx
Power of Attorney
[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
36
COMPANY:
GDT S.A.
By: /s/ XXXXXXXX X. XXXXX
-----------------------------------------
Xxxxxxxx X. Xxxxx
Director
By: /s/ XXXXXXX XXXX
-----------------------------------------
Xxxxxxx Xxxx
Director
[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
37
Exhibits
A The Shares
B Amendment to Employment Agreement
C Company's Secretary's Certificate
D Opinion of Counsel to the Sellers and the Company
E Opinion of Counsel to CNET
F Management Shareholders
G Stock Options
H Powers of Attorney
I Closing Certificates
Schedules
2.6(a) Assets
2.10(a) Financial Statements
2.12 Absence of Certain Changes or Events
2.16 Employee Matters
2.17(a) Material Contracts
2.18 Material Customers and Material Suppliers
2.19 Registrations and Applications for Intellectual Property
2.24 Insurance
2.29 Employee Benefit Plans
