EXHIBIT 10.4
Private & Confidential
DATED 30 SEPTEMBER 2005
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BRIGHTPOINT HOLDINGS BV (1)
AS SELLER
AND
INITIATIVE ET FINANCE INVESTISSEMENT
IN THE NAME AND ON BEHALF OF NEWCO (2)
AS PURCHASER
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AGREEMENT FOR THE
SALE AND PURCHASE SUBJECT TO
CONDITIONS
OF 100% OF THE SECURITIES OF
BRIGHTPOINT FRANCE AND TRANSFER
OF SHAREHOLDER LOAN
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CONTENTS
CLAUSE PAGE
1 Definitions 2
2 Sale and Purchase of the Securities; Transfer of Shareholder Loan 5
3 Conditions precedent - Seller Actions Pending Closing 9
4 Closing 10
5 Representations and Warranties of Seller 11
6 Representations and Warranties of the Purchaser 18
7 Covenants 19
8 Indemnification by Seller 20
9 Indemnification by Purchaser 23
10 General 23
1
THIS AGREEMENT is made BETWEEN:
(1) BRIGHTPOINT HOLDINGS BV, a limited liability company (besloten
vennootschap) constituted under the laws of the Netherlands, having
its registered office at 55 Rokin, 1012KK Amsterdam, the Netherlands,
registered with the Trade Register (Handelsregister) of Amsterdam
under number 24284025, represented by its chief executive officer,
Xxxxxx Xxxxxx Xxxxx, hereinafter referred to as the "SELLER";
AND
(2) INITIATIVE & FINANCE INVESTISSEMENT IFI, a French corporation (societe
anonyme) with a share capital of EUR 48,318,951, having its registered
office at 00, xxxxxx x'Xxxx 00000 Xxxxx Cedex 16, registered with the
Registry of Commerce and Companies of Paris under single
identification number 330 219 882 RCS Paris, represented for the
purposes hereof by its management company, INITIATIVE ET FINANCE
GESTION, itself represented by Xx Xxxxxxxx Xxxxxxx, in his capacity as
Director associate, hereinafter referred to as the "PURCHASER"),
INITIATIVE ET FINANCE INVESTISSEMENT acting in its own name and on behalf of any
commercial company it may incorporate for the purpose hereof.
(the Seller and the Purchaser being referred to collectively hereinafter as the
"PARTIES").
WHEREAS:
(A) Brightpoint (France) SARL is a French limited liability company
(societe a responsabilite limitee) with a share capital of EUR 900,000
(nine hundred thousand Euro), registered with the Registry of Commerce
and Companies of Bobigny under single identification number 417 753
217 RCS Bobigny, having its registered office at 00, xxx Xxxxxxx 00000
Xxxxxx (hereinafter referred to as "BRIGHTPOINT FRANCE" or the
"COMPANY").
(B) The Seller is the owner of sixty thousand (60,000) Securities with a
par value (valeur nominale) of EUR 15 (fifteen Euro) each (the
"SECURITIES"), representing one hundred percent (100%) of the share
capital and voting rights of the Company.
(C) The Company owns or will on the Closing Date own all of the shares or
interests ("actions" or "parts sociales") in each of the following
companies:
o Eurocom Systems, a French corporation (societe anonyme) with a
share capital of EUR 736,200 (seven hundred and thirty-six
thousand, two hundred Euro), registered with the Registry of
Commerce and Companies of Bobigny under single identification
number 339 824 237 RCS Bobigny, having its registered office at
00, xxx Xxxxxxx 00000 Xxxxxx (hereinafter referred to as
"EUROCOM");
o Mega-Hertz, a French limited liability company (societe a
responsabilite limitee) with a share capital of EUR 7,500 (seven
thousand, five hundred Euro), registered with the Registry of
Commerce and Companies of Bobigny under single identification
number 381 774 975 RCS Bobigny, having its registered office at
00, xxx Xxxxxxx 00000 Xxxxxx (hereinafter referred to as
"MEGA-HERTZ"); and
o Mega-Hertz Entreprises, a French limited liability company
(societe a responsabilite limitee) with a share capital of EUR
8,000 (eight thousand Euro), registered with the Registry of
Commerce and Companies of Bobigny under single identification
number 439 602 509 RCS Bobigny, having its registered office at
00, xxx Xxxxxxx 00000 Xxxxxx (hereinafter referred to as
"MEGA-HERTZ ENTREPRISES");
(D) Eurocom owns or will on the Closing Date own all of the shares in
Autocom, a French limited
liability company (societe a responsabilite limitee) with a share
capital of EUR 7,774.90 (seven thousand, seven hundred and
seventy-four Euro and ninety Euro cents), registered with the Registry
of Commerce and Companies of Bobigny under single identification
number 411 121 122 RCS Bobigny, having its registered office at 00,
xxx Xxxxxxx 00000 Xxxxxx (hereinafter referred to as "AUTOCOM")
(Eurocom, Autocom, Mega-Hertz and Mega-Hertz Entreprises being
referred to collectively as the "SUBSIDIARIES" and the Company and the
Subsidiaries being referred to collectively as the "GROUP COMPANIES").
(E) NEWCO is an acquisition vehicle constituted for the purposes of the
acquisition referred to herein, certain of the principals and
shareholders of which will be Xx. Xxxxxx Xxxx, the Commercial Director
(Directeur Commercial) and Xx. Xxxxxxx Xxxx, previously the Financial
Director (Directeur Financier) of the Company (collectively, the
"MANAGERS").
(F) The Seller wishes to sell the Securities and to transfer the
Shareholder Loan to the Purchaser, and the Purchaser wishes to
purchase the Securities and acquire the Shareholder Loan from the
Seller, subject to and in accordance with the terms of the present
Agreement.
NOW THEREFORE IT IS HEREBY AGREED AS FOLLOWS:
1 DEFINITIONS
1.1 In this Agreement, the following terms have the following meanings:
"ACCOUNTING PRINCIPLES" means generally accepted accounting principles
in France.
"AFFILIATE" when used with reference to a specified person, means any
person that directly, or indirectly through one or more
intermediaries, controls, is controlled by or is under common control
with the specified Person. For the purposes hereof, the term "control"
(including the terms "controlling", "controlled by" and "under common
control with") shall have the meaning ascribed to the term "controle"
in Article L. 233-3 of the French Commercial Code (Code de Commerce).
"AGREEMENT" means this share purchase agreement and its Schedules and
Exhibits, as the same may, from time to time, be amended, supplemented
or modified.
"BASE PURCHASE PRICE" has the meaning specified in Clause 2.3.2.
"BASE PURCHASE PRICE PAYMENTS" has the meaning specified in Clause
2.3.2(b).
"BUSINESS" means the principal business activity of the Group
Companies prior to the Closing Date, which involves the supply of
services and the sale on the French territory of products relating to
wire and mobile communication as well as components and accessories in
relation thereto.
"BUSINESS DAY" means a day, other than a Saturday or Sunday or public
holiday in France, on which commercial banks in Paris, France are open
for business and in particular, the transfer of monies.
"CLAUSES" means the clauses of this Agreement unless otherwise stated.
"CLOSING" means the closing of the sale by the Seller and purchase by
the Purchaser of the Securities and the transfer of the Shareholder
Loan and the other transactions contemplated in connection therewith
in accordance with the terms hereof as envisaged by Clause 4.
"CLOSING DATE" means the date on which the Closing takes place, which
shall occur within 10 (ten) Business Days following the expiry date of
the period referred to in Clause 2.4.3 or such
later date (but no later than the Closing Deadline Date) as is
mutually agreed by in writing by the Seller and the Purchaser.
"CLOSING DEADLINE DATE" means November 1, 2005, or at the expiry date
of a 15-Business Days period starting from the date of delivery of the
Closing Financial Statements by the Seller, pursuant to Clause 2.4.1.
"CLOSING FINANCIAL STATEMENTS" means the audited interim consolidated
accounts of the Group Companies as at September 30, 2005, prepared by
Ernst & Young France, as referred to in Clause 2.4.1.
"COMPANY" has the meaning specified in the Recitals.
"DEED OF TRANSFER" deed of transfer (acte constatant la realisation de
la cession des Titres) to be executed for tax registration purposes
only between the Purchaser and the Seller on the Closing, in a form
mutually agreed;
"DEFERRED BASE PURCHASE PRICE PAYMENTS" has the meaning specified in
Clause 2.3.2(b)(ii) below.
"DEFERRED PURCHASE PRICE PAYMENTS" means, collectively:
o the Deferred Base Purchase Price Payments; and
o the Supplementary Purchase Price Payments.
"EBITDA" has the meaning set out in Schedule 1.
"ENCUMBRANCE" means, for an asset (including any share or security) of
any Group Companies and for the securities, any liens (suretes),
claims, charges, easements, mortgages, encumbrances or restrictions of
any sort, prior approval clause, put or call options, undertakings to
secure, options or rights of first refusal or preemptive right or any
other third party right or obligation of whatever sort affecting its
ownership, its transfer or the exercise of any other right with
respect thereto.
"FRENCH TAX AUTHORITIES" means the Direction General des Impots of the
Ministere de l'Economie, des Finances et de l'Industrie, and/or any
other Governmental Authority charged with the collection of Taxes in
France.
"GOVERNMENTAL AUTHORITY" means, both in France and outside of France,
any court or other judicial authority or governmental, administrative
or regulatory body, department, agency, commission, authority or
instrumentality;
"GROUP COMPANIES" has the meaning specified in the Recitals.
"INITIAL BASE PURCHASE PRICE PAYMENT" has the meaning specified in
Clause 2.3.2(b)(i) hereof.
"MANAGERS" has the meaning set forth in the Recitals.
"MATERIAL CONTRACTS" means those certain contracts, loan documents,
commitments, agreements and guarantees or other undertakings to which
any of the Group Companies is a party and which are material to the
carrying on of the Business, the management, development and marketing
of the Group Companies, as set forth in Schedule 5 hereof.
"ORDINARY COURSE OF BUSINESS" means the ordinary and usual course of
business conducted by the Group Companies consistent with past custom
and practice.
"PARTIES" has the meaning specified in the Recitals.
"PERSON" means any natural person (personne physique) or legal entity
(personne morale).
"PROCEEDING" means any action, suit, claim or legal, administrative,
arbitration or other alternative dispute resolution proceeding or
investigation (collectively "PROCEEDINGS").
"PURCHASER CLAIM(S)" has the meaning specified in Clause 8.2.
"PURCHASER LOSS" has the meaning specified in Clause 8.1.
"PURCHASER WARRANTIES" means the representations and warranties made
by the Purchaser to the Seller in Clause 6.
"RECITALS" means the paragraphs of this Agreement set out under
"Whereas" above.
"SALES PARTIES" has the meaning specified in the Recitals.
"SCHEDULE(S)" means the schedule(s) to this Agreement.
"SELLER GROUP" means the Seller and all the Affiliates of the Seller.
"SELLER WARRANTIES" means the representations and warranties made by
the Seller to the Purchaser in Clause 5.
"SHAREHOLDER LOAN" means the shareholder loan (compte courant
d'actionnaire) extended by the Seller to the Company, in the aggregate
principal and interests amount on the Date of Signature of EUR
11,656,367.67.
"SHAREHOLDER LOAN TRANSFER" means the assignment and transfer by the
Seller to the Purchaser of the rights of the Seller to payment by the
Company of the amounts due by the Company to the Seller under the
Shareholder Loan, effected by way of cession de creances pursuant to
the Shareholder Loan Transfer Agreement.
"SHAREHOLDER LOAN TRANSFER AGREEMENT" means an agreement to be
prepared on the Closing Date providing for the Shareholder Loan
Transfer. "SHAREHOLDER LOAN TRANSFER AMOUNT" has the meaning specified
in Clause 2.2.1 below.
"SHAREHOLDER LOAN TRANSFER AMOUNT PAYMENTS" means, collectively, each
of the Base Purchase Price Payments and the Supplementary Purchase
Price Payments.
"SECURITIES" has the meaning specified in the Recitals.
"SIGNATURE DATE" means the date on which the present Agreement is
signed, as set forth on the signature page hereof.
"SUBSEQUENT FINANCIAL STATEMENTS" has the meaning specified in Clause
2.3.3(b) hereof.
"SUBSEQUENT FINANCIAL YEARS" has the meaning specified in Clause
2.3.3(b) hereof.
"SUBSIDIARIES" has the meaning specified in the Recitals.
"SUPPLEMENTARY PURCHASE PRICE" and "SUPPLEMENTARY PURCHASE PRICE
PAYMENT" have the meaning specified in Clause 2.3.3.
"TAX" means any taxes, duties, deductions, contributions or charges
(including social security (Securite Sociale) contributions and
parafiscal charges), including in particular, income tax, capital
gains tax, property tax, business tax, withholding tax, indirect
taxes, local taxes, value added tax, salary and employment taxes,
registration or stamp duties, customs duties (droits de douane)
imposed or collected by any State or by any organization or local
authority, national or
supranational, and including interest, penalties, fines, reassessments
and other related charges; and "TAXATION" shall be construed
accordingly.
"TAX REGULATION" means Tax or customs law, as well as decrees, orders
or other texts of application or interpretation of the relevant law
applicable in a given country, as well as any international treaty.
"TRADEMARK LICENSE AGREEMENT" means an agreement to be signed at
Closing pursuant to which:
o Brightpoint Inc shall grant at no cost the Company and its
Subsidiaries a license to use the "Brightpoint" name for a
period of nine months following the Closing Date (the
"TRADEMARK LICENSE PERIOD") and shall allow the use by the
Group Companies of the domain name "Xxxxxxxxxxx.xx"
[however, solely on receive-only service] for 12 months
following the Closing Date; and
o the Company shall agree (in its own name and on behalf of
the Subsidiaries) to cease using the Brightpoint name for
commercial purposes (including without limitation in its
business activities, in its legal name (raison sociale) and
for internet domain purposes), no later than at the end of
the duration provided for under the above paragraph.
"TRANSACTION" has the meaning ascribed to it in Clause 2.1.1.
1.2 In this Agreement, unless the context requires otherwise:
1.2.1 references to any French legal term for any action, remedy, method of
judicial proceeding, legal document, legal status, court, official or
any legal concept or thing shall in respect of any jurisdiction other
than France, as the case may be, be deemed to include what most nearly
approximates in that jurisdiction to the French legal term;
1.2.2 references to time are to Paris time; and
1.2.3 words importing the singular include the plural and vice versa, words
importing a gender include every gender and references to persons
include corporations, partnerships and other unincorporated
associations or bodies of persons.
2 SALE AND PURCHASE OF THE SECURITIES; TRANSFER OF SHAREHOLDER LOAN
2.1 Sale and Purchase of the Securities; Shareholder Loan Transfer
2.1.1 Upon and subject to the terms and conditions of this Agreement, and in
particular subject to the satisfaction of the Conditions Precedent on
the Closing Date:
(a) the Seller shall sell to the Purchaser, and the Purchaser shall
purchase from the Seller, the Securities, free and clear from all
Encumbrances and other third party rights, as well as all rights
now or hereafter attaching to the Securities, including but not
limited to, voting and distribution rights with effect from the
Closing Date, it being specified that the Company shall own on
the Closing Date 100% of the Securities of the Subsidiaries; and
(b) the Seller shall assign and transfer to the Purchaser, and the
Purchaser shall acquire from the Seller, the Seller's rights to
payment from the Company of the amounts due and owing to the
Seller under the Shareholder Loan, pursuant to the Shareholder
Loan Transfer
(such transactions being referred to collectively in this Agreement as
the "TRANSACTION").
2.1.2 The sale of the Securities and the Shareholder Loan Transfer shall
occur on the Closing Date and such transfer shall be deemed to occur
simultaneously with the other actions described in Clause 4 (Closing)
below.
2.2 Securities purchase price
The purchase price for the Securities shall be equal to an amount of
EUR 1,000 (one thousand Euro) payable by the Purchaser to the Seller,
in full on the Closing Date.
2.3 Shareholder Loan Transfer Amount and Payment
2.3.1 Shareholder Loan Transfer Amount
The aggregate transfer amount payable by the Purchaser to the Seller
for the Shareholder Loan (the "SHAREHOLDER LOAN TRANSFER AMOUNT")
shall consist of the sum of the following amounts:
(a) the Base Purchase Price, as such term is defined in Clause
2.3.2(a) hereof, payable in two Base Purchase Price Payments as
set forth in such Clause 2.3.2; and
(b) the Supplementary Purchase Price, as such term is defined in
Clause 2.3.3 hereof, payable in one or more Supplementary
Purchase Price Payments as set forth in such Clause 2.3.3.
Furthermore, the shareholders of NEWCO undertake to pay, and IFI shall
cause such shareholders to pay, an amount to the Seller equal to 5%
(five percent) of the total price resulting from the transfer (in one
or several stages) of the securities constituting the share capital of
the Purchaser (or of the value of all other kinds of compensation
received by reason of such transfer) pursuant to the terms (investment
by the Seller in the share capital of the Purchaser up to 4.99%,
"golden share" giving a preferred and absolute right to the amount of
5% referred to above, etc.) and such other terms and conditions to be
mutually agreed upon between the Seller and Initiative & Finance
Investissement at the latest on the Closing Date (it being specified
that such terms and conditions (i) shall not be less favourable than
those granted to the Managers in terms, inter alia, of pre money
valuation of the share capital of the Purchaser, dividend rights, tag
along and drag along rights obligations, information rights or such
other rights of the same nature granted to minority shareholders under
a shareholders agreement, but (ii) shall not grant any right to the
Seller to intervene in the affairs of, or to vote, with respect to the
Company and its Subsidiaries).
2.3.2 Base Purchase Price
(a) The base price for the transfer of the Shareholder Loan (the
"BASE PURCHASE PRICE") shall be equal to EUR 2,800,000 (two
million, eight hundred thousand Euro);
(b) The Base Purchase Price shall be payable by the Purchaser to the
Seller in the following amounts and at the following times (the
"BASE PURCHASE PRICE PAYMENTS"):
(i) on the Closing Date, the Purchaser shall pay to the Seller
an amount (the "INITIAL BASE PURCHASE PRICE PAYMENT") equal
to EUR 2,150,000 (two million, one hundred fifty thousand
Euro).
(ii) thereafter, the Purchaser shall pay to the Seller one (1)
additional Base Purchase Price Payment (the "DEFERRED BASE
PURCHASE PRICE PAYMENT"), equal to EUR 650,000 (six hundred
fifty thousand Euro), such payment to be made at the latest
on March 31st, 2006.
2.3.3 Supplementary Purchase Price
(a) The Purchaser shall pay the Seller as consideration for the
Shareholder Loan transfer and in addition to the Base Purchase
Price, an aggregate amount, not in excess of EUR 2,750,000 (two
million, seven hundred fifty thousand Euro), calculated in
accordance with this Clause 2.3.3 (the "SUPPLEMENTARY PURCHASE
PRICE").
(b) Within one hundred and twenty (120) days following the close of
each financial year (exercice social) of the Group Companies
occurring in calendar years 2006, 2007, 2008 and 2009 (the
"SUBSEQUENT FINANCIAL YEARS)", the Purchaser shall cause the
Company to prepare its audited consolidated financial statements,
which have been audited by a certified public accounting firm
acceptable to Seller, for such financial year in accordance with
the Accounting Principles and in the same format as that used for
the Closing Financial Statements (the "SUBSEQUENT FINANCIAL
STATEMENTS", it being specified that the Subsequent Financial
Year 2009 shall only be taken into account for the purpose of
determining the Supplementary Purchase Price, in the event
referred to in paragraph (d) below). Immediately upon each of
such Subsequent Financial Statements becoming available, the
Purchaser shall transmit a copy thereof to the Seller. The
Purchaser shall cause the Company to make its books and records
available upon request to the Seller for the purposes of
verifying such Subsequent Financial Statements (in a manner which
shall not disrupt the ordinary course of business of the Group
Companies). The Purchaser acknowledges that the financial year of
each of the Group Companies currently corresponds to the calendar
year (January 1 - December 31) and the Purchaser undertakes to
refrain from changing the financial year of any of the Group
Companies until the full amount of the Supplementary Purchase
Price Payments have been made, unless pro forma financial
statements as at 31st December are issued every year (as audited
by the Company's Auditor).
(c) No later than 30 (thirty) days following such transmission to the
Seller of each Subsequent Financial Statement 2006, 2007 and
2008, the Purchaser shall, subject to the provisions of paragraph
(e) below, pay to the Seller twenty-five percent (25%) of the
amount of EBITDA of each such Subsequent Financial Years, it
being specified that the maximum amount to be paid by the
Purchaser to the Seller in that respect is capped at EUR 750,000
(seven hundred fifty thousand Euro) for the Subsequent Financial
Year 2006, EUR 1,000,000 (one million Euro) for the Subsequent
Financial Year 2007 and EUR 1,000,000 (one million Euro) for the
Subsequent Financial Year 2008 (each such payment, a
"SUPPLEMENTARY PURCHASE PRICE PAYMENT").
(d) However, in the event that the aggregate amount paid under
paragraph (c) above is less than EUR 1,275,000 (one million two
hundred seventy five thousand Euro), the payment of the
corresponding shortfall shall be deferred to the Subsequent
Financial Year 2009 and will be payable up to 40% (forty percent)
of the amount of EBITDA attained during such Financial Year (it
being specified that such amount of EBITDA cannot, for the
purpose of the calculation to be made pursuant to this paragraph
(d), exceed EUR 1,700,000 (one million seven hundred thousand
Euro), at the latest thirty (30) days following the delivery to
the Seller of the Financial Statements relating to such Financial
Year.
(e) The maximum amount required to be paid by the Purchaser to the
Seller as Supplementary Purchase Price shall be EUR 2,750,000
(two million seven hundred fifty thousand Euro). Once such amount
has been paid by the Purchaser to the Seller in respect of
Supplementary Purchase Price, the Purchaser shall have no further
obligations to the Seller under this Clause 2.3.3. Some examples
of the calculation of the Supplementary Purchase Price are set
out in Schedule 2.2(e) hereof.
2.3.4 In the event of a transfer of securities issued by NEWCO to a third
party (or of any similar transaction, such as a transfer of assets,
loan of securities or of assets, etc.) before the date of full payment
of the Earning Purchase Price, the Purchaser shall continue to be
required to effect such payment except if (i) the obligation to comply
with the rights to the Supplementary Purchase Price (the "Rights to
the SPP") has been assigned to such third party, or if (ii) the Rights
to the SPP are repaid by anticipation, up to the amount determined
pursuant to the provisions set out in paragraphs (b) to (e) above, it
being specified that the calculation of such Rights shall be made on
the basis of the higher EBITDA amount as between (i) the EBITDA for
the Subsequent Financial Year immediately preceding the financial year
during which the transfer of the NEWCO's securities shall have
occurred and (ii) EUR 1,700,000 (one million seven hundred thousand
Euro).
2.3.5 Mechanics of Shareholder Loan Transfer Amount Payments
Each of the Shareholder Loan Transfer Amount Payments shall be made by
the Purchaser to the Seller by wire transfer to the Seller's account
the details which shall be communicated by the Seller to the Purchaser
prior to the Closing Date.
2.3.6 Optimization
The Seller and the Purchaser agree that they may, by mutual written
consent, amend the terms and conditions relating to the payment of the
purchase price for the Securities and/or of the Shareholder Loan
Transfer Amount, in order to optimize the tax consequences of any of
the terms and conditions hereof.
2.4 Preparation and Review of Closing Financial Statements
2.4.1 As soon as possible following the Signature Date, the Seller shall
cause the Company to prepare its consolidated financial statements
(consisting of a balance sheet (bilan) together with the related
profit and loss account (compte de resultat) and the annexes thereto)
as at, and for the nine months ending on 30 September 2005 (the
"CLOSING FINANCIAL STATEMENTS"). The Closing Financial Statements
shall be prepared in accordance with the Accounting Principles,
audited by Ernst & Young and delivered to the Purchaser on October
21st, 2005. The Purchaser shall be entitled to request access to the
supporting documents used by Ernst & Young in the preparation of the
Closing Financial Statements and to raise any relevant questions with
respect thereto.
In the event of difficulties in the preparation or the review by Ernst
& Young of such consolidated accounts, the Parties shall agree to
follow the following procedure:
- the Seller shall procure that the Company prepare consolidated
accounts (consisting of a balance sheet (bilan) together with the
related profit and loss account (compte de resultat) and the
annexes thereto) as at, and for the nine months ending on 30
September 2005 (the "CLOSING FINANCIAL STATEMENTS"). The Closing
Financial Statements shall be prepared in accordance with the
Accounting Principles and delivered to the Purchaser on October
21st, 2005,
- simultaneously and within the same timeframe:
o an audit will be carried out by Ernst & Young on the
individual intermediary financial statements for the
companies Brightpoint France and Eurocom, closed as at, and
for the nine months ending on 30 September 2005. The audit
reports will be delivered to the Purchaser at the latest on
October 21st, 2005.
o a limited audit will be carried out by Ernst & Young and/or
Mazars pursuant to a procedure to be agreed, on the
individual intermediary financial statements closed as at,
and for the nine months ending on 30 September 2005 for the
companies Mega Hertz, Mega Hertz Entreprises and Autocom.
The limited audit reports will be delivered to the Purchaser
at the latest on October 21st, 2005.
The Purchaser may also request, in such case, to be given access to
all the documents used by Ernst & Young for the purpose of the
preparation of the Closing Financial Statements and may raise any
relevant questions in relation thereto.
2.4.2 The Seller and the Purchaser agree that the Purchaser shall, at its
discretion, have the option to refrain from proceeding with the
Closing of the Transaction if:
- the audit of the Closing Financial Statements carried out by the
Purchaser between the date of delivery of Closing Financial
Statements and, at the latest, 15 (fifteen) Business
Days as from the date of delivery of such financial statements,
do not confirm that such Closing Financial Statements comply with
the Accounting Principles and that the EBIDTA as set forth in the
Closing Financial Statements is at least equal to (EUR 450,000)
(negative four hundred fifty thousand Euro) plus or minus 10%.
- the legal, tax and employment due diligence relating to the Group
Companies that the Purchaser shall carry out between the Date
hereof and at the latest 15 (fifteen) Business Days as from the
delivery of the Closing Financial Statements has evidenced
matters likely to adversely and materially affect the financial
situation and the operating conditions of the Group Companies.
(Hereafter collectively referred to as the "AUDITS")
2.4.3 As from the date of finalization of the Audits, the Purchaser shall
have a period of 8 (eight) days (the "OPTION PERIOD") to send a notice
(the "OPTION NOTICE") to the Seller, in the event that the conditions
referred to in paragraph 2.4.2 are not fulfilled, that the Purchaser
wishes to refrain from effecting the Closing of the Transaction (the
"Option").
In the event that the Purchaser sends the Option Notice to the Seller
pursuant to the terms hereof within the Option Period, the Purchaser's
obligation to effect the Closing of the Transaction shall terminate,
failing which Closing shall take place on the Closing Date.
3 CONDITIONS PRECEDENT - SELLER ACTIONS PENDING CLOSING
3.1 The obligation of the parties to proceed with the Closing is made
conditional upon the satisfaction of the following conditions
precedent:
- approval of the Transaction contemplated hereby by the investment
Committee of the company Initiative & Finance Investissement (RCS
330 219 882) at the latest on the date of expiry of the Option
Period;
- approval of this Transaction by the Board of Directors of the
company Brightpoint Inc. (shareholder of the Seller), at the
latest on October 11, 2005;
3.2 The Seller shall from the date hereof until the Closing Date procure
that:
3.2.1 the business of the Group Companies shall be carried on in the
Ordinary Course of Business and shall refrain from carrying out any
action likely to negatively affect the Ordinary Course of Business
(without prejudice however to compliance with internal procedures
within the Seller Group);
3.2.2 in the absence of prior approval of the Purchaser, the only business
conducted by the Group Companies shall be the Business and that none
of the Group Companies shall enter into any new line of business or
change its material business policies in any respect in relation to
the conduct of its existing business, except as required by law or by
policies imposed by any regulator;
3.2.3 none of the Group Companies will be a party to any merger,
contribution or spin off or will make any change to its capital, or
issue securities of any nature whatsoever or warrants to subscribe to
shares;
3.2.4 no modification shall be made to the by-laws (statuts) of any of the
Group Companies;
3.2.5 none of the Group Companies shall acquire or agree to acquire any
shares or interests in any other company (except as necessary in order
for the Company to own 100% (one hundred percent) of the shares of
each of the Group Companies; and
3.2.6 the terms and conditions applicable to the Shareholder Loan remain
unchanged.
3.3 The Seller shall procure that, on the Closing Date, the Company shall
have been transformed into a Societe par Actions Simplifiee, pursuant
to applicable laws and regulations. In such respect, the Purchaser
shall deliver to the Seller the text of the future by-laws of the
Company within a reasonable time period.
3.4 Furthermore, the Seller undertakes to use its best efforts and to
assist the Company in order to enable the Company to be in a position
to enter into a supply agreement with the company HTC relating to
goods marketed by such company under conditions satisfactory for the
Company. The Seller undertakes to invite one or two representative(s)
of the Company to technical or marketing presentations or meetings
organized by HTC in Europe (subject however to presentations or
meetings having a confidential nature with respect to the Seller
Group's business).
3.5 The Seller undertakes to pay all the costs borne or to be borne (as
the case may be) by the Company until the Closing Date, relating to
(i) services rendered by Xx Xxxxxxxxx Xxxxxx and Xxx Xxxxxxxx Xxxxx
and to (ii) diligences carried out by external counsels or personnel
of the Seller Group relating to the preparation of the Transaction
contemplated hereof.
4 CLOSING
4.1 The Closing of the sale and purchase of the Securities shall take
place on the Closing Date at the offices of Xxxxxx Xxxx, 00, xxx
Xxxxxxxxxx, 00000 Xxxxx Xxxxx, Xxxxxx, or at such other place as the
Parties may agree prior to the Closing Date, when all (but not part
only) of the business referred to in this Clause 4 shall be
transacted.
4.1.1 The Seller shall deliver to the Purchaser:
(a) evidence satisfactory to the Purchaser that the Company owns 100%
(one hundred percent) of the shares (in the case of Mega-Hertz
and Mega-Hertz Entreprises, the Securities and in the case of
Eurocom, the shares) of each of the Group Companies;
(b) all of the statutory, corporate, share transfer ledger,
individual shareholder accounts, minute and other books of each
of the Group Companies;
(c) the written resignations of each of:
(i) the managing directors (gerants) of each of the Company;
Mega-Hertz and Mega-Hertz Enterprises; and
(ii) the members of the Board of Directors (conseil
d'administration) of Eurocom;
duly executed by the persons holding such positions and
confirming that at the Closing Date they do not have any
Purchaser Claims against any of the Group Companies;
(d) the written resignations of Ernst & Young Audit and Xx. Xxxxxx
Xxxxx from their positions as statutory auditors (commissaries
aux comptes) of the Company and Eurocom with effect from the
Closing Date;
(e) two original signed copies of the Trademark License duly executed
by Brightpoint Inc.;
(f) evidence of termination of the services contract relating to the
use by the Company of the services supplied by Xx Xxxxxxxxx
Xxxxxx, Xx Xxxxxxx Chaumien and Xxx Xxxxxxxx Xxxxx ;
(g) any document showing that the Works Council (comite d'entreprise)
of the Company has been consulted and has issued its opinion with
respect to the Transaction;
(h) the Update Exhibit (as the case may be);
(i) evidence of the approval of the Transaction contemplated hereby
by the Board of Directors of Brightpoint Inc.;
(j) evidence of the absence of exercise by the following operators:
SFR, Orange and Bouygues, of their right to terminate the
agreements entered into with the Group Companies by reason of the
consummation of the Transaction;
(k) a certification of the Seller confirming that the Seller
Warranties are accurate as at the Closing Date subject to the
Update Exhibits.
4.1.2 The Purchaser shall deliver to the Seller:
(a) evidence of the approval of the Transaction contemplated hereby
by the investment Committee of Initiative & Finance
Investissement;
(b) payment of the purchase price for the securities, pursuant to the
terms and conditions referred to in Clause 2.3.5 hereof;
(c) the Initial Base Purchase Price Payments, in the manner specified
in Clause 2.3.5 hereof;
(d) an original signed copy of the Trademark License, duly executed
by the Company;
(e) a letter confirming (i) the release of the surety granted by the
company Brightpoint Inc. to the Natexis bank with respect to the
short tem loan granted by the latter to the Company and (ii) the
absence of termination of the bank loans currently in force.
4.1.3 The Purchaser and the Seller shall execute and exchange:
(a) the Shareholder Loan Transfer Agreement, it being specified that
the Purchaser undertakes to notify the Company within 24 hours of
such transfer;
(b) the Deed of Transfer of Securities in four originals, one of
which shall be for the Purchaser, one for the Seller and two
shall be used for tax registration purposes.
4.1.4 The Seller, the Purchaser and Initiative & Finance Investissement
shall execute the contract(s) reflecting the agreements reached among
them relating to the provisions set out in the last paragraph of
Clause 2.2.1 hereof.
5 REPRESENTATIONS AND WARRANTIES OF SELLER
5.1 Scope of Seller Warranties
5.1.1 The Purchaser acknowledges the following:
(a) NEWCO is an acquisition vehicle constituted for the purposes of
the acquisition referred to herein, certain of the principals of
which (the Managers) are current and former senior executives of
the Company, who have or until recently have had significant
responsibility for the running of, and who are fully familiar
with the business and activities of, the Group Companies; and
(b) the Seller is the shareholder of record of the Company and has
not participated in the management of the Company on a day-to-day
basis, although the Seller has defined the strategy of the Group
Companies and has controlled or was in position to control the
Managers.
5.1.2 Accordingly, the Purchaser agrees that the Seller shall not be liable
under the representations and warranties provided under this Clause 5
with respect to a Purchaser Loss, provided that the Seller can prove
that one of the Managers had, against the formal advice of the Seller,
carried out a transaction which turned out to be detrimental to the
Group Companies, or that
one of the Managers (or both of them) had an actual knowledge prior to
the date hereof of the inaccuracy or of the breach of the
representation or of the warranty from which the Purchaser Loss
originates.
5.1.3 To the extent that such proof can be established, and subject to the
fulfilment of such condition, the Purchaser accordingly agrees that it
shall not be entitled to any indemnification under Clause 8 hereof
relating to the Loss concerned.
5.1.4 Subject to the foregoing provisions of this Clause 5.1, the Seller
hereby makes the representations and warranties set forth in this
Clause 5 to the Purchaser.
5.2 Organization, Authority and Validity
5.2.1 The Seller is a limited liability company (besloten vennootschap) duly
organized and validly existing under the laws of the Netherlands. The
Seller has the corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder.
5.2.2 The execution of this Agreement and the consummation of the
transactions contemplated herein have been duly authorized by the
competent corporate bodies of the Seller, and no other corporate
action on the part of the Seller is necessary to authorize the
execution of this Agreement or the consummation of any of the
transactions contemplated herein.
5.2.3 This Agreement has been duly executed by the Seller and constitutes a
legal, valid and binding obligation of the Seller in accordance with
its terms.
5.3 No Breach
Neither the performance by the Seller of its obligations hereunder nor
the consummation of the transactions contemplated herein:
(a) conflicts with or violates any provision of its by-laws
(statuten) or any of its corporate governance documents;
(b) violates, conflicts with or results in the breach of any contract
to which it is a party;
(c) constitutes a violation by it of any laws or regulations; or
(d) conflicts with any provisions of any contracts or agreements
entered into between the entities of the Seller's group.
except for any such matters that would not have an adverse effect on
the ability of the Seller to perform its obligations under this
Agreement.
5.4 Consents and Proceedings
5.4.1 Except as indicated in Exhibit 5.4.1 hereof, no consent is required to
be obtained by the Seller in connection with the execution of this
Agreement or the consummation of any of the transactions contemplated
herein.
5.4.2 There is no pending Proceeding involving the Seller which seeks to
enjoin the consummation of the transactions contemplated by this
Agreement, which could result in its nullification.
5.5 Ownership of Securities; Capital Structure
5.5.1 The Seller has full and valid title to the Securities and the
Securities are free of all Encumbrances or of restrictions affecting
their transfer. The Securities represent 100% (one hundred percent) of
the capital and voting rights of the Company. The Seller is entitled
to dispose freely of and transfer the Securities without any
restriction, and as the Seller is the sole shareholder of the Company,
the clause d'agrement in the by-laws (statuts) of the Company does not
require corporate action for the transfer of the Securities to the
Purchaser
it being specified that on the Closing Date (i) the relevant corporate
bodies of BRIGHTPOINT Inc, shareholder of the Seller, will have
formally authorized such transfer under the terms of this Agreement
and that (ii) the Company will be transformed into a societe par
actions simplifiee under the terms and conditions set out in Clause
3.3 of this Agreement.
5.5.2 Except as indicated in Exhibit 5.5.2, the Company has have full and
valid title to all of the Securities issued by each of the
Subsidiaries (whether parts sociales in the case of Mega-Hertz and
Mega-Hertz Enterprises, or actions in the case of Eurocom) (the
"SUBSIDIARIES SHARES") and the Subsidiaries Shares are free of all
Encumbrances. The Company shall validly own on the Closing Date the
ownership of all the Subsidiaries Shares.
5.5.3 The share capital of each of the Group Companies is as set forth in
the following table:
---------------------------------------------------------------------------------------------
NAME OF KIND OF SHARES NUMBER OF PAR VALUE OF TOTAL SHARE
COMPANY SHARES EACH SHARE CAPITAL
Brightpoint Parts sociales 60,000 EUR 15 EUR 900,000
France
Eurocom Systems Actions 49,080 EUR 15 EUR 736,200
Mega-Hertz Parts sociales 500 EUR 15 EUR 7,500
Mega-Hertz Parts sociales 800 EUR 10 EUR 8,000
Entreprises
Autocom Parts sociales 510 No par EUR 7,774.90
---------------------------------------------------------------------------------------------
Except for such shares, the Group Companies have not issued, nor
approved the issuance of, any shares, warrants or securities of any
nature whatsoever; and there are no options, promises, warrants or
other agreements or undertakings pursuant to which any of the Group
Companies is or may become obligated to issue any shares, warrants or
other securities of any nature whatsoever. Title shall mean "security"
as defined by the "ordonnance" dated June 2004.
5.5.4 Other than as set forth in the foregoing table, none of the Group
Companies (i) has any subsidiary, or holds any interests in any other
companies, partnerships or entities or (ii) has held any interest in
any company, group or other entity where each shareholder's liability
is not individually limited to the contributions made by such
shareholder.
5.6 Incorporation, Existence and Authority of the Group Companies
5.6.1 Each of the Group Companies validly exists under the laws of France.
5.6.2 Each of the Group Companies has full power and authority to carry out
its activities in the manner in which they are currently carried out.
5.6.3 None of the Group Companies is the subject of any voluntary or
judicial reorganization proceedings, or is in liquidation, nor have
any such proceedings been threatened.
5.6.4 Except as indicated in the licence agreement entered into with
Brighpoint Inc., the Group Companies have not entered into any
specific agreements with the Seller (or one of its Affiliates), nor
with the corporate officers of the Companies other than the agreements
referred to in the minutes of the general shareholders meeting of the
Group Companies. No undertaking made by the corporate bodies or by the
corporate officers or managers of the Companies is subject to any
proceedings which seek the nullification thereof.
5.7 Compliance with Laws
Except as indicated in Exhibit 5.7, the Group Companies' activities
are carried out under conditions substantially in compliance with the
permits and consents required for the performance of their activities
and in substantial compliance with all legislation and regulations
which are currently applicable to them.
5.8 Licenses and Consents
All necessary licenses, registrations, consents, permits and
authorizations ("LICENSES") have been obtained by each of the Group
Companies such that the Group Companies may carry on the Business in
the places and in the manner in which it is now conducted.
Except as indicated in Exhibit 5.7, the Group Companies have filed
with the competent authorities and within the time limit set out by
applicable laws and regulations, all representations, reports, reviews
or other documents as required by applicable laws and regulations
(except when the absence of filing or compliance with the deadlines
does not trigger any materially adverse consequences for the Group
Companies). They have obtained all permits required to carry out their
activities and have not received any notification stating any
violation of these permits which may have a material adverse effect on
the businesses of the Group Companies.
5.9 Financial Statements
5.9.1 The Closing Financial Statements will be true and accurate and will
give a fair view of the financial situation and of the assets and
liabilities, as well as of the operating results of the Companies.
They will be drawn up pursuant to the Accounting Principles,
consistently applied for the preparation of the annual accounts over
the last three (3) financial years.
The off balance sheet liabilities of each of the Group Companies will
be duly reflected or will be adequately provided for, in accordance
with such Principles, in the Closing Financial Statements.
5.9.2 The Purchaser expressly acknowledges that its final decision to
consummate the Transaction and to effect the Closing will be made
solely on the basis of the Closing Financial Statements and not on the
basis of any previous financial statements prepared by or in
connection with any of the Group Companies.
5.10 Assets
5.10.1 The real property (biens immobiliers) used by each of the Group
Companies is held by it under a valid lease and in compliance with
applicable laws and regulations, it being specified that the Companies
have complied with their obligations in all material respects pursuant
to each lease.
5.10.2 Except as mentioned in Exhibit 5.10.2, all movable property,
installations and equipment used by each of the Group Companies to
conduct its business are either fully owned by the relevant Group
Company and are not the subject of any Encumbrance, or are used by the
relevant Group Company under the terms of a valid lease or finance
lease ("credit bail") agreement and in compliance with applicable laws
and regulations, it being specified that the Companies have complied
with their obligations in all material respects pursuant to each
financial lease.
5.10.3 All receivables accounted for in the Closing Financial Statements,
decreased by the amounts of the provisions booked in the Reference
Accounts, and any new receivables invoiced since the date of the
Reference Accounts, are payable for their full net amount in
accordance with their terms by each of the corresponding debtors.
5.11 Material Contracts
5.11.1 Save for those contracts and other documents listed in Exhibit 5.11.1
(the "CONTRACTS"), there are no other Material Contracts relating to
any of the Group Companies or the Business.
5.11.2 Except as indicated in the agreement and other documents listed in
Exhibit 5.11.2, none of the Group Companies is in breach or default in
respect of any of the Contracts.
5.12 Trade Names
5.12.1 Except as mentioned in Exhibit 5.12.1, all trade names used by the
Group Companies in carrying out their activities are owned or used as
corporate name by the Group Companies, except for the denomination
"BRIGHTPOINT", which is used pursuant to a valid license agreement.
5.12.2 A complete and up-to-date list of all intellectual and industrial
property rights registered in the name of any of the Group Companies
is attached hereto as Exhibit 5.12.2. The aforesaid intellectual and
industrial property rights are not the subject of any Encumbrances
whatsoever or of any claims or actions. The name "DIRLAND" can be used
pursuant to terms of a licence agreement entered into with a third
party.
5.13 Debts
5.13.1 The Company has not lent any money to any third party which will not
have been repaid by or on the Closing Date, other than in the ordinary
course of business.
5.13.2 The Companies have constantly repaid all spread payments relating to
long-term loans entered into with banks and other financial
institutions in compliance with applicable amortization tables.
The Companies have made, in a timely manner, all material payments due
to all creditors, such that they are not liable to pay any penalty or
indemnity whatsoever, nor likely to be held liable in that respect.
The Companies comply with their contractual obligations pursuant to
short term facilities granted by financial institutions (overdrafts,
maximum discount, etc.) and such facilities have been regularly
granted by such financial institutions and are not, subject to the
information set out in Exhibit 5.13.2, likely to be affected by the
execution of this Agreement.
The Companies have correctly accounted for all operating debts or
liabilities resulting from exceptional events.
5.13.3 The Companies have never granted any security, guarantee, letter of
comfort, warranty or any similar undertaking, of any sort whatsoever,
to the benefit of any third party, and have not undertaken any
obligations to cause any third party to take any action whatsoever.
The employees, managers or shareholders of the Companies have never
been granted any loan.
Except for the Shareholder Loan, the corporate officers and
shareholders do not have any claim against the Companies.
5.14 Taxation
5.14.1 Except as indicated in Exhibit 5.7, all returns, declarations and
reports (the "Returns") required to be delivered by any of the Group
Companies to the French Tax Authorities have been made and delivered
and no Return is disputed by the relevant French Tax Authorities and
all Taxation that was due and payable prior to the Closing Date will
be paid by the Closing Date. With regard to Tax, this warranty shall
only apply in relation to tax returns filed by the Seller or filing of
which was required prior to the Closing Date.
5.14.2 Except as mentioned in Exhibit 5.7, there are no pending or audits or
investigations with respect to any of the Group Companies relating to
Taxation.
5.15 Insurance
The policies of insurance maintained by each of the Group Companies in
relation to its business and assets (the "Policies") are in full force
and effect. All premiums payable under the Policies have been paid and
all obligations provided for by the Policies have been complied with
in all material respects by the Group Companies.
5.16 Employees; Labour Matters
5.16.1 Set forth in Exhibit 5.16.1 is a true and complete list of all
executives and employees of the Group Companies indicating their gross
annual remuneration
5.16.2 The collective bargaining agreements (conventions collectives)
applicable to the Group Companies are the Wholesale Trade collective
bargaining agreement ("Convention Collective du commerce xx xxxx"),
the Retail Trail collective bargaining agreement ("Convention
Collective du commerce de detail") and the automobile services
collective bargaining agreement ("Convention Collective des services
de l'automobile").
5.16.3 Except as indicated in Exhibit 5.16.3, no dismissal procedures are
currently in progress within the Company.
5.16.4 Except for any employee benefit, bonus, welfare, pension, retirement,
stock option, profit sharing and other compensation plans required to
be maintained by applicable legislation, regulations and by the
Collective Bargaining Agreement (collectively, the "PLANS"), none of
the Group Companies is a party to any plan or arrangement having as
its purpose or effect the making of such payments or the provision of
such charges on behalf of the Group Companies beyond the Plans imposed
by the law and by the Collective Bargaining Agreement. Each Plan has
been administered in accordance with all applicable laws and
regulations.
5.16.5 Except as indicated in Exhibit 5.7, the Group Companies have complied
with:
- laws and regulations relating to employee representative
institutions;
- laws and regulations relating to organization of working time.
5.16.6 The Seller represents that, within the Group Companies and except as
mentioned in Exhibits 5.16.3 and 5.16.6:
- there is no retirement plan other than provided by law, no
retirement premium plan, health or life insurance or any other
advantage in favour of the employees of the Companies, pending or
contemplated;
- the employees of the Companies do not benefit from any provision,
in case of dismissal or redundancy, pursuant to which they could
have a claim against any of the Companies for the payment of
amounts exceeding those provided by the law or the applicable
collective bargaining agreement;
- none of the employees of the Companies, nor their parents or
relatives by marriage, is entitled to any pension or any other
advantage on the date of his/her retirement, exceeding the
provisions set out by the law and applicable collective
bargaining agreement and by supplementary retirement and welfare
scheme to which the Companies have legally or de facto
subscribed;
- there is no contract entitling any independent service provider
to claim the status of a salaried employee;
- no employee is entitled to claim for any intellectual property
rights, except for the rights specifically reserved by the law to
their authors or inventors;
- the Companies have not entered into fixed term employment
contracts other than when and as permitted by law and no contract
of this nature, terminated or pending on the date hereof, is
likely to be reclassified as an indefinite duration employment
contract;
- no employer-employee conflict affects or threatens to affect the
Companies, and there is no indication that could lead one to
believe that the consummation of the Transaction could be
followed by such employer-employee conflict;
- no employee has suffered from any labour accident which has
caused the death or permanent or temporary disablement for a
duration greater than three months over the last 5 years;
- individual or collective dismissals implemented prior to the date
of this warranty, have been carried out in compliance with
applicable laws and none of these dismissals is likely to
trigger, for the Companies, other material consequences than
those already paid or for which provisions have been accounted
for in the Closing Financial Statement;
- the Seller represents that, at the date hereof, no employee
currently employed has expressed his/her decision to resign.
5.17 Litigation
Except as set forth in Exhibit 5.16, there is no Proceeding in
progress against any of the Group Companies.
Sufficient provisions relating to the Proceedings listed in Exhibit
5.17, have been accounted for, pursuant to the Accounting Principles,
in the Closing Financial Statements.
5.18 Effect of Agreement
5.18.1 Neither the execution, delivery or performance of this Agreement nor
the consummation of the transactions contemplated herein will, except
as set forth in Exhibit 5.18.1:
(a) violate any law applicable to any of the Group Companies;
(b) result in the breach or termination of any Material Contract,
permit or license, applicable or related to any of the Group
Companies; or
(c) result in the creation of or imposition of any Encumbrance upon
any of the assets of any of the Group Companies .
5.18.2 Neither the acquisition of the Securities, nor compliance with the
terms of this Agreement will:
(a) result in any present indebtedness of any of the Group Companies
becoming due or capable of being declared due and payable prior
to its stated maturity; or
(b) give rise to or cause to become exercisable any material third
party right (including of an Affiliate of the Seller) against any
of the Group Companies.
5.19 Intermediaries
All negotiations relating to this Agreement have been carried out
without the involvement of any person acting on behalf of any of the
Seller or any of the Group Companies in such manner as to give rise to
any valid claim against any of the Group Companies for any broker's or
finder's fee or similar compensation in connection with the
transactions contemplated herein.
5.20 Position on the Closing Date
5.20.1 The Seller represents and warrants to the Seller that the
representations set forth in this Clause 5 and made on the date hereof
will be true and correct as of the Closing Date as if made on such
date, except as to any matters that originated between the date of
signature of this Agreement and the Closing Date which the Seller may
disclose in an Exhibit provided that such Exhibits are not likely to
produce an adverse effect of an aggregate amount greater than EUR
50,000 (the "UPDATE EXHIBITS").
6 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
6.1.1 The Purchaser hereby makes the representations and warranties set
forth below to the Seller.
6.2 Organization, Authority and Validity
6.2.1 NEWCO will be on the Closing Date a simplified share company (societe
par actions simplifiee) duly organized and validly existing under the
laws of France. The Purchaser has the corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder.
6.2.2 The execution of this Agreement and the consummation of the
transactions contemplated herein have been duly authorized by the
relevant corporate bodies of the Purchaser, and no other corporate
action on the part of the Purchaser is necessary to authorize the
execution of this Agreement or the consummation of any of the
transactions contemplated herein.
6.2.3 This Agreement has been duly executed by the Purchaser and constitutes
a legal, valid and binding obligation of the Purchaser in accordance
with its terms.
6.3 No Breach
Neither the performance by the Purchaser of its obligations hereunder
nor the consummation of the transactions contemplated herein:
(a) conflicts with or violates any provision of its by-laws (statuts)
or any of its corporate governance documents;
(b) violates, conflicts with or results in the breach of any contract
to which it is a party; or
(c) constitutes a violation by it of any laws or regulations;
except for any such matters that would not, either individually or in
the aggregate, have a material adverse effect on the ability of the
Purchaser to perform its obligations under this Agreement.
6.4 Consents and Proceedings
6.4.1 No consent is required to be obtained by the Purchaser in connection
with the execution of this Agreement or the consummation of any of the
transactions contemplated herein.
6.4.2 There is no pending Proceeding involving the Purchaser which seeks to
enjoin the consummation of the transactions contemplated by this
Agreement, or which may result in its nullification
6.5 Financing
6.5.1 NEWCO and/or the Purchaser has or will have funds available to it in
an amount sufficient to enable, in a timely manner, the consummation
of the transactions contemplated herein.
6.6 No Other Representations or Warranties; No Knowledge of
Misrepresentation by the Seller
6.6.1 The Purchaser represents that it has, for the purpose of undertaking
to purchase the Securities, in part relied upon the representations
and warranties set out in Clause 5 and the agreements and undertakings
set out in Clause 5.
6.6.2 As of the date of execution of this Agreement, the Purchaser is not
aware of any inaccuracy in any of the representations and warranties of
the Seller as set forth in this Agreement which would entitle the
Purchaser to bring any Claim against the Seller for breach of any of
such representations and warranties of the Seller.
6.7 Purchaser's Interest
6.7.1 NEWCO has been constituted as a management buy-out vehicle for the
purpose of enabling the Managers, to purchase the Group Companies.
None of the executives (cadres) of any of the Group Companies other
than the Managers hold, directly or indirectly, any interest in NEWCO
on the date hereof.
6.7.2 The Purchaser has no plans, on the date hereof, to resell the
Business, in whole or in part, or the shares of any of the Group
Companies to any competitor of the Seller or of one of its Affiliate.
6.8 Position on the Closing Date
The Purchaser represents and warrants to the Seller that the
representations set forth in this Clause 9 are or will be accurate as
of the Closing Date as if made on such date.
7 COVENANTS
7.1 Co-operation
Each Party shall co-operate with the other insofar as is reasonable
necessary for it to do so, to secure all necessary consents,
approvals, authorizations, exemptions and waivers from third parties
(including relevant workers' committees) as shall be required in order
to enable the Parties to effect the transactions contemplated hereby.
7.2 Insurance
The Purchaser shall be responsible for arranging insurance with effect
from the Closing Date in respect, in the future, of those matters and
risks as are covered by the Policies listed in Exhibit 7.2 (and until
the date hereof, subscribed by the Seller Group which will cease to
provide cover for the Business and assets of the Company from such
date).
7.3 Public Announcements
No Party and no Affiliate of any Party shall make any public
statement, including, without limitation, any press release, with
respect to this Agreement and the transactions contemplated hereby
without the prior written consent of the other Parties, except as may
be required by law or the regulations of any recognized stock
exchange. The text of any public statement which any Party proposes to
make with respect to such transactions (except for the public
announcements required by applicable laws or regulations) shall be
submitted to the other Parties three (3) Business Days prior to the
date on which the announcement is to be made.
7.4 Confidentiality
Except as required by law or regulation, the Parties undertake not to
disclose, and to use their best efforts to procure that none of their
respective directors, employees, officers or agents shall disclose to
any Person at any time before or after the Closing any confidential
information, observations, data, written materials, records or
documents which may be disclosed or delivered in the course of the
negotiations of this Agreement or the actions taken pursuant to
this Agreement (the "CONFIDENTIAL INFORMATION"). The Parties further
undertake to use the CONFIDENTIAL INFORMATION for the exclusive
purpose of the transactions contemplated herein.
7.5 Non Competition
The Seller hereby undertakes on its behalf and on behalf of the Seller
Group not to carry on or be engaged directly or indirectly (except as
expressly authorized in writing by the Purchaser) on the territory of
France (the "TERRITORY") for a period of 18 (eighteen) months from the
Date of Signature, in any business which may compete with the
Business, it being specified that (i) the Seller and its Affiliates
shall be free to sell, directly or indirectly, at the expiration of a
period of 12 (twelve) months from the Date of Signature, HTC products
, in the Territory and that (ii) the Seller shall be entitled, as from
the Date of Signature, to sell, directly or indirectly, mobile
terminals in the Territory.
The Purchaser undertakes on its behalf and on behalf of its
Affiliates, not to carry on or be engaged directly or indirectly
(except as otherwise agreed in writing with the Seller) for a period
of 18 (eighteen) months as from the Date of Signature, in any business
which involves the supply of services and the sale of any products
relating to wire and mobile telecommunication (as well as components,
accessories and equipments in relation thereto) on the territory in
which the Seller Group has a subsidiary or a branch.
8 INDEMNIFICATION BY SELLER
8.1 Principle
Subject to the provisions of this Agreement, the Seller hereby
undertakes to indemnify the Purchaser for any loss (a "PURCHASER
LOSS") actually suffered by the Purchaser or by the Group Companies as
a result of any inaccuracy or breach of the representations and
warranties or covenants of the Seller hereunder.
Any indemnification due by the Seller with respect to a Purchaser Loss
shall be paid to the Purchaser or to the Group Company designated by
the Purchaser:
(a) either, within eight (8) days following the date of a written
agreement reached between the Purchaser and the Seller on the
corresponding indemnification;
(b) or, within eight (8) days following the date of a definitive and
binding court decision rendered against any of the Group
Companies in case of a third party claim;
(c) or, in the event that the Purchaser Claim has been made in
compliance with the provisions of this Agreement and the Seller
has not contested such Purchaser Claim within sixty (60) days
following the notification thereof;
(d) or, in case of disagreement between the parties with respect to a
Purchaser Claim, within eight (8) days following a court decision
becoming definitive and binding pursuant to a proceeding
initiated in compliance with Clause 10.9.2 hereof, or following
the settlement agreement signed between the parties and in
relation to such conflict.
8.2 Purchaser Claims
In order to be valid, any claims made by the Purchaser under the terms
of this Clause 8 (a "PURCHASER Claim") shall be made in writing as
follows (failing which such Purchaser Claim shall be forfeited):
8.2.1 each Purchaser Claim shall state, with reasonable detail, the specific
grounds therefore and the amount claimed; and
8.2.2 each Purchaser Claim shall be delivered by the Purchaser to the Seller
no later than thirty (30) days after the Purchaser becomes aware of
the circumstances giving rise to such
Purchaser Claim or, if the circumstances so require (e.g., in the case
of emergency proceedings or when the response to a notification must
be given within a time period subject to forfeiting its rights), the
Purchaser will send the written notification to the Seller with
sufficient time to permit the Seller to take the actions referred to
in Clause 8.4.
8.3 Period for making of Purchaser Claims
Any Purchaser Claims may give rise to indemnification only if notified
by the Purchaser to the Seller prior to the expiration of a period of
18 months from the Closing Date, except for Purchaser Claims in
relation to Tax which shall be validly notified to the Seller prior to
the expiration of the relevant statute of limitations applicable to
the facts or actions in question.
8.4 Third-Party Purchaser Claims
In the event that a Purchaser Claim is made on the basis of a claim
made by a third party against a Group Company, the Seller may retain
counsel at its own expense in order to follow the evolution of third
party claims and the way they are managed and to communicate to the
Purchaser and its counsel any arguments to defend the interests at
stake, it being specified that the Purchaser and/or the Group Company
involved shall remain entitled to defend the interests of the Group
Company involved. At the Seller's request, the Purchaser shall cause
said Group Company to present all arguments, submit all pleadings,
take all actions, file all counterclaims and more generally cooperate
with the Seller and the counsel appointed by the Seller. The Purchaser
shall provide, and shall cause the Group Companies to provide, the
Seller, for information purposes, with all information or documents in
relation to said third-party claim which the Seller may reasonably
request. However, the Purchaser shall not, and shall cause the Group
Companies not to, settle, admit liability or withdraw any claim in
connection with said third-party claim without the prior written
consent of the Seller.
8.5 Actual Nature of Purchaser Loss
8.5.1 A Purchaser Loss shall be eligible for indemnification by the Seller
to the extent and only to the extent such Purchaser Loss has actually
been sustained by the Purchaser or by any of the Group Companies.
8.5.2 Any deficiency assessed by the tax authorities the sole effect of
which is to shift a tax liability from one fiscal year to another
shall give rise to indemnification by the Seller only insofar as a
Group Company is required to pay a penalty, cost or interest charge in
relation thereto.
8.5.3 Any deficiency assessed with regard to a tax, such as a value-added
tax, shall give rise to indemnification by the Seller only insofar as
a Group Company is required to pay a penalty, cost or interest charge
in relation thereto and provided that it is recoverable in full.
8.5.4 Any indemnification due by the Seller shall be calculated taking into
account the effect of any net tax savings effectively realized by the
Group Companies as a result of the tax deductibility of the relevant
Purchaser Loss.
8.5.5 For purposes of calculation of the indemnification due by the Seller,
any amounts paid to the Purchaser or the Group Companies under
insurance policies or any other amount directly connected to the Loss
concerned, and compensating the Purchaser Loss for which the Purchaser
Claim is made shall be deducted. If the Seller pays an indemnity in
respect of a Purchaser Loss and the Purchaser or any of the Group
Companies subsequently recovers or may recover (even after expiration
of the relevant time limit set forth in Clause 8.3) all or part of the
amount of such indemnity from a third party (including insurance
companies or tax authorities), the Purchaser shall take or shall cause
the Group Companies to take all reasonable steps to recover such
amount and, immediately upon recovery thereof, shall pay, or cause the
Group Companies to pay, to the Seller the amount thereby recovered,
net of any relating taxes. In the event that the amounts paid
following such recovery shall result in the Purchaser Loss(es)
becoming inferior to the amount (Deductible) specified in Clause
8.6.1, the Purchaser shall repay to the Seller the full amount paid by
the Seller in respect of all the relevant Purchaser Loss(es).
8.5.6 Any indemnification due by the Seller shall be based on the amount of
the Purchaser Loss actually suffered by the Group Companies, and shall
be computed without regard to any multiple, price-earnings or
equivalent ratio implicit in negotiating and/or settling the
Shareholder Loan Transfer Amount.
8.5.7 Only direct Purchaser Losses sustained by the Purchaser or the Group
Companies shall be eligible for indemnification by the Seller.
8.5.8 Any indemnification due by the Seller shall in all cases be limited to
the amount of the Purchaser Loss, notwithstanding the fact that the
event giving rise to the Seller's obligation may originate from an
inaccuracy of several of the representations made under Clause 5
hereof.
8.5.9 If a Purchaser Claim is based upon a liability which is contingent
only, no indemnification shall be due unless and until such Loss
becomes due.
8.5.10 In the event that a Group Company is required to make a payment in
connection with a third-party claim, the Seller shall not be required
to make any indemnification payment in connection thereto before such
payment has actually been made by such Group Company.
8.5.11 The Seller shall not be held liable for indemnification of any
Purchaser Loss sustained by a Group Company, to the extent that such
Purchaser Loss is directly compensated by a gain accruing to the
benefit of another Group Company and corresponding to the Loss
suffered by an other Group Company.
8.6 Determination of Indemnification
8.6.1 No indemnification shall be due by the Seller unless the aggregate
amount of the indemnification owed by the Seller exceeds (after all
deductions pursuant to this Article 8) EUR 50,000 (fifty thousand
Euro), and such indemnification shall then become due for the total
aggregated amount exceeding such deductible amount.
8.6.2 In respect of individual Purchaser Claims, the Purchaser shall be
entitled to indemnification only if the amount of the indemnification
exceeds EUR 1,500 (one thousand and five hundred Euro) per such
individual Purchaser Claim and any indemnification which would be owed
by the Seller but for this Clause 8.6.2 (i.e., an individual amount
not exceeding EUR 1,500 (one thousand and five hundred Euro)) shall
not be counted towards the amount set forth in Clause 8.6.1 above.
8.6.3 The total indemnification that may be due by the Seller to the
Purchaser (the "TOTAL INDEMNIFICATION") shall not exceed, and the
liability of the Seller to the Purchaser hereunder shall be limited
to, the aggregate of the total amount of the Shareholder Loan Transfer
Amount (as such term is defined in Clause 1.1) and such
indemnification shall be payable solely by way of set off
(compensation) by the Purchaser of such Total Indemnification against
the Shareholder Loan Transfer Amount Payment, at such times and in
such amounts as such Shareholder Loan Transfer Amount are required to
be made by the Purchaser pursuant to Clause 2.2 hereof.
8.7 Exonerating and Mitigating Factors
8.7.1 The Seller shall not be held liable for indemnification to the extent
the Purchaser Loss for which indemnification is sought may be
attributed to any voluntary action or omission on the part of the
Purchaser and/or the Group Companies after the Closing Date or any
change in accounting methods (including consolidation methods) or
policies of the Group Companies after such date, except if the
accounting principles applied before the Closing Date did not complied
with applicable laws.
8.7.2 The Seller shall not be held liable in respect of any breach of
representation or warranty which would not have occurred but for any
Tax related law passed after the date of this Agreement with
retroactive effect.
8.7.3 The Purchaser, upon learning of the situation giving rise or likely to
give rise to a Purchaser Loss, shall use its best efforts to mitigate
the corresponding Purchaser Loss.
8.7.4 In the event that a situation giving rise to a Purchaser Claim is
curable, the Purchaser shall use its best efforts in order to procure
that such a cure be implemented.
8.7.5 The Seller shall not be held liable for indemnification if the
Purchaser has not exercised, or has not caused the Group Companies to
exercise, any and all rights the Purchaser or the Group Companies may
have against third parties in connection with the corresponding
Purchaser Loss.
8.7.6 It is specified, for the sake of clarity, that the Seller shall not be
held liable for indemnification in respect of any facts or matters
which were disclosed in any Exhibit attached hereto (it being
specified that the information and documents appearing in one of the
Exhibit relate to the representations and warranties to which the
Exhibit in question refers but shall also be deemed to relate to any
other representation or warranty to which the said Exhibit or
information and documents may apply). No indemnification shall be owed
by the Seller in connection with liabilities reserved against in the
Closing Financial Statements up to the amounts in line with the
Accounting Principles.
8.8 Exclusivity of Remedy
The indemnification provided in this Clause 8.8 shall be the exclusive
remedy of the Purchaser against the Seller in respect of any breach of
any representation, warranty, covenant or undertaking of the Seller.
8.9 No other representations by Seller
The Seller neither makes any representation nor gives any warranty to
the Purchaser other than as specifically provided for in Clause 5.
Without limiting the generality of the foregoing, the Seller makes no
representation and gives no warranty to the Purchaser with respect to
financial projections, budgets or management analyses relating to any
of the Group Companies and to the future profitability and financial
performance of any of the Group Companies
9 INDEMNIFICATION BY PURCHASER
Subject to the provisions of this Agreement, the Purchaser hereby
undertakes to indemnify the Seller for all damages, losses and
reasonable expenses (collectively a "SELLER LOSS") actually suffered
by the Seller or by any company in the Seller Group as a result of any
inaccuracy or breach of the representations and warranties or
covenants of the Purchaser hereunder.
10 GENERAL
10.1 Expenses
Each Party shall bear the fees, costs and expenses incurred by it in
respect of its respective counsel, accountants, brokers and other
business advisers in connection with the preparation, negotiation,
execution and performance of this Agreement and the consummation of
the transactions contemplated hereby. Any and all stamp or
registration duties which may be assessed on account of any act or
failure to act of any Party, whether intentionally or otherwise, shall
be borne entirely by such Party, it being understood, for the
avoidance of doubt, that all registration and stamp duties (and any
late payment interest or penalties thereon) payable in relation to the
acquisition of the Securities pursuant to this Agreement shall be for
the sole account of the Purchaser.
10.2 Entire Agreement; Modification
This Agreement (including the Exhibits and Schedules hereto) and any
document delivered by the Seller or the Buyer in accordance herewith,
constitute the entire agreement between the
Parties with respect to the subject matter hereof, and supersede all
prior agreements and understandings, whether oral or written. This
Agreement shall not be modified, changed, discharged or terminated
except by a written agreement signed by all of the Parties.
10.3 Benefits
This Agreement is intended to be solely for the benefit of the Parties
and shall be binding upon them and their respective permitted
successors and assigns. Nothing in this Agreement or any other
agreement delivered or executed as part of the transactions
contemplated herein shall be construed to confer a benefit on any
party that is not a party to this Agreement.
10.4 Assignment
This Agreement may not be assigned by either Party without the prior
written consent of the other Party. A sale of substantially all of the
assets of a Party or the Company or a merger with another Person other
than an Affiliate of such Party or the Company shall be deemed to be
an assignment for the purposes of this Agreement.
10.5 Severability
The invalidity of all or any part of any Article of this Agreement
shall not render the remainder of that Article or of this Agreement
invalid, and the Agreement shall be carried out as nearly as possible
according to its original terms and intent. If any provision of this
Agreement is so broad as to be unenforceable, such provision shall be
interpreted and enforced only to the extent that the provision is
enforceable.
10.6 Notices
All notices, requests, demands, and other communications given or made
hereunder (a "NOTICE") shall be in writing and shall be delivered
personally, sent by registered mail, return receipt requested, postage
prepaid or transmitted by facsimile to the Party to whom such Notice
is directed at the following address or at such other address or fax
number as may be designated by Notice from such Party:
To the Seller as follows:
Brightpoint Holdings BV
55 Rokin,
0000XX Xxxxxxxxx
The Netherlands
Fax: x00 00 000 00 00
For the attention of: Xxxxxx Xxxxxxxx
With a copy to:
Brightpoint Inc.
000 Xxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
XXX
Fax: x0 000 000 0000
For the attention of: Xxxxxx X. Xxxxx
And to:
Xxxxxx Xxxx
Washington Plaza
00 xxx Xxxxxxxxxx
00000 Xxxxx Cedex 08
Fax: x00 0 00 00 00 00
Attn: Herve Castelnau
To the Purchaser as follows:
Initiative et Finance Investissement
00 xxxxxx x'Xxxx
00000 Xxxxx
Fax: x00 0 00 00 00 00
For the attention of: Xxxxxxxx Xxxxxxx
With a copy to:
Lamartine Conseil
00 xxxxxx Xxxxx
00000 Xxxxx
Fax : x00 0 00 00 00 00
For the attention of: Olivier Renault
Any Notice given or made in the manner prescribed above shall be
deemed to have been received o [BLANK IN ORIGINAL] days after the date
of mailing or on the date of delivery by hand or transmission by
facsimile.
10.7 Non-Waiver
The failure to enforce or to require the performance at any time of
any of the provisions of this Agreement shall in no way be construed
to be a waiver of such provisions, and shall not affect either the
validity of this Agreement or any part hereof or the right of any
Party thereafter to enforce each and every provision in accordance
with its terms.
10.8 Language
This Agreement is entered into in both the English and the French
language. In the event of any dispute concerning the construction or
meaning of this Agreement, the text of the Agreement as written in
French shall prevail.
10.9 Governing Law and Dispute resolution
10.9.1 This Agreement shall be governed by and interpreted in accordance with
the laws of the Republic of France.
10.9.2 Any dispute or litigation arising out of, or in connection with the
execution, the interpretation or the termination of this agreement (a
"DISPUTE") shall be settled by an arbitration under the French
Association Arbitration Rules ("Reglement de l'Association Francaise
d'Arbitrage") ("AFA") to which the Parties undertake to comply with.
The arbitral Court will be composed of a panel of three arbitrators,
i.e.: one arbitrator appointed by the claimant, one arbitrator
appointed by the defendant, and one chairperson of the arbitral Court
appointed by the two first arbitrators thus appointed. Unless
otherwise agreed by the Parties, the chairman of the arbitral Court
shall be of a nationality other than French or American and shall have
a recognized understanding of civil law.
The arbitral Court shall not have the power to judge "ex-aequo xxxx".
The arbitration place shall be Paris, France.
The language of the arbitration shall be English. Any documents and/or
evidences communicated in a language other than French or English,
shall be communicated together with an English translation.
The arbitral decision shall be final and non-appealable and
enforceable. In that respect, the parties undertake to perform the
terms of the arbitral decision spontaneously and without delay. The
Parties expressly waive any recourse they may have which they are
entitle dto waive.
The Parties undertake to keep strictly confidential both the content
of the submissions (whether oral or written) and the existence of the
arbitration proceeding itself.
Executed in Paris, on September 30, 2005,
in ___ original copies.
BRIGHTPOINT HOLDINGS BV INITIATIVE ET FINANCE INVESTISSEMENT
/s/ Xxxxxx X. Xxxxx /s/ Xxxxxxxx Xxxxxxx
--------------------------------------- -------------------------------------
represented by Xxxxxx Xxxxxx Xxxxx represented by INITIATIVE ET FINANCE
duly authorised for the purpose hereof GESTION, itself represented by Xx Xxxxxxxx
Xxxxxxx duly authorised for the purpose
hereof
LIST OF OMITTED SCHEDULES
IN ACCORDANCE WITH ITEM 601(B)(2) OF ITEM S-K, THE FOLLOWING SCHEDULES HAVE BEEN
OMITTED. THE REGISTRANT WILL PROVIDE COPIES OF THE SCHEDULES TO THE COMMISSION
UPON REQUEST.
Schedule 1 Definitions of EBITDA
Schedule 2.2.3(e) Example of calculation of the Supplementary Purchase Price
Schedule 5.4.1 Authorisation to be granted to the Seller for the purpose
of the execution of the agreement
Schedule 5.5.2 Ownership of the Subsidiary Shares
Schedule 5.7 Compliance with law
Schedule 5.10.2 Off balance sheet commitment
Schedule 5.11.1 Material Contracts
Schedule 5.11.2
Schedule 5.12.2 Group Companies' Intellectual Property Rights
Schedule 5.13.2 Short term facilities likely to be terminated by reason of
the execution of the agreement
Schedule 5.14.1 Tax returns
Schedule 5.16.1 List of the employees of the Company Brightpoint France
Schedule 5.16.3 Proceedings pending before the labour court ("Conseil des
Prud'hommes")
Schedule 5.16.6
Schedule 5.17 Litigation
Schedule 5.18.1 Material contracts which signature or exclusion could be
deemed to be a breach or trigger its termination.
