EXHIBIT 10.1
File No. /1998
-------------------------------
Share Transfer Agreement
------------------------
Today, the 20th day of May
nineteen hundred and ninety eight
appeared before me
Xx. Xxxxxx Xxxxxxxxxx
---------------------
notary in Munich
at my office in Xxxxxxxxxx(xxxx)x 0, 00000 Xxxxxx
1. Xx. Xxxxxxx Xxxxxxxxxxx, born on August 19th, 1950
with his residence Xxxxxxxxxxxxx(xxxx)x 00, 00000 Xxxxxx
identified by his identity card
-hereinafter referred to as "the Seller No. 1"-
2. Xx. Xxxx Xxxxxx, born on August 1st, 1947
with his residence Xxxxxxxxxxxxxxx(xxxx)x 00, 00000 Xxxxxx
identified by his identity card
-hereinafter referred to as "the Seller No. 2"-
2
3. Mr.
identified by his identity card
acting not in his own name, but rather for the company
BOGEN Communications International, Inc., a corporation incorporated and
existing under the laws of the State of Delaware, with its principal
office at 00, Xxxxxx Xxxxxx, P.O. Box 575, Ramsey, New Jersey, 07446 USA,
-hereinafter referred to as "the Buyer"-
on the basis of the written authority attached to this document
The Sellers and the Buyer requested the notarization of the following
declarations in the English language and declared to be in full command of the
English language. After having been advised by the notary public of their right
to an interpreter and/or to a written translation of the present notary deed,
they waived such rights.
Thereupon, the persons appearing requested that the notary records the following
Share Transfer Agreement
------------------------
I. Preliminary Statements
-------------------------
The Sellers and the Buyer are the sole shareholders of the company SPEECH DESIGN
Gesellschaft fur elektronische Sprachverarbeitung mbH, with its legal seat in
Germering, entered in the Commercial Register of Munich Local Court under HRB
69353 with a stated capital in the nominal value of DM 1,960,000.--(hereinafter
referred to as the "Company").
3
The Seller No. 1 and the Seller No. 2 participate in the stated capital of the
company of in total DM 1,960,000,--with several shares as follows:
Shareholder Share in the
nominal value of
------------------------------------------------------
- Seller No. 1 DM 107,000.--
DM 52,000.--
DM 145,000.--
DM 74,000.--
-------------------
in total DM378,000.--
- Seller No. 2 DM 107,000.--
DM 145,000.--
-------------------
in total DM252,000.--
------------
together DM630,000.--
============
The Seller No. 1 and the Seller No. 2 are the sole managing directors of the
Company.
II. Purchase and Sale
---------------------
1. The Sellers hereby sell, assign and transfer all their shares in the
Company in the nominal value of in total DM 630,000.-- as outlined in
section I. above to Buyer, including all ancillary rights. The Buyer
purchases and accepts the transfer of said shares for the hereinafter
stated purchase price and to the conditions set out in the present
agreement.
2. The assignment of shares herewith agreed becomes effective upon receipt
of the cash portion of the purchase price and the delivery of the shares
of Bogen Stock acquired by the Sellers hereunder to Mr. Xx. Xxxxxxxxx
Gotze, attorney-at-law, Frankfurt/Main as interim escrow agent.
4
3. The profit of the current fiscal year as well as the profit of previous
fiscal years which has not been distributed to shareholders shall be
exclusively for the account of the Buyer.
4. The purchase price payable to the Sellers will be
4.1. for the Seller No. 1)
- DM 4,542,000.-- (four million five hundred forty-two
thousand Deutsch Marks),
- 274,800 shares of the common stock of the Buyer in the
nominal value of each US$.001 (herein referred to as
"shares of Bogen Stock")
4.2. for the Seller No. 2)
- DM 3,028,000.-- (three million twenty-eight thousand
Deutsch Marks),
- 183,200 shares of Bogen Stock.
The cash portion of the purchase price is payable in cash upon signature
of the present agreement. The shares of Bogen Stock are to be transferred
upon signature of the present agreement to Mr. Xx. Xxxxxxxxx Gotze,
attorney-at-law in Frankfurt/Main, until transferred to an independent
escrow agent chosen by the Buyer after the parties have entered into an
escrow agreement based on the restrictions on the transfer of shares of
Bogen Stock set forth in the present agreement and the provisions of
Schedule 1.12. hereto, such Escrow Agreement not providing further
restrictions on the transfer of shares, other than the restrictions
provided under the present agreement and the Schedules hereto. The
transfer to the Escrow Agent will be executed upon written instruction to
Mr. Gotze, such written instruction to be mutually agreed and supplied by
the Sellers and the Buyer. The parties agree to enter in such escrow
agreement within ten days after the date of signature of the present
agreement. The transfer of the shares of Bogen Stock to the Sellers will
be carried out according to section III. of this contract and is subject
to the restrictions hereunder.
5
III. Transfer of Bogen Stock
----------------------------
1. The disposition of the shares of Bogen Stock which constitute a part of
the purchase price will be carried out according to the laws of the
applicable State of the United States and the US Securities Laws. The
Buyer hereby transfers the said shares of Bogen Stock to the Sellers. The
rights in the shares of Bogen Stock are embodied by certificates that
will be delivered to the Sellers upon signature of the present agreement.
The Sellers hereby accept the transfer of the said shares to the
conditions set out in the present agreement.
2. The Buyer shall be obliged to have the shares of Bogen Stock transferred
hereunder registered at own expenses within their next offering or on
demand of one of the Sellers whichever will occur first; provided,
however, that the Sellers shall pay for their portion of any underwriting
discounts and commissions attributable to the sale of securities. With a
view to making available the benefits of certain rules and regulations of
the Securities and Exchange Commission that may permit the sale of
restricted securities, as such term is used in the Securities Act of
1933, as amended, to the public without registration, the Buyer agrees to
use its best efforts to furnish to the Sellers forthwith upon written
request a copy of the most recent annual or quarterly report of the
Buyer, and such other reports and documents filed with the Securities and
Exchange Commission as may be reasonably requested by the Sellers in
order to avail itself of any rule or regulation of the Securities and
Exchange Commission allowing the sale of certain shares of Bogen Stock
without registration.
3. The transfer of the shares of Bogen Stock is subject to the restrictions
hereunder and to the restrictions set forth in Schedule 1.12. hereto.
6
3.1. During a period of twelve months beginning on the date of
signature of the present agreement (hereinafter referred to as
"Twelve-Month Ban") the Sellers are not entitled to dispose
whether by selling, leasing or pledging of the shares of Bogen
Stock. After the expiration of the Twelve-Month Ban the Sellers
are entitled to dispose of up to but not exceeding 152,000 shares
of Bogen Stock. For the remaining 306,000 shares of Bogen Stock
the limitation of the right of disposal remains in force for an
additional period of twelve months after expiration of the
Twelve-Month Ban.
3.2. The Buyer has issued 3,400,000 warrants to purchase common stock
of the Buyer in 1993 (hereinafter referred to as "Warrants").
These Warrants expire at the latest in October 2000, provided that
they were not exercised before this date.
Notwithstanding the foregoing in section 3.1. above the Sellers
are free to dispose of up to but not exceeding 92,000 shares of
Bogen Stock, when and as far as 80% (eighty percent) of these
Warrants have either been exercised or have expired. The amount of
shares of Bogen Stock transferable after the expiration of the
Twelve-Month Ban is increased accordingly and the amount of shares
of Bogen Stock remaining under the limitation provided above is
reduced accordingly.
3.3. All restrictions set out in this section 3. expire effective
immediately for one or both Sellers if the respective Seller
terminates his Management Contract with the Company for cause, in
particular in the event that
3.3.1. the appointment of the Managing Director as Managing
Director of the Company is revoked without cause,
3.3.2. an additional Managing Director (except of replacement of
the other Managing Director to the extent permitted under
the Management Contract) or a permanent representative is
appointed by the Buyer with the right to instruct the
Managing Director in the normal course of business,
7
3.3.3. the sphere of activities or the power to represent the
Company is materially restricted,
3.3.4. the Buyer sells all or substantially all of the tangible
or intangible assets or properties of the Company,
3.3.5. the Buyer sells a majority participation in the Company.
3.4. Each Seller agrees to the placement of a legend on each
certificate evidencing the ownership in the shares of Bogen Stock
which provides that the transfer of such shares of Bogen Stock is
restricted hereunder. Such legend shall be in form and content
satisfactory to the Buyer and its counsel, subject to the consent
of the Sellers.
3.5. To secure the compliance with the restrictions hereunder the
Sellers agree that the shares of Bogen Stock acquired by the
Sellers hereunder will be deposited with an independent
escrow agent to be named by the Buyer. All rights of each Seller
in the shares, including but not limited to the voting rights,
remain unaffected. The rights of the distribution of profits will
be delivered into the Escrow Fund to the benefit of each Seller
(except such distributions may be applied for the benefit of the
Buyer in the event certain set-off rights are applicable).
As far as the release of the deposited shares under this section
3.5. does not conflict with the restrictions set forth in Schedule
1.12. known to and binding upon the Escrow Agent, the Escrow Agent
shall release the deposited shares in Bogen Stock to the Sellers
as soon as and to the extent that one of the following occurs
3.5.1. the Escrow Agent receives a common instruction in writing
by the Buyer and the respective Sellers to release the
shares of Bogen Stock in whole or in part, or
3.5.2. upon written notice of the respective Seller to the
Escrow Agent and limited to the respective number of
shares, in the event that the Twelve-Month-Ban or the
additional restriction period pursuant to section 3.1.
above has expired,
8
3.5.3. upon written notice of the respective Seller to the
Escrow Agent, that the Managing Directors Contract has
been terminated for cause according to Section 3.3.
above,
3.5.4. the Escrow Agent is presented a final legal judgment
stating that the Buyer is obligated to consent to release
of the shares in whole or in part. In particular the
Buyer is obligated to consent to the release of the
deposited shares in Bogen Stock in the event that the
respective Seller is entitled to transfer an additional
number of shares of Bogen Stock within the
Twelve-Month-Ban or the additional limited period
according to section 3.2.
4. As long as the Sellers own together not less than 300,000 shares of Bogen
Stock as adjusted for stock splits, stock dividends, reorganizations and
the like, the Sellers are entitled to nominate one director to the Board
of Directors of the Buyer. The Buyer will make all declarations that
might be necessary to grant the right above to the Sellers.
According to the internal arrangement between the Sellers the first
director nominated by the Sellers shall be the Seller No. 1.
IV. Warranties and Representations
----------------------------------
1. Each Seller warrants to the exclusion of all further liability for
whatever legal reason, respectively, that
1.1. that the statements set out in section I. above are correct,
9
1.2. the Company is a Gesellschaft mit beschrankter Haftung duly
organized, validly existing and in good standing under the
German Laws and has the corporate power and lawful authority to
own, lease and operate its assets, properties and business and
to carry on its business as now conducted,
1.3. the Company has at present only the following subsidiaries:
SATELCO AG, Switzerland, SPEECH DESIGN U.K. Ltd., United
Kingdom, SPEECH DESIGN ISRAEL, Ltd., Israel. To the best
knowledge of the Sellers and as verified by the Company's
auditors the subsidiaries are duly organized, validly existing
and in good standing under the respective laws and have the
corporate power and lawful authority to own, lease and operate
their assets, properties and carry on their business as
currently conducted.
1.4. the respective Seller has the full legal right and power and all
authority and approval required to enter into, execute and
deliver the present agreement and to perform fully his
obligations hereunder, which shall be a valid and legally
binding agreement,
1.5. As of the date of signature of the present agreement, each
Seller owns the number of shares in the company as is the sum of
the numbers and with a nominal value as is set forth in section
I Preliminary statements and the capital contributions in
connection with these shares are fully paid. Such shares are
owned by each Seller free and clear of all liens and other
restrictions. The transfer of the shares in the Company pursuant
to the terms of the present agreement shall vest in the Buyer
full legal and beneficial title to such shares free and clear of
all liens and other restrictions. The shares of each Seller
transferred hereunder are all of the shares held by the
respective Seller. To the best knowledge of the Sellers the
remaining shares in the share capital which were not transferred
hereunder are owned by the Buyer, assuming that no agreement on
the transfer of shares between the Buyer and a third party
exists.
10
1.7. Financial statements
--------------------
1.7.1. The unaudited March 31, 1998 financial statements as
enclosed as Schedule 1.7.1. have been prepared from the
books and records of the Company and its subsidiaries in
accordance with the applicable laws and generally
accepted accounting principles, applied on a consistent
basis. To the best of the Sellers' knowledge the March
31, 1998 financial statements present fairly the
financial condition of the Company and its subsidiaries.
1.7.2. The accounts receivable of the Company and its
subsidiaries as set forth on the March 31, 1998 financial
statements or arising thereafter are valid and genuine,
have arisen solely out of bona fide sales and performance
of services or other business transactions in the
ordinary course of business consistent with past practice
and are not subject to valid defenses, set-offs or
counterclaims, and to the best knowledge of the Sellers,
are collectible in the ordinary course of business.
1.7.3. The accounts payable of the Company and its subsidiaries
as set forth on the March 31, 1998 financial statements
or arising thereafter are valid and genuine.
1.7.4. All inventory of the Company and its subsidiaries
reflected on the March 31, 1998 financial statements or
acquired thereafter, was acquired and has been maintained
in the ordinary course of the business consistent with
past practice and is of good and merchantable quality
(subject to the recorded reserve for obsolescence).
1.7.5. All material liabilities and obligations of the Company
and its subsidiaries, whether absolute or accrued, which
existed at the date of the March 31, 1998 financial
statements have been disclosed in the balance sheets
included in the Financial Statements to the extent such
liabilities were required to be disclosed under the
applicable laws.
11
1.8. Taxes
-----
To the best knowledge of each Seller,
1.8.1. the Company and its subsidiaries have each timely filed
all returns required to be filed by it with respect to
all taxes and paid all taxes required to be paid by it,
or have had such taxes paid on its behalf;
1.8.2. all taxes that are required to be collected or withheld
by the Company or its subsidiaries have been duly
collected or withheld and any such amounts that are
required to be remitted to any taxing authority have been
duly remitted by the Company or its subsidiaries,
1.8.3. the accruals for taxes in the March 31, 1998 financial
statements are adequate to the amount of all unpaid
liability for taxes, with the exception of the tax
liabilities disclosed in Schedule 1.8.3. hereto,
1.8.4. there is no challenge, dispute or current audit regarding
taxes by governmental authorities.
1.9. Loans. Neither the Company nor any of its subsidiaries is in
default under any loan. No loan agreement of the Company contains
a provision on the termination of the loan agreement as a result
of the transaction contemplated hereby.
1.10. Property. The Company does not own real property. All personal
property included on the March 31, 1998 financial statements is
held by the Company and, to the best knowledge of the Sellers, by
its subsidiaries and is free and clear of all liens and other
encumbrances, except for immaterial assets.
12
1.11. Contracts. All existing Bank contracts are enclosed in Schedule
1.11. hereto. Other material contracts are, to the best knowledge
of the Sellers, in full force and enforceable in accordance with
their terms and, to the best knowledge of the Sellers, neither the
Company nor any other party hereto has breached any material
provision of such contract. No Bank contract and, to the best
knowledge of the Sellers, no other material contract contains a
provision on the termination of such contract by reason of the
transactions contemplated under the present agreement and no
party's consent to such transactions is required.
1.12. Litigation and Claims. The Sellers have no knowledge of pending or
threatening litigation, arbitration, government action or audit,
with the exception of the issues stated in Schedule 1.12. hereto
and with the exception of litigation relating to the collection of
accounts receivable in the normal course of business. There is
presently no outstanding judgment of any court of justice, court
of arbitration or governmental authority against the Company
affecting the company or its assets.
1.13. Insurances. To the best knowledge of the Sellers there have been
no changes in insurance policies since December 31, 1997 and the
Company has received no notice that it is in default with respect
to any provision of any such policies.
1.14. Employment Matters. Listed on Schedule 1.14. hereto are all
contracts of the Company and its subsidiaries regarding employment
of an employee who earned more than US$ 100,000. The Company does
not provide any Pension or retirement stock option, severance,
life, health, medical or disability benefits other than benefits
required under and provided in compliance with applicable law. No
strikes or significant slow downs, work stoppages or other similar
labor actions by any group of employees of the Company or any of
its subsidiaries have occurred or have been threatened.
13
1.15. Absence of certain changes. Since March 31, 1998 no material
adverse changes of the financial situation of the Company or its
subsidiaries presented by the March 31, 1998 financial statements
have occurred, with exception for such changes caused by the
proper and customary business or disclosed herein or in other
filings or releases made after the date thereof. Since December
31, 1997, the Company has conducted the business only in the
ordinary and usual course in accordance with past practices, in
particular there have occurred
1.15.1. no increases in the salaries or other compensation or
fringe benefits or any advance or loan to officers,
directors, employees or shareholders of the Company or
its subsidiaries (except normal merit increases made in
the ordinary course of business and consistent with the
past practice),
1.15.2. no material adverse change or threat of such change in
the Company's relations with suppliers or customers,
with the exclusion of such threatening changes disclosed
in Schedule 1.14.2. hereto,
1.15.3. no write-offs as uncollectible of any accounts receivable
of the Company or write-downs of the value of any assets,
other than immaterial amounts or in the ordinary course
of business consistent with the past practice.
2. The Buyer warrants to the exclusion of all further liability for
whatever legal reason, that
2.1. the Buyer is a corporation duly organized, validly existing and
in good standing under the Laws of the State of Delaware and has
the corporate power and lawful authority to own, lease and
operate its assets, properties and business and to carry on its
business as now conducted,
2.2. the Buyer has the full legal right and power and all authority
and approval required to enter into, execute and deliver the
present agreement and to perform fully his obligations
hereunder,
14
2.3. the Buyer has an authorized capital stock consisting of
Preferred Stock and of 50,000,000 shares of common stock (herein
referred to as "Bogen Stock").
2.4. the Buyer is fully authorized to issue the 458,000 shares of
Bogen Stock to the Sellers,
2.5. the shares of Bogen Stock to be issued in connection with this
transaction have been duly authorized by the Buyer and, when
delivered in accordance with this agreement shall be validly
issued and fully paid and nonassessable and the Sellers will
receive 458,000 shares of Bogen Stock free and clear of any
lien, option or other encumbrances, other than the restrictions
on transferability imposed by the applicable securities laws on
any transfer of shares of common stock of any corporation quoted
on the stock exchange or the restrictions set forth in the
present agreement or the Escrow Agreement to be entered into
between the parties hereto, such Escrow Agreement not providing
further restrictions on the transfer of shares, others than the
restrictions provided under the present agreement and the
Schedules hereto.
2.6. all contingently necessary consents and agreements necessary for
the nomination of the person named by the Sellers to be
nominated as a member of the Board of Directors are at the
disposal of the Buyer's management or directors.
2.7. to the best knowledge of the Buyer, its 1997 Annual Report on
Form 10-K as delivered to the Sellers did not contain any untrue
statement of material fact, or fail to state any material fact
required to be stated herein or necessary to make the statements
made therein not materially misleading as of the date thereof.
Since such date no material adverse changes of such financial
situation has occurred, with exception for such changes caused
by the proper and customary business or disclosed in other
filings (including the form 10-Q for the quarter ended March 31,
1998) or releases made after the date thereof.
15
3. Apart from these warranties, no other warranties or liabilities whether
factual or legal are given by the parties. The parties have such
knowledge and experience in financial and business matters that they are
able of evaluating the merits and risks of the transactions contemplated
hereunder.
4. The Sellers shall jointly indemnify and hold harmless the Buyer from any
losses or damages arising out of or due to a breach of any representation
or warranty contained in this agreement up to but not exceeding one third
of the indemnifiable losses and damages.
5. The Buyer shall indemnify and hold harmless each Seller from any losses
or damages arising out of or due to a breach of any representation or
warranty contained in this agreement.
6. No party shall be liable to any other party for indemnification of any
losses under section 4. or section 5. above unless such indemnifiable
loss or damage in the individual case exceeds DM 75,000.--(seventy-five
thousand Deutsch Marks) or unless and until the aggregate amount of all
such indemnifiable losses or damages exceeds DM 300,000.--(three
hundred thousand Deutsch Marks) in which event, the indemnification of
the respective party shall apply to the aggregate amount of all such
losses and damages.
7. Any action or claims arising under this section IV. shall be
statute-barred two years after the signature of the present agreement.
Notwithstanding the foregoing any claim arising out of any breach or
inaccuracy of any representation or warranty made by any Seller under
Section 1.7. Financial statements shall be statute-barred at the latest
60 days after the audited financial statements of the Company for the
fiscal year 1998 have been finalized.
8. The Sellers hereby accept the provisions of this section 8. as far as
required by the U.S. securities laws relating to private placement of
securities:
16
8.1. Accredited Investor Status. Each of the Sellers has received a
copy of the 1997 Annual Report on Form 10-K of the Buyer and has
had an opportunity to review the document and ask questions
regarding such document, the Buyer and its business plans and
prospects of the officers and management employees of the Buyer.
Each seller has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and
risks of the transactions contemplated hereby and his acquisition
of shares of Bogen Stock in connection therewith. Each Seller
confirms that the Buyer has made available to him the opportunity
to ask questions of the officers and management employees of the
Buyer and to acquire additional information about the business and
financial condition of the Buyer. Each Seller is financially able
to bear the economic risk of an investment in such shares of Bogen
Stock and has no need for liquidity in this investment.
Furthermore, the financial capacity of each Seller is of such a
proportion that the total costs of each Seller's investment in the
shares of Bogen Stock is not material when compared with such
Seller's total financial capacity. Each Seller is an "accredited
investor" as defined in Rule 501.
8.2. Acquisition of Bogen Stock for Investment. Each Seller is
acquiring the shares of Bogen Stock to be acquired by him for his
own account, for investment and not with a view toward of for sale
in connection with any distribution thereof in violation of any
federal or state securities or "blue sky" laws. Each Seller
acknowledges and agrees that any shares of Bogen Stock to be
delivered in connection herewith will not have been registered
under the U.S. Securities Act of 1933, as amended (the "Securities
Act") or any United States state securities laws and are being
sold hereunder without registration pursuant to a claimed
exemption under the provisions of the Securities Act which
depends, in part, upon his investment intention. Accordingly, each
Seller acknowledges and agrees that he must bear the economic risk
of an investment in the Buyer for an indefinite period of time.
Each Seller acknowledges and agrees that his shares of Bogen Stock
may not be sold, transferred, offered for sale, pledged,
hypothecated or otherwise disposed of without registration under
the Securities Act, except pursuant to an exemption from such
17
registration available under the Securities Act, and without
compliance with state, local and foreign securities laws, in each
case, to the extent applicable. Each Seller acknowledges that he
is the position of the Securities and Exchange Commission (the
"SEC") that the statutory basis for such exemption would not be
present if his representation merely meant that his present
intention was to hold such securities for a short period, such as
the capital gains period of tax statutes, for a deferred sale, for
a market rise, assuming that the market develops, or for any other
fixed period. Each Seller acknowledges and agrees that, in the
view of the SEC, a purchase now with an intent to resell would
represent a purchase with an intent inconsistent with his
representation to the Buyer and the SEC might regard such a sale
or disposition as a deferred sale to which such exemptions are not
available.
Each Seller understands and acknowledges that the shares of Bogen
Stock are being offered and sold pursuant to an exemption from
registration under the Securities Act that depends on the
representations made by each Seller in this Agreement and that the
Buyer is relying on such representations as an condition precedent
to its issuing the Bogen Stock to each Seller. Each Seller
acknowledges and agrees that Rule 144 requires, among other
conditions, a one-year holding period prior to the resale (in
limited amounts and only pursuant to the terms and conditions of
Rule 144) of securities acquired in a non public offering without
having to satisfy the registration requirements of the Securities
Act. Each Seller acknowledges and agrees that the Buyer may, if it
desires, permit the transfer of the shares of Bogen Stock out of
his name only when his request for transfer is accompanied by any
opinion of counsel, in form and content satisfactory to the Buyer
and its counsel, that the sale or the proposed transfer complies
with an applicable exemption from the registration requirements of
the Securities Act, together with such other documentation as
counsel for the Buyer may in its sole discretion require as a
condition precedent in order to make a determination that the
proposed sale of transfer will not be a violation of the
Securities Act or any applicable state "blue sky" laws
(collectively, the "Securities Law") and consents to such
restrictions.
18
V. Non-Competition Clause
-------------------------
1. During a period of five years upon signature of the present agreement
(hereinafter referred to as "Non-Competition Period") each of the
Sellers shall not whether directly or indirectly
1.1. hire, solicit or encourage any employee of the Company or any of
its affiliates to leave the employment of the Buyer or any of its
affiliates, or
1.2. hire, solicit or encourage any consultant under contract with the
Company or any of its affiliates to cease to work with the Company
or any of its affiliates, or
1.3. actively engage in competing business transactions, by way of
employment or self-employment, occasionally or commercially, or
own an interest in any such business as a partner, shareholder,
director, officer, principal, agent, employee, trustee,
consultant, or in any other relationship or capacity, other than
owning shares of the Company or shareholders of the Company or
less than 1% of the outstanding stock of any publicly traded
company.
Competing business transactions in terms of section 1.3. shall be
considered the development, production and/or distribution of
supplementary electronical equipment for telephone facilities
and/or services, such as PABX peripherals and unified messaging
systems, including, without limitation, any voicemail via voice or
e-mail, computer telephony integration and the like. The
geographic scope of application is limited to Europe.
2. During the Non-Competition Period as defined above no additional
compensation for the abstention from acts of competition is to be paid to
the Sellers, such contingent compensations to be regarded as fully
compensated by the purchase price.
19
VI. Company Consents, Waiver of Preemption Rights
-------------------------------------------------
1. The Buyer and the Sellers are the sole shareholders of the Company. The
Buyer and the Sellers herewith grant the consent to the assignment of all
shares owned by the Sellers to the Buyer hereunder.
2. The Sellers herewith waive all preemption rights in the shares of the
Company according to section 12. of the company statutes of Speech Design
Gesellschaft fur elektronische Sprachverarbeitung mbH and all options
rights granted in the Transfer and Option agreement dated August 21, 1995
(Notary deed Xx. 000/0000 xx xxxxxx Xxxxxx Xxxxxx, Xxxxxxxxx xx Xxxx) and
the amendment hereto dated July 28, 1997 (Notary deed No. 2136K/1997 of
notary Xxxxx Xxxxx, Munich) for the sale of the shares in the Company to
the Buyer hereunder.
VII. Close Cooperation
----------------------
1. The parties herewith agree to cooperate closely. Namely the Buyer agrees
to consult the Sellers in all matters relating the international
expansion of the business of the Company, as long as the respective
Seller is a Managing Director of the Company.
2. The parties agree, that all notices to third parties and all other
publicity concerning the transactions contemplated by this agreement
shall be agreed between them before the initial release. This provision
does not apply to announcements or filings necessary under applicable
securities laws. The Buyer will inform the Sellers on all such
announcements or filings by the way of providing a copy thereof.
VIII. General Provisions
------------------------
1. All notices, requests, demands and other communications required or
permitted to be given hereunder shall be in writing by registered mail or
telefax to the address of the addressee first above stated or such other
address as the party in question may have substituted therefor by notice
in accordance with this provision.
20
2. There are no subsidiary verbal agreements in respect to the subject
matter contained herein. The present agreement may be amended only by
notary deed.
3. This agreement, including all obligations arising out of warranties and
representations given hereunder, shall be governed by the laws of the
Federal Republic of Germany, except as otherwise provided in this
agreement. As provided in section III. hereunder the disposition of the
shares in Bogen Stock is carried out according to the Laws of the State
of Delaware and the applicable US security laws. The Munich Law Courts
shall have exclusive jurisdiction.
4. Should any provision of the present agreement be or become invalid, this
shall not affect the validity of the remaining provisions. The parties
shall replace the invalid provision by mutual agreement by a regulation
which comes closest to the economic purpose of the invalid provision. The
same shall apply in the event that this agreement is incomplete. This
provision applies also if the invalidity or unenforceability of a
provision is due to the extent of a time limit or period or of a
geographic area. In this case the legally permitted time limit or period
or geographic area shall be applicable.
IX. Costs, executed copies
--------------------------
1. Each party agrees to bear the fees and costs of all agents, consultants,
brokers and lawyers employed by it in connection with the transactions
contemplated by this agreement. The costs of this notary deed shall be
borne by the Buyer.
2. This notary deed is made
- in triplicate - for the Buyer (1)
- for the Seller No. 1 (1)
- for the Seller No. 2 (1)
- with certified copies - for the Company (1)
- for Mr. RA/WP/StB Xxxxxx
X. Xxxxxx (1)
21
The notary instructed the appeared persons, that
- in case of a transfer of shares in a GmbH a party will be
recognized by the company as the transferee and shareholder only
if his or her acquisition has been notified to the company
together with the submission of evidence of the transfer,
- that the transferee is bound by acts taken before such
notification by the company vis-a-vis seller or by the seller
vis-a-vis the company with respect to the shareholding
relationship,
- that the transferee is together with the seller liable for
contributions on the shares which are still outstanding at the
time of such notification.
The notary is asked to notify to the Company the acquisition of the shares by
the Buyer according to ss.16 GmbHG by means of submitting a certified copy of
this notary deed.
