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EXHIBIT 10.39
AGREEMENT
BETWEEN THE UNDERSIGNED
GLOBAL TELESYSTEMS GROUP, Inc., a corporation organized under the laws of
Delaware with its head office at 0000 Xxxxxxxx Xxxxx North Tower 12th Floor,
McLean, Virginia 22102 U.S.A. (hereafter referred to as "GTS"), acting on its
own behalf represented by Xx. Xxxxxxx X. Xxxxx duly empowered.
(hereafter referred to as the "Purchaser")
ON THE ONE PART
CESIA S.A., a company set up under French law, with a capital of 8.056.000 FRF,
with registered office at 000 xxxxxx xx Xxxxxxxx, XX 000, 00000 Xxxxxxxxx Cedex
08, registered at the Companies' Registry of Marseille, under the number B 950
426 759, acting on its own behalf, represented by Xx. Xxxx Xxxxxxx, its
President of the Board of Directors,
(hereafter referred to as "CESIA" or the "Seller")
ON THE SECOND PART
(hereafter collectively referred to as the "Parties")
RECITALS
1. The share capital of C-DATACOM International, a French Societe Anonyme
having its registered office at 0 xxxxxx xx Xxxxxxx xx Xxxxxxxx, 00000
Xxxxx, registered at the Companies' Registry of Paris, under the
number B 393 227 749 is allocated as indicated in Appendix 1.
(hereafter referred to as "CDI").
2. The sole activity of CDI consists in providing high speed digital
international telecommunication services between India and the rest of
the world. CESIA has entered into an initial agreement dated November
5, 1992 as well as into three subsequent amendments dated respectively
July 2, 1993, August 8, 1994 and January 25, 1995 and three
supplementary agreements of July 2, 1993, August 8, 1994 and January
25, 1995 entered into with SATCOMM SERVICES (INDIA), a "society" set
up under the laws of India, true and complete copies of which are
attached hereto as APPENDIX 2 (hereafter the "Contract").
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On December 15, 1993, the rights and obligations under the Contract
have been transferred from CESIA to CDI pursuant to an agreement, a
copy of which is attached hereto as APPENDIX 3.
3. The merger between SATCOMM SERVICES (INDIA) and Software Technology
Parks India (hereafter referred to as "STPI"), being effective as at
August 1, 1995, STPI will be the current contracting party with CDI
under the Contract. Therefore any reference in this Agreement to
SATCOMM SERVICES (INDIA) shall also include reference to STPI.
4. At the date hereof, the share capital of CDI amounts to 250,000 FRF
and is divided into 250 shares with a nominal value of 1,000 FRF.
5. GTS, an international telecommunication network company, wishes to
develop directly or indirectly its activity relating to India in the
area of high speed digital telecommunication network. With a view to
achieve such goal, GTS approached CESIA in December 1994 to discuss
the possibility for GTS to acquire directly or indirectly the whole
share capital of CDI.
6. CESIA wishes to transfer the activities it has developed through CDI
in the field of international high speed digital telecommunications
with India.
In consideration of their mutual interest, the Parties have agreed to enter
into this agreement (hereafter the "Agreement").
NOW THEREFORE, IT HAS BEEN AGREED AS FOLLOWS
ARTICLE 1 - OBJECT AND STRUCTURE OF THE TRANSACTION
1.1 Subject to the conditions precedent and cancellation condition set
forth in Article 4 hereof as well as pursuant to the other terms and
conditions set forth in the Agreement, CESIA undertakes to sell to GTS
or its assignee as defined in Article 12 below as GTS may solely
decide, and GTS undertakes to purchase or to cause such assignee to
purchase from CESIA under the same terms and conditions 250 shares of
CDI which represent 100% of the share capital and voting rights of
CDI. It is specified that the acquisition of 100% of the share
capital and voting rights of CDI (hereafter "the CDI Shares") is an
essential condition of this transaction which has led the Purchaser to
enter into this Agreement.
It is expressly agreed that the present commitments to sell and
purchase shall include, and all provisions of the present Agreement
shall apply (without any modification of the Purchase Price as such
term is defined hereafter) to all shares or other securities which
have been or may be issued and allocated to the Seller in connection
with the CDI Shares prior to the transfer dates as defined hereafter
in
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Article 2, as a consequence notably of any merger, split-up, exchange
of shares, increase or decrease of the capital of CDI.
The Seller hereby undertakes, as from the date of the present
Agreement and until the transfer date of all shares or other
securities allocated to the Seller, not to transfer, contribute,
alienate, create a security interest (pledge or other) or otherwise
dispose in favor of any third party of any right to or in respect of
such shares or securities.
1.2 It is specified that the transaction defined in this Agreement will be
structured as follows:
- 225 shares of CDI representing 90% of its share capital and
voting rights shall be transferred on the Transfer Date as
indicated hereafter;
- 25 shares of CDI representing 10% of its share capital and
voting rights (hereafter referred to as the "Remaining
Shares") shall be transferred in accordance with the terms and
conditions set forth in Section 2.2 hereafter.
ARTICLE 2 - TRANSFER DATES
2.1. The Parties agree that 225 shares representing 90% of the share
capital and voting rights of CDI (hereafter the "Shares") will be
transferred within eight (8) working days following the fulfillment of
the last of the conditions precedent set forth in Article 4 hereafter
(hereafter referred to as the "Transfer Date").
The Shares are sold with effect as at the Transfer Date, that is, the
Purchaser shall be entitled to receive all dividends and distributions
attached to the Shares not paid prior to the Transfer Date, which
shall include any dividend and/or distributions attached to the Shares
with respect to the fiscal year 1994 and to previous fiscal years.
2.2. The Parties agree that the Remaining Shares will be transferred to the
Purchaser on the fifth anniversary of the Transfer Date (hereafter the
"Remaining Shares Transfer Date").
2.3. On the Transfer Date, the Seller shall deliver to the Purchaser:
(i) one or more transfer orders (ordres de mouvement) in respect
of the Shares, duly signed by the Seller in favor of the
Purchaser and/or its assignees, if any;
(ii) a certified copy of CDI's directors' resignation letters;
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(iii) the minutes of the board of directors' meeting of CESIA and of
CDI approving and authorizing the present sale and purchase to
the Purchaser in accordance with Article II of CDI's by-laws;
(iv) a certified copy of any document assessing that the conditions
precedent set forth in Section 4.1 (i) and (ii) hereafter have
been satisfied;
(v) a duly signed copy of the Representations and Warranties, the
terms and conditions of which are set forth in the draft
attached hereto as APPENDIX 4 accurate at the present date as
well as on the Transfer Date; this being an essential condition
without which the Purchaser would not have undertaken to
acquire the CDI Shares;
2.4. On the Transfer Date, the Purchaser shall deliver to the Seller:
(i) a copy of the minutes of the board of directors of the
Purchaser authorizing the transaction as contemplated in this
Agreement.
(ii) the part of the Purchase Price defined in Section 3.2
hereunder by means of a check.
2.5. On the Remaining Shares Transfer Date, the Seller shall deliver to the
Purchaser:
- one or more transfer orders (ordres de mouvement) in respect
of the Remaining Shares, duly signed by the Seller in favor of
the Purchaser and/or its assignee if any.
2.6. On the Remaining Shares Transfer Date, the Purchaser shall deliver to
the Seller:
- The part of the Purchase Price as defined in Article 3.5
hereafter by means of a check.
3. PURCHASE PRICE
3.1. In consideration of the purchase of the CDI Shares and of all related
rights referred to in Article 1 above, the Purchaser shall pay a
maximum amount of US$ eight million five hundred thousand (8,500,000).
The purchase price of the CDI Shares and of all related rights
referred to in Article 1 above (hereafter "the Purchase Price") shall
be computed and paid under the terms and conditions set forth
hereunder.
3.2. On the Transfer Date, the Purchaser shall pay to the Seller an amount
equal to US$ one million (1,000,000).
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3.3. Subject to the limitation of the amount of the Purchase Price set
forth in Section 3.1 above, upon satisfaction of the conditions set
forth hereunder and provided such conditions are satisfied prior to
the first annual anniversary of the Transfer Date, GTS will make an
additional payment to CESIA of US$ one million (1,000,000). It is
however specified that regardless of the date on which such conditions
are satisfied within such one year period, the payment of US$ one
million (1,000,000) shall not be made earlier than six months after
the Transfer Date. The conditions to be satisfied are the following:
(i) SATCOMM SERVICES (INDIA) has agreed in writing to extend the
term of the Contract such that the expiration date of that
agreement is not earlier than July 27, 2005; and
(ii) SATCOMM SERVICES (INDIA) has agreed to extend the Area of
Operation pursuant to Article 1, Section 3 of the contract
between CDI and SATCOMM SERVICES (INDIA) dated November 5,
1992 to include all SATCOMM SERVICES (INDIA) traffic to all
parts of the world. However, the Purchaser/CDI may on a case
by case basis accept that SATCOMM SERVICES (INDIA) be freed
from the exclusivity commitment where the Purchaser/CDI is not
in a position to respond to a specific requirement of a
customer if such exclusion from the exclusivity provision is
beneficial to the cooperation of those companies (i.e. the
Purchaser, CDI and SATCOMM SERVICES (INDIA)); and
(iii) CDI shall provide evidence, satisfactory to the Purchaser,
that the authorizations under which SATCOMM SERVICES (INDIA)
operates are valid, and in full force and effect for the term
(as extended in paragraph (i) above) of the Contract.
The Seller shall inform the Purchaser on a regular basis with respect
to the actions undertaken to satisfy the above conditions.
3.4. Subject to the limitation of the amount of the Purchase Price set
forth in Section 3.1 above, GTS will be obligated to pay to CESIA in
US dollars an amount equal to 2% of all revenues, (less taxes and
revenues collected by CDI from customers for the Indian portion of
services provided by SATCOMM SERVICES (INDIA) under the One-Stop-Shop
provisions contained in the Contract) collected by CDI and/or
affiliates of/or the Purchaser for international telecommunications
services to and from India, where SATCOMM SERVICES (INDIA) provides
the Indian part of the international services (hereafter the
"Revenues") during the 48 calendar months following the Transfer Date.
This amount shall be paid in five installments payable on March 1st of
each of the years 1996, 1997, 1998, 1999 and 2000 for the Revenues
received during those months of the above 48 months included in the
preceding calendar year.
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In case of disagreement between the Parties on the price payable
pursuant to this section 3.4, the amount thereof shall be determined
in accordance with Article 1592 of the French Civil Code by an expert
appointed jointly by the Parties or in case of disagreement relating
to such designation, by the President of the Tribunal de Commerce de
Paris (hereafter the "Expert") within sixty (60) days of its seizure
by the most diligent party. The Expert's decision shall be binding
upon the Parties and not subject to appeal.
3.5. Subject to the limitation of the amount of the Purchase Price set
forth in Section 3.1 above, the Parties agree that on March 1st 2000
and 2001, the Purchaser shall pay to CESIA an amount equal to 20% of
the Revenues received, for the March 1st 2000 payment, from July 1st
1999 to December 31, 1999 and, for the March 1st 2001 payment, from
January 1st 2000 to June 30, 2000.
In case of disagreement between the Parties on the part of the
Purchase Price defined in this section, such amount shall be
determined by the Expert as defined in Section 3.4 above and pursuant
to the terms and conditions defined in such section.
3.6. The amount set forth in Section 3.2 to Section 3.5 above constituting
part of the Purchase Price shall be paid by the Purchaser to the
Seller by means of a check.
ARTICLE 4 - CONDITIONS PRECEDENT AND CANCELLATION CONDITION
4.1. The obligations undertaken by the Purchaser pursuant to this Agreement
are subject to the satisfaction of the following conditions precedent:
(i) the obtaining of any necessary or appropriate consents from
third parties, including governmental entities;
(ii) the approval of the transaction as described in this Agreement
by the boards of directors of the Seller and the Purchaser;
(iii) the satisfactory carrying out of a legal, financial and
accounting due diligence examination of CDI by the Purchaser
and its advisors (hereafter the "Due Diligence"), it being
specified that the Purchaser undertakes to make its best
efforts to have the Due Diligence completed by June 26, 1995.
It is specified that the Purchaser may renounce to the benefit of any
of the conditions precedent provided for in paragraphs (ii) with
respect to the approval of the Purchaser and (iii) above.
The Seller and the Purchaser shall mutually inform each other within
the best timeframe with respect to progress made on the satisfaction
of the conditions precedent set forth above.
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For the purpose of the Due Diligence, the Seller undertakes in his own
name and on behalf of CDI to make available all necessary documents
for review by the Purchaser and its advisors as well as all managers
and directors and/or key employees of CDI or CESIA with a view to
answer the Purchaser's and its advisor's queries.
If the above conditions precedent are not satisfied by July 31, 1995,
the Parties hereto shall be free from any of the obligations contained
in this Agreement which would become null and void without any
indemnity being due by any of the Parties as a result thereof. The
Parties would however remain bound by the terms of the confidentiality
provision set forth under Article 10 and 13.4 hereof.
4.2. The present Agreement shall be considered as null and void and the
Parties free from any obligations undertaken thereunder if a
substantial change having an adverse impact on CDI's activity, assets,
prospects or results were to occur between the date of this Agreement
and the Transfer Date. The Parties would however remain bound by the
terms of Article 10 and 13.4 hereof.
ARTICLE 5 - UNDERTAKINGS OF THE PARTIES
5.1 The Seller undertakes that between the date of this Agreement and the
Transfer Date, he shall not take or have CDI take any decision outside
of the latter's normal course of business without the prior written
approval of the Purchaser, in particular no amendment to the Contract
shall be signed except the ones necessary to satisfy the conditions
described in Sections 3.3 (i) and (ii) above.
5.2 The Seller undertakes to repurchase the shares of CDI from the
individuals listed in APPENDIX 1 before the Transfer Date. It is
however recognized and accepted by the Purchaser that the Seller may
not be in a position to purchase one of those shares. If this were to
be the case, the Seller shall indemnify the Purchaser and/or CDI of
any cost (including the price to be paid to the assignor) or damage
suffered by the Purchaser or CDI by reason of such situation. However
until December 31, 1995 solving the issue of this share purchase
shall be the exclusive responsibility of the Seller.
5.3 The Seller undertakes to make available to CDI all the services
provided to it as at the date of this Agreement and as requested by
the Purchaser. The price of such services shall be determined by
mutual agreement between the Parties.
5.4 For the period during which the Seller shall remain a 10% shareholder
in CDI, he shall be entitled to be a member of the board of directors
of CDI. The Seller shall be represented by Xx. Xxxx Xxxxxxx as long as
he shall be working with it. The by-laws of CDI shall include a
provision to this effect by providing for two classes of shares.
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ARTICLE 6 - WAIVER
In the event that any Party shall refrain at any time from insisting on the
performance by the other party of any provision of this Agreement, its right to
do so at any later time shall remain fully in effect. In addition, the waiver
by any Party of its right in respect to the failure by the other party to
perform any provision of this Agreement shall not mean, nor be interpreted to
mean, that such party has waived its rights under such provision or under any
other provision of this Agreement.
ARTICLE 7 - SEVERABILITY
Should any of the provisions of this Agreement be declared void or
unenforceable by any court or competent authority, or become unlawful for any
court or competent authority, or become unlawful for any reason whatsoever, the
Parties shall negotiate in good faith with a view to replacing it by a valid
provision as close as possible to the original one, and all other provisions of
this Agreement shall remain in full force and effect.
ARTICLE 8 - APPLICABLE LAW AND JURISDICTION
The parties agree that all disputes arising in connection with the present
Agreement, which cannot be resolved by agreement of the parties, shall be
submitted to arbitration.
The most diligent party shall appoint one arbitrator and shall inform the other
party by registered mail with return receipt requested of the name of such
arbitrator as well as of the questions it intends to submit for arbitration.
The other party shall within fifteen (15) days of such notification appoint its
own arbitrator and proceed with the same information as the one referred to
above.
If that party fails to appoint an arbitrator within that time, the arbitrator
of the defaulting party shall be appointed by the President of the "Tribunal de
Grande Instance" of Paris under summary proceedings (referes) on application of
the non defaulting party.
The two arbitrators so appointed shall appoint a third arbitrator within thirty
(30) days. If they fail to do so, the third arbitrator shall be appointed by
the President of the "Tribunal de Grande Instance" of Paris, under summary
proceedings (referes) upon application of either party.
The three arbitrators shall make up an arbitral tribunal which shall rule
pursuant to the Livre IV of the French Nouveau Code de Procedure Civile and the
applicable law shall be French law.
At the request of either party, the arbitral tribunal may make any temporary or
partial award. It may also take any temporary measure that it judges to be
necessary in the form
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of a pre-judgment award, without prejudice to any question that will be
presented in summary procedure or, upon request by either party, before the
judicial courts.
In the event that any arbitrator dies, resigns, is prevented from acting or
declines to act, or in the event that the arbitrator appointed fail to give
their decisions within the time period referred to above, the arbitrator who is
so prevented or in default shall be replaced by the party who appointed that
arbitrator within the same time frame, in accordance with this clause and
without invalidating the arbitration proceedings.
The arbitrators in their decision shall apportion the expenses of the
arbitration consisting of the fees and expenses of the arbitrators and any
experts.
The arbitration shall take place in Geneva (Switzerland).
The arbitration award shall be final and binding upon the parties.
ARTICLE 9 - EXPENSES
Each Party shall bear the expenses incurred by it in connection with the
drafting and negotiation of this Agreement.
Payment of any registration duties, if any, for the transfer of the Shares and
Remaining Shares will be borne by the Seller.
ARTICLE 10 - CONFIDENTIALITY - DISCLOSURE
Except for disclosures required by applicable law, no party shall make any
disclosure of the proposed transaction without prior discussion and agreement
with the other party as to the necessity for such disclosure and the content of
any such disclosure. The Seller agrees to the present provision in his own name
and on behalf of CDI.
No written or oral news releases or public statements by or on behalf of the
Purchaser or the Seller or any of their respective affiliates, or any of their
respective directors or officers, pertaining to the transaction contemplated in
this Agreement shall be made, without the consent of the other party.
ARTICLE 11 - NOTICES
Any notice or other communication required under this Agreement shall be made
by registered letter with return receipt requested, addressed to the Parties at
their addresses set out above or at another address which they may notify in
writing. All notices will be deemed to be received upon the signature of the
return receipt.
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ARTICLE 12 - TRANSFER
The Purchaser may assign or transfer part or all of its rights and obligations
under the Agreement to any of its wholly owned subsidiary. It being understood
that in case of such transfer or assignment, the Purchaser shall guarantee the
compliance by such subsidiary of the so assigned or transferred rights and
obligations.
ARTICLE 13 - MISCELLANEOUS
13.1. This Agreement contains the entire understanding between the Parties
relating to the subject matter herein contained and replaces any and
all former agreement on the subject matter.
13.2. The rights and obligations stipulated herein are binding to the
successors and assignees of the Parties.
13.3. No person or entity acting on behalf of any of the Parties hereto is
or will be entitled to any finders' or brokers' fee or any other
similar commission directly or indirectly from such Parties.
13.4 The Purchaser agrees as of the date of this Agreement and until the
Transfer Date not to negotiate separately with SATCOMM SERVICES
(INDIA) or STPI or to act in such a way which may lead to a separate
agreement between the Purchaser and such entities concerning part or
all of the transaction described in this Agreement. Besides in case
the transaction is not carried out as contemplated herein, the
Purchaser shall remain bound by this commitment until December 31,
1995 unless such non occurrence is due to the Seller. The Seller shall
not conduct any negotiation with any third party relating to the
transaction described in this Agreement until July 31, 1995, except if
this Agreement is not completed due to the Purchaser.
This Agreement has been signed
On June 1st, 1995
In 2 originals
In Paris In Monaco
/s/ XXXX XXXXXXX
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Seller Purchaser
duly represented duly represented
by Xx. Xxxx Xxxxxxx by Xx. Xxxxxxx X. Xxxxx
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LIST OF APPENDICES
Appendix 1 : List of Shareholders
Appendix 2 : Contract
Appendix 3 : Transfer Agreement
Appendix 4 : Representations and Warranties
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APPENDIX I
Shareholders of CDI
Name of Shareholder Number of Shares
Xxxx Xxxxxxx 1
Xxxxxxx X. Xxxx 1
Xxxxxxx Cabaret 1
Xxxxxxx Xxxxxx 1
Xxxx-Xxxxx Xxxxxxx 1
Michel Laeard Baton 1
CESIA 244
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APPENDIX 2
CONTRACT
