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EXHIBIT 2.6
STOCK PURCHASE AGREEMENT
AMONG
CLIENTLOGIC INTERNATIONAL HOLDING, INC.
(THE "BUYER")
AND
XX. XXXXXX LOUBARESSE
XX. XXXXXXX LOUBARESSE
XX. XXXXXXX LOUBARESSE
ONLINE SERVICES
(COLLECTIVELY, THE "SELLERS")
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered into on October 8,
1999, by and among ClientLogic International Holding, Inc. (the "BUYER"), and
Xx. Xxxxxx Loubaresse, a French citizen residing at 00 xxx xxx Xxxxxxxxx, 00000
Xxxxx, Xx. Xxxxxxx Loubaresse, a French citizen residing at 00 xxx Xxxxxxx Xxxx,
00000 Xxxxx, Xx. Xxxxxxx Loubaresse, a French citizen residing at 0 xxx Xxxxx,
00000 Xxxxx, and ONLINE SERVICES, a French limited liability company with its
registered office at 00 xxx xx Xxxxxxx, 00000 Xxxxx, each acting jointly and
severally.
For purposes of this Agreement, Xx. Xxxxxx Loubaresse, Xx. Xxxxxxx Loubaresse
Xx. Xxxxxxx Loubaresse and ONLINE SERVICES SARL are collectively referred to as
the "SELLERS". The Buyer and the Sellers are referred to collectively herein as
the "PARTIES".
The Sellers own 100% of the outstanding capital stock of Groupe Adverbe
International S.A. (the "TARGET"), a corporation organized under the laws of
France with its registered office located at 00, xxx xx Xxxxxxx xxx Xxxxxx,
00000 Xxxxx, Xxxxxx. The Target is the holding company of the Adverbe Group (the
Target and the Subsidiaries (as defined in Section 1.35) are collectively
referred to as the "GROUP").
The Target holds in turn:
- 100% of the shares of Phone Communication SA, a corporation organized
under the laws of France with its registered office located at 00, xxx
xx Xxxxxxx xxx Xxxxxx, 00000 Xxxxx, Xxxxxx ("PhoneCom").
- 100% of the shares of H2M - Hors Media Medical, a corporation organized
under the laws of France with its registered office located at 00, xxx
xx Xxxxxxx xxx Xxxxxx, 00000 Xxxxx, Xxxxxx ("H2M").
- 4,300 shares out of a total of 4,500 shares in Agence de Diffusion et
d'Information de Systemes SARL, a limited liability company organized
under the laws of France with its registered office located at 00, xxx
xx Xxxxxxx xxx Xxxxxx, 00000 Xxxxx, Xxxxxx ("Agedis").
- 100% of Consulte SARL, a limited liability company organized under the
laws of France with its registered office located at 00, xxx xx Xxxxxxx
xxx Xxxxxx, 00000 Xxxxx, Xxxxxx ("Consulte").
It is acknowledged that this Agreement was to be entered into between
the Sellers and Cordena Call Management Holding (France) SARL, a wholly
owned subsidiary of Cordena Call Management BV, which has negotiated
all of the provisions hereof and has made investigations in connection
with this transaction. In light of the change of control of Cordena
Call Management BV which has been acquired by Client Logic
International Holding Inc., it has been agreed that Cordena Call
Management Holding (France) would
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be substituted in this transaction by Client Logic International
Holding Inc. which hereby fully accepts the provisions of this
Agreement and fully acknowledges the investigations conducted by
Cordena Call Management BV.
THIS AGREEMENT gives effect to a transaction in which the Buyer purchases from
the Sellers and the Sellers sell to the Buyer the outstanding capital stock of
the Target owned by the Sellers.
NOW, THEREFORE, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties, and covenants
herein contained, the Parties agree as follows:
1. CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall be defined as set forth
below and such definitions shall be applicable to both the singular and plural
forms of such terms:
1.1 "ACCOUNTS RECEIVABLE" means all moneys owing by customers of any of the
Target and the Subsidiaries and includes those amounts disclosed in the
Financial Statements, together with all those amounts assigned to
factoring companies.
1.2 "ADVERSE CONSEQUENCES" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, dues, penalties, fines,
costs, reasonable amounts paid in settlement, Liabilities, obligations,
Taxes, liens, losses, expenses, and fees, including court costs and
reasonable fees and expenses of attorneys, accountants, consultants and
experts.
1.3 "AFFILIATE" means any Person that directly or indirectly controls, is
controlled by, or is under common control with the Person to whom the
reference is made and with respect to a particular individual: (i) each
other member of such individual's family and (ii) any Person that is
controlled by one or more members of such individual's family. As used
in the preceding sentence, "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of
voting securities or otherwise.
1.4 "ALLOCABLE PORTION" means with respect to the share of any Seller in a
particular amount that fraction equal to the number of Target Shares
the Seller holds as set forth in Section 4.2 of the Disclosure Schedule
over the total number of outstanding Target Shares also set forth in
Section 4.2 of the Disclosure Schedule.
1.5 "BAD LEAVER" means in connection with the termination of an employment
contract or of a position as chairman of the board of directors (PDG),
director (administrateur), general manager (directeur general) or
manager (gerant) in any of the Target or the Subsidiaries, a
termination for gross misconduct (faute lourde) or breach of a non
competition or non solicitation undertaking.
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1.6 "BASIS" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction that forms or could
form the basis for any specified consequence.
1.7 "BUYER" has the meaning set forth in the preface above.
1.8 "CLIENTLOGIC" means ClientLogic Holding Corporation, a company
incorporated in Delaware, having its principal place of business at
Dallas, Texas, USA.
1.9 "CLOSING" means the closing of the transactions contemplated by this
Agreement specified in Section 6 below.
1.10 "CLOSING DATE" means the date of signature of this agreement.
1.11 "CODE" means the French Tax Code, as amended.
1.12 "COMMON STOCK" means the common stock of Client Logic.
1.13 "CONFIDENTIAL INFORMATION" means any information concerning the
businesses and affairs of the Target and the Subsidiaries that is not
already generally available to the public.
1.14 "CORDENA" means Cordena Management Call BV, a company incorporated in
the Netherlands, having its principal place of business at
Xxxxxxxxxxxxx 00, 0000XX Xxxxxxx, Xxx Xxxxxxxxxxx.
1.15(a) "CURRENT ACCOUNTS" means the accounts representing amounts loaned to an
entity by its owners or an Affiliate of such owners.
1.15(b) "DATA ROOM INDEX" means the data room index set forth in EXHIBIT
1.15(b) hereto.
1.16(a) "DEFERRED PAYMENT" has the meaning set forth in Section 2.4.
1.16(b) "DEFERRED PAYMENT DATE" has the meaning set forth in Section 2.4.
1.17 "DISCLOSURE SCHEDULE" has the meaning set forth in Section 4 below.
1.18 "EMPLOYEE BENEFIT PLAN" has the meaning set forth in Section 4.23
below.
1.19 "ENCUMBRANCE" means any claim, demand, right of first refusal, purchase
right, option, warrant, commitment, charge, encumbrance or any other
restriction of any kind on ownership, transfer, use, licensing,
possession, receipt of income from or any other exercise of any
attribute of ownership, including any Security Interest.
1.20 "FINANCIAL STATEMENTS" has the meaning set forth in Section 4.7 below.
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1.21 "GAAP" means French generally accepted accounting principles applied on
a basis consistent with the basis on which the Financial Statements
referred to in Section 4.7 were prepared.
1.22 "GOVERNMENTAL BODY" means any country, any national body (including the
European Union), any state, province, municipality, or subdivision of
any of the foregoing, any agency, governmental department, court,
entity, commission, board, ministry, bureau, locality or authority of
any of the foregoing.
1.23 "INTELLECTUAL PROPERTY" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements
thereto, and all patents, patent applications, and patent disclosures,
(b) all trademarks, service marks, trade dress, logos, trade names, and
corporate names, all related applications and registrations, and all
goodwill associated therewith, (c) all copyrightable works, all
copyrights, and all copyright applications and registrations, (d) all
mask works, and all mask work applications and registrations, (e) all
trade secrets and business information, (f) all computer software
(including data and related documentation), (g) all internet and
intranet names, addresses, icons and other identifications useful to
identify or locate the Target on a computer network such as the World
Wide Web, and (h) all other proprietary rights.
1.24 "INTEREST RATE" means five percent (5%) per annum, calculated on the
basis of a 365 days per year factor applied to the actual days on which
there exist an unpaid amount.
1.25 "KNOWLEDGE" means actual knowledge after such inquiry as is reasonably
practicable.
1.26 "LAWS" means all constitutions; statutes; regulations; by-laws, codes;
ordinances; decrees; rules; and judicial, arbitral, administrative,
ministerial, departmental or regulatory judgments, orders, decisions,
rulings, or awards.
1.27 "LIABILITY" means any and all liability, obligation, loss, commitment,
damage, or deficiency including interest, penalties, fines, reasonable
fees of attorneys, accountants and consultants, and experts, and any
liability for Taxes (in each instance whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether
accrued, under accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due).
1.28 "ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to
quantity and frequency).
1.29 "PARTY" has the meaning set forth in the preface above.
1.30 "PERMIT" means any license, permit, approval, consent, authorization,
requirement and application of or to a Governmental Body and all
governmental or third party product registrations or approvals.
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1.31 "PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, a limited
liability company, an unincorporated organization, any other form of
entity, or a Governmental Body.
1.32 "PURCHASE PRICE" has the meaning set forth in Section 2.2 below.
1.33 "REQUISITE SELLERS" means Sellers holding a majority in interest of all
of the Shares as set forth in Section 4.2 of the Disclosure Schedule.
1.34 "SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest.
1.35 "SELLERS" has the meaning set forth in the preface above.
1.36 "SHARES" means the shares of capital stock of the Target.
1.37 "SUBSIDIARY" means any corporation with respect to which the Target (or
a Subsidiary thereof) owns common stock, has the power to vote or
direct the voting of securities to elect one or more directors, or owns
any other security, and any partnership in which the Target (or a
Subsidiary thereof) is a general or limited partner.
1.38 "TARGET" has the meaning set forth in the preface above.
1.39 "TAXES" means all French and foreign income, gross receipts, profits,
license, payroll, employment, stamp, premium, windfall profits,
withholding, capital, general corporate, customs duties, environmental,
disability, registration, minimum sales, goods and services, property
(including improvement assessments), severance, production, recording,
ad valorem, gains, transfer, value-added, unemployment compensation,
social security premium, privilege and any and all other taxes,
including any interest, penalty, or addition thereto, but specifically
excluding any of the foregoing due in respect of any indemnification
hereunder.
1.40 "TAX RETURN" means any return, declaration, report, claim of any kind
including for refund, or information return or statement relating to
Taxes, including any schedule or attachment thereto, and including any
amendment thereof.
2. PURCHASE AND SALE OF TARGET SHARES
2.1 BASIC TRANSACTION. On and subject to the terms and conditions of this
Agreement, on Closing the Buyer purchases from each of the Sellers, and
each of the Sellers will sell to the Buyer all of his or her Shares for
the consideration specified below in this article 2. The Shares will be
conveyed free and clear of all Encumbrances and together with all
rights now and hereafter attaching thereto. The total number of Shares
(and breakdown by Seller) to be purchased by the Buyer from the Sellers
on the Closing Date is set forth in EXHIBIT 2.1. Upon transfer of the
Shares, the Buyer shall own one hundred percent (100%) of the capital
of the Target.
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2.2 PURCHASE PRICE.
2.2.1 The Buyer agrees to pay to the Sellers sixty one million six
hundred sixty thousand French Francs (FRF. 61,660,000) (the
"PURCHASE PRICE"), less the Purchase Price Adjustment, if any,
determined in accordance with Section 2.3 hereof, for all of
the Shares, consisting of:
- a cash payment in the amount of forty million six
hundred sixty thousand French Francs
(FRF. 40,660,000);
- 723,850 shares of Common Stock valued at ten million
French Francs (FRF. 10,000,000);
- a Deferred Payment in cash of a maximum amount of ten
million French Francs (FRF. 10,000,000) as determined
in accordance with Section 2.4;
- a Deferred Payment of a maximum number of 72,385
shares of Common Stock for a maximum amount of one
million French Francs (FRF. 1,000,000) as determined
in accordance with Section 2.4;
2.2.2 The payment of the Purchase Price to the Sellers shall be made
in the following manner:
- thirty nine million eight hundred four thousand eight
hundred and fifteen French Francs (FRF. 39,804,815)
(which includes a 5% interest for the period between
June 30, 1999 and the Closing Date based on
FRF. 39,251,000) shall be paid in cash at Closing by
wire transfer in the account designated by each
Seller in an amount equal to the amount specified
opposite that Seller's name in EXHIBIT 2.2.2;
- four hundred fifty three thousand French Francs
(FRF. 453,000) shall be paid in cash at Closing by
wire transfer in the account designated by Xxxxxxxx &
Associes;
- nine hundred fifty six thousand French Francs
(FRF. 956,000) shall be paid in cash at Closing by
wire transfer in the account designated by Financiere
Breteuil;
- issuance at Closing of Common Stocks to each of the
Sellers in an amount equal to the amount specified
opposite that Seller's name in EXHIBIT 2.2.2;
- Deferred Payment in cash and in Common Stocks on the
Deferred Payment Date in accordance with Section 2.4
below.
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The Buyer shall cause and warrants the delivery of the shares
of Common Stock to the Sellers by Client Logic in the manner
provided above within 5 business days as from the Closing
Date.
2.3 PURCHASE PRICE ADJUSTMENT. The Purchase Price is based upon the
assumption that the consolidated shareholders equity ("capitaux propres
consolides" as defined according to the principles and using these
certain values set out in Exhibit 2.3 all in accordance with GAAP) of
the Group on June 30, 1999, (the "Closing Date Shareholders Equity") is
at least equal to twelve million two hundred thousand French Francs
(FRF. 12,200,000) (the "Base Shareholders Equity"), subject to the
specific provision of Section 4.11.3.
In the event that the Closing Date Shareholders Equity is less than the
Base Shareholders Equity, the Buyer shall be entitled to a franc per
franc reduction of the Purchase Price, which reduction shall be equal
to the difference between the Base Shareholders Equity and the Closing
Date Shareholders Equity.
The Closing Date Shareholders Equity shall be determined according, to
the following procedure:
(i) The Closing Date Shareholders Equity shall be determined as
soon as practicable after the Closing Date by the Sellers'
accountants who shall prepare the consolidated financial
statements of the Group as at the Closing Date (the "Closing
Date Financial Statements"). The Closing Date Financial
Statements shall be prepared according to the principles and
using those certain values set out in Exhibit 2.3 all in
accordance with GAAP on a basis consistent with the methods
applied by the Target in preparing the Financial Statements;
For the purpose of preparing the Closing Date Financial
Statements, the Buyer hereby agrees to allow, as from the
Closing Date, unrestricted access to the Target's premises and
to the Target's legal and accounting documents, books and
registers, to the Sellers and to any Sellers' representatives
as may be designated in writing by the Sellers;
(ii) not later than 60 days after the Closing Date, the Sellers
shall deliver to the Buyer the Closina Date Financial
Statements;
(iii) the Buyer shall within 30 days of the delivery of the Closing
Date Financial Statements by the Sellers either agree to the
Closing Date Financial Statements or, if the Buyer disagrees
in relation to any item of the Closing Date Financial
Statements (together the "Disputed Items"), it shall identify
in writing the Disputed Items to the Sellers.
(iv) if the Parties are in disagreement in relation to any Disputed
Items, and if such disagreement between the Sellers and the
Buyer cannot be resolved by the mutual agreement of the Buyer
and the Sellers by the end of the 45 day period following the
delivery of the Closing Date Financial Statements by the
Sellers to the Buyer, the
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Disputed Items shall be submitted for resolution to the
accounting firm of Xxxxxx Xxxxxxxx, or, if Xxxxxx Xxxxxxxx
shall not accept such mission, to another internationally
recognized independent certified public accounting firm
("Independent Accounting Firm") mutually acceptable to the
Sellers and the Buyer. If within five (5) business days
following the date on which Xxxxxx Xxxxxxxx shall have refused
its mission, the Sellers and the Buyer cannot agree on the
choice of such Independent Accounting Firm, either party shall
be entitled within five (5) business days to request the
designation of an Independent Accounting Firm by the President
of the Court of Commerce of Paris. The Sellers and the Buyer
shall instruct the Independent Accounting Firm to limit its
examination to the Disputed Items affecting the determination
of the Closing Date Shareholders Equity, and to use its best
efforts to make its determination thereon within thirty (30)
business days after its engagement hereunder. The resolution
of any such previously Disputed Items by such Independent
Accounting Firm shall be made in writing delivered to the
Buyer and the Sellers and shall be final, conclusive and
binding upon the Sellers and the Buyer in accordance with
Articles 1592 and 2044 et seq. of the French Civil Code. The
fees and expenses charged by the Independent Accounting Firm
with respect to the Disputed Items shall be shared equally
between the Buyer and the Sellers.
The adjustment amount of the Purchase Price, if any, as
finally determined in accordance with the above provisions,
shall be paid in French Francs by the Sellers by certified
bank check within ten (10) business days of the determination
of the Closing Date Financial Statements, as determined
pursuant to the above procedure.
2.4 DEFERRED PAYMENT. Within four weeks following the issuance of the
financial statements of the companies in the Group audited (when
appropriate) for the fiscal year ended December 31, 1999, (the
"Deferred Payment Date") the Buyer will pay to the Sellers an
additional amount of purchase price, if any, based on the formula and
the principles described in EXHIBIT 2.4 and subject to the provisions
of Section 4.11.3. The Deferred Payment shall not be due to a Seller
if, on the Deferred Payment Date, the latter has resigned or has been
dismissed as a Bad Leaver.
However, if (i) the Buyer terminates the term of office of Franck
Loubaresse as chairman and manager of the Target and the Subsidiaries,
where applicable, or the employment of Laurent Loubaresse or Jacques
Loubaresse for a reason other than a Bad Leaver or (ii) between Closing
and December 31, 1999, Buyer carries out any action materially
detrimental to the Target or the Subsidiaries and which would impede
the achievement of the full Deferred Payment, the Deferred Payment will
become payable in full to the Sellers as promptly as practicable.
The Parties undertake to procure, insofar as each is able, the issuance
of the financial statements of the Group as of December 31, 1999 no
later than June 30, 2000. Such financial statements and the
consolidation shall be prepared in accordance with those principles set
out in EXHIBIT 2.3 all in accordance with GAAP. There shall be written
back into the consolidated profit of the Group costs and expenses
incurred by the Group
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during the due diligence process prior to the signature, and as a
result of the implementation of this Agreement, up to a maximum amount
of FRF.150,000. The Parties shall decide on a mutually agreeable basis
the expenses and investments which shall be made by the Group during
the period running from the Closing Date to December 31, 1999.
The Parties further agree that any provision booked by any of the
Target or the Subsidiaries during fiscal year closed on December 31,
1999, which (i) impacts the consolidated operating result (resultat
d'exploitation consolide) of the Group and (ii) is recaptured on or
before the end of the fiscal year 2001, shall be taken into account for
the recaptured amount in the calculation of a complementary deferred
payment amount on the basis of the formula set forth in Exhibit 2.4
hereto as if such recaptured amount of the provision had not or
partially not, where applicable, existed on the Deferred Payment Date.
This complementary deferred payment amount shall be payable in cash to
the Sellers within 30 days of the approval of the financial statements
of the relevant company for the fiscal year during which the recaptured
of the provision was accounted for. It is understood that the sum of
the above complementary deferred payment amount and the Deferred
Payment amount initially paid shall not exceed the maximum amount set
forth in Section 2.2.1 above, i.e., FRF 11,000,000.
2.5 SET-OFF. If prior to the Deferred Payment Date, the Buyer shall have
obtained an enforceable arbitration award against the Sellers pursuant
to the provisions of article 9 below in connection with any one of the
indemnification undertakings assumed by the Sellers in article 7, the
Buyer shall be authorized to operate a set-off between any payment of
any amount still owed to the Sellers thereunder and any amount that the
Sellers may owe to the Buyer
3. REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Sellers that the statements contained
in this article 3 are correct and complete as of the Closing Date.
3.1 ORGANIZATION OF THE BUYER. The Buyer is a corporation duly organized,
validly existing, and in good standing under the Laws of the
jurisdiction of its incorporation.
3.2 AUTHORIZATION OF TRANSACTION. The Buyer has full power and authority
(including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder.
3.3 NON-CONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby, will (A) violate any Law or other restriction of any
Governmental Body to which the Buyer is subject or any provision of its
charter or bylaws or (B) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or
require any notice under any agreement, contract, lease, license,
instrument,
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or other arrangement to which the Buyer is a party or by which it is
bound or to which any of its assets is subject.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Except as set forth in the disclosure schedule delivered by the Sellers to the
Buyer on the date hereof (the "DISCLOSURE SCHEDULE"), the Sellers represent and
warrant, jointly and severally, to the Buyer that the statements contained in
this article 4 are correct and complete as of June 30, 1999, and all references
in this article 4 to the date hereof, the Closing Date shall be deemed to refer
to June 30, 1999, except for the statements contained in Sections 4.1, 4.2, 4.3,
4.4(a), 4.4(c), 4.6, the preamble to 4.8, 4.8.13, 4.9, 4.23 and 4.31 which shall
be correct and complete as of the Closing Date and all references in these
paragraphs to the date hereof and the Closing Date shall be deemed to refer to
October 8, 1999. All verbs in the present tense shall be deemed accordingly
mutatis mutandis in the past tense. Nothing in the Disclosure Schedule shall be
deemed adequate to disclose an exception to a representation or warranty made
herein, unless the Disclosure Schedule identifies the exception with reasonable
particularity and describes the relevant facts in reasonable detail. The
Disclosure Schedule will be arranged in paragraphs corresponding to the numbered
paragraphs contained in this Section 4.
4.1 ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. Each of the Target
and the Subsidiaries is a corporation or limited liability company,
duly organized and validly existing under the laws of the jurisdiction
of its incorporation or formation. Each of the Target and the
Subsidiaries is duly authorized to conduct business under the laws of
each jurisdiction where such qualification is required. Each of the
Target and the Subsidiaries has full power and authority and all
Permits necessary to carry on the businesses in which it is engaged and
to own and use the properties owned and used by it. Section 4.1 of the
Disclosure Schedule lists the directors and officers of each of the
Target and the Subsidiaries. The Sellers have delivered to the Buyer
correct and complete copies of the charter and bylaws of each of the
Target and the Subsidiaries (as amended to date). The minute books
(containing the records of meetings of the stockholders and the board
of directors), the share transfer register ("Registre des mouvements de
titres") and the individual shareholders accounts ("Comptes individuels
d'actionnaires"), where applicable, of each of the Target and the
Subsidiaries are correct and complete and each has been provided to the
Buyer. The Target is not in default under or in violation of any
provision of its charter or bylaws.
4.2 CAPITALIZATION. The entire stated capital stock of the Target consists
of 1,225,000 shares of common stock, with a par value of FRF.10 each.
All of the Shares are validly issued and fully paid and are duly owned,
free and clear of any Encumbrances, Taxes, Security Interests and
contracts, by the respective Sellers as set forth in Section 4.2 of the
Disclosure Schedule. Other than as expressly set out in Section 4.2 of
the Disclosure Schedule, there are no outstanding, or authorized
options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights, or other contracts or commitments that could
require the Target or any Subsidiaries to issue, sell, or otherwise
cause to become outstanding any of its capital stock. There are no
voting arrangements, proxies, or other agreements or
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understandings with respect to the voting of the capital stock of the
Target or any of the Subsidiaries.
4.3 AUTHORIZATION OF TRANSACTION. Each of the Sellers has full power and
authority to execute and deliver this Agreement and to perform the
Seller's obligations hereunder and to consummate the transactions
contemplated hereunder.
4.4(a) NON-CONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby, will (i) violate any judgment or any provision of the charter
or bylaws of any of the Target and the Subsidiaries or (ii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement
to which any of the Target and the Subsidiaries is a party or by which
it is bound or to which any of its assets is subject (or result in the
imposition of any Security Interest upon any of its assets). None of
the Target and the Subsidiaries needs to give any notice to, make any
filing with, or obtain any Permit of any Governmental Body in order for
the Parties to consummate the transactions contemplated by this
Agreement.
4.4(b) BROKERS' FEES. None of the Target and the Subsidiaries has any
Liability to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement.
None of the Sellers has any Liability to pay any fees or commissions to
any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which the Buyer could become liable
or obligated.
4.4(c) HSR ACT. On the Closing Date, neither the Company nor any Subsidiary,
individually or in the aggregate, will own any assets located in the
United States (other than investment assets or voting or non-voting
securities of another person) having an aggregate book value of
US$15,000,000 or more and will not control (as that term is defined
under Section 801.1(b) of the United States Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act")) any US issuer (as
defined in the HSR Act) that has annual net sales or total assets of
US$25,000,000 or more.
4.5 TITLE TO ASSETS. Except as set forth in Section 4.5 of the Disclosure
Schedule, the Target and the Subsidiaries have good and marketable
title to, or a valid leasehold interest in, all of the properties and
assets used by them, located on their premises, or shown on the
Financial Statements or acquired after the date thereof, free and clear
of all Encumbrances, except for properties and assets disposed of in
the Ordinary Course of Business since the date of the Financial
Statements.
4.6 SUBSIDIARIES. Section 4.6 of the Disclosure Schedule sets forth for
each of the Subsidiaries (i) its name and jurisdiction of incorporation
or formation, and (ii) the number of shares of each class of its
capital stock, the names of the holders thereof, and the number of
shares held by each such holder. All of the shares of capital stock of
the Subsidiaries have been duly authorized and are validly issued,
fully paid. All of the shares of the Subsidiaries are free and clear of
all Encumbrances, Taxes, Security Interests, contracts and equities.
There are
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no outstanding or authorized options, warrants, purchase rights,
conversion rights, exchange rights, or other contracts or commitments
that could require any of the Target and the Subsidiaries to sell,
transfer, or otherwise dispose of any capital stock of any of the
Subsidiaries or that could require the Subsidiaries to issue, sell, or
otherwise cause to become outstanding any of its own capital stock.
There are no voting arrangements, proxies, or other agreements or
understandings with respect to the voting of any capital stock of the
Subsidiaries. Except with respect to the Target's control of or equity
participation in the Subsidiaries, none of the Target and the
Subsidiaries controls directly or indirectly or has any direct or
indirect equity participation in any Person.
4.7 FINANCIAL STATEMENTS. Attached hereto as SCHEDULE 4.7 are audited (for
the societes anonymes) balance sheets and statements of income
(including the related notes), as of and for the fiscal year December
31, 1998, with respect to the Target and the Subsidiaries as validly
approved by the shareholders of such companies and duly filed with the
appropriate Registries of Commerce and Companies (collectively the
"FINANCIAL STATEMENTS"). The Financial Statements (including the notes
thereto) have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby, present truly
and fairly the financial condition, assets and Liabilities, and the
results of operations of the Target and the Subsidiaries for such
periods and are consistent with the books and records of the Target and
the Subsidiaries.
Each transaction of each of the Target and the Subsidiaries is properly
and accurately recorded on the books and records of such company, and
each document (including any contract, invoice or receipt) on which
entries in such company's books and records are based is complete and
accurate in all material respects.
4.8 EVENTS SUBSEQUENT TO DECEMBER 31, 1998. Except as set forth in Section
4.8 of the Disclosure Schedule, since December 31, 1998 and through to
the Closing Date, there has not been any material adverse change in the
business, financial condition, operations, results of operations, or,
in the Sellers' reasonable opinion, future prospects of the Target or
the Subsidiaries. Without limiting the generality of the foregoing,
since December 31, 1998 and through June 30, 1999 (it being understood
that amounts expressed below in French francs refer to amounts on an
annual basis):
4.8.1 none of the Target and the Subsidiaries has sold, leased,
transferred, or assigned, any of its assets, tangible or
intangible, other than for a fair consideration in the
Ordinary Course of Business;
4.8.2 none of the Target and the Subsidiaries has entered into any
agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) either involving
more than FRF.500,000 or outside the Ordinary Course of
Business;
4.8.3 no party (including any of the Target and the Subsidiaries)
has accelerated, terminated, modified, or canceled any
agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) involving more
than
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FRF.300,000 to which any of the Target and the Subsidiaries is
a party or by which any of them is bound;
4.8.4 Except as disclosed in Section 4.8.4 of the Disclosure
Schedule [factoring agreement], none of the Target and the
Subsidiaries has imposed any Security Interest upon any of its
assets, tangible or intangible;
4.8.5 none of the Target and the Subsidiaries has made without prior
consultation with the Buyer, any capital expenditure (or
series of related capital expenditures) either involving more
than FRF.300,000 or outside the Ordinary Course of Business;
4.8.6 none of the Target and the Subsidiaries has made any capital
investment in, any loan to, or any acquisition of the
securities or assets of, any other Person (or series of
related capital investments, loans, and acquisitions) either
involving more than FRF.100,000 or outside the Ordinary
Course of Business;
4.8.7 none of the Target and the Subsidiaries has issued any note,
bond, or other debt security, and none of the Target and the
Subsidiaries has created, incurred, assumed, or guaranteed or
guarantee, any indebtedness for borrowed money or capitalized
lease obligation either involving more than FRF.300,000;
4.8.8 none of the Target and the Subsidiaries has delayed or
postponed the payment of accounts payable and other
Liabilities outside the Ordinary Course of Business;
4.8.9 none of the Target and the Subsidiaries has canceled,
compromised, waived, or released any right or claim (or series
of related rights and claims) either involving more than
FRF.300,000 or outside the Ordinary Course of Business;
4.8.10 none of the Target and the Subsidiaries has granted any
license or sublicense of any rights under or with respect to
any Intellectual Property outside of the Ordinary Course of
Business;
4.8.11 there has been no change made or authorized in the charter or
bylaws of any of the Target and the Subsidiaries;
4.8.12 none of the Target and the Subsidiaries has issued, sold, or
otherwise disposed of any of its capital stock, and none of
the Target and the Subsidiaries has granted any options,
warrants, or other rights to purchase or obtain (including
upon conversion, exchange, or exercise) any of its capital
stock;
4.8.13 Except as disclosed in Section 4.8.13 of the Disclosure
Schedule, none of the Target and the Subsidiaries has
declared, set aside, or paid any dividend, and none of the
Target and the Subsidiaries has made any distribution with
respect to its capital stock (whether in cash or in kind), and
none of the Target and the Subsidiaries has redeemed,
purchased, or otherwise acquired any of its capital stock;
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4.8.14 none of the Target and the Subsidiaries has experienced any
damage, destruction, or loss (whether or not covered by
insurance) to its property of a value in excess of
FRF. 100,000;
4.8.15 none of the Target and the Subsidiaries has made any loan to,
or entered into any other transaction with, any of its
directors, officers, and employees, outside the Ordinary
Course of Business;
4.8.16 none of the Target and the Subsidiaries has entered into any
employment contract or collective bargaining agreement,
written or oral, or modified the terms of any existing such
contract or agreement, granted any increase in the base or
other compensation of any of its directors, officers, and
employees outside the Ordinary Course of Business, adopted,
amended, modified, or terminated any bonus, profit-sharing,
incentive, severance, or other plan, contract, or commitment
for the benefit of any of its directors, officers, and
employees (or taken any such action with respect to any other
Employee Benefit Plan), or made any other change in employment
terms for any of its directors, officers, and employees,
outside the Ordinary Course of Business;
4.8.17 none of the Target and the Subsidiaries has made or pledged to
make any capital contribution outside the Ordinary Course of
Business;
4.8.18 none of the Target and the Subsidiaries has changed its
accounting methods, principles, or practices, except as
required by GAAP;
4.8.19 none of the Target and the Subsidiaries has revalued any of
its assets;
4.8.20 there has been no significant adverse change outside the
Ordinary Course of Business in the prices which any of the
Target or the Subsidiaries charges for its products and
services;
4.8.21 none of the Target and the Subsidiaries has committed to any
of the foregoing.
All amounts set forth above are stated on a yearly basis.
4.9 UNDISCLOSED LIABILITIES. None of the Target and the Subsidiaries has
any Liability (and there is no Basis for any present or, to the
Sellers' Knowledge, future action, suit, proceeding, complaint, claim,
or demand against any of them giving rise to any Liability), except for
(i) Liabilities set forth on the face of the Financial Statements
(rather than in any notes thereto) and (ii) Liabilities which have
arisen after December 31, 1998 in the Ordinary Course of Business (none
of which results from or relates to any breach of contract, breach of
warranty, tort, infringement, or violation of Law). No claims will be
made under this Section 4.9 in respect of Liabilities accounted for in
the financial statements prepared for the purposes of Section 2.3.
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4.10 COMPLIANCE WITH LAWS. To the Seller's knowledge, each of the Target,
the Subsidiaries, and their respective predecessors and Affiliates has
complied with all applicable Laws and no action, suit, proceeding,
complaint, claim, demand, or notice has been filed or commenced against
any of them alleging any failure so to comply.
Particularly, none of the Target and the Subsidiaries is subject to the
obligations imposed by the Data Processing, Data Files and Individual
Liberties Act of 1978 (Loi Informatique et Libertes).
To the Sellers' knowledge, no principal or officer of the Target or the
Subsidiaries has been or is a government official (as hereinafter
defined) or a candidate for political office; and none of the Target,
the Subsidiaries, or the Sellers or, where applicable, Sellers'
officers, in order to assist the Target or the Subsidiaries to obtain
or retain business, has offered, paid, promised to pay, or authorized
the payment of any money or anything of value to a government official,
political party or official thereof, or candidate for political office,
for the purpose of influencing said official to use his influence with
a government or instrumentality thereof to influence any action of such
government or instrumentality. As used in this paragraph, the term
"government official" means any officer or employee of a government or
any department, agency, or instrumentality thereof, or any person
acting in an official capacity for or on behalf of such government or
department, agency, or instrumentality.
4.11 TAX MATTERS. For purposes of this Section 4.11, the term "Target" and
"Subsidiaries" shall include any other company, partnership, or
grouping which has been merged, absorbed, liquidated, within the Target
or the Subsidiaries, or transferred by way of a universal transfer of
assets and Liabilities to or by the Target and/or the Subsidiaries.
4.11.1 RETURNS FILED. Each of the Target and the Subsidiaries has
timeously filed all Tax Returns that it is required to file
and all such Tax Returns were correct and complete in all
respects.
4.11.2 TAXES PAID. All Taxes owed by any of the Target and the
Subsidiaries, either individually or jointly and severally
with any other Person, and whether or not shown on any Tax
Return, have been timeously paid in fall and full provision
has been made for the payment of all Taxes not yet due and
payable which relate to periods on or before the Closing.
There are no Encumbrances on any of the assets of any of the
Target and the Subsidiaries that arose in connection with any
failure (or alleged failure) to pay any Tax.
4.11.3 NO FURTHER ASSESSMENTS. No Seller expects any authority to
assess any additional Taxes for any period for which Tax
Returns have been filed. There is no dispute or claim
concerning any Liability relating to Taxes of any of the
Target and the Subsidiaries. No Tax Returns of the Target and
the Subsidiaries for any tax period have been or are currently
the subject of a tax audit and no Governmental Body has
contacted the Target or the Subsidiaries regarding such a
prospective tax audit except as set forth in Section 4.11.3 of
the Disclosure Schedules.
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The Buyer acknowledges the existence of a tax reassessment
notified to Groupe Adverbe International SA as disclosed in
Section 4.11.3 of the Disclosure Schedule as well as the
existence of a tax audit performed by the French tax
authorities within AGEDIS the expected consequences of which
are described in Section 4.11.3 of the Disclosure Schedule.
The Buyer agrees to bear the net financial consequences of
these procedures within Groupe Adverbe International and
AGEDIS up to a maximum amount of FRF. 600,000. In addition, as
an exception to Section 2.3, the above net financial
consequences shall not impact the Purchase Price adjustment
nor Deferred Payment to the extent they do not exceed
FRF. 600,000.
None of the Target and the Subsidiaries has taken or omitted
to take any action which has either resulted in the extension
of any statute of limitations for the assessment of any Taxes
or for audit of any Tax Returns for any period ending on or
before the Closing Date or in the deprivation of the benefit
of an accelerated statute of limitation; no deficiency for any
Taxes has been proposed, asserted or assessed which has not
been finally resolved; none of the Target and the Subsidiaries
is aware of any circumstance which could result in any
assertion or assessment of a Tax in a material amount with
respect to any past taxable period; and none of the Target and
the Subsidiaries is aware of any issue concerning the
Liability of the Target or the Subsidiaries for Taxes that by
application of similar principles could result in any
assertion or assessment of a Tax for another taxable period.
4.11.4 NO AFFILIATED GROUP. None of the Target and the Subsidiaries
has ever been a member of or a party to any partnerships,
joint ventures or interest groupings, or tax sharing or tax
allocation agreements under which any of the Target and the
Subsidiaries may be responsible for any tax obligations of any
other Person.
4.11.5 NO AGREEMENTS REGARDING DEFERRALS OF TAXES OR LIABILITIES.
None of the Target and the Subsidiaries has ever made any
commitment or entered into any agreement or taken any action
resulting in tax deferral or in deferred Liability.
4.11.6 NO POST-CLOSING REPORTING OF DEFERRED INCOME BASED ON
PRE-CLOSING MATTERS. None of the Target and the Subsidiaries
has any income reportable for a period ending after the
Closing Date but attributable to a transaction, event or fact
occurring in, or a change in accounting method made for a
period ending on or prior to the Closing Date which resulted
in a deferred reporting of income from such transaction or
from such change in accounting method.
4.11.7 NO ADDITIONAL LIABILITY FOR TAXES. None of the transactions
contemplated by or completed with respect to this Agreement
has or will cause any of the Target and the Subsidiaries to
incur any additional Liability for Taxes as a result thereof.
None of the restructuring operations completed prior to
Closing by any of the Sellers with respect to their
shareholding in the Target and/or the Subsidiaries has
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or will cause any of the Target and the Subsidiaries to incur
any additional Liability for Taxes as a result thereof.
4.12 REAL PROPERTY. Section 4.12 of the Disclosure Schedule lists all real
property that any of the Target and the Subsidiaries owns, leases, or
subleases and indicates the owner, lessor, or sublessor thereof.
Sellers have delivered to Buyer correct and complete copies of the
leases and subleases listed in Section 4.12 of the Disclosure Schedule
(as amended to date). With respect to each lease and sublease listed in
Section 4.12 of the Disclosure Schedule, the lease or sublease is
legal, valid, binding, enforceable, and in full force and effect and,
to the Sellers' knowledge, no party to the lease or sublease is in
breach or default, and no event has occurred which, with notice or
lapse of time, would constitute a breach or default or permit
termination, modification or acceleration thereunder.
4.13 INTELLECTUAL PROPERTY. Section 4.13 of the Disclosure Schedule sets
forth a list of all registrations of patents and pending applications
therefor, all registrations of trademarks, trade names and service
marks and all pending applications therefor, all registrations of
copyrights and all pending applications therefor (including with
respect to the Callium software) and all licenses, sublicenses or other
agreements with respect to each of the foregoing of either the Target
or the Subsidiaries. To the Sellers' Knowledge, all of the patents,
trademarks, trade names, service marks, copyrights and licenses or
other agreements listed in Section 4.13 of the Disclosure Schedule are
in full force and effect, and either the Target or the Subsidiaries
possesses all right, title, and interest in and to, or valid rights as
a licensee, to or with respect to each such item, free and clear of any
Encumbrance or restriction or rights of any Person, including any
licensee or sublicensee. Neither the Target nor the Subsidiaries are
infringing upon, or otherwise violating, the rights of any third party
with respect to any Intellectual Property, and neither the Target nor
the Subsidiaries have received or have Knowledge of any claim or
allegation that the Target or the Subsidiaries are infringing upon the
Intellectual Property rights of any third party. To the Knowledge of
each of the Sellers, no third party has interfered with, infringed
upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of any of the Target or the Subsidiaries.
Except as set forth in Section 4.13 of the Disclosure Schedule, none of
the Target or the Subsidiaries has ever agreed to indemnify any person
or entity for or against any interference, infringements,
misappropriation, or other conflict with respect to its Intellectual
Property.
4.14 TANGIBLE ASSETS. The Target and the Subsidiaries own or lease all
buildings, machinery, equipment, and other tangible assets necessary
for the conduct of their businesses as presently conducted and as
presently proposed to be conducted. Such assets are free from material
defects, have been maintained in accordance with normal industry
practice, are in good operating condition and repair (subject to normal
wear and tear), and are suitable for the purposes for which they
presently are used. Neither Target nor any Subsidiaries owns or leases
any buildings, machinery, equipment or other tangible asset that is not
presently used in its or their businesses as presently conducted.
4.15 CONTRACTS. Section 4.15 of the Disclosure Schedule lists the following
contracts and other agreements to which any of the Target and the
Subsidiaries is a party:
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4.15.1 any agreement (or group of related agreements) for the lease
of personal property to or from any Person providing for lease
payments in excess of FRF.100,000 per annum;
4.15.2 any agreement (or group of related agreements) for the
purchase or sale of raw materials, commodities, supplies,
products, or other personal property, or for the furnishing or
receipt of services, the performance of which will extend over
a period of more than one year, result in a loss to any of the
Target and the Subsidiaries, or involve consideration in
excess of FRF.500,000 per annum;
4.15.3 any agreement concerning a partnership or joint venture;
4.15.4 any agreement (or group of related agreements) under which the
Target or a Subsidiary has created, incurred, assumed, or
guaranteed any indebtedness for borrowed money, or any
capitalized lease obligation;
4.15.5 any agreement concerning confidentiality or non-competition,
other than customer contracts in the Ordinary Course of
Business;
4.15.6 any agreement regarding ownership by any of the Target or the
Subsidiaries of any creations or inventions of any employee or
consultant;
4.15.7 any agreement with any of the Sellers and their Affiliates
(other than the Target and the Subsidiaries);
4.15.8 any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan
or arrangement for the benefit of the Target's and the
Subsidiaries' current or former directors, officers, and
employees;
4.15.9 any collective bargaining agreement;
4.15.10 any agreement under which the Target or a Subsidiary has
advanced or loaned any amount to any of its directors,
officers, and employees outside the Ordinary Course of
Business;
4.15.11 any agreement related to any bank account or credit facility,
letter of credit, payment or performance bond, or other surety
relationship, indicating names of signatories, and the amounts
they are authorized to draw;
4.15.12 any agreement to license or sub-license the Registered
Intellectual Property listed in Section 4.13 of the Disclosure
Schedule;
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4.15.13 any agreement under which the consequences of a default or
termination could have an adverse effect on the business,
financial condition, operations, results of operations, or
future prospects of any of the Target and the Subsidiaries; or
4.15.14 any other agreement (or group of related agreements) the
performance of which involves consideration in excess of
FRF.300,000 per annum, other than Customer Contracts in the
Ordinary Course of Business.
The Sellers have delivered to the Buyer a correct and complete
copy of each written agreement listed in Section 4.15 of the
Disclosure Schedule (as amended to date) and a written summary
setting forth the terms and conditions of each oral agreement
referred to in Section 4.15 of the Disclosure Schedule. With
respect to each such agreement: (A) the agreement is legal,
valid, binding, enforceable, and in full force and effect; (B)
the agreement will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms
following the consummation of the transactions contemplated
hereby; (C) to the Sellers' knowledge, no party is in breach
or default, and no event has occurred which with notice or
lapse of time would constitute a breach or default, or permit
termination, modification, or acceleration, under the
agreement; and (D) no party has repudiated any provision of
the agreement.
4.16 NOTES AND ACCOUNTS RECEIVABLE. Except as set out in Schedule 4.16, all
notes and accounts receivable of the Target and the Subsidiaries are
reflected properly on their books and records, are valid receivables
subject to no setoffs or counterclaims, and are current. Unprovided or
insufficiently provided bad and doubtful receivables will not exceed
0.5% of the total book value thereof as at September 30, 1999.
4.17 POWERS OF ATTORNEY. Except as set forth in Section 4.17 of the
Disclosure Schedule, there are no outstanding powers of attorney
executed on behalf of any of the Target and the Subsidiaries.
4.18 INSURANCE. Section 4.18 of the Disclosure Schedule sets forth a list of
insurance policies under which any of the Target and the Subsidiaries
is a named insured or a beneficiary of coverage. Sellers have provided
the Buyer with copies of all such policies. The Target and the
Subsidiaries have always complied with the terms and conditions of such
insurance policies. With respect to each such policy in effect as of
the date of this Agreement, the continued effectiveness of such policy
after the Closing Date under its current terms will not be affected by
the consummation of the transactions contemplated by this Agreement.
4.19 LITIGATION. Section 4.19 of the Disclosure Schedule sets forth each
instance in which any of the Target and the Subsidiaries (i) is subject
to any outstanding injunction, judgment, order, decree, ruling, or
charge or (ii) is a party or is threatened in writing to be made a
party to any action, suit, proceeding, hearing, or investigation of,
in, or before any court or quasijudicial or administrative agency of
any jurisdiction or before any arbitrator. None of the
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Sellers has any reason to believe that any such action, suit,
proceeding, hearing, or investigation may be brought or threatened
against any of the Target and the Subsidiaries.
4.20 PRODUCT WARRANTY. Subject to normal maintenance, each product
manufactured, sold, leased, or delivered by any of the Target and the
Subsidiaries, including, but not limited to the Callium software, has
been in conformity with all applicable contractual commitments and all
express and implied warranties, and none of the Target and the
Subsidiaries has any Liability (and there is no Basis for any present
or future action, suit, proceeding, charge, complaint, claim, or demand
against any of them giving rise to any Liability) for replacement or
repair thereof or other damages in connection therewith, in excess of
the reserve for product warranty claims set forth on the face of the
Financial Statements (rather than in any notes thereto) as adjusted for
the passage of time through the Closing Date in accordance with the
past custom and practice of the Target and the Subsidiaries. None of
the Sellers and the directors and officers (and employees with
responsibility for litigation matters) of the Target and the
Subsidiaries has any Knowledge of any defects in the products and parts
sold by the Target or the Subsidiaries or the failure of any such
products and parts to satisfy the warranty applicable to their sale. No
product manufactured, sold, leased, or delivered by any of the Target
and the Subsidiaries is subject to any guaranty, warranty, or other
indemnity beyond the applicable standard terms and conditions of sale
or lease used by the Target and the Subsidiaries in their businesses.
Section 4.20 of the Disclosure Schedule includes copies of the standard
terms and conditions of sale or lease for each of the Target and the
Subsidiaries (containing applicable guaranty, warranty, and indemnity
provisions).
4.21 PRODUCT LIABILITY. None of the Target and the Subsidiaries has any
Liability (and there is no Basis for any present or future action,
suit, proceeding, charge, complaint, claim, or demand against any of
them giving rise to any Liability) arising out of any injury to
individuals or property as a result of the ownership, possession, or
use of any product manufactured, sold, leased, or delivered by any of
the Target and the Subsidiaries, including, but not limited to the
Callium software.
4.22 EMPLOYEES, EMPLOYEE BENEFITS. EMPLOYMENT CONTRACTS.
4.22.1 Except as disclosed on Section 4.22.1 of the Disclosure
Schedule, none of the Target and the Subsidiaries maintains or
is required to make contributions to any pension, profit
sharing, supplementary pension, or other retirement plan,
employee share ownership plan, bonus or other incentive plan,
termination or retirement indemnity plan, health or group
insurance plan, supplementary sickness or disability benefit
plan, supplementary death benefit plan, or similar plan
agreement, policy, arrangement, program or understanding
("EMPLOYEE BENEFIT PLAN"). The Target and the Subsidiaries
have made all required contributions under their respective
Employee Benefit Plans and paid all premium amounts payable
for all periods through and including the Closing Date, and
adequate provisions have been made therefor in the Financial
Statements. The Target and the Subsidiaries have made all
required contributions under the social security regimes
applicable to their businesses.
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4.22.2 Section 4.22.2 of the Disclosure Schedule contains (i) a true
and complete list of the following information for each
employee of the Target and the Subsidiaries, except the
telephone sales representatives: employer, name, job title,
hiring date and current compensation paid; and (ii) a
description of any employment contract which may be terminated
only by giving more than the minimum notice provided for under
French Law or the applicable bargaining agreement or upon
payment of compensation in excess of that provided for by Law
or the applicable collective bargaining agreement. All
employees of the Target and the Subsidiaries have been
provided with payslips in accordance with applicable Law. None
of the employees, except TSR, of the Target and the
Subsidiaries has been the subject of any change to, or action
in connection with, his or her employment contract which will
trigger any liability for constructive dismissals.
4.22.3 Any collective labor agreement applicable to the Target or the
Subsidiaries is stated in Section 4.22.3 of the Disclosure
Schedule. Each of the Target and the Subsidiaries is in
compliance with all applicable Laws with respect to employment
and employment practices and terms and conditions of
employment, including wages and hours.
4.22.4 There is currently no fixed term employment that may be
converted into an employment of indefinite duration, except as
set forth in Section 4.22.4 of the Disclosure Schedule.
4.22.5 To the Knowledge of any of the Sellers, no executive, key
employee, or group of employees has any plans to terminate
employment with any of the Target and the Subsidiaries. None
of the Target and the Subsidiaries has committed at any
material time any discriminatory labor practice.
4.22.6 The Target and the Subsidiaries have always complied with
employees' representation legal requirements.
4.23 GUARANTIES. None of the Target and the Subsidiaries is a guarantor or
otherwise is liable for any Liability or obligation (including
indebtedness) of any other Person.
4.24 CERTAIN BUSINESS RELATIONSHIPS WITH THE TARGET AND THE SUBSIDIARIES.
Except with respect to their Current Accounts and as set out in
Schedule 4.24, none of the Sellers or their Affiliates has been
involved in any business arrangement or relationship with any of the
Target and the Subsidiaries within the past 12 months, and none of the
Sellers or their Affiliates owns, leases or licenses any asset,
tangible or intangible, that is used in the business of any of the
Target and the Subsidiaries.
4.25 ENVIRONMENT, HEALTH AND SAFETY. Each of the Target and of the
Subsidiaries, has complied with all environmental, health and safety
Laws, and no action, suit, proceeding,
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claim, demand, or notice has been filed or commenced against any of
them alleging any failure so to comply.
4.26 YEAR 2000 COMPLIANCE. All products manufactured, sold, leased or
delivered by any of the Target and the Subsidiaries, including, but not
limited to the Callium software, (the "PRODUCTS") and all software used
by any of them, including, but not limited to the Callium software,
(the "SOFTWARE") are designed to be used prior to, during, and after
the calendar year 2000 A.D. ("YEAR 2000"), and such Products and
Software will operate during each such time period without error
relating to date data, including, but not limited to, any error
relating to, or product of, date data which represent or reference
different centuries or more than one century. Without limiting the
generality of this Section 4.26, the Sellers further represent and
warrant that: (i) the Products and the Software will not abnormally end
or provide invalid or incorrect results as a result of any such date
data, specifically including date data which represents or references
different centuries or more than one century; (ii) the Products and the
Software have been designed to ensure Year 2000 compatibility,
including, but not limited to, date data recognition, calculations that
accommodate same century and multi-century formulas and data values,
and date data interface values that reflect the century; and (iii) the
Products and the Software include "Year 2000 Capabilities". For
purposes of this Section 4.26, the term "Year 2000 Capabilities" means
that the Products and the Software: (i) will manage and manipulate data
involving dates, including single century formulas and multi-century
formulas, and will not malfunction, cause any program or application to
abnormally end, or generate incorrect values or invalid results
involving such dates; (ii) will provide that all date-related user
interface functionalities and data fields include the proper indication
of the century; and (iii) will provide that all date-related data
interface functionalities include the proper indication of the century.
4.27 EURO COMPLIANCE. As from January 1, 1999, the Software shall recognize
and be capable of managing the symbol and codes for the Euro. During
the Euro transitional period, the Products and Software shall permit
the operation of all transactions employing any one of the former
national currencies of one of the member countries participating in the
Economic and Monetary Union ("EMU"), either in said former national
currency or in Euros. The conversion method used for the above purposes
shall comply with the regulations issued by the EMU.
Upon the expiration of the Euro transition period, the Products and the
Software shall be capable of operating exclusively in Euros all
transactions employing data expressed in any one of the former
currencies of one of the member countries of the EMU.
4.28 MERGER BETWEEN THE TARGET, FRAMAR INVESTISSEMENTS AND L&L CAPITAL. The
merger between the Target, Framar Investissements and L&L Capital was
conducted in compliance with all applicable Laws, including with
respect to Taxes, and was fully effective and finally completed on June
10, 1999. There is no pending formalities remaining to be completed in
connection therewith.
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4.29 RESTRUCTURING OF THE SHAREHOLDING OF FRANCK AND LAURENT LOUBARESSE IN
THE TARGET PRIOR TO CLOSING. The restructuring implemented by Franck
and Laurent Loubaresse with respect to their shareholding in the Target
prior to Closing, including, but not limited to, the contribution of
25.3% of the Shares to ONLINE SERVICES, was conducted in compliance
with all applicable Laws, including with respect to Taxes, and shall
not adversely affect the Buyer, the Target or the Subsidiaries.
4.30 MAINTENANCE OF BUSINESS. To Sellers' Knowledge, none of the material
customers of any of the Target and the Subsidiaries intends to cease
doing business with any of such companies or to reduce materially the
amount of the business that such customer is presently doing with any
of such companies.
4.31 DISCLOSURE. There is no fact currently known to the Sellers, or to any
of the Target and the Subsidiaries, which materially adversely affects
or in the future would (so far as now can be reasonably foreseen)
materially adversely affect any of the Target and the Subsidiaries, its
financial condition or business which has not been set forth in this
Agreement or the Disclosure Schedule hereto. The Sellers are not aware
of any items contained in the executive summaries of the due diligence
reports or the Data Room Index incorporated in the Disclosure Schedule
that should be separately disclosed on the Disclosure Schedule in the
absence of the executive summaries of the due diligence reports and
Data Room Index.
5. POST-CLOSING COVENANTS. The Parties agree to take the actions or, as
appropriate, forebear taking those actions, set forth in the following
paragraphs of this article 5 with respect to the period following the Closing.
5.1 GENERAL. In case at any time after the Closing any further
action is necessary to carry out the purposes of this
Agreement, each of the Parties will take such further action
(including the execution and delivery of such further
instruments and documents) as any other Party reasonably may
request, all at the sole cost and expense of the requesting
Party (unless the requesting Party is entitled to
indemnification therefor under article 7 below). The Sellers
acknowledge and agree that from and after the Closing, the
Buyer will be entitled to possession of all documents, books,
records (including Tax records), agreements, and financial data
of any sort relating to the Target and the Subsidiaries.
5.2 TRANSITION. None of the Sellers will take any action that is
designed or intended to have the effect of discouraging any
lessor, licensor, customer, supplier, or other business
associate of any of the Target and the Subsidiaries from
maintaining the same business relationships with the Target and
the Subsidiaries after the Closing as it maintained with the
Target and the Subsidiaries prior to the Closing. Each of the
Sellers will refer all customer inquiries relating to the
businesses of the Target and the Subsidiaries to the Buyer from
and after the Closing.
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5.3 CONFIDENTIALITY. Each of the Sellers will treat and hold as such all of
the Confidential Information, refrain from using any of the
Confidential Information except in connection with this Agreement, and
deliver promptly to the Buyer or destroy, at the request and option of
the Buyer, all tangible embodiments (and all copies) of the
Confidential Information which are in the Seller's possession.
5.4 COVENANT NOT TO COMPETE. For a period of two (2) years from and after
the date the Sellers individually cease association with any of the
Target, the Subsidiaries, the Buyer, or the successors to or Affiliates
of any of them, none of the Sellers will (and the Sellers will cause
their Affiliates not to) engage directly or indirectly in any business
that any of companies in the Group conducts as of the Closing Date in
any geographic area in which any of the Target and the Subsidiaries
conducts that business as of the Closing Date, except for services
provided to the companies in the Group; provided, however, that (i)
ownership of less than 1% of the outstanding stock of any publicly
traded corporation or (ii) ownership of less than 34% (in aggregate
amongst all of the Sellers) of the voting rights of any internet
companies in which the Sellers will play a passive role, shall not be
deemed to engage solely by reason thereof in any of its businesses. If
the final judgment of a court of competent jurisdiction declares that
any term or provision of this Section 5.4 is invalid or unenforceable,
the Parties agree that the court making the determination of invalidity
or unenforceability shall have the power to reduce the scope, duration,
or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest
to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified.
5.5 NON-SOLICITATION. For a period of two (2) years from and after the
Closing Date, the Sellers shall not (and the Sellers shall cause their
Affiliates not to) directly or indirectly solicit (i) for employment
the employees and (ii) the customers, of either the Target or the
Subsidiaries without the prior written consent of the Buyer.
5.6 APPOINTMENT OF FRANCK LOUBARESSE AS REPRESENTATIVE OF THE TARGET AND
THE SUBSIDIARIES. Immediately after Closing, the Buyer shall procure
that Franck Loubaresse be appointed as chairman of the board of
directors of the Target, H2M and PhoneCom and as co-manager of Agedis
and Consulte. Franck Loubaresse undertakes not to resign from such
functions until December 31, 1999. The Buyer shall cause the Target and
the Subsidiaries not to dismiss Franck Loubaresse from his functions
until December 31, 1999, except in case of Bad Leaver.
5.7 ACQUISITION OF THE MINORITY SHAREHOLDINGS IN AGEDIS BY THE BUYER. The
Sellers shall use their best efforts to procure that within six months
from the Closing, the minority shareholders in AGEDIS sell their shares
in such companies to the Target for a total aggregate purchase price
not to exceed FRF. 150,000. The Sellers shall hold the Buyer and its
Affiliates harmless from and against any Adverse Consequences arising
out of the acquisition of such shares.
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5.8 YEAR 2000 COMPLIANCE. The Sellers shall use their utmost efforts,
particularly in their capacity as managers of the Target and the
Subsidiaries, to ensure that all products manufactured, sold or leased
by the Target and the Subsidiaries be Year 2000 compliant by December
31, 1999. In accordance with the Deferred Payment provisions set forth
in article 2.4 above, all expenses required in connection with the Year
2000 compliance shall proportionately reduce the amount of the Deferred
Payment.
5.9 STOCK OPTIONS. The Sellers shall use their best efforts to cause the
employees of the Group holding stock options of the Target on the
Closing Date to waive said stock options in exchange for stock options
of Client Logic.
5.10 ONLINE SERVICES. The Sellers (other than Online Services) undertake for
a period of three years from Closing or for so long as any warranty
claim hereunder shall remain unresolved (if longer) not to reduce their
holdings (in aggregate) in Online Services below fifty percent plus one
share, nor to place Online Services into liquidation or dissolution
other than by reason of its insolvency nor to sell any of the assets of
Online Services other than on an arm's length basis.
6. CLOSING
The following actions shall take place on Closing:
6.1 The Sellers shall deliver to the Buyer:
6.1.1 duly executed share transfer forms (ordres de mouvement) in
respect of the Shares and such other instruments of transfer
as are requested by the Buyer to vest in the Buyer good title
to the Shares and the stock of the Subsidiaries;
6.1.2 a certified copy of the minutes of the board of directors of
the Target approving the Buyer (and its nominees) as new
shareholder(s);
6.1.3 a certified copy of the minutes of the board of directors of
each of the Target and the Subsidiaries having validly decided
to convene an ordinary general meeting of the shareholders of
each of the Target and the Subsidiaries respectively, to be
held shortly after the Closing Date (but after the transfer of
the Shares) in order to appoint the new directors and
managers, where applicable, of each of the Target and the
Subsidiaries;
6.1.4 written evidence that the workers' council's representative
has been validly convened to attend the board of directors
meeting of Phone Communication SA to be held shortly after the
Closing Date for the purpose of appointing the new chairman of
the board of directors of Phone Communication SA.
6.1.5 copies of any powers of attorney necessary to complete the
transactions contemplated by this Agreement;
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6.1.6 written evidence that the workers' council of Phone
Communication SA has been validly consulted as required under
French Law regarding the transactions contemplated in this
Agreement;
6.1.7 the Buyer shall have received the resignations, effective as
of the date of replacement, of each director and manager of
the Target and the Subsidiaries, where applicable, and
containing a waiver of any and all claims such persons may
have against the Target or the Subsidiaries for loss of
office, fees, compensation or otherwise and/or an
acknowledgment that no such claims exist, such resignations to
be effective as of the Closing Date;
6.1.8 the Buyer shall have received copy of a letter requesting the
resignation of the statutory auditors of each of the Target
and the Subsidiaries effective as of the general shareholders
meeting to be held in 2000 for the approval of the financial
statements for fiscal year 1999;
6.1.9 Xx. Xxxxxxx Loubaresse and Xx. Xxxxxxx Loubaresse shall have
entered into employment agreements with the Target;
6.1.10 all Current Accounts shall have been paid by the Target and
the Subsidiaries to the obligees on such accounts; and
6.1.11 an agreement for the transfer of the "Consulte" trademark by
Jacques Loubaresse to the Taraet.
6.2 The Buyer shall deliver to Sellers:
6.2.1 copy of the wire transfer instructions concerning the relevant
part of Purchase Price as provided in Section 2.2;
6.2.2 a certified copy of the minutes of the Buyer's board of
directors meeting having approved the transactions
contemplated by this Agreement and giving powers to the
signatory of this Agreement on behalf of the Buyer so to sign;
6.2.3 certificates in respect the Common Stock as provided in
Section 2.2 (effective delivery shall occur within five
business days as from the Closing Date);
6.2.4 an on demand bank guarantee of up to FRF 10,000,000 issued by
Bank of Scotland;
6.2.5 a legal opinion issued by the law firm of Weil, Gotshal &
Xxxxxx LLP regarding the issuance of the Common Stocks
relative to the present transaction.
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7. REMEDIES FOR BREACHES OF THIS AGREEMENT
7.1 SURVIVAL. All of the representations and warranties of the Parties
contained in this Agreement shall survive the Closing hereunder and
continue in full force and effect forever thereafter for three (3)
years after the Closing, except for representations and warranties with
respect to Taxes, which will continue in full force and effect until
the expiration of the applicable statutes of limitations for the
underlying claim(s). All covenants of the Parties contained in this
Agreement shall survive the Closing and continue thereafter until the
expiration of the applicable statute of limitations, other than any
covenant which by its express term terminates sooner.
7.2 SELLERS' AGENT. Xx. Xxxxxx Loubaresse, Xx. Xxxxxxx Loubaresse, and Xx.
Xxxxxxx Loubaresse hereby appoint ONLINE SERVICES, which shall be
represented by Xx. Xxxxxx Loubaresse to act as their representative
("Sellers' Agent") for the purpose of this Section 7, and each of the
Sellers renounces his/her rights to intervene in the procedure set out
in this section. ONLINE SERVICES and Xx. Xxxxxx Loubaresse hereby
accept this appointment. The Sellers' Agent shall act as the sole
representative to receive notices from the Buyer and to coordinate the
Sellers' joint defense and any other actions hereunder.
7.3 INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE BUYER.
7.3.1 If any of the Sellers breaches any of their representations,
warranties, and covenants contained herein, and Buyer makes a
written claim for indemnification against any of the Sellers,
by providing written notice thereof to Sellers' Agent, within
the survival period, then each of the Sellers will defend,
indemnify (subject to the provisions of article 7.7) and hold
the Buyer harmless from and against the entirety of any
Adverse Consequences that the Buyer may suffer through and
after the date of the claim for indemnification (including any
Adverse Consequences that the Buyer may suffer after the end
of any applicable survival period) resulting from, arising out
of, relating to, in the nature of, or caused by the breach.
7.3.2 Subject to the provisions of article 7.7, each of the Sellers
will defend, indemnify and hold harmless the Buyer from and
against the entirety of any Adverse Consequences it may suffer
resulting from, arising out of, relating to, in the nature of,
or caused by any Liability of any of the Target and the
Subsidiaries for the unpaid Taxes of any Person (other than
any of the Target and the Subsidiaries), as a transferee or
successor, by contract, or operation of Law.
7.3.3 Subject to the provisions of article 7.7, and notwithstanding
any disclosure made to the Buyer, including the disclosures
made in the Disclosure Schedule, each of the Sellers will
indemnify the Buyer from and against the entirety of any
Adverse Consequences the Buyer may suffer resulting from,
arising out of, or relating to all Liabilities of the Target
and the Subsidiaries arising out of any Liability arising
from the failure to comply with applicable Laws with respect
to (i) the
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merger between the Target, Framar Investissements and L&L
Capital and (ii) the restructuring implemented by Franck and
Laurent Loubaresse with respect to their shareholding in the
Target prior to Closing, including, but not limited to, the
contribution of 25.3% of the Shares to ONLINE SERVICES.
7.3.4 Subject to the other provisions of article 7.7, each of the
Parties will indemnify the other from and against the entirety
of any Adverse Consequences such other may suffer resulting
from, arising out of, or relating to any breach by the first
party of a covenant of this Agreement or any ancillary
agreement referenced herein.
7.3.5 The ability of the Buyer to seek indemnity pursuant to Section
7.3.1 shall not preclude the Buyer from asserting its claim
pursuant to Sections 7.3.2, 7.3.3 and 7.3.4 but no claim shall
give rise to double indemnification.
7.4 INDEMNIFICATION PROCEDURE
7.4.1 If any third party shall notify the Target, a Subsidiary, the
Buyer or any of their Affiliates with respect to any matter (a
"Claim") which may give rise to a claim for indemnification
against any Seller under this Section 7, the Buyer shall
promptly notify the Sellers' Agent thereof in writing. No
delay on the part of the Buyer in notifying the Sellers' Agent
shall relieve the Sellers from any obligation hereunder unless
(and then solely to the extent) the Sellers are materially
prejudiced by the delay. All Claims relating to Taxes shall be
notified to the Sellers within fifteen (15) days from receipt
of the notice; provided, however, that no delay on the part of
the Buyer in notifying the Sellers' Agent shall relieve the
Sellers from any obligation hereunder unless (and then solely
to the extent) the Sellers thereby are materially prejudiced.
7.4.2 The Buyer shall take or cause the Target or a company in the
Group to take all such reasonable steps or proceedings as it
may consider necessary to avoid, resist, defend, appeal or
compromise any Claim other than a Claim conducted by Sellers
as described in Section 7.4.3 below. Neither the Buyer nor the
Target will enter into any settlement with respect to a Claim
other than a claim described in Section 7.4.3 without the
prior written consent of the Sellers' Agent (not to be
withheld or delayed unreasonably).
7.4.3 The Sellers' Agent will have the right to defend the Target
against any Claim with its counsel so long as the Sellers'
Agent so notifies the Buyer in writing within 15 days after
the Buyer has given notice of the Claim.
In such event the Buyer shall ensure that the Target and the
Subsidiaries shall at all reasonable times on reasonable
notice allow the Sellers and their authorized representatives
access to inspect and to take copies of such documents and
records of the Target and the Subsidiaries which are relevant
to the Claim subject
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always to keeping the same confidential other than necessary
disclosures in connection with such Claim.
For the avoidance of doubt, the Sellers shall be entitled to
participate in any inquiry or verification by any tax, social
security or customs authority whether or not the same gives
rise to any actual Claim and any such inquiry or verification
shall be notified to the Sellers for such purposes as soon as
reasonably practicable.
7.4.4 The Seller's Agent will not enter into any settlement with
respect to a Claim referred to in Section 7.4.3 above without
the prior written consent of the Buyer (not to be withheld or
delayed unreasonably).
7.4.5 However, if the Sellers' Agent notifies the Buyer that it
decides not to defend the Claim referred to in Section 7.4.3
above, the Buyer or the Group will not enter into any
settlement with respect to the Claim without the prior written
consent of the Sellers' Agent (not to be unreasonably withheld
or delayed). Subject to the limitations set forth in Section
7.6 below, the Sellers will not be released from any Liability
for any Adverse Consequences the Buyer or the Target may
suffer resulting from, arising out of, relating to, or caused
by the Claim.
7.4.6 In case of a Claim related to Taxes and/or social security
being pending or occurring after the Deferred Payment Date,
the Deferred Payment shall nonetheless be paid and the Sellers
shall provide, upon demand of the Buyer and within 30 days of
such demand, an on-demand bank guarantee or a security up to
the amount of such Claim in order to secure indemnification
thereunder only if such bank guarantee or security is
requested by the French tax or social security administration.
This bank guarantee or security shall be in a form acceptable
to the French tax or social security administration and the
costs relating to the issuance of this bank guarantee or
security shall be borne by the Sellers.
In case of a Claim other than a Claim related to Taxes and/or
social security being pending at the Deferred Payment Date,
the Buyer shall nonetheless pay the Deferred Payment less the
corresponding amount of the Claim (less the amount of any Tax
savings realized by the Target or the Subsidiaries as a result
of the Tax deductibility of the relevant Claim), but not
exceed the amount of the Deferred Payment, which the Buyer
shall put into escrow at the time of payment of the Deferred
Payment until the resolution of such Claim. The escrow
agreement shall be substantially in the form of the document
attached as EXHIBIT 7.4.6 hereto.
7.5 OTHER INDEMNIFICATION PROVISIONS. Each of the Sellers hereby agrees
that he will not make any claim for indemnification against any of the
Target and the Subsidiaries by reason of the fact that he was a
director, officer, employee, or agent of any such entity or was serving
at the request of any such entity as a partner, director, officer,
employee, or agent of another entity (whether such claim is for
judgments, damages, penalties, fines,
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costs, amounts paid in settlement, losses, expenses, or otherwise and
whether such claim is pursuant to any statute, charter document, bylaw,
agreement, or otherwise) with respect to any action, suit, proceeding,
complaint, claim, or demand brought by the Buyer against such Seller
(whether such action, suit, proceeding, complaint, claim, or demand is
pursuant to this Agreement, applicable law, or otherwise).
7.6 LIMITATIONS ON INDEMNIFICATION.
7.6.1 Notwithstanding anything to the contrary in this Section 7, no
claim by the Buyer against the Sellers for indemnification
arising under this Agreement shall be valid and assertible
unless and until such time, if any, as the aggregate Adverse
Consequences in respect of any individual event or occurrence
giving rise to such Adverse Consequences suffered by the
Buyer, the Target, or any of their Affiliates or to which any
of them becomes subject, the after tax effect of which shall
exceed one hundred thousand French Francs (FRF. 100,000)
("DEDUCTIBLE"). Furthermore, the first claim by the Buyer for
indemnification arising hereunder shall not be made until the
aggregate amount of all such valid and assertible claims
exceeds the amount of five hundred thousand French Francs
(FRF. 500,000) (the "BASKET"). In such event, the Buyer shall
be entitled to assert claims only for amounts in excess of the
Basket.
Notwithstanding anything to the contrary contained in this
Section 7, any Adverse Consequences suffered by the Buyer or
the Target arising out of or in connection with (i) VAT,
business tax (taxe professionnelle) or (ii) Section 7.3.3,
shall not be subject to the Deductible and Basket
requirements.
7.6.2 The Sellers' maximum liability for all Adverse Consequences
under Section 7 shall not exceed the amount of the Purchase
Price actually paid in cash and Common Stock.
Claims based on proven fraud or deceit or intentional
wrongdoing (dol) on the part of Sellers shall be excluded from
the foregoing limitation of liability and Sellers will be
liable for all Adverse Consequences with respect to such
claims.
7.6.3 Any amount due by the Sellers with respect to any claim will
be reduced by any amount received from a third party with
respect to such claim. If the amount due by the Sellers has
already been paid to the Buyer, the Buyer shall repay to the
Sellers the lesser of the amount so recovered from the third
party or the indemnification made.
Any indemnification due by the Sellers hereunder shall be
calculated taking into account the effect of any Tax savings
realized by the Target or the Subsidiaries as a result of the
Tax deductibility of the relevant Adverse Consequence.
In addition, any claim related to Taxes which merely
constitutes a timing difference in the deductibility of the
corresponding charge (reintegration of
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depreciation, reintegration of reserves, etc.) shall only be
taken into account to the extent of the costs of any
surcharges, penalties, late payment interest or fines.
The Buyer shall use its best efforts to ensure that the Group
takes reasonable steps to pursue any claim against a third
party arising out of the same fact, matter or thing as may
give rise to a claim against the Sellers hereunder provided
that such steps are in the Group's best interests.
7.7 PAYMENT OF INDEMNIFICATION
Indemnification under this Article 7 with respect to any claim
concerning an Adverse Consequence shall be payable upon (a) actual
payment by the Buyer and/or the Group of any amount in relation with
such Adverse Consequence provided it relates to a third party claim and
not to a direct claim between the Parties, (b) the resolution of the
claim by mutual agreement between the Seller and the Buyer, or (c) the
issuance of an order from a governmental entity (including any State
authority or administrative agency or commission or other Government
Body) or an enforceable (executoire) judgment, award, order or other
ruling by a court or arbitral tribunal having jurisdiction over the
parties and the subject matter of such claim.
Any payment by way of indemnification made hereunder by the Sellers
shall be made to the Buyer and treated as a reduction of the Purchase
Price.
7.8 INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE SELLERS. Subject to the
limitations set forth in this Section 7.8, if the Buyer breaches (or if
any third party alleges facts that, if true, would mean the Buyer has
breached) any of its representations, warranties, and covenants
contained herein, and any of the Sellers makes a written claim for
indemnification against the Buyer within the Survival Period, then the
Buyer will defend, indemnify and hold harmless each of the Sellers from
and against the entirety of any Adverse Consequences such Seller may
suffer through and after the date of the claim for indemnification
resulting from, arising out of, relating to, or caused by the breach.
The Buyer's maximum liability for all Adverse Consequences under this
Section 7 shall not exceed the amount of the Purchase Price, actually
paid in cash and Common Stock.
7.9 LITIGATION SUPPORT. In the event and for so long as any Party is
actively contesting or defending any action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on
or prior to the Closing Date involving the Target or a Subsidiary, each
of the other Parties will cooperate with the contesting or defending
Party and its counsel in the contest or defense, make available their
personnel, and provide such testimony and access to their books and
records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or
defending Party (unless the contesting or defending Party is entitled
to indemnification therefor under this Section 7).
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7.10 The Sellers shall be under no liability in respect of any claim
hereunder to the extent to which:
(1) the same occurs or arises as a result of a wrongful
intentional act after the date hereof of the Buyer, which the
Buyer knew would give rise to the liability unless such
wrongful intentional act occurred:
(i) pursuant to an obligation of one of the Target or
Subsidiaries incurred prior to the date hereof; or
(ii) in compliance with any law, regulation or requirement
of any competent authority; or
(iii) with the agreement or at the request of all of the
Sellers;
(2) the same occurs or arises as a result of any legislation not
in force at the date hereof of as a result of any change in
legislation after the date hereof; or
(3) the subject matter thereof is the subject of a provision or
reserve in the Closing Date Financial Statement to the extent
of such provision.
8. MISCELLANEOUS
8.1 NATURE OF OBLIGATIONS. The representations, warranties, and covenants
of Sellers in this Agreement are joint and several obligations, the
liability of each Seller being nonetheless limited individually to the
amount of the Purchase Price actually received by the relevant Seller.
Subject to this limit and to the aggregate limits provided in article 7
above, each Seller will be responsible for the entirety of any Adverse
Consequences the Buyer may suffer as a result of any breach of the
above representations, warranties, and covenants.
8.2 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. The Parties shall coordinate
their actions regarding any such press release or public announcement,
and such release shall not include any reference to the Purchase Price.
8.3 ENTIRE AGREEMENT. This Agreement (including all Exhibits, certificates,
Schedules and ancillary agreements attached hereto or referred to
herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by
or among the Parties, written or oral, to the extent they relate in any
way to the subject matter hereof.
8.4 SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties and its respective successors and
assigns. This Agreement or any part hereof may not be assigned by any
party without the prior written consent of the other parties hereto,
except that Buyer may without increasing the liability of the Sellers
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hereunder (i) assign its rights and obligations to any affiliate of
Client Logic or Buyer or (ii) make a collateral assignment of its
rights under this Agreement to any lender who provides funds to Client
Logic or Buyer for the acquisition of the Target without the written
consent of the Sellers; provided that any such assignment shall not
relieve Buyer from its obligations hereunder. The Sellers shall execute
acknowledgements of such assignment(s) and collateral assignments in
such forms as Buyer or Client Logic's or Buyer's lender(s) may from
time to time reasonably request.
8.5 LANGUAGE OF AGREEMENT; COUNTERPARTS.
8.5.1 This Agreement, excepting Disclosure Schedules, shall be
executed in English.
8.5.2 This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
8.6 HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
8.7 NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed given
(i) when delivered by hand, (ii) when transmitted by facsimile
transmission with confirmation of receipt (including a message
generated by the sender equipment) (provided the notice, request,
demand, claim or other communication is also sent by overnight courier
for next day delivery), or (iii) after one business day when sent by
overnight courier for next day delivery, to the addressee at the
following address or fax number, as applicable, or to such other
addressee or fax number as a Party may specify from time to time by
notice hereunder:
IF TO THE SELLERS: Franck Loubaresse
00 xxx xxx Xxxxxxxxx
00000 Xxxxx
Xxxxxx
COPY TO: Xxxxxxxx & Associes
00, xxx xx Xxxxxxxxxx
00000 Xxxxx
Attention: Xxxxxxxx Xxxxx
Facsimile: 01 53 83 74 01
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IF TO THE BUYER: ClientLogic International Holding, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Facsimile: (000) 000 0000
COPY TO: Xxxx Xxxxxxx & Xxxxxx
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
XXX
Attention: Xxxx Xxxxx
Facsimile (000) 000 0000
8.8 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the domestic Laws of the Republic of France.
8.9 AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement, shall be valid unless the same shall be in writing and
signed by the Buyer and the Sellers. No waiver by any Party of any
default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any
prior or subsequent default, misrepresentation, or breach of warranty
or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
8.10 SEVERABILITY. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction.
8.11 EXPENSES. Each of the Parties, the Target, and the Subsidiaries will
bear his, her or its own costs and expenses (including all fees and
expenses of his, her or its attorneys, consultants, investment brokers,
accountants, advisors or other agents or representatives) incurred in
connection with this Agreement and the transactions contemplated
hereby. Save as referred to in Section 2.4, the Sellers agree that none
of the Target and the Subsidiaries has borne or will bear any of the
Sellers' costs and expenses (including fees and expenses of the
Sellers' attorneys, consultants, investment brokers, accountants or
other advisers) related to the negotiation and execution of this
Agreement.
8.12 INCORPORATION OF EXHIBITS, CERTIFICATES, AND SCHEDULES. The Exhibits,
Certificates and Schedules identified in this Agreement, including any
ancillary agreements referred to herein, are incorporated herein by
reference and made a part hereof.
8.13 TRANSFER TAXES. All transfer, registration, recording, conveyancing,
notarial and other such Taxes, duties, costs and expenses (including
any penalties and interest) incurred in France in connection with this
Agreement and the transactions contemplated hereby and
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thereby, shall be borne by the Sellers, except for the registration tax
(droit d'enregistrement et de timbre) related to this Agreement which
shall be borne by the Purchaser. The Buyer and the Sellers shall
cooperate in the filing of all necessary Tax Returns and other returns
and other documentation with respect to all such Taxes, duties, costs
and expenses. The Buyer and the Sellers will each join in the execution
of any such Tax Returns and other documentation. For the purpose of
registration formalities, the Parties hereby agree to sign on the
Closing Date, and without the validity of this Agreement being affected
thereby in any way, a short form deed. In case of inconsistency, the
present Agreement shall prevail over the short form deed.
9. DISPUTE RESOLUTION.
9.1 Except as provided in Section 2.3, in the event of a dispute between
the Buyer on the one hand and Sellers on the other hand with respect to
the validity, intent, interpretation, performance, enforcement or
arbitrability of any of the terms contained in this Agreement, or any
claim arising out of or in connection with this Agreement, the matter
shall be submitted for final resolution to an international arbitration
panel consisting of three (3) arbitrators selected as follows: The
Buyer shall select one arbitrator; and the Sellers collectively shall
select one arbitrator, and the two arbitrators so appointed shall
select a third arbitrator. The third arbitrator shall be the presiding
arbitrator. In the event either the Sellers or the Buyer shall have
failed to select an arbitrator within fifteen (15) days after either
Sellers or the Buyer has selected its arbitrator or the two arbitrators
so selected shall fail to agree on a third arbitrator, such arbitrator
shall be selected by the International Chamber of Commerce as
appointing authority.
9.2 The place of arbitration shall be Paris, France. All arbitrators shall
be fluent in both the English and French languages and their award
shall be rendered in English. The English or French language may be
used in all documents, briefs, evidence and any other writings
submitted to the arbitration panel. All arbitration proceedings shall
be conducted in English.
9.3 The arbitration procedure set forth in this article 9 shall be the sole
and exclusive means of settling or resolving any dispute referred to in
this article 9. The arbitration shall be conducted in accordance with
French law.
9.4 The award of the arbitrators shall be final and binding on the Parties
and may be presented by any of the Parties for enforcement in any court
of competent jurisdiction and the Parties hereby consent to the
jurisdiction of such court solely for purposes of enforcement of this
arbitration agreement and any award rendered hereunder. In any such
enforcement action, irrespective of where it is brought, none of the
Parties will seek to invalidate or modify the decision of the
arbitrators or otherwise to invalidate or circumvent the procedures set
forth in this article 9 as the sole and exclusive means of settling or
resolving such dispute. The fees of the arbitrators and the other costs
of such arbitration shall be borne by the Parties in such proportions
as shall be specified in the arbitration award.
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9.5 Nothing contained in this article 9 shall prevent a Party from seeking
temporary injunctive relief from any judicial or administrative
authority pending the resolution of a controversy or claim by
arbitration.
The Parties hereto have executed this Agreement on the date first above written.
THE BUYER THE SELLERS
CLIENTLOGIC INTERNATIONAL XX. XXXXXX LOUBARESSE
HOLDING, INC.
/s/ XXXXX XXXXXXXX /s/ FRANCK LOUBARESSE
----------------------------------- -----------------------------
By: Xxxxx Xxxxxxxx
Title: President
XX. XXXXXXX LOUBARESSE
/s/ LAURENT LOUBARESSE
-----------------------------
XX. XXXXXXX LOUBARESSE
/s/ JACQUES LOUBARESSE
-----------------------------
ONLINE SERVICES
/s/ FRANCK LOUBARESSE
-----------------------------
By: Franck Loubaresse
Title: Manager
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