SHARE SALE AND PURCHASE AGREEMENT
BETWEEN THE UNDERSIGNED
Network Imaging Corporation, a corporation incorporated under the laws of the
state of Delaware and having its principal place of business at 000 Xxxxxxx Xxxx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000, XXX, duly represented by Xx. Xxxxx Xxxxxxx, duly
authorised for the purposes hereof pursuant to the declaration, of which a copy
is attached as Schedule 1 hereof,
hereinafter called the "Vendor"
OF THE ONE HAND
AND
Systems Engineering Xxxxxxxxx S.A.R.L, a French corporation, whose registered
office (siege) is at 00, xxx xx Xxxxxxxx, 00000 Mulhouse, which is registered
under no. B 383 805 504 with the Commercial and Company Register of Mulhouse, in
the process of being converted to a Societe par Actions Simplifiee, duly
represented by Xx. Xxxx X. Xxxxxxxxx, and duly authorised for the purposes
hereof pursuant to the declarations in Schedule 2 hereof,
hereinafter called the "Purchaser"
ON THE SECOND HAND
Hereafter collectively referred to as the "Parties" and individually referred to
as the Party"
WHEREAS:
A. Dorotech France, a societe anonyme whose registered office (siege) is
at 000 xxxxxx Xxxxxx Xxxxxxxxxx, 00000 Nanterre, and which is
registered under no. B 334 631 504 with the Commercial and Company
Registry of Nanterre.
B. The share capital of Dorotech France amounts to FRF 2,053,800 divided
into 20,538 shares of FRF 100 each. The Vendor is the owner of all the
shares.
C. The principal activity of Dorotech France is the provision of computer
systems for data storage and processing, including software,
engineering services and hardware.
D. The Vendor wishes to sell and the Purchaser wishes to purchase the
entirety of the shares of Dorotech France.
NOW IT IS HEREBY AGREEED AS FOLLOWS:
1. Definitions
In this agreement, the following terms and expressions shall have the
meanings set forth below:
1.1. "Actual Consolidated Net Equity" shall mean the actual Consolidated Net
Equity of the Company as of the Closing Date as determined in
accordance with Article 3.1.6 hereof;
1.2. "Actual Tax Credits" shall mean the actual Company Tax Credits as of
the Closing Date as determined in accordance with Article 3.1.6 hereof;
1.3. "Assumed Consolidated Net Equity" shall mean the Consolidated Net
Equity (as defined) of the Company as of the Closing Date, assuming no
change between September 30, 1997 and the Closing Data, which, pursuant
to Article 3.1.2 hereof, is deemed to amount to FRF 20,274,493;
1.4. "Assumed Tax Credits" shall mean the Company Tax Credits (as defined)
as of September 30, 1997;
1.5. "Closing Accounts" shall mean the accounts (balance sheet and statement
of loss or profit) to be drawn up by Ernst & Young pursuant to Article
3.1.6 hereof;
1.6. "Closing Date" shall mean the date on which the ownership of the Shares
is transferred as defined at Article 5.1 hereof;
1.7. "Company" shall mean Dorotech France.
1.8. "Company Tax Credits" shall refer to the amount of carry forward
losses, deductible for tax purposes pursuant to French tax law,
multiplied by the corporate income tax rate applicable to companies in
fiscal year 1997;
1.9. "Consolidated Net Equity" shall mean the consolidated net equity of the
Company calculated in accordance with the French generally accepted
accounting principles, and more specifically, calculated in accordance
with the principles set forth at Schedule 3 hereof.
1.10. "Damage" shall refer to the damages which may be claimed by the Pur-
chaser in accordance with the provisions of Article 8.1 et seq hereof;
1.11. "Dorotech" shall mean Dorotech France SA, a French societe anonyme,
having its registered office at 344 avenue Clemenceau, 92000 Nanterre;
1.12. "Escrow Agreement" shall mean the escrow agreement to be entered into
between the Parties and the Escrow Agent in accordance with the terms
set forth at Article 3.2.1 hereof and in the form set forth at Schedule
4 hereof;
1.13. "Estimated Damage" shall mean the estimated amount of damages contained
in Purchaser's notice pursuant to Article 8;
1.14. "Independent Arbitrator" shall mean the independent arbitrator
appointed pursuant to Article 3.1.6, for the resolution of
disagreements as to the amount of Actual Consolidated Net Equity and
the difference between the Actual Tax Credits and the Assumed Tax
Credits;
1.15. "Interim Accounts" shall mean the balance sheets, and profit and loss
account of the Company as of, and for the period of nine months ended
on, September 30, 1997;
1.16. "Purchase Price" shall mean the price paid in consideration of the
Shares, as defined at Article 3.1.1 hereof;
1.17. "Representations and Warranties" shall mean representations made and
warranties given by the Vendor pursuant to Article 7 hereof;
1.18. "Shares" shall mean 100% of the shares of Dorotech France;
1.19. "Share Purchase Agreement" shall mean the present Share Purchase Agree-
ment, including the Schedules attached hereto;
1.20. "Non-Competition Agreement" shall mean the non-competition undertaking
to be entered into by the Vendor in the form set forth at Schedule 5
hereof.
1.21. "Net Purchase Price" shall mean the Purchase Price reduced or increased
by the price adjustments in accordance with Articles 3.1.4 and 3.1.5
hereof, respectively.
2. Sale and Purchase of the Shares
2.1 In consideration for the payment of the Purchase Price, the Vendor
shall sell and the Purchaser shall purchase all, but not part only, of
the Shares in accordance with the terms and conditions hereafter set
forth together with all rights now or hereafter attaching thereto. To
this end, the Vendor hereby irrevocably undertakes to carry out all the
necessary procedures (without limitation to the foregoing, obtaining
any requisite authorisation to transfer Shares (clause d'agrement), and
as the case may be, carrying out any necessary share transfer prior to
the Closing Date) so that the Purchaser, on the Closing Date, shall
become the owner of all the Shares.
3. Purchase Price and Terms of Payment
3.1 Purchase Price
3.1.1 The total price of the Shares (hereafter referred to as the "Purchase
Price") shall amount to US$ 8,275,000 subject to the provisions of
Articles 3.1.4 and 3.1.5 hereof.
3.1.2 The above Purchase Price is based upon the assumption that the
Consolidated Net Equity (as defined) of the Company as of the Closing
Date is equal to FRF 20,274,493 (hereinafter referred to as the
"Assumed Consolidated Net Equity") and that the Company Tax Credits (as
defined) are equal to the Assumed Tax Credits (as defined).
3.1.3 The Consolidated Net Equity and the Company Tax Credits at the Closing
Date shall be verified by a financial review to be carried out in
accordance with the terms set forth at Article 3.1.6 hereof. The final
figures obtained following such verification shall be referred to as
the "Actual Consolidated Net Equity" and "Actual Tax Credits."
3.1.4 In the event that the Actual Consolidated Net Equity plus the Actual
Tax Credits are less than the Assumed Consolidated Net Equity plus the
Assumed Tax Credits, the Purchaser shall be entitled to a dollar for
dollar reduction of the Purchase Price, which reduction shall be equal
to the sum of the Assumed Consolidated Net Equity and the Assumed Tax
Credits minus the sum of the Actual Consolidated Net Equity and the
Actual Tax Credits.
3.1.5 In the event that the Actual Consolidated Net Equity plus the Actual
Tax Credits are greater than the Assumed Consolidated Net Equity plus
the Assumed Tax Credits, the Vendor shall be entitled to a dollar for
dollar increase in the Purchase Price, which increase shall be equal to
the sum of the Actual Consolidated Net Equity and the Actual Tax
Credits minus the sum of the Assumed Consolidated Net Equity and the
Assumed Tax Credits.
3.1.6 The following provision shall apply in relation to the determination of
the Actual Consolidated Net Equity and the Actual Tax Credits:
(i) After the Closing Date, the firm Ernst & Young shall conduct an
independent audit and draw up a statement of accounts (the
"Closing Accounts") of the Company with the purpose of
determining the assets, liabilities and the amount of the Actual
Consolidated Net Equity at the Closing Date and the difference
between the Actual Tax Credits and the Assumed Tax Credits. The
cost of the additional work by Ernst and Young, which is more
than required in the ordinary course of business for Dorotech, if
any, shall be shared equally by the Parties. The Actual
Consolidated Net Equity and the Company Tax Credits should be
calculated in accordance with the principles set forth at
Schedule 3 hereof. The Closing Accounts shall be drawn up and
transmitted to the Parties no later than 45 days after the
Closing Date. The Purchaser shall make available to Ernst & Young
all of the documents they might reasonably require in order to
draw up such account statement, and shall authorize, upon
reasonable notice, access to the premises, for a reasonable
duration.
(ii) Following the drawing up of the Closing Accounts, the Parties
shall be entitled to review and verify the results thereof. Such
review by the Parties shall be carried out within a period of 15
days as from the receipt by the Parties of the report.
(iii) To this end, the Parties shall promptly make available all such
documentation as may be in their possession, or in the possession
of their advisors with respect to the carrying out of the above
review and verification by the Parties referred to in paragraph
(ii) above.
(iv) Upon completion of the Parties' verification, the Parties shall
promptly inform each other of their findings.
(v) In the event of a continued disagreement between the Parties as
to the amount of the Actual Consolidated Net Equity and/or the
difference between the Actual Tax Credits and the Assumed Tax
Credits following completion of the above Closing Accounts and
verification thereof, provided that the difference between the
amounts found by each party amounts to more than FRF 100,000 and
notably in the event of a disagreement for a period of longer
than 10 days following notification of the results of its
verifications by the Purchaser, the matter shall be referred by
either Party to the offices of the Independent Arbitrator who,
having agreed to act in this capacity, shall finally resolve such
disagreement within 30 days of such referral, in compliance with
section (vi) below, it being understood that the Parties shall
make available all such documentation and provide such access as
may be required for the performance of its assignment by the
Independent Arbitrator.
(vi) The Independent Arbitrator shall be Coopers & Xxxxxxx Audit sub-
ject to the condition that at the times it is entrusted with the
assignment, neither Coopers & Xxxxxxx nor any other related
entity have accepted any assignment whatsoever from either of the
parties or from an entity it controls, which controls it or which
is controlled by an entity controlling it, directly or
indirectly. Should Coopers & Xxxxxxx be unable to act as
Independent Arbitrator, for any reason whatsoever, including that
referred to above, the Independent Arbitrator shall be appointed
jointly by the parties by mutual agreement or, should no
appointment be made within 10 working days as from the written
request of one of the aforementioned Parties to the other in
order so to do, by order of the President of the Commercial Court
of Paris ruling in summary proceedings, each of the parties
having had the right to state its case. Initially, the estimated
expenses and fees of the Independent Arbitrator shall be divided
in equal shares and paid in advance by each of the Parties. At
the end of the arbitration proceedings, the Independent
Arbitrator shall determine the liability of each party for all or
part of the expenses and fees. In order to determine the Actual
Consolidated Net Equity and the Actual Tax Credits, the
Independent Arbitrator shall act as arbitrator pursuant to the
working of Article 1592 of the French Civil Code and his
decisions shall be deemed final and shall be binding on the
Parties, unless there is obvious error.
The Independent Arbitrator shall consider only the points of
disagreement, that he shall convene both parties in advance to
draw up, under his responsibility the list of points of
disagreement. The Independent Arbitrator shall not have the power
to construe the Share Purchase Agreement, as his assignment is
limited to determining the amount of the Actual Consolidated Net
Equity and/or the Actual Tax Credits in the strict confines of
the Parties' requests. The Independent Arbitrator shall use his
best efforts to render his decision within 15 to 30 days
following the date of the submission by the Vendor and the
Purchaser of all the documents necessary to carry out this
assignment.
3.2 Terms of Payment
3.2.1 The Purchase Price shall be paid upon accordance with the following terms
and conditions:
Upon the Closing Date, the Purchaser shall provide two Irrevocable
Standby Letters Of Credit which are payable on demand on January 2,
1998, issued by BHF-BANK Frankfurt, one to CDR Entreprises for an
amount of US$ 6,547,908 and the other to the Vendor for an amount of
US$ 452,092, and
Upon completion of the independent audit by Ernst & Young and
production of the Closing Accounts as referred to in article 3.1.6
hereof:
(i) 50% of the remaining balance of the Net Purchase Price shall
be paid to the Vendor by wire transfer within 7 days of the
final determination of the Actual Consolidated Net Equity and
the difference between the Actual Tax Credits and Assumed Tax
Credits of the Company.
(ii) The remaining balance of the Net Purchase Price shall be paid
to the Escrow Agent to be held in escrow in accordance with
the terms and conditions of the Escrow Agreement set forth at
Schedule 4 hereof, not to be released to the Vendor until 12
months after the Closing Date.
If the balance of the Net Purchase Price in accordance with Articles
3.2.1 (I) and 3.2.1 (ii) is not paid within the given 7 day period the Parties
hereby agree that interest shall be due thereon, payable monthly by the
Purchaser to the Vendor at the legal interest rate ("taux d'interet legal") from
time to time in force.
4. Conditions Precedent
4.1 The purchase of the Shares by the Purchaser shall be subject to prior
fulfilment of the following conditions precedent, each of which
constitute essential and determining conditions to its decision to
purchase the Shares:
4.1.1 the completion of the financial, legal, tax and social audit of the
Company by the Purchaser and/or its advisors, other than the one to be
undertaken by Ernst and Young under Article 3.1.6, which shall reveal
no material adverse change in the Company's business, financial
condition, assets or operations as compared with the information
already made available to the Purchaser by or on behalf of the Vendors
nor any material finding;
4.1.2 the continuing accuracy, as at the Closing Date, of the Representations
and Warranties contained in Article 7 hereof;
4.1.3 the execution by the Vendor of a Non-Competition Agreement in the form
set forth at Schedule 5 hereto;
4.1.4(i) the signature of an amendment to the employment contract between the
Company and Xx. Xxxxx XXXXXXX in the form set forth in Schedule 6.1
hereto;
4.1.4(ii)the transfer to the Purchaser of a certain commitment from the Vendor
towards Xx. Xxxx-Xxxxxxxx XXXXXX pursuant to an amendment executed on
March 20, 1997 in the form set forth in Schedule 6.2 hereto.
4.1.5 the entering into of the Escrow Agreement in the form set forth at
Schedule 4 hereto;
4.1.6 the obtaining of valid releases of all pledges and charges whatsoever
over the Company's Shares or assets and notably, but without limitation
to the generality of the foregoing, the obtaining of a valid release
from CDR Entreprises SA of the pledge covering 100% of the Shares;
4.1.7 the proper and complete execution by the Vendor of all their
obligations under the Share Purchase Agreement;
4.1.8 the prior approval by the Board of Directors of the Company relating to
the transfer of the shares;
4.1.9 the release of any guarantees whatsoever granted by the Company and
covering third party obligations (except for the guarantee granted in
favor of COFRACOMI);
4.1.10.1 the obtaining from CDR Entreprises SA of the following duly executed
documents:
(1) a counter-guarantee (contre-cautionnement) in favor of the Com-
pany in the form set forth at Schedule 20A hereof;
(2) a side letter addressed to the Company in the form set forth at
Schedule 20B hereof;
4.1.10.2 the obtaining from Cofracomi of a clear statement of account in
relation to monies payable by ATG Cygnet (and guaranteed by the
Company) in the form set forth in Schedule 20C hereof;
4.1.11 the obtaining of a new purchase order known as the "P6 Contract" from
France Telecom SA for a value exceeding FRF 17,000,000, together with
the express approval by France Telecom of the Purchaser as controlling
shareholder of the Company;
4.1.12 the absence of pending or threatened legislation regarding this
agreement or the transactions to be contemplated thereby; and
4.1.13 the cancellation of the Management Services Agreement entered into on
February 22, 1995 between the Vendor and the Company.
4.2 The above conditions are for the benefit solely of the Purchaser who
may waive all or any of them in whole or in part.
4.3 The Parties shall use al their efforts to ensure that the above
conditions are fulfilled as soon as reasonably practicable.
4.4 Subject to any waiver by the Purchaser pursuant to Article 4.2 hereof,
if the above conditions are not fulfilled by December 31, 1997 this
Share Purchase Agreement shall become null and void and, in the absence
of fraud or manifest bad faith which may have prevented the fulfillment
of any of such conditions, neither party shall have any claim against
the other in respect thereof.
However, the Parties may freely agree in writing to extend the date
upon which the aforementioned conditions precedent must be satisfied.
5. Closing
5.1 The parties hereby agree that the transfer of ownership of the Shares
in favor of the Purchaser shall occur at 6:01 pm on December 31, 1997,
Eastern Standard Time (the "Closing Date), or any other date mutually
agreed by the Parties.
5.2 Upon the Closing Date, the Vendor shall deliver the Purchaser:
5.2.1 duly executed share transfer forms (ordres de mouvement) in
respect the entirety of the Shares in favor of such person or
persons as the Purchaser may specify;
5.2.2 a certified copy of the resolution of the Company's board of
directors approving the Purchaser and such other persons or
corporations as the Purchaser may specify as shareholders of
the Company;
5.2.3 the Company's shareholder accounts, together with the transfer
registers in both cases updated to record the transfers made
pursuant to the share transfer forms referred to in Article
5.2.1 hereof;
5.2.4 the current minute books of board and shareholder's meetings
of the Company both of which are up-to-date, together with the
relevant attendance sheets and proxies for shareholders'
meetings and the minute books of board meetings being
numbered, initialed and signed by all members of the board at
the end of each board meeting;
5.2.5 the unconditional resignations of the directors of the Company, except
Mr. Jean Xxxxxxxx XXXXXX.
5.2.6 a certificate signed by all of the Vendor confirming that (I) at the
Closing Date the Representations and Warranties contained in Article 7
hereof remain true and accurate in all respects and (ii) the Vendor
have duly performed their obligations set forth in the Share Purchase
Agreement;
5.2.7 the Escrow Agreement, for a duration of 12 months, running from the
Closing Date, duly signed by the Vendor, the Purchaser and CARPA des
Hauts-deSEine ("The Escrow Agent") in the form of the draft set forth
in Schedule 4 hereto pursuant to the balance of the Purchase Price, as
referred to in Article 3.2.1 hereof, shall be paid to the "CARPA"
account of the Escrow Agent, by way of security for any claim arising
pursuant to Article 8 hereof;
5.2.8 the Non-Competition Agreement duly executed by the Vendor;
5.2.9 evidence of the agreement between the Company and the Vendor
as to the cancellation of the Management Services Agreement;
5.2.10 duly signed P6 contract between France Telecom and the Com-
pany;
5.2.11 evidence of the express approval by France Telecom of the
Purchaser as controlling shareholder of the Company;
5.2.12 duly executed counter-guarantee from CDR Enterprises SA and a
duly executed side letter entered into by CDR Enterprises SA,
as referred to in article 4.1.10.1 hereof; together with the
statement of account duly executed by Cofracomi as referred to
at article 4.1.10.2 hereof;
5.2.13 release, executed by CDR Enterprises SA, of the pledge cover-
ing 100% of the Shares;
5.2.14 release of all other pledges covering the Shares;
5.2.15 such other documents or instruments as the Purchaser or the
Vendor may reasonably request for the valid completion of the
operations provided for herein.
5.3 At the Closing Date, the Vendor shall procure the holding of such board
and/or shareholders' meetings of the Company as the Purchaser may request
to effect the appointment of such persons as the Purchaser may require to
the position of directors (administrators) of the Company and as Chairman
(President du conseil d'administration) of the Company.
6. Vendor's Obligations Pending Closing
6.1 As from the date hereof and up to and including the Closing Date the Ven-
dor shall cause:
6.1.1 the business of the Company to be carried on in the ordinary
course and in a prudent and appropriate manner and that any
material adverse change in such business shall be forthwith
notified to the Purchaser in writing;
6.1.2 the Company to comply with all relevant laws and regulations
and, in particular, but without prejudice to the generality of
the foregoing, with all applicable employment law requirements
in relation to the subject matter of the Share Purchase
Agreement;
6.1.3 the Company, except with the prior written consent of the
Purchase, not to modify their articles of association
(statuts), undertake any merger, spin-off or other form of
reorganization or propose, declare or pay any dividend or
grant any mortgage, pledge or security, or take any other
measure which may encumber or otherwise affect the free
disposition of their respective assets;
6.1.4 except with the prior written consent of the Purchaser, there
to be no increase or undertakings to increase the compensation
payable or other benefits due to any members of the personnel
or of any manager or mandataire social (whether or not having
employee status) of the Company (such as premiums, profit
sharing, pension or retirement rights or other similar
benefits) nor shall the Company hire or dismiss an corporate
officers (cadres superieurs) or executive employees (cadres
dirigeants);
6.1.5 the Company to authorize the Purchaser and its representatives
(including its auditors and legal advisors) and Ernst & Young,
for the purposes of the independent audit referred to in
Article 3.1.6 hereof, to have access to the properties,
assets, books and records of the Company and to provide all
requested assistance and explanations;
6.1.6 except with the prior agreement of the Purchaser, the Company
not to enter into any contracts which are subject to unusual
or unduly onerous terms, or which are outside the normal
course of business of the Company;
6.1.7 the Company not to undertake any capital or non-routine
expenditure, except with respect to replacements for an amount
less than FRF 500,000, save where such expenditure is
essential to preserve the value of an asset of the Company, it
being understood that any such expenditure on replacements
which equals or exceeds FRF 500,000 must be authorized prior
thereto, by the Purchaser;
6.1.8 the Company not to grant nor receive any loan from a third
party;
6.1.9 the Company and its directors, shareholders, representatives
and agents not to negotiate nor enter into an agreement with
any third party prior to Closing Date in respect of the
purchase of shares of the Company contemplated herein, or the
sale in part or in whole of the Company's assets.
6.2 Generally, the Vendor unconditionally agrees, up to the
Closing Date inclusively, to ensure the ordinary day-to-day
management of the Company with a view towards maintaining a
profitable operation in accordance with customary commercial,
accounting and fiscal principles, applied in the course of the
three fiscal years preceding the Closing Date, and to ensure
that any transaction of an extraordinary nature shall only be
decided on after consultation with the Purchaser.
7. Representations and Warranties
7.1 The Vendor hereby makes the Representations and gives the Warranties set
forth below:
7.1.1 Corporate existence and capitalisation of the Company
7.1.1.1 Dorotech France is a duly organized societe anonyme,
validly existing under French Law whose registered
office is at 000 xx. Xxxxxxx Xxxxxxxxxx 00000
Nanterre, registered in the Commercial and Company
Registry of Nanterre under the number B 334 631 504,
whose share capital of FRF 2,053,800 is divided into
20,538 shares of FRF 100 each;
7.1.1.2 a certified true and up-to-date copy of the articles
of association (stratuts) of Dorotech France is at-
tached as Schedule 8 hereto; the minutes and other
corporate records of the Company are accurate and up-
to-date; the Company's filing with the Commercial and
Company Registry is complete and up-to-date in all
respects; the good-standing information sheet (ex-
trait K-bis) dated November 12, 1997, and a liens and
Charges Search Certificate (etat des nantissements et
privileges) issued by the Commercial and Company Re-
gistry of Nanterre and provided in Schedule 9 hereto
are fail and accurate at the date hereof;
7.1.1.3 The Company is not in a state of insolvency, or in
suspension of payments (cessation des paiements) and
is not and never has been subject to a judicial
reorganization (redressement judiciaire) or judicial
liquidation (liquidation judiciaire) proceedings, or
any other amicable settlement (reglement amiable) or
collective bankruptcy proceedings provided for by Law
number 84-148 of March 1, 1984, nor has it requested
an extension period (delai de grace) in application
of Article 1244-1 of the French Civil Code;
7.1.1.4 Except for possible minor infringements with no
implications for the continuation/and or
profitability of its business, the Company (I) has
the corporate power and authority and holds all
governmental and other authorizations and permits to
own all of its properties and other assets an to
carry on business as it is currently being conducted,
and (ii) is in compliance with all the laws and
regulations to which they are subject. The Company is
not in default with respect to any judgment, or order
of any court, arbitrage tribunal or government
department or agency;
7.1.1.5 The Company is not, and has not over the last five
years been, whether directly or indirectly, a member
of any partnership, joint venture, economic interest
group or any other organization or structure having
unlimited liability;
7.1.1.6 Since February 1997, the Company has not (I) held any
shares in any corporation or (ii) exercised any
authority as board member or manger or (iii) acted as
a de facto manager of any corporation.
7.1.2 The Shares
7.1.2.1 The Shares represent all of the share capital of
Dorotech France, are fully paid in, and are freely
transferable, subject to the restrictions constrained
in the by-law of the Company.
7.1.2.2 There exists no agreement or undertaking of any na-
ture whatsoever pursuant to which any person is, or
could become, entitled to request the issue of new
shares by any of the Company (and namely without
limitation to the generality of the foregoing, the
Company has neither entered into promises to sell nor
options to purchase nor other rights of a similar na-
ture in respect of the Shares). The Company has not
issued any securities which would give rise to a
capital increase or the issue of securities granting
the right to any amount which the Company may dis-
tribute, or to voting rights, or which could result
in any limitation of the rights attached to the
Shares.
7.1.2.3 The Vendor has full and valid title to the Shares
free from any lien, charge or encumbrance or any
other third party rights, with the exception of the
pledge in favor of CDR Enterprises SA; on the Closing
Date such titled shall be validly transferred to the
Purchaser or to such person or persons as the
Purchaser may stipulate. All of the authorization
which must be obtained prior to the transfer of the
Shares, in accordance with the Company's status and
the law, have been or will have been obtained at the
Closing Date.
7.1.2.4 A list of shareholders of the Company including the
names and number of Shares held by each of them is
set forth at Schedule 11 hereto.
7.1.3 Effects of the Transfer of Shares
7.1.3.1 The transfer of the Shares to or in accordance with
the Purchaser's instruction will not result in:
(i) any breach of any agreement or undertaking
by the Company;
(ii) the possibility for any person having
dealings with the Company (a) to terminate
any agreement or contract or to modify the
effects thereof, other than the "P6 France
Telecom Contract" referred to in Article
4.1.12 hereof for which approval as to the
change of control shall have been obtained
before the Closing Date, or (b) to claim the
reimbursement of any subsidy, grant, loan or
advance;
(iii) the modification, cancellation or revocation
of any permit, authorization or license of
any kind whatsoever which is necessary or
desirable for the operations of the
Company's activities, or the modification,
cancellation or revocation of any
preferential tax regime or subsidy or other
assistance granted by public or quasi-public
authorities;
(iv) the possibility for a third party to invoke
any guarantee, surety, comfort letter of any
other document having and equivalent effect
which may have been granted by or in favor
of one of the Company;
(v) the violation of the articles of association
of the Company or of the law or of any
agreement made other than that which is
provided herein.
7.1.4 Financial Statement of the Company
7.1.4.1 Copies of the Company's financial statements which
means the annual accounts for both the 1995 and 1996
financial years, as defined, hereof (balance sheet,
profit and loss account as well as the other
documents appearing in the liasse fiscale together
with annexed documents in compliance with Article 8
of the French Code de commerce), and the Interim
Accounts are annexed as Schedule 12 hereto (the
"Financial Statement").
7.1.4.2 The Financial Statements have been prepared in
accordance with the accounting principles generally
accepted in France, which principles were
consistently applied by the Company.
7.1.4.3 The Financial Statements have been prepared in the
form required by applicable law and show a true and
fair view of, and accurately reflect the position of
the Company, and the result of its operations for the
financial period ended on the date of the Financial
Statements.
7.1.4.4 At the date of the Financial Statements, the Company
had no liabilities or obligations (due, payable,
certain, contingent, conditional or otherwise and
including, without limitation, any obligation
resulting from a factoring or leasing agreement or
from current, pending or threatened litigation) other
than those set out, or for which adequate provision
has been made, in the Financial Stataements.
7.1.4.5 The depreciation and other provisions appearing in
the Financial Statements are sufficient, have been
determined in accordance with applicable legislation.
7.1.4.6 All of the Company's accounts, books and records have
been fully, properly and accurately kept and
completed. They give a true, complete and fair view
of the Company's financial, contractual and business
position and of its plant and machinery, fixed and
current assets and liabilities (actual and
contingent), debtors, creditors and inventories and
work in progress.
7.1.5 Receivables
7.1.5.1 The Company's trade and other receivables as shown in
the Financial Stataements, and any receivables which
have arisen since the date of the Financial
Statements, are valid and have been recovered, or are
recoverable in full, within the relevant legal or
contractual time-limits (subject, in the case of
receivables shown in the Financial Statements, to any
provision for bad and/or doubtful debts appearing
therein).
7.1.6 Inventories
7.1.6.1 The inventories set out in the Financial Stataements
consist of usable articles which, with respect to
their quality and quantity, can be sold in the normal
course of business at a price at least equal to the
value at which they appear in the Financial State-
ment, namely the lower of cost and net realizable
value. The Company does not hold in its inventories
any products on consignment which belong to third
parties, or which are subject to a retention of title
clause, and no undertakings have been given to take
back the inventories of any agents, distributors or
other representatives of the Company. Inventories
acquired since the date of the Financial Statements
consist of high-quality, usable articles which can be
sold in the normal course of business and are carried
in the books at the lower of cost and net realizable
value. The Company's current levels of inventories
are adequate for the Company's present and anticipat-
ed requirements.
7.1.7 Taxes
7.1.7.1 The provisions for taxes and the provisions for
social charges (including, but not limited to, social
security contributions, and contributions to comple-
mentary welfare and pension schemes) which appear in
the Financial Statements are sufficient for the pay-
ment of all taxes, social charges due to accrued at
the date of the Financial Stataements (regardless of
the date of the event which is the source of the
taxes, social charges, and regardless of the date on
which payment thereof is due). The Company has filed
al national, departmental and local tax and social
security declarations at the required time and has
kept copies of the original filed. All State, de-
partmental and local taxes, and duties (including,
but not limited to, corporation tax, value added tax,
business tax, registration tax, land tax and customs
duties) and all social charges owed by the Company or
payable at the date hereof have been paid within the
legal time limits.
7.1.7.2 The Company has withheld all tax and/or social
security charges to be withheld by it in respect to
wages, license fees, interest or any other sum
payable by it.
7.1.7.3 The interest paid tot he Company's shareholders prior
to the date hereof has never exceeded the maximum
authorized by Articles 39-1 3 and 212 of the General
Tax Code.
7.1.7.4 Attached at Schedule 13 is a copy of the tax
reassessment relating to Dorotech. The Vendor hereby
declares that is has paid all sums due as a result of
such tax reassessment.
7.1.7.5 Save in respect of the specific circumstances
described in Article 8.6 to 8.7 hereof, (inclusive),
the Vendor hereby undertake to bear the entire cost
of all taxes, interest for late payment and penalties
that the Company may have to pay pursuant to a tax
reassessment, where the cause of action for such
reassessment arose prior to the Closing Date.
7.1.8 Ownership of Assets
7.1.8.1 The Company has full and unencumbered title to all of
its assets including its on-going business (fonds de
commerce). All tangible assets (both real estate and
otherwise) are properly constructed an in good
condition, subject only to normal wear and tear, and
have been consistently and properly maintained. None
of such tangible assets is out of order or has any
apparent defect which prevents or could prevent its
use in the future in accordance with the purpose for
which it was intended.
7.1.8.2 The Company conducts its business and uses its assets
in accordance with all legal or regulatory
requirements;
7.1.8.3 The Company holds all the necessary assets for its
business activities and the said assets are all
geographically located on the Company's premises of;
7.1.9 Leases
7.1.9.1 Details of all material leases agreements to which
the Company is a party, whether as lessor or lessee,
are set forth at Schedule 14 hereto.
7.1.9.2 Each of the leases of real or personal property to
which the Company is a party, either as lessor or
lessee, is valid and enforceable in accordance with
its terms. All of the premises (establishments) in
which the Company conducts its business under a
commercial lease subject to the provisions of the
Decree of September 30, 1953 are registered
(immarticule) with the competent commercial and
companies registries.
7.1.9.3 The Company has given notice, in compliance with all
French Laws and regulations, by bailiff (huissier) on
August 7, 1997, of the termination, with effect on
February 28, 1998, of the leases covering the
premises situated at 000 Xxxxxx Xxxxxx Xxxxxxxxxx,
00000 Nanterre (building A-B and C) and 00 xxx Xxxxxx
Xxxxx, 00000 Xxxxxxxx.
7.1.9.4 Except as mentioned in Schedule 14 hereof, none of
such leases are at this time the subject, and, to the
best of the Vendor's knowledge, shall in the future
be the subject of, any objection, refusal to renew or
claim.
7.1.9.5 The contracts in respect of utilities (gas,
electricity, water, etc.) in respect of the premises
are sufficient in view of the activities carried out
by the Company on its premises and are not assigned
to other premises.
7.1.10 Intellectual Property
7.1.10.1 Schedule 15 hereof contains a list of the patents,
trademarks, trade names, copyright, logos, design,
non-protected design, software and other intellectual
property rights (hereinafter called "the Rights")
used by the Company. The Rights are owned by the
Company free from any charge or encumbrance.
7.1.10.2 The Company has not infringed, nor is infringing, any
right belonging to any third party relating to any
patent, trademark, trade name, copyright, logo,
design or software or any other intellectual property
rights belonging to third parties and, to the
knowledge of the Vendor, no third party is infringing
any industrial or intellectual property right
belonging to the Company.
7.1.10.3 None of the directors, manager or employees or the
Company own, directly or indirectly, in whole or in
part, any patent, trademark, or other intellectual or
industrial property right to which the Company has a
license or which is necessary or desirable for its
commercial activities as presently carried on.
7.1.10.4 The company has the unencumbered right to use its
corporate name of which it has full title and
enjoyment, without paying any royalties whatsoever to
any third party.
7.1.11 Contracts
7.1.11.1 All the contracts, commitments, agreements and
guarantees or other undertakings to which the Company
is a party, and which:
(i) account for more than 5% of the revenue
turnover of the Company for the most recent
financial period; or
(ii) are for a period of more than one year; or
(iii) involve the disposal of capital assets for
an aggregate amount in excess of FRF 50,000;
or
(iv) contain binding undertakings to buy or sell
for an aggregate amount in excess of FRF
50,000, or any exclusivity commitment by, or
for the benefit of, the Company; or
(v) contain a non-competition undertaking; or
(vi) are otherwise material to the management,
development and marketing of the Company;
are hereinafter called "Material Contracts".
7.1.11.2 the Company (I) has not entered into any Material
Contract which gives rise to duties or liabilities
which are unusual in relation to the normal rules of
proper management of a commercial enterprise, and
(ii) is not in breach of any of its obligations under
any Material Contract.
7.1.11.3 To the best of the Vendor's knowledge, all contracts,
agreements or arrangements, whether written or
verbal, to which the Company is a party, represent
valid enforceable obligations. None of them has been
entered into in violation of applicable laws or
regulations and the Company and the other contracting
parties have complied with their obligations
thereunder. No such contract, agreement or
arrangement was entered into outside the normal
course of business or is illegal or liable to be
declared null and void.
7.1.11.4 The transfer of the Shares on the Closing Date will
not result in the accelerated maturity of any loan or
guarantee agreement or any other payment to be made
to any third party under the other contract or
arrangement to which the Company is a party.
7.1.11.5 By virtue of the change in control of the Company,
the execution and performance of the Share Purchase
Agreement:
(i) does not and will not result in the
termination of any Material Contract or any
other instrument or arrangement to which the
Company is a party or by which it may be
bound or affected,
(ii) does not and will not conflict with or
result in any violation or breach by the
Company under any Material Contract or other
instrument or arrangement, and
(iii) will not grant to any other contracting
party the right to terminate or modify any
such Material Contract or other instrument
or arrangement, other than the "P6 France
Telecom Contract" referred to in Article
4.1.12 hereof for which approval as to the
change of control shall have been obtained
before the Closing Date.
7.1.11.6 Neither the Vendor nor the Company has received any
notice whatever pursuant to which any customers of,
or suppliers or lenders to the Company has disclosed
its intention to cease or substantially reduce its
commercial relationship with the Company for any
reason whatsoever including, without limitation, as a
result of the transfer of the Shares to the
Purchaser.
7.1.11.7 The Company is not bound by any contract, commitment
or other arrangement directly or indirectly with the
Vendor, or any of its corporate officers (mandataires
sociaux), or any legal entity controlled by any of
them, other than the Management Services Agreement
which shall be terminated before or on the Closing
Date pursuant to Article 4.1.16 hereof.
7.1.12 Personnel
7.1.12.1 The following are set forth at Schedule 17 hereof:
(i) a list of all the Company's employees,
including their ages, seniority and present
annual remuneration (including any right to
bonus, benefits in kind, profit sharing and
any departure or retirement indemnities)
and, for persons having a definite term
employment agreement, the date of expiration
of the agreement;
(ii) a list of all pension benefits offered by
the Company to any of their present or
former employees or corporate officers, all
of which benefits are fully funded;
(iii) a list of temporary personnel, outside
collaborators, sales representatives (VRP's)
and any other persons who do not have the
status of salaried employees but who
regularly collaborate in the operations of
the Company, if any; and
(iv) a list of all the collective bargaining and
other collective agreements applicable to
the Company's personnel (including any
agreement relating to bonuses, pensions
(excluding compulsory state pension
schemes), deferred remuneration, profit
sharing or share option schemes).
7.1.12.2 The Company has compiled with the continues to comply
with, all their obligations pursuant to the
applicable labor and social security law.
7.1.12.3 None of the employees or corporate officers of the
Company benefit from unusual rights in the light of
the prevailing industry standards in the place where
they are employed
7.1.12.4 To the knowledge of the Vendor, none of the Company's
employees have made known their intention to
terminate their employment agreement.
7.1.12.5 There have been no strikes, lock-outs, strike
pickets, occupation of the premises or other labor
unrest on the premises of the Company during the 2
years prior to the date hereof, and the Vendor is not
aware of any such industrial action being threatened
or pending.
7.1.13 Insurance
7.1.13.1 To the best of the Vendor's knowledge, the Company's
activities and all the assets owned, leased or used
by it are validly insured, under customary
conditions, with reputable companies, and the terms
of the policies are such as would be acceptable to a
prudent entrepreneur carrying on a similar business
with similar assets.
7.1.13.2 The Company ahs fulfilled all its obligations
pursuant to the insurance policies, in particular
with respect to the declarations of risks and claims
and the payment of premiums relating to such
policies. As at the date hereof the Company has not
received or given any notice of termination or
non-renewal in respect to any of the said policies
and the insurance companies have not given them
notice of their intention to increase substantially
the premiums due, to raise the deductibles or to
reduce the coverage provided.
7.1.14 Product Liability
7.1.14.1 To the best of the Vendor's knowledge, no claim has
been made on the Company in respect t of damage
suffered resulting from a defect in any product
manufactured, assembled or sold and not product
manufactured, assembled or sold by the Company has
any latent defect or other defect likely to result in
a claim for damages from a purchaser or user of the
product or a third party.
7.1.15 Environment
7.1.15.1 To the best of the Vendor's knowledge, the activities
of the Company have al ways been and are being
operated in compliance with the applicable laws and
regulations in force concerning environmental
protection, and not product manufactured, assembled
or sold or any service supplied by the Company is in
violation of such laws and regulations.
7.1.15.2 The Company has at all times obtained and complied
with all authorizations, licenses and other approvals
required by the laws and regulations in force and
have not received any notification from any entity in
authority to the effect that any such authorization,
license or approval has not been complied with or has
been withdrawn.
7.1.15.3 No leak or spill or disposal of any substance,
material or waste which is regulated as "toxic" or
"hazardous" under any applicable environmental
regulation has occurred on any of the real properties
currently owned or occupied by the Company. The
Company is not obligated nor reasonably likely to
become obligated to clean up or otherwise conduct
remedial work on any contaminated surface water,
ground or soil.
7.1.16 Litigation
7.1.16.1 There is not current, threatened or pending
litigation, arbitration, claim, administrative
proceeding, administrative or tax investigation or
any other action or proceeding pending or
contemplated, whether as plaintiff or defendant, in
relation to the Company, relating to payments of
amounts in excess of FRF 50,000, or assets worth more
than such amount, or which could have a material
negative impact on the Company's business and the
Vendor is unaware of any facts which might give rise
to any such action or proceeding.
7.1.17 Absence of Changes
7.1.17.1 From the date of the Interim Accounts to the Closing
Date, non of the following events in respect of the
Company has arisen or shall arise;
(i) any change in the financial position, as-
sets, liabilities, business or operations
otherwise than in normal course of business;
(ii) save with the prior written consent of the
Purchaser, any declaration or payment of any
dividend or any other distribution of
profits or reserves;
(iii) any damage, destruction or other casualty
loss (whether or not covered by insurance)
materially affecting the Company's business
or financial position;
(iv) any purchase or sale of securities by the
Company, as issue of shares or other
securities, rights or options to purchase or
subscribe shares in the Company or which
might grant the right to acquire or
subscribe securities which represent a share
in the capital of the Company;
(v) any loan incurred, granted, promised or se-
cured by the Company;
(vi) the assumption of an obligation or liability
other than current obligations or
liabilities incurred in the normal course of
business;
(vii) any termination, waiver, amendment of, or
default in relation to any contract,
undertaking or arrangement other than in the
normal course of business;
(viii) any increase or promised increase in the
remuneration of employees, agents, sales
representatives or corporate officers or in
any of their benefits;
(ix) any sale, lease or transfer of any tangible
or intangible assets other than items of
stock in the normal course of business, nor
any cancellation or waiver of any
receivables;
(x) any guaranteed, surety or comfort letter in
respect of the obligations of third parties;
(xi) any lien, security interest, pledge,
mortgage, easement, or other charge granted
over any tangible or intangible assets;
(xii) any social disturbance, conflict, strike,
lock-out, sit-in or similar event.
7.1.18 Guarantee of Third Party Obligations
7.1.18.1 The Company is not liable under any guarantee granted
in order to cover the execution of a third parties
obligations, save as mentioned in Schedule 18 hereof;
7.1.18.2 The Company is not jointly and severally liable with
any other person or entity as regards the execution
of the latter's contractual or legal obligations.
7.1.18.3 More generally, there are not obligations incumbent
upon the Company as a result of the winding up of
Dorotech GmbH nor the sale of its entire shareholding
in Dorotech (UK) Ltd. Nor the sale of its entire
shareholding in Dorotech Srl.
7.1.19 Lists
7.1.19.1 Schedule 19 hereof contains lists in relation to the
Company, setting forth:
(i) the name and address of each person who has
received general or special powers;
(ii) all real estate, land, facilities or other
property owned, rented, leased or otherwise
occupied;
(iii) banks and bank accounts, and financing
arrangement showing (a) the names or people
with power of signature (b) the amount of
each credit line and the level of
utilization and any other financing
agreement, and (c) the amount of any
borrowing guaranteed by the Company.
(iv) all guarantees, sureties or endorsements
granted in favor of third parties;
(v) the name of each corporate officer
(mandataire social) and of the gross annual
remuneration (including all benefits) of
each of them;
(vi) all agency, license, distribution or repre-
sentation agreements;
(vii) all grants, subsidies or other public
benefits in excess of FRF 50,000 which the
Company is under a contingent liability to
repay.
7.1.20 General
7.1.20.1 To the best of the Vendor's knowledge, all of the
information contained in the Share Purchase Agreement
and its Schedules thereto are complete and accurate
in all respects.
7.1.20.2 There are no existing facts or events known to the
Vendor which are likely to have a negative effect of
the Company's assets, business or activities or which
could reasonably be expected to affect adversely with
willingness of the Purchaser to purchase the Shares
upon the terms of the Share Purchase Agreement which
has not been disclosed to the Purchaser in writing by
the Vendor.
7.1.21 Authority Relative to this Share Purchase Agreement
7.1.21.1 The execution and performance of this Share Purchase
Agreement by the Vendor do not and will not conflict
with or result in any violation or breach of, or any
default under, any law or any obligation of the
Vendor or any other agreement to which the Vendor is
a party, not is there any litigation current or
pending involving the Vendor which could prevent or
hinder their execution and performance of this Share
Purchase Agreement.
7.1.21.2 The Vendor has full power, authority and right to
enter into this Share Purchase Agreement and to
complete the transactions contemplated hereby.
7.2 The Vendor recognizes and accepts that the Purchaser has entered
into this Share Purchase Agreement in reliance on the
Representations and Warranties an in reliance on the documents
and information of a significant nature which the Vendor has
transmitted to the Purchaser. The liability of the Vendor in
relation to the Representations and Warranties shall be in no way
limited should it be established that the Purchaser was aware of
the inaccuracy of one or more of the Representation or Warranties
either at the date hereof or at the Closing Date.
8. Indemnification
8.1 Subject to the provisions of Article 8.2 herein, the Vendor
undertakes to indemnify the Purchaser by reducing the Purchase
Price or, and if the Purchaser in its absolute discretion so
wishes, by making good and holding harmless the Company for the
full amount of any damage, loss, liability or expense of any
kind, including legal and court fees (hereinafter called
"Damage") which results from;
8.1.1 any failure of the Vendor to respect its obligations
hereunder;
8.1.2 any inaccuracy, error or omission in the Representations and War-
ranties; and
8.1.3 any increase in the liabilities, whose origin is prior to the
Closing Date, and which is not shown in the Actual Consolidated
Net Equity of the Company, drawn up as at the Closing Date.
8.1.4 It is specifically agreed and understood by the Parties that the
Purchaser may validly claim against the Vendor under Article
8.1.2 hereof, notwithstanding any lack of knowledge on the part
of the Vendor should there be any contract, agreement or
arrangement as more particularly described in Article 7.1.11.3
hereof, to which the Company is a party, and which in fact
represents an unenforceable obligation.
8.1.5 It is specifically agreed and understood by the Parties that the
Purchaser may validly claim against the Vendor under Article
8.1.2 hereof, notwithstanding any lack of knowledge on the part
of the Vendor should there in fact be any claim relating to
product liability for products manufactured distributed or sold,
as more particularly described in Article 7.1.14.1 hereof.
8.1.6 It is specifically agreed and understood by the Parties that the
Purchaser may validly claim against the Vendor under Article
8.1.2 hereof, notwithstanding any lack of knowledge on the part
of the Vendor, in respect of the completeness and accuracy of any
information contained therein, as more particularly described in
Article 7.1.19.1 hereof.
8.1.7 It is specifically agreed and understood by the Parties that the
Purchaser may validly claim against the Vendor under Article
8.1.2 hereof, notwithstanding any lack of knowledge on the part
of the Vendor, in respect of any failure to comply with the laws
and regulations in force concerning environmental protection, as
more particularly described in Article 7.1.15.1 hereof.
8.2 The total indemnity paid hereunder shall not exceed ten percent
(10%) of the Net Purchase Price.
8.3 The Vendor shall not be liable to indemnify the Purchaser under
this Article 8 in respect of damage or Estimated Damage unless
and until the aggregate amount of value of such Damage or
Estimated Damage exceed FRF 100,000, but in which event the
Seller shall be liable to indemnify the Purchaser against any and
all damage or Estimated Damage in full including those Damages
and Estimated Damages in the said FRF 100,000, subject to the
maximum total indemnity specified in Article 8.2.
8.4 Except for claims in respect of fiscal or social security matters
which may be made up of the expiration of the statute of
limitations, and for claims in respect to environmental matters
(Article 7.1.15 hereof) which may be made for up to 5 years
following the Closing Date, any claim for indemnification
pursuant to Article 8.1 hereof must be made no later than 12
months following the Closing Date by notice I n writing to the
Vendor in accordance with Article 12 hereof. Such notice shall
give brief details of the relevant facts and an estimate of the
Damage ("Estimated Damages"). Indemnification based on the
Estimated Damages shall be due if notice of the relevant facts is
given within the relevant period, even if the quantification of
the Damage does not take place until after the expiration of such
period. Payment from the Escrow Agent shall be in accordance with
Section 6 of the Escrow Agreement.
8.5 In the event that any Damage or Estimated Damage results from a
demand or claim made by a third party, the Purchase shall notify
the Vendor, with the details described above, within one month of
the Purchase becoming aware thereof and the Vendor, or its
counsel, shall have access to all relevant books and other
documents of the Company any with regard to such a demand or
claim, and these shall be made available at the Company's
registered office or any other place mutually agreed upon,
subject to reasonable notice, and for reasonable period. The
Vendor shall have the right, at its own expense to join in the
defense or the conclusion, by way of settlement (transaction) or
amicable agreement with respect to any such demand or claim.
However, the Purchaser shall have absolute discretion as to
whether and, if so, on what terms, to settle any such demand or
claim. Should. the Purchaser elect not xxx comply with the
Vendor's proposal of settlement, any sums due by the Company
and/or Purchaser exceeding the amount of the settlement proposed
by the Vendor, which shall have been accepted by the third party
as full and final settlement of all related claims, shall be
borne by the Purchaser.
8.6 All payments due under Article 8 hereof shall be treated as a
reduction in the Purchase Price made within one month from the
date on which notice of the Damage is given by the Purchaser to
the Vendor or, if later, from the date on which the Damage is
quantified. These sums shall be drawn in priority from the
amounts deposited with the Escrow Agent, it being specified that
in the event that the amounts held upon escrow should be
insufficient to compensate the Purchaser for any damage notified
by the latter, the Vendor shall be under an obligation to pay an
indemnity for an amount equal of the difference between the
amounts due pursuant to Article 8 hereof and the said held sums
held upon escrow.
Should the damaged be quantified or the Estimated Damages be
payable after the amounts held in escrow have been released to
the Vendor in accordance with Article 3.2 herein and the Article
3 of the Escrow Agreement, the indemnity to be paid by the Vendor
shall be paid by wire transfer to the Purchaser's bank account.
Should the quantification of the Damage result in a sum to be
reimbursed by the Purchaser to the Vendor in respect of the
Estimated Damage previously paid by the Vendor, the Purchaser
shall pay the sum by wire transfer to the Vendor's bank account.
8.7 The parties agree that if it emerges that any Damage is
deductible from the taxable results of the Company that amount of
an indemnity to be paid by the Vendor shall be reduced by the tax
saving effectively made by the Company.
9. Assignment
9.1 This Share Purchase Agreement is personal to the Parties and
cannot be assigned by any of them save that (I) the Purchaser may
assign its right hereunder to an associated company for which
purpose the term "associated company" shall mean any company
which, directly or indirectly, controls or is controlled by or is
under the same control as the Purchaser and the term "control"
shall mean the ability to exercise or to procure the exercise,
directly or indirectly, of at least 50 percent (50%) of the
voting shares of a company; and (ii) the Purchaser (or such
associated company) may freely assign its rights pursuant to
Article 8 hereof to any person(s) or corporation(s) to whom the
Shares may be transferred following the Closing Date. Rights to
Escrow can be assigned by the Vendor if a successor in interest
purchases substantially all the assets of the Vendor.
9.2 Should the Purchaser assign its rights under the terms herein, it
shall remain liable, jointly with the assignee, for the
obligation under this Share Purchase Agreement until full payment
of the Purchase Price has been made to the Vendor
10. Expenses
10.1 Each of the Parties shall bear all of the costs and expenses
incurred by it in connection with this Share Purchase Agreement
and its execution including, but not limited to, the fees and
disbursements of any counsel, independent accountant or any other
person whose services may have been used by said party in
relation hereto, with the exception of the independent audit to
be conducted by Ernst & Young pursuant to Article 3.1.6 hereof,
the Parties having agreed to share equally the expenses of such
audit.
10.2 It is agreed that a short form French version of this Agreement
summarizing the main provisions concerning the scope of the sale
and purchase and the price shall be produced and signed by the
parties hereto at the Closing Date and registered with the French
fiscal authorities at the expense of the Purchaser. It is
expressly agreed that none of the parties may avail themselves of
the short form agreement for any purpose other than as proof of
such registration, their rights and obligations in connection
with the sale and purchase contemplated herein deriving solely
from this Agreement.
11. Confidentiality
11.1 The Vendor and the Purchaser undertake to keep confidential and
not to disclose to third parties (except to their professional
advisors and, in the case of the Purchaser, to any of its
associated Companies as defined in Article 9.1 hereof for the
purposes of the assignment), without the prior written consent of
the other Party, the terms and conditions of the transaction
contemplated hereby.
11.2 All announcement by or on behalf of the Parties hereto relating to the
transaction contemplated hereby shall be in terms agreed by the Parties
save that the Parties shall be entitled to make such announcements as
they think fit to comply with the regulations of the Stock Exchanges on
which they were quoted.
11.3 If for any reason the transaction contemplated hereby is not completed,
the obligations of the Parties pursuant to this Article 11 hereof will
remain in force for a period of 12 months from the date hereof.
12. Notices
12.1 Any notice required to be given hereunder shall be validly given if
sent by registered letter (with return receipt requested) or by fax,
confirmed by such registered letter, or by hand delivery against
written acknowledgment of receipt to the following addresses or to such
other address as may have been transmitted by either of the Parties to
the other in accordance herewith:
For notices to the Vendor: For notices to the Purchaser:
Xx. Xxxxx Xxxxxxx Xx. Xxxx Xxxxxx
CFO, Network Imaging Corporation Board Member, SER Systems AG
500 Huntmar Park Drive 00000 Xxxxxxx Xxxxxxx Xxxx
Xxxxxxx, XX 00000, XXX Xxxxxx, XX 00000, XXX
Notices shall be effective as of the date of receipt.
12.2 The Vendor irrevocably confers on Xx. Xxxxx Xxxxxxx (referred to in Ar-
ticle 12.1 hereof), who accepts, the authority to accept notices on its
behalf.
13. Proper Law and Jurisdiction
13.1 This Agreement shall be governed by and construed in accordance with French
law.
13.2 Subject to the provisions of Article 3.1.6 hereof in relation to the
resolution of disagreements pertaining to the amount of Actual
Consolidated Net Equity, Actual Tax Credits and Assumed Tax Credits,
any dispute arising in relation to this Agreement, its interpretation
or execution (including, without limitation, its validity, performance
or interpretation) shall be submitted to the Commercial Court of Paris.
14. Waivers
14.1 The failure by one of the Parties hereto promptly to avail itself in
whole or in part of any right, power or privilege to which such party
is entitles pursuant to the terms of this Agreement shall not
constitute a waiver of such right, power or privilege which may be
exercised at any time. To be valid, waiver by one of the Parties hereto
to right, power or privilege must be in writing and notified to the
other party as provided herein.
15. Headings
The descriptive words or phrases at the head of the Articles are
inserted only as a convenience and for reference purposed and are not
intended to in any way define, limit or describe the scope or intent of
the Articles which they preceded.
16. Whole Agreement
This Share Purchase Agreement constitutes the entirety of the agreement
between the Parties with regard to the subject matter hereof and
supersedes any previous agreement or agreements whether verbal or
written with regard thereto.
17. Interpretation and Language
17.1 Unless the context requires otherwise, all words used in this Share
Purchase Agreement in the singular number shall extend to and include
the plural, all words in the plural number shall extend to and include
the singular, and vice versa.
17.2 This Agreement shall be executed only in the English language.
17.3 Severability
If any provision, clause, or part of the Share Purchase Agreement, or
application thereof under certain circumstances, should be held void,
illegal or unenforceable, the Parties undertake to consult each other
and to seek an agreement in respect of a valid clause the effects of
which come as close as possible to those of the paragraph, the clause
or the part invalidated.
EXECUTED by the Parties on
In Herndon, Virginia, USA
The Vendor For the Purchaser
----------------------------- -------------------------
By: Xxxxx X. Xxxxxxx By:
Title: Senior Vice President & Title:
Chief Financial Officer
List of Schedules
1. Declaration of authority to sign the Share Purchase Agreement on behalf of
NIC.
2. Declaration of authority to sign the Share Purchase Agreement on behalf of
SER.
3. Principles relating to the claculation of the Consolidated Net Equity.
4. Escrow Agreement
5. Non-Competition Agreement.
6. Addendums to Employment contracts for Xx. Xxxx-Xxxxxxxx Xxxxxx and Xx.
Xxxxx Xxxxxxx.
7. List of resigning directors.
8. Certified true and up-to-date copy of the articles of association (statuts)
of Dorotech France SA.
9. Good-standing information sheet (extrait kbis) of Dorotech France SA dated
November 12, 1997.
10. Liens and Charges Search Certificate (etat des nantissement et privileges)
of Dorotech France SA issued by the Commercial and Companies Registry of
Nanterre.
11. List of the shareholders of the Company including the name and numbers of
Shares held by each of them.
12. Copies of the Financial Statements of the Company for both the 1995 and
1996 financial years and of the Interim Accounts of the Company as of
September 30, 1997.
13. Copy of the Company's tax reassessment.
14. Copy of all lease agreements to which the Company is a party and list of
objections, refusals to renew or claims relating to these leases.
15. Patents, trademarks, trade names, copyright, logos, designs, non-protected
designs, software and other intellectual property rights owned by the
Company.
16. N/A
17. Lists relating to:
- all pension benefits offered by the Company to any of their employees
or corporate officers, all of which are fully funded;
- temporary personnel, outside collaborators, sales representatives
(VRPs) and any other persons who do not have the satus of salaried
employees but who regularly collaborate in the Company's operation;
- the collective bargaining and other collective agreement applicable to
the Company's personnel (including any agreement relating to bonuses,
pensions (excluding compulsory state pension Schemes), deferred
remuneration, profit sharing or share option schemes).
1. Guarantees and other undertakings in favor of third parties.
2. Lists setting forth:
- the name and address of each person who has received general or special
powers.
- all real estate, land, facilities or other property owned, rented,
leased or otherwise occupied; - the name of each corporate officer (man-
dataire social) and of the gross annual remuneration (including all be-
nefits) of each of them;
- all agency, license, distribution or representation agreements;
- all grants, subsidies or other public benefits in excess of FRF _______
which the Company is under a contingent liability to repay.
1. Documents relating to CDR counter guarantee
a) Main counter-guarantee for 47,000,000 FF
b) CDR's side letter
c) Cofracomi letter
