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EXECUTION COPY
EXHIBIT 2.5
SHARE PURCHASE AGREEMENT
by and among
CLIENTLOGIC HOLDING CORPORATION
CLIENTLOGIC INTERNATIONAL HOLDING, INC.
CORDENA CALL MANAGEMENT B.V.
STICHTING ADMINISTRATIEKANTOOR CORDENA CALL MANAGEMENT
and
THE MANAGEMENT SHAREHOLDERS LISTED ON THE SIGNATURE PAGES
HERETO
Dated October 7, 1999
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TABLE OF CONTENTS
Page
ARTICLE I THE ACQUISITION .....................................................................2
1.1 Purchase and Sale of the Shares and the Sale Warrants ...................................2
1.2 Consideration for the Shares and the Sale Warrants ......................................2
1.3 Delivery and Payment ....................................................................2
1.4 Adjustment of Share Purchase Price ......................................................2
1.5 Amendment of Options and Warrants .......................................................4
1.6 Payment Obligations .....................................................................5
ARTICLE II THE CLOSING .........................................................................5
2.1 Date of Closing .........................................................................5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE
MANAGEMENT SHAREHOLDERS OF THE COMPANY ..............................................5
3.1 Corporate Organization ..................................................................5
3.2 Authority; Absence of Conflicts .........................................................6
3.3 Outstanding Capital Stock ...............................................................7
3.4 Financial Statements ....................................................................8
3.5 Absence of Undisclosed Liabilities; Indebtedness ........................................8
3.6 Absence of Material Changes .............................................................9
3.7 Real Property ..........................................................................11
3.8 Tangible Personal Property .............................................................12
3.9 Accounts Receivable ....................................................................13
3.10 Accounts Payable .......................................................................13
3.11 Euro Compliance ........................................................................13
3.12 Year 2000 Compliance ...................................................................13
3.13 Contracts ..............................................................................14
3.14 Legal Proceedings ......................................................................16
3.15 Labor Matters ..........................................................................16
3.16 Employee Benefit Plans .................................................................16
3.17 Environmental Matters ..................................................................17
3.18 Tax Matters ............................................................................19
3.19 Insurance ..............................................................................20
3.20 Books and Records ......................................................................21
3.21 Brokers' or Finders' Fees ..............................................................21
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3.22 Material Customers and Suppliers .....................................................21
3.23 Bank Accounts; Powers of Attorney ....................................................22
3.24 Intellectual Property Rights .........................................................22
3.25 Compliance with Laws; Permits and Licenses ...........................................23
3.26 Certain Business Practices; Potential Conflicts of Interest ..........................23
3.27 Projections ..........................................................................24
3.28 Subsidies ............................................................................24
3.29 HSR Act ..............................................................................24
3.30 Disclosure ...........................................................................24
3.31 Material Consents ....................................................................24
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE
MANAGEMENT SHAREHOLDERS ...........................................................25
4.1 Organization .........................................................................25
4.2 Authority; Absence of Conflicts ......................................................25
4.3 Title to Shares ......................................................................26
4.4 Brokers' or Finders' Fees ............................................................26
ARTICLE V REPRESENTATIONS AND WARRANTIES OF HOLDING
AND BUYER .........................................................................26
5.1 Organization and Corporate Power .....................................................26
5.2 Authority; Absence of Conflicts ......................................................26
5.3 Outstanding Capital Stock; Issuance of Shares ........................................27
5.4 Legal Proceedings ....................................................................28
5.5 Brokers' or Finders' Fees ............................................................28
5.6 Financial Statements .................................................................28
ARTICLE VI COVENANTS..........................................................................28
6.1 Non-Competition; Confidentiality .....................................................28
6.2 Redemption of Depository Receipts ....................................................30
6.3 Agreement Regarding Management .......................................................30
ARTICLE VII CLOSING DELIVERIES ................................................................31
7.1 Documents being delivered by the parties at Closing ..................................31
ARTICLE VIII THE EARNOUT .......................................................................32
8.1 Additional Payments ..................................................................32
8.2 Each Participating Shareholder's Share of the Payments ...............................33
8.3 Method of Payment ....................................................................33
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8.4 Management Shareholder's Termination .................................................33
ARTICLE IX MISCELLANEOUS .....................................................................33
9.1 Expenses ..............................................................................33
9.2 Attorneys' Fees .......................................................................34
9.3 Brokers ...............................................................................34
9.4 Notices ...............................................................................34
9.5 Transfer Taxes ........................................................................35
9.6 Successors and Assigns ................................................................35
9.7 Entire Agreement and Modification .....................................................36
9.8 Certain Interpretive Matters ..........................................................36
9.9 Governing Law .........................................................................36
9.10 Counterparts ..........................................................................37
9.11 Further Assurances ....................................................................37
9.12 Severability ..........................................................................37
9.13 No Recourse ...........................................................................37
9.14 Public Statements .....................................................................37
9.15 Specific Performance ..................................................................37
9.16 Notary ..............................................................................37
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SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of the 7th day of October, 1999, by and among ClientLogic Holding
Corporation, a Delaware corporation ("Holding"), ClientLogic International
Holding, Inc., a Delaware corporation an indirect wholly owned subsidiary of
Holding ("Buyer"), Cordena Call Management B.V., a Netherlands corporation (the
"Company"), Stichting Administratiekantoor Cordena Call Management, a
Netherlands trust (the "Stichting") and Jules T.H.M. Kortenhorst and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇ (collectively, the "Management Shareholders").
RECITALS:
WHEREAS, the Stichting is the record owner of 6,337,774 shares (the
"Shares") in the capital of the Company (the "Company Capital Stock"), nominal
value NLG 0.04 per share, which represent all of the capital stock of the
Company;
WHEREAS, the persons listed on Exhibit 1 hereto (the "Shareholders")
are the beneficial owners of such number of Shares set forth opposite such
Shareholder's name on Exhibit 1;
WHEREAS, the persons listed on Exhibit 2 hereto (the "Optionholders")
are the record and beneficial owners of options (the "Options") to purchase the
number of depository receipts representing beneficial ownership of shares of
Company Capital Stock (the "Option Shares") at the exercise prices set forth
opposite each such Optionholder's name on Exhibit 2;
WHEREAS, the persons listed on Exhibit 3 hereto (the "Warrantholders"
and together with the Shareholders and the Optionholders, the "Holders") are the
record and beneficial owners of warrants (the "Warrants") to purchase the number
of depository receipts representing beneficial ownership of shares of Company
Capital Stock (the "Warrant Shares") at the weighted average exercise prices
set forth opposite each such Warrantholder's name on Exhibit 3;
WHEREAS, each of the Holders has granted to the Stichting, through a
power of attorney ("Power of Attorney") the power and authority to execute this
Agreement and sell, assign, transfer and convey such Holder's interest in the
Shares, Options and Warrants, as applicable, to the Holding; and
WHEREAS, the Stichting and the Holders desire to sell and Holding
desires to purchase the Shares, and the Holders elect to receive shares of
common stock of Holding (the "Holding Common Stock"), par value $0.01 per share
upon exercise of the Options and Warrants pursuant to an exchange agreement
between the Optionholders and Warrantholders and Holding.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements set forth in this Agreement, and for other
good and valuable
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consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
THE ACQUISITION
1.1 Purchase and Sale of the Shares. On the terms and subject to
the conditions of this Agreement at the Closing (as defined in Section 2.1),
the Stichting (i) hereby sells and transfers to Buyer, and Buyer hereby
purchases and acquires from the Stichting, all right, title and interest of the
Stichting in and to the Shares, free and clear of all Encumbrances (as defined
in Section 3.7(c)), and (ii) on behalf of the Shareholders, hereby sells and
transfers to Buyer, pursuant to the Shareholders' respective Powers of Attorney,
and Buyer hereby purchases and acquires from the Stichting, all of the
Shareholder's right, title and interest in and to the Shares, free and clear of
all Encumbrances.
1.2 Consideration for the Shares. The aggregate purchase price
payable by Holding for the Shares shall equal NLG 45,202,364.04 (the "Unadjusted
Share Purchase Price") consisting of (a) NLG 39,778,108.89 in cash plus (b)
1,172,511 shares of Holding Common Stock, subject to adjustment as provided in
Section 1.4. All cash payments due hereunder shall be made in NLG.
1.3 Delivery and Payment. At the Closing, the Stichting, Holding,
Buyer and the Company are executing a notarial deed transferring the Shares to
Buyer, and the transfer is being registered in the shareholders' register of the
Company. Immediately thereafter, Holding (a) is delivering (in the case of the
Holding Common Stock as soon as possible but in any event within five business
days of the Closing) to civil law notary H. van Wilsum (the "Notary"), on behalf
of the Holders, by check or wire transfer of immediately available funds an
amount in cash and Holding Common Stock equal to NLG 41,202,364.04, and (b) is
delivering (in the case of the Holding Common Stock as soon as practicable but
in any event within five business days of the Closing) to civil law notary H.
van Wilsum (the "Escrow Agent") an amount, in cash and Holding Common Stock,
equal in value to NLG 4,000,000.00, such amount to be derived from the
respective Shareholders' pro rata portions of the aggregate cash and stock
consideration set forth on Schedule 1.1, calculated based upon their
respective ownership interests in the issued and outstanding Company Capital
Stock (the "Escrow Funds"); such consideration to be held by the Escrow Agent
pursuant to the terms of the Indemnification and Escrow Agreement attached
hereto as Annex A (the "Escrow Agreement").
1.4 Adjustment of Share Purchase Price.
(a) As soon as practicable, but in no event more than 90
days after the Closing Date (as defined in Section 2.1), Holding shall deliver
to the Stichting a consolidated balance sheet of the Company and its
Subsidiaries prepared in accordance with generally accepted accounting
principles in effect in the Netherlands ("Dutch GAAP") as of the Closing Date;
provided, that (A) no liabilities, accruals or reserves shall be reduced,
modified or eliminated except by reason of payment or credit occurring in the
ordinary course of business consistent with past practice, (B) such amounts will
be determined without regard to any adjustments thereto in respect of or
relating to the transactions
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contemplated hereby or simultaneous or subsequent action, and (C) such amounts
shall be determined by eliminating intercompany and affiliate accounts, other
than accounts receivable and payable for goods and services provided in the
ordinary course at costs equivalent to those that would be incurred between
arm's-length third parties. Holding shall simultaneously deliver a related
statement (the "Post-Closing Statement") setting forth the final Share Purchase
Price (as defined in Section 1.4(d)), as calculated from such Closing Date
balance sheet. Such balance sheet and related schedules supporting the
Post-Closing Statement shall be audited by an audit team headed by ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ of PriceWaterhouseCoopers and composed of members unaffiliated with any
prior audits of the Company and shall be delivered together with their report
thereon. Any currency translation required in preparation of the Post-Closing
Statement shall be made as of the Closing Date.
(b) Within 45 days after the delivery of the Post-Closing
Statement to the Stichting, the Stichting shall, on behalf of the Holders,
either accept the amount of the final Share Purchase Price as set forth in the
Post-Closing Statement as correct or object to the final Share Purchase Price as
set forth in the Post-Closing Statement, specifying in reasonable detail in
writing the nature of the objection(s). In the event the Stichting does not
object to the final Share Purchase Price as set forth in the Post-Closing
Statement within said 45-day period, the Stichting and the Holders shall be
deemed to have accepted the final Share Purchase Price as so set forth. In the
event the Stichting objects to the final Share Purchase Price, then, during a
45-day period subsequent to the receipt by Holding of notice of objection(s),
the parties shall attempt in good faith to resolve any differences respecting
such final Share Purchase Price as so set forth. In the event the parties are
unable to resolve their differences within said 45-day period, the parties agree
that the matter shall be submitted to KPMG (the "CPA Firm"), which the parties
acknowledge to be a mutually acceptable firm of independent certified public
accountants. The costs and expenses of the CPA Firm shall be borne equally by
Holding and the Stichting. The CPA Firm shall resolve any disputed amounts and
shall determine the final Share Purchase Price as promptly as practicable, but
in any event within 60 days following submission of such matter to the CPA Firm.
The CPA Firm's calculation of the final Share Purchase Price shall be delivered
in writing to Holding and the Stichting. During the period from the date of
delivery of the Post-Closing Statement to the Stichting through the date of
resolution of any dispute regarding the final Share Purchase Price as
contemplated by this Section 1.4, Holding shall provide the Stichting, the CPA
Firm, to the extent applicable, and their respective agents and representatives
reasonable access to all appropriate books, work papers, records (including
those supplemental schedules prepared in connection with preparation of the
Post-Closing Statement), facilities and employees of the Company and its
Subsidiaries and their successors for purposes relevant to the review of such
Post-Closing Statement and the resolution of any related dispute. Any
determination of the final Share Purchase Price by the CPA Firm shall be final
and binding on all parties hereto.
(c) Within five (5) Business Days after the determination
of the final Share Purchase Price:
(i) If the amount of the final Share Purchase
Price is more than the Unadjusted Share Purchase Price, then
Holding shall pay, or cause to be paid, to the Stichting, on
behalf of the Shareholders, in cash an amount equal
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any such difference between the final Share Purchase Price and
the Unadjusted Share Purchase Price. Upon receipt of such
payment, the Stichting shall promptly pay to each Shareholder
its respective Shareholder Percentage of such payment. The
"Percentage" of any Shareholder shall equal a fraction, the
numerator of which is the NLG value of the Total Cash
Consideration and Total Stock Consideration received by such
Shareholder as set forth on Schedule 1.1 and the denominator
is the NLG value of the Total Cash Consideration and Total
Stock Consideration to be received by all Shareholders as set
forth on Schedule 1.1.
(ii) If the amount of the final Share Purchase
Price is less than the Unadjusted Share Purchase Price, the
difference between the final Share Purchase Price and the
Unadjusted Share Purchase Price shall be paid by the Escrow
Agent to Holding in accordance with the terms of the Escrow
Agreement, with the source of such payment being the Escrow
Funds.
(d) As used herein the term "Share Purchase Price" shall
mean the Unadjusted Share Purchase Price adjusted as follows: (A) in the event
that either (i) Net Debt as of the Closing Date is less than NLG 33,507,000, the
Unadjusted Share Purchase Price shall be increased by the difference between NLG
33,507,000 and Net Debt as of the Closing Date or (ii) Net Debt as of the
Closing Date is greater than NLG 33,507,000, the Unadjusted Share Purchase Price
shall be reduced by the difference between NLG 33,507,000 and Net Debt as of the
Closing Date and (B) in the event that either (i) Working Capital as of the
Closing Date is less than NLG 487,000, the Unadjusted Share Purchase Price shall
be reduced by the difference between NLG 487,000 and Working Capital as of the
Closing Date, or (ii) Working Capital as of the Closing date is greater than NLG
487,000, the Unadjusted Share Purchase Price shall be increased by the
difference between NLG 487,000 and Working Capital as of the Closing Date;
provided, that in the event (i) any aggregate adjustment pursuant to subclauses
(A) and (B) is less than NLG 1,000,000, no such aggregate adjustment shall be
made, or (ii) any aggregate adjustment pursuant to subclauses (A) and (B) above
is equal to or greater than NLG 1,000,000, such adjustment shall be made in its
entirety. The term "Net Debt" shall mean all outstanding current and long term
debt (debt means debt for borrowed monies including, but not limited to, loans,
capital leases, monies owing to the sellers of companies acquired by the Company
and liabilities classified as provisions on Schedules 1.4(d) and 3.4.2), less
all cash and cash equivalents. The term "Working Capital" shall mean current
assets (excluding cash and cash equivalents) less current liabilities (excluding
the current portion of principal and interest in respect of any current and long
term debt (debt means debt for borrowed monies including, but not limited to,
loans, capital leases, and monies owing to the sellers of companies acquired by
the Company and liabilities classified as provisions on Schedules 1.4(d) and
3.4.2), all as determined from a consolidated balance sheet of the Company and
its Subsidiaries, prepared in accordance with Dutch GAAP AS of the Closing Date.
Set forth on Schedule 1.4(d) is the calculation of the Net Debt and Working
Capital Amounts set forth above.
1.5 Amendment of Options and Warrants. On the terms and subject to
the conditions of this Agreement, at the Closing each Optionholder and Exchange
Warrant Holder and the Holding will enter into an arrangement whereby (i) each
Optionholder is
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amending each Optionholder's option agreement (the "Option Amendments")
providing that each Optionholder agrees to receive that number of shares of
Holding Common Stock set forth on Schedule 1.5 hereof in lieu of depository
receipts to purchase Company Common Stock upon exercise of such Optionholder's
Options and payment of the applicable exercise price and (ii) each Holder of
Exchange Warrants is amending each Exchange Warrant Holder's warrant agreement
(the "Warrant Amendments") providing that each Exchange Warrant Holder agrees to
receive that number of shares of Holding Common Stock set forth on Schedule 1.5
hereof in lieu, of depository receipts to purchase Company Common Stock upon
exercise of such Warrantholder's Warrants and payment of the applicable exercise
price
1.6 Payment Obligations. The parties agree that upon delivery by
Holding of the Unadjusted Share Purchase Price (including by way of delivery of
Holding Common Stock) to the Notary, pursuant to Section 1.3 hereof and to the
Stichting pursuant to Section 1.4(c), Holding shall have fulfilled its payment
obligations to the Stichting and the Holders, and shall have no obligations or
liability to the Stichting or the Holders for any payments under this Agreement.
Upon the receipt of such payments the Notary or the Stichting, as the case may
be, shall be solely responsible and liable for the delivery of such payments to
the Holders, which payments shall be made to the Holders in accordance with the
terms of this Agreement.
ARTICLE II
THE CLOSING
2.1 Date of Closing. The consummation of the purchase and sale of
the Shares contemplated hereby (the "Closing") is taking place on the date
hereof, at the offices of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ in Amsterdam. The date on which the
Closing is effected is referred to in this Agreement as the "Closing Date." At
the Closing, the parties shall execute and deliver the documents referred to in
Article VII.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE MANAGEMENT SHAREHOLDERS AND THE STICHTING OF THE COMPANY
The Management Shareholders and the Stichting make the following
representations and warranties to Holding and Buyer each of which is true and
correct as of the date hereof and shall be unaffected by any investigation
heretofore or hereafter made by Holding or Buyer or any representative thereof.
Where a reference is made to the knowledge of the Management Shareholders, a
reference is made to such knowledge of each of the Management Shareholders,
having made all reasonable inquiries of the Company, the Subsidiaries and their
officers, auditors, and legal advisors and taking into account that all of the
Management Shareholders are employees of the Company and/or its Subsidiaries.
3.1 Corporate Organization.
(a) The Company is a corporation duly organized and
validly existing under the laws of the Netherlands, and has all requisite
corporate power and authority to
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own, lease and operate the properties and assets it now owns, leases or operates
and to carry on its business as presently conducted or proposed to be conducted
pursuant to existing plans. The Company is duly qualified or licensed to
transact business in each of the jurisdictions where such qualification or
licensing is required by reason of the nature or location of the properties and
assets owned, leased or operated by it or the business conducted by it. The
jurisdictions in which the Company is so qualified are listed on Schedule
3.1(a). The Company has provided to Holding complete and correct copies of its
Deed of Incorporation, as amended to date (certified by the competent authority
of the jurisdiction of incorporation of the Company within 30 days of the date
hereof).
(b) Each of the subsidiaries of the Company listed on
Schedule 3.1(b) (each a "Subsidiary" and collectively, the "Subsidiaries") is a
corporation duly organized and validly existing under the laws of its
jurisdiction of organization or incorporation as set forth on Schedule 3.1(b),
and each of the Subsidiaries has all requisite corporate power and authority to
own, lease, and operate the properties and assets it now owns, leases or
operates and to carry on its business as presently conducted or proposed to be
conducted pursuant to existing plans. Each of the Subsidiaries is duly qualified
or licensed to transact business in each of the jurisdictions where such
qualification or licensing is required by reason of the nature or location of
the properties and assets owned, leased or operated by it or the business
conducted by it. The jurisdictions in which the Subsidiaries are so qualified
are listed on Schedule 3.1(b). Except as set forth on Schedule 3.1(b) and other
than the Subsidiaries the Company does not (i) own, of record or beneficially,
directly or indirectly, any equity or other proprietary interest in, (ii) except
for the agreement to acquire Adverbe (as defined herein), possess the right to
acquire any such interest, contingent or otherwise in, or (iii) otherwise
control, whether through control over the composition of the board of directors,
or by contract or proxy, any other corporation, partnership, joint venture,
limited liability company, business enterprise or other entity (together with
natural persons, "Persons").
(c) The lawfully appointed directors of Stichting Beheer
Derdengelden H.D.M. are Jules T.H.M. Kortenhorst, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇
▇▇▇▇.
3.2 Authority; Absence of Conflicts.
(a) The Company has full corporate power and authority to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby, subject to the limitations imposed on the Company by
Article 2:207c BW (Dutch Civil Code). The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly approved by the Board of Managing Directors (Bestuur) and the Supervisory
Board of Directors (Raad van Commissarissen) of the Company, and no other
corporate actions on the part of the Company are necessary to authorize and
approve the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Company and, assuming this Agreement constitutes a
valid and binding obligation of Holding and Buyer, constitutes the valid and
binding obligation of the Company, enforceable against it in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws of general applicability relating to or
affecting creditors' rights and by general equitable principles.
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(b) Except as set forth on Schedule 3.2(b) hereto,
neither the execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby, nor compliance with the terms hereof, will
(i) conflict with or violate any provision of the Deed of Incorporation or other
organizational documents of the Company or any Subsidiary, (ii) violate,
conflict with or result in a breach of or default (or constitute any event
which with the lapse of time or the giving of notice or both would constitute a
breach or default) under any of the terms, conditions or provisions of any
Material Contract (as defined in Section 3.13) to which the Company or any
Subsidiary is a party or by which their respective assets or properties are
bound, (iii) accelerate or give to others any interests or rights, including
rights of acceleration, termination, modification or cancellation, under any
Material Contract to which the Company or any Subsidiary is a party or by which
their respective assets are bound or in or with respect to the capital stock,
business, assets or properties of the Company or any Subsidiary, (iv) result in
the creation of any Encumbrance on the capital stock, business, assets or
properties of the Company or any Subsidiary, (v) conflict with, violate or
result in a breach of or constitute a default under any law, statute, rule,
judgment, order, decree, injunction, ruling, treaty, convention or regulation of
any government, governmental agency, authority or instrumentality, court or
arbitration tribunal (each, a "Governmental Entity") to which the Company, any
Subsidiary or any of their respective assets or properties are subject, or (vi)
require the Company or any Subsidiary to give notice to, or obtain an
authorization, approval, order, license, franchise, declaration or consent of,
or make a filing with, any third party, including, without limitation, any
Governmental Entity ("Company Consents").
3.3 Outstanding Capital Stock.
(a) The authorized Company Capital Stock consists of
12,500,000 shares of capital stock, nominal value NLG 0.04 per share, of which
6,337,774 shares are issued and outstanding. No other classes of capital stock
of the Company are authorized or outstanding. All of the issued and outstanding
shares of Company Capital Stock have been duly authorized and are validly
issued, fully paid and nonassessable, and none of such shares has been issued in
violation of any preemptive rights of shareholders.
(b) The authorized capital stock, and the issued and
outstanding shares, of each Subsidiary is as set forth on Schedule 3.3(b).
Except as set forth in Schedule 3.3(b) all the outstanding shares of capital
stock of each Subsidiary have been validly issued and are fully paid and
nonassessable and are owned by the Company, by one or more wholly-owned
subsidiaries of the Company or by the Company and one or more such Subsidiaries,
free and clear of all Encumbrances.
(c) Except for the Options for the purchase of 1,204,178
depository receipts representing a beneficial interest in shares of Company
Capital Stock issued under the Company's Stock Option Plan, the Warrants for the
purchase of 373,925 depository receipts representing a beneficial interest in
shares of Company Capital Stock, depository receipts issued by the Stichting and
that certain promissory note between the Company and Breydon Ltd., there is no
outstanding right, subscription, warrant, call, unsatisfied preemptive right,
option or other agreement of any kind to purchase or otherwise to receive from
the Company or any Subsidiary any shares of the capital stock or any other
security of the Company or any Subsidiary, and there is no outstanding security
of any kind convertible into such capital stock or other security. Schedule
3.3(c) sets forth a list of
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such Optionholders and Warrantholders and the respective number of Options
and/or Warrants held by each. There are no stock appreciation or similar
rights to participate in the value of the equity of the Company or any
Subsidiary.
3.4 Financial Statements. The Company has delivered to Holding
true and complete copies of (a) the audited balance sheet of the Company and its
consolidated Subsidiaries at December 31, 1998 and the related statements of
income (including explanatory notes thereto), changes in shareholders' equity,
and cash flows for the year then ended, certified by the Company's independent
public accounting firm, and (b) an unaudited balance sheet of the Company and
its consolidated Subsidiaries at June 30, 1999 and related statements of income,
changes in shareholders' equity, and cash flows for the period then ended
(collectively, the "Financial Statements"). The unaudited balance sheet at June
30, 1999 (the "6/30/99 Balance Sheet") is attached hereto as Schedule 3.4(a)(i)
and a proforma balance sheet at June 30, 1999 setting certain proforma
adjustments to the 6/30/99 Balance Sheet is attached hereto as Schedule
3.4(a)(2). Except as set forth on Schedule 3.4(a), the Financial Statements have
been prepared in accordance with Dutch GAAP consistently applied throughout the
periods involved and such balance sheets, including the related notes, fairly
present the financial position, assets and liabilities (whether accrued,
absolute, contingent or otherwise) of the Company and its consolidated
Subsidiaries at the dates indicated and such statements of income, changes in
stockholders' equity and cash flow fairly present the results of operations,
changes in stockholders' equity and cash flows of the Company and its
consolidated Subsidiaries for the periods indicated; provided, however, that the
unaudited financial statements included in the Financial Statements do not
contain footnotes and are subject to normal year-end adjustments (all of which
are of a recurring nature and none of which individually or in the aggregate
would have a Company Material Adverse Effect). As used in this Agreement,
"Company Material Adverse Effect" means any change, effect, event or
circumstance that (a) is, or could reasonably be expected to be, materially
adverse to the assets, business, financial condition, prospects, liabilities or
results of operations (including, but not limited to, trailing and prospective
earnings before interest, taxes, depreciation or amortization) of the Company
and the Subsidiaries, taken as a whole, or (b) materially impairs the ability of
the Company to perform its obligations under this Agreement. References in this
Agreement to the "Balance Sheet" shall mean the 6/30/99 Balance Sheet of the
Company and its Subsidiaries referred to above, and references in this Agreement
to the "Balance Sheet Date" shall be deemed to refer to June 30, 1999.
3.5 Absence of Undisclosed Liabilities; Indebtedness. Except as
set forth on Schedule 3.5 hereto, neither the Company nor any Subsidiary has any
direct or indirect indebtedness, guaranty, endorsement, claim, loss, damage,
deficiency, cost, expense, obligation, or responsibility, whether fixed or
contingent, known or unknown, asserted or unasserted, ▇▇▇▇▇▇ or inchoate,
liquidated or unliquidated, secured or unsecured, whether due or to become due
and whether arising out of transactions entered into or any condition or state
of facts existing on or prior to the date hereof (collectively, "Liabilities")
except, (a) Liabilities set forth on the Balance Sheet and (b) Liabilities which
have arisen after the date of the Balance Sheet Date in the ordinary course of
business consistent with past practice, all of which are accurately and fairly
reflected in the books and records of the Company and which will not,
individually or in the aggregate, reasonably be expected to result in a Company
Material Adverse Effect. Except as set forth on Schedule 3.5 hereto,
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neither the Company nor any Subsidiary has any outstanding (a) indebtedness for
borrowed money, (b) Liabilities evidenced by bonds, debentures, notes or other
similar instruments, (c) Liabilities in respect of rent or other amounts due
under a lease to which the Company or any Subsidiary is a party that is
required to be classified and accounted for as a capitalized lease under Dutch
GAAP, (d) Liabilities incurred or assumed as the deferred purchase price of
property, or pursuant to conditional sale obligations (excluding trade accounts
payable arising in the ordinary course of business consistent with past
practice), (e) Liabilities relating to the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction, or (e)
Liabilities in respect of guarantees by the Company or any Subsidiary of items
referred to in clauses (a) through (d) above of other Persons (collectively,
"Indebtedness").
3.6 Absence of Material Changes. Except as set forth on Schedule
3.6 hereto, since the Balance Sheet Date, the Company and each Subsidiary has
conducted its business in the ordinary course of business consistent with past
practice. Without limiting the generality of the foregoing, except as set forth
on Schedule 3.6 hereto and as otherwise contemplated by this Agreement, since
the Balance Sheet Date, neither the Company nor any Subsidiary has:
(a) incurred any Liabilities, other than Liabilities
incurred in the ordinary course of business consistent with past practice, or
discharged or satisfied any Encumbrance, or paid any Liability, other than the
payment of any Liabilities in the ordinary course of business consistent with
past practice, or failed to pay or discharge when due any Liabilities, which the
failure to pay or discharge has caused or will cause any material damage or risk
of material loss to it, its business as now conducted or any of its assets or
properties;
(b) suffered any damage, destruction or loss of physical
property or goods resulting in costs or expenses to the Company or any of the
Subsidiaries in excess of NLG 100,000 whether or not covered by insurance;
(c) created, incurred, assumed or guaranteed any
Indebtedness or subjected to any Encumbrance any of its assets or properties,
tangible or intangible, except for Permitted Liens (as defined in Section
3.7(b));
(d) sold, assigned or transferred any of its assets or
properties or compromised any of its Liabilities, except, in each such case, in
the ordinary course of business consistent with past practice;
(e) experienced any Company Material Adverse Effect;
(f) made any capital expenditures or capital additions or
betterments in excess of an aggregate of NLG 100,000; provided that the Company
and its Subsidiaries have timely made the capital expenditures contemplated by
the Company's 1999 fiscal year budget, attached as Schedule 3.6(f);
(g) revalued any of its assets or properties;
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(h) made or suffered any amendment or termination of any
Material Contract or waived or compromised any substantial debts or claims held
by it, or waived or compromised any rights of substantial value, whether or not
in the ordinary course of business;
(i) made any change in any financial or tax accounting
method, principle or practice (including, without limitation, practices
regarding accrual methods or policies regarding reserves) or in its method of
applying any such principle or practice;
(j) paid any dividends or made any distributions (however
characterized and whether payable in cash, additional shares of stock or other
property) in respect of any shares of its capital stock;
(k) repurchased or redeemed any shares of its capital
stock or the stock of any Subsidiary not wholly-owned;
(1) issued any additional shares of its capital stock or
granted any right, subscription, warrant, call, option or any other securities
convertible into or exchangeable for shares of its capital stock or right to
participate in the equity thereof;
(m) increased the salaries or other compensation of,
altered any bonus or incentive arrangement or made any advance or loan to, any
officer, director or employee of the Company or any Subsidiary ("Employee");
(n) provided any Employee with any increased security or
tenure of employment;
(o) increased the amounts payable to any Employee upon
the termination of any such person's employment or upon the consummation of this
transaction;
(p) suffered any repeated, recurring or prolonged
shortage, cessation or interruption of supplies or utility or other services
required to conduct its business and operations;
(q) adopted, amended or revised the terms of any Benefit
Plan (as defined in Section 3.16) with respect to the benefits granted to or for
the benefit of any of the present or former Employees thereunder, other than as
required by law;
(r) received notice or had knowledge of any actual or
threatened labor trouble, strike or other occurrence, event or condition of any
similar character;
(s) acquired (by merger, share exchange, consolidation,
combination or acquisition of stock or assets) any corporation, partnership or
other business organization or division thereof; or
(t) entered into any agreement to do, or taken any steps
toward doing, any of the foregoing.
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3.7 Real Property.
(a) The Company does not own any real property.
(b) Schedule 3.72(b) hereto sets forth a complete list of
all real property leased by the Company or any Subsidiary (the "Leased Real
Property" and all other rights, licenses and interests of the Company and the
Subsidiaries in real property are collectively referred to herein as the "Real
Property"). The Company has made available to Holding true and correct copies
of all leases, subleases and licenses in the Company's or any Subsidiary's
possession relating to any of the Real Property. None of the Real Property
reflected in the Balance Sheet has been disposed of, and no Real Property has
been acquired by the Company or any Subsidiary since the date of the Balance
Sheet.
(c) Except for (i) liens disclosed on Schedule 3.7(c)
hereto, (ii) liens for current Taxes (as defined in Section 3.18(h)) not yet
delinquent and duly accrued for on the Balance Sheet, or, if more recent,
otherwise accrued for in the Company's books and records, (iii) covenants,
conditions and restrictions of record, none of which materially impairs the use
of such property in the manner currently used or impairs the ability of the
Company or any Subsidiary to deliver good title to such Real Property, and (iv)
any mechanic's, workmen's, repairmen's, materialmen's, contractor's,
warehousemen's, carrier's, supplier's or vendor's lien, if payment is not yet
due on the underlying obligation and duly accrued for on the Balance Sheet, or,
if more recent, otherwise accrued for in the Company's books and records (the
"Permitted Liens"), the Company or a Subsidiary has a valid leasehold interest
in all Leased Real Property, free and clear of any mortgage, pledge, security
interest, lien, claim, charge, license, conditional sales contract, restriction,
reservation, option, right of first refusal or other encumbrance of any nature
whatsoever (collectively, "Encumbrances"). Except as set forth on Schedule
3.7(c), the Company or a Subsidiary has good title to all structures, plants,
leasehold improvements, systems, fixtures and other property located on or about
any of the Leased Real Property and which are owned by the Company or a
Subsidiary, as reflected in the Balance Sheet or otherwise used by the Company
or a Subsidiary, free and clear of any Encumbrances except for Permitted Liens,
and none of such assets is subject to any Contract (as defined in Section 3.13)
for its use by any Person other than the Company or a Subsidiary.
(d) Each of the leases and subleases relating to the
Leased Real Property is in full force and effect, there is no material default
by the Company or a Subsidiary (or to the knowledge of the Company, by the
lessor) under any such lease or sublease, and, except as set forth on Schedule
3.7(d), each such lease and sublease will remain in full force and effect
following the Closing without any modification in the rights or obligations of
the parties under any such lease or sublease.
(e) Except as set forth on Schedule 3.7(e) hereto, no
work has been performed on or with respect to or in connection with any of the
Real Property that would cause such Real Property to become subject to any
additional mechanic's, materialmen's, workmen's, repairmen's, carrier's or
similar Encumbrance aggregating in excess of NLG 100,000.
(f) The structures, plants, improvements, systems and
fixtures (including, without limitation, storage tanks or other impoundment
vessels, whether above
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or below ground) located on each parcel of Real Property comply in all material
respects with all applicable laws, ordinances, rules, regulations and similar
governmental and regulatory requirements, and are in good operating condition
and repair, ordinary wear and tear excepted. Each such parcel of Real Property
(in view of the purposes for which it is currently used) conforms in all
material respects with all covenants or restrictions of record and conforms with
all applicable building codes and zoning requirements and there is not, to the
knowledge of the Management Shareholders, any proposed change in any such
governmental or regulatory requirements or in any such zoning requirements. All
existing material electrical, plumbing, fire sprinkler, lighting, air
conditioning, heating, ventilation, elevator and other mechanical systems
located in or about the Real Property are in good operating condition and
repair, ordinary wear and tear excepted.
(g) The Real Property includes all material easements,
rights-of-way and similar rights necessary to conduct the Company's and its
Subsidiaries' business as presently conducted and to use all of their Real
Property as currently used. No such material easement or right will be breached
by, nor will any party thereto be given a right of termination as a result of,
the transactions contemplated by this Agreement.
(h) Except as set forth on Schedule 3.7(h) the Company
and its Subsidiaries do not have any continuing liability in respect of any
other property formerly owned or occupied by them either as the original
contracting party or by virtue of any direct covenant having been given or under
any guarantee agreement or as surety for the obligations of any other person in
respect of any Real Property.
(i) There is no matter of which the Company and its
Subsidiaries is or ought to be aware on reasonable enquiry which adversely
affects the commercial use of any Real Property by the Company.
3.8 Tangible Personal Property.
(a) The Company or a Subsidiary has good title to all
machinery and equipment, tools, spare and maintenance parts, furniture, vehicles
and all other tangible personal property (collectively, the "Tangible Personal
Property") owned by the Company or a Subsidiary, free and clear of any
Encumbrance of any kind or nature whatsoever, except for Permitted Liens. All
material items of Tangible Personal Property currently owned or used by the
Company or a Subsidiary as of the date hereof are in good operating condition
and repair, ordinary wear and tear excepted, are physically located at or about
the Company's or a Subsidiary's place of business and are owned outright, or
validly leased by the Company or a Subsidiary. Except as set forth on Schedule
3.8(a) hereto, the owned and leased Tangible Personal Property consists of all
tangible personal property necessary for the operation of the business of the
Company and its Subsidiaries as currently conducted or as currently contemplated
to be conducted.
(b) Schedule 3.8(b) hereto sets forth a complete and
correct list of all material Tangible Personal Property leases to which the
Company or a Subsidiary is a party, together with a brief description of the
property leased. The Company has made available to Holding complete and correct
copies of each lease (and any amendments thereto) listed on Schedule 3.8(b).
Except as set forth on Schedule 3.8(b): (i) each such lease is in full force and
effect; (ii) all lease payments due to date on any such lease have
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been paid, and neither the Company nor any Subsidiary nor (to the knowledge of
the Management Shareholders) any other party is in default under any such lease,
and no event has occurred which constitutes, or with the lapse of time or the
giving of notice or both would constitute, a default by the Company or a
Subsidiary or (to the knowledge of the Management Shareholders) any other party
under such lease; and (iii) to the knowledge of the Management Shareholders,
there are no defaults alleged against the Company or a Subsidiary by any other
party with respect to any such lease.
3.9 Accounts Receivable. The accounts receivable and notes
receivable (collectively, the "Accounts Receivable") reflected on the Balance
Sheet are, and the Accounts Receivable of the Company and its Subsidiaries
created from and after the date of the Balance Sheet to the Closing Date will
be, free and clear of any Encumbrance. Except as set forth on Schedule 3.9, all
existing Accounts Receivable of the Company and its Subsidiaries (i) arose from
bona fide sales of goods or services in the ordinary course of business
consistent with past practice, (ii) are accurately and fairly reflected on the
Balance Sheet or, with respect to Accounts Receivable of the Company and its
Subsidiaries created after the date thereof and through the date of this
representation and warranty, are accurately and fairly reflected in the books
and records of the Company, and (iii) are valid and collectible, net of the
reserve for uncollectible accounts reflected on the Balance Sheet, and there is
no contest, claim or right of set-off asserted by any maker of any such Account
Receivable relating to the amount or validity thereof.
3.10 Accounts Payable. Except as set forth on Schedule 3.10
hereto, all accounts payable of the Company and its Subsidiaries (i) arose from
bona fide purchases in the ordinary course of business and consistent with past
practice, and (ii) are accurately and fairly reflected on the Balance Sheet or,
with respect to accounts payable of the Company and its Subsidiaries created
after the Balance Sheet Date and through the date of this representation and
warranty, are accurately and fairly reflected in the books and records of the
Company consistent with past practices.
3.11 Euro Compliance. Except as set forth on Schedule 3.11
Currency-Sensitive Systems are Euro Compliant. "Currency-Sensitive Systems"
means any software, microcode or hardware system or component, including any
business computer system or software application to support pricing, payment or
accounting by the Company or any Subsidiary for goods and services in the unit
of single currency as defined in Counsel Regulations (EC) ▇▇. ▇▇▇▇/▇▇ ▇▇ ▇▇ ▇▇▇▇
▇▇▇▇ (▇▇▇ "Euro"). "Euro Data" means any data of any type that includes Euro
currency information or which is otherwise derived from, dependent on or related
to Euro currency information. "Euro Compliant" means, with respect to
Currency-Sensitive Systems, that each such system accurately processes all Euro
Data, without any loss of functionality or performance, including, but not
limited to, calculating, comparing, sequencing, storing and displaying such Euro
Data, when used with a stand alone system or in combination with other software
or hardware.
3.12 Year 2000 Compliance. Set forth on Schedule 3.12 is a
description of all actions and testing taken by the Company and its Subsidiaries
to ensure that all Date-Sensitive Systems are Year 2000 Compliant. To the
knowledge of the Management Shareholders as set forth on Schedule 3.12 is a
listing of all deficiencies in the Company's and the Subsidiaries'
Date-Sensitive Systems rendering such systems not Year 2000 Compliant.
"Date-Sensitive System" means any software, microcode or hardware system
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or component, including any electronic or electronically controlled system or
component, that processes any Date Data and that is installed, in development or
on order by the Company or any Subsidiary for its internal use, or which the
Company or any Subsidiary sells, leases, licenses, assigns or otherwise
provides, or the benefit of which the Company or any Subsidiary provides, to
its customers, vendors, suppliers, affiliates or any other third party. "Date
Data" means any data of any type that includes date information or which is
otherwise derived from, dependent on or related to date information. "Year 2000
Compliant" means, with respect to Date-Sensitive Systems, that each such system
accurately processes all Date Data, including for the twentieth and twenty-first
centuries, without loss of any functionality or performance, including, but not
limited to, calculating, comparing, sequencing, storing and displaying such Date
Data (including all leap year considerations), when used as a stand-alone system
or in combination with other software or hardware.
3.13 Contracts.
(a) Except as set forth on Schedule 3.13(a) hereto,
neither the Company nor any Subsidiary is a party to, or subject to:
(i) any contract, agreement, license, lease
arrangement or understanding, whether oral or written
("Contract"), or series of related Contracts, (A) which
involves annual expenditures or receipts by the Company and
its Subsidiaries of more than NLG 100,000 or (B) which
provides for performance, regardless of amounts, over a period
in excess of one year after the date of such contract,
arrangement or commitment;
(ii) any license or royalty Contract, whether as
licensor or licensee;
(iii) any Contract with suppliers or customers;
(iv) any note, bond, indenture, credit facility,
mortgage, security agreement or other instrument or other
Contract relating to or evidencing Indebtedness or a security
interest in or mortgage on the assets of the Company or any
Subsidiary;
(v) any warranty, indemnity or guaranty issued
by the Company or any Subsidiary (other than customary product
warranties provided by the Company or any Subsidiary in the
ordinary course of business, a description of which is set
forth on Schedule 3.13(a) and the form or forms of which have
previously been provided to Holding);
(vi) any Contract for capital expenditures or the
acquisition or construction of fixed assets;
(vii) any Contract granting to any Person the
right to use any property or property right of the Company or
any Subsidiary, including any lease;
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(viii) any Contract granting to any Person a right
of first refusal, first or similar preferential right to
purchase or acquire any assets or properties of the Company or
any Subsidiary;
(ix) any Contract restricting the right of the
Company or any Subsidiary to engage in any business activity
or to compete with any business;
(x) any joint venture, partnership or similar
Contract;
(xi) any management service, investment advisory,
investment banking, or other similar Contract;
(xii) any outstanding proxy, power of attorney or
similar delegation of authority of the Company or any
Subsidiary;
(xiii) any other material Contract not made in the
ordinary course of business and consistent with past practice;
or
(xiv) any outstanding offer or commitment to enter
into any Contract of the nature described in subsections (i)
through (xiv) of this Section 3.13(a).
(b) Schedule 3.13(b) hereto contains an accurate and
complete list of all Contracts which are currently in effect between the Company
or any Subsidiary and any of the following: (i) each director, officer,
shareholder or affiliate of the Company or any Subsidiary; (ii) the spouses,
children, grandchildren, siblings, parents, grandparents, uncles, aunts, nieces,
nephews or first cousins of any director or officer of the Company or any
Subsidiary or the spouses of any of the foregoing Persons (collectively, "near
relatives"); (iii) any trust for the benefit of any director or officer of the
Company or any Subsidiary or any of their respective near relatives; and (iv)
any Person owned or controlled by any director or officer of the Company or any
Subsidiary or any of their respective near relatives. (The Contracts described
in Schedule 3.13(a) and Schedule 3.13(b) are collectively referred to herein as
"Material Contracts").
(c) The Company has made available to Holding complete
and correct copies of each written Material Contract (and any amendments
thereto), and Schedule 3.13(a) and Schedule 3.13(b) contain accurate summary
descriptions of all oral Material Contracts. Except as set forth on Schedule
3.13(c) hereto: (i) each Material Contract is in full force and effect; (ii)
none of the Company, any Subsidiary nor, to the knowledge of the Management
Shareholders, any other party is in default under any such contract, and no
event has occurred which constitutes, or which with the lapse of time or the
giving of notice or both would constitute, a default by the Company, any
Subsidiary or, to the knowledge of the Management Shareholders, by any other
party under such contract; and (iii) to the knowledge of the Management
Shareholders, there are no defaults alleged against the Company or any
Subsidiary by any other party with respect to any such Contract.
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3.14 Legal Proceedings. Except as set forth on Schedule 3.14
hereto, there are no suits, actions, proceedings (including, without limitation,
arbitral and administrative proceedings), claims or governmental investigations
or audits pending or, to the knowledge of the Management Shareholders,
threatened, by or against the Company, any Subsidiary or their respective
properties, assets or business, Employees or agents in connection with the
business of the Company or any Subsidiary. There are no such suits, actions,
proceedings, claims or investigations pending or, to the knowledge of the
Management Shareholders, threatened, challenging the validity or propriety of,
or otherwise relating to or involving, this Agreement or the transactions
contemplated hereby. Except as set forth on Schedule 3.14, there is no judgment,
order, writ, injunction, decree or award (whether issued by a Governmental
Entity or otherwise) to which the Company or any Subsidiary is a party or
otherwise subject, or involving the property, assets or business of the Company
or any Subsidiary, which is unsatisfied or which requires continuing compliance
therewith by the Company or any Subsidiary.
3.15 Labor Matters. Except as set forth on Schedule 3.15 no union,
works council or other labor organization is certified or recognized as
collective bargaining agent to represent any Employees and the Management
Shareholders do not have knowledge of any campaign currently in progress to seek
representation with respect to any Employees. Neither the Company nor any
Subsidiary is a party to, the subject of, involved in or, to the knowledge of
the Management Shareholders, threatened by any labor dispute, unfair labor
practice charge, strike, work stoppage, work slowdown, picketing, boycott,
handbilling or other concerted action by or on behalf of any Employees.
3.16 Employee Benefit Plans.
(a) For purposes of this Agreement, "Benefit Plan" means
and includes (i) any employment, consulting, severance or other compensation
Contract, (ii) any deferred compensation, stock ownership, executive
compensation, bonus or other incentive compensation, supplemental retirement,
vacation pay, sickness, disability, death benefit, retiree medical or life
insurance, employee stock option or stock purchase, employee discount, club
membership, educational assistance, severance pay, termination or salary
continuation plan, arrangement or practice (whether provided through insurance,
on a funded or unfunded basis or otherwise), and (iii) each other employee
benefit plan, program or arrangement which relates to any of the Employees or
former Employees or in respect of which the Company or any Subsidiary has any
Liability or obligation (contingent or otherwise).
(b) Other than with respect to employment agreements for
call center employees not involving more than NLG 100,000 in any one instance,
Schedule 3.16(b) sets forth a complete and correct list of all Benefit Plans,
and summary of oral Benefit Plans, if any, and the Company has delivered
complete and correct copies of all such written Benefit Plans.
(c) Except as set forth on Schedule 3.16(c), neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any material payment
becoming due, or materially increase the amount of compensation due, to any
Employee or former Employee, (ii) materially increase any benefits otherwise
payable under any Benefit Plan, or (iii) result in the acceleration of the
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time of payment or vesting of any such benefits. With respect to each Benefit
Plan, the Company has made available to Holding complete and correct copies of
all material descriptions distributed to Employees or set forth in any manuals
or other documents, the text of the Benefit Plan and of any trust, insurance or
annuity Contract maintained in connection therewith, and the most recent
actuarial reports, if any, relating to the Benefit Plan.
(d) All contributions required to be made to or with
respect to each Benefit Plan with respect to the service of Employees, former
Employees or other individuals with the Company or any Subsidiary prior to the
date hereof have been made or have been accrued for in the Balance Sheet or in
the books and records of the Company for periods after the date of the Balance
Sheet, as applicable.
(e) Except as set forth on Schedule 3.16(e) hereto, each
Benefit Plan has in all material respects been administered to date in
accordance with applicable laws and with the terms and provisions of all
documents or contracts pursuant to which such Benefit Plan is maintained, except
as otherwise permitted by law; there is no dispute, arbitration, claim, suit or
grievance pending or, to the knowledge of Management Shareholders, threatened,
involving a Benefit Plan (other than routine claims for benefits), and, there is
not, to the knowledge of Management Shareholders, any basis for such a claim;
none of the Benefit Plans nor, to the knowledge of Management Shareholders, any
fiduciary thereof (in such Person's capacity as such) has been the direct or
indirect subject of an order of, or, to the knowledge of Management
Shareholders, an investigation by, a Governmental Entity; and there are no
matters pending as to which the Company or any Subsidiary has received notice
from any Governmental Entity or otherwise with respect to a Benefit Plan.
(f) None of the Benefit Plans provide for post-retirement
life insurance or health benefits coverage for any participant or any
beneficiary of a participant.
3.17 Environmental Matters.
(a) Except as disclosed on Schedule 3.17 hereto:
(i) the Company, its Subsidiaries and their
respective operations have been and are, and the Real Property
during the period that it is or was owned, operated or leased
by or for the Company or any Subsidiary is or was, in material
compliance with all applicable Environmental Laws (as defined
in Section 3.17(c)) and the Company or a Subsidiary obtained,
currently maintains and is in compliance with any permit,
authorization, license or similar approval required by
Environmental Laws and to the knowledge of the Management
Shareholders there are not any facts, circumstances or
conditions that could reasonably be expected to interfere with
such continued material compliance or require capital
expenditures in excess of NLG 100,000 to maintain such
compliance;
(ii) no judicial or administrative proceedings
are pending or, to the knowledge of the Management
Shareholders, threatened, against the Company, any Subsidiary
or the Real Property as owned, operated or leased by or on
behalf of the Company and its Subsidiaries, alleging the
violation of
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or seeking to impose liability under or pursuant to any
Environmental Law, and there are no investigations pending or,
to the knowledge of the Company, threatened, under or pursuant
to Environmental Laws against the Company, any Subsidiary or
the Real Property as owned, operated or leased by or on behalf
of the Company or its Subsidiaries;
(iii) neither the Company nor any Subsidiary has
received any written notice or other communication indicating
or otherwise alleging that the Company or any Subsidiary is or
could be liable for the cost of investigating, remediating or
otherwise addressing Hazardous Material (as defined in Section
3.17(c)) under Environmental Laws;
(iv) neither the Company nor its Subsidiaries are
subject to any outstanding Environmental Costs and Liabilities
(as defined Section 3.17(c)) in the aggregate in excess of NLG
100,000 and, there are not, to the knowledge of the Management
Shareholders, any facts, circumstances or conditions relating
to, arising from, associated with or attributable to the
operations of the Company, any Subsidiary or any Real Property
as owned, operated or leased by or on behalf of the Company or
any Subsidiary that could reasonably be expected to result in
the Company or any Subsidiary incurring Environmental Costs
and Liabilities in the aggregate in excess of NLG 100,000;
(v) there is not now, nor, to the knowledge of
the Management Shareholders, has there been in the past, on,
in or under any Real Property at the time owned, leased or
operated by the Company or any Subsidiary (x) any underground
storage tanks, above-ground storage tanks, dikes or
impoundments containing Hazardous Material, (y) any
asbestos-containing materials, or (z) any polychlorinated
biphenyls; and
(vi) neither the Company nor any Subsidiary has
filed any notice under Environmental Laws indicating past or
present treatment, storage or disposal of hazardous wastes or
reporting a Release (as defined Section 3.17(c)) of Hazardous
Material.
(b) The Company has made available to Holding copies of
all environmentally related audits, assessments, studies, reports, analyses and
results of investigations of any Real Property that are in the Company's or its
Subsidiaries' possession, custody or control.
(c) For purposes of this Agreement, the following terms
have the following definitions:
(i) "Environmental Costs and Liabilities" means
any and all losses, liabilities, obligations, damages, fines,
penalties, judgments, actions, claims, costs and expenses
(including, without limitation, fees, disbursements and
expenses of legal counsel, experts, engineers and consultants
and the costs of investigation and feasibility studies and
remedial
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action) arising from or under any Environmental Law or any
agreement with any Governmental Entity or other Person
thereunder or pursuant thereto.
(ii) "Environmental Law" means any applicable law
(including common law), statute, code, ordinance, rule,
regulation or other requirement relating to the environment,
natural resources, or public or employee health and safety, as
such laws have been amended or supplemented, and the
regulations promulgated pursuant thereto, and all analogous
state or local statutes.
(iii) "Hazardous Material" means any substance,
material or waste that is regulated by any Governmental Entity
as hazardous, toxic or words of similar meaning, including,
without limitation, any material, substance or waste that is
defined as a "hazardous waste," "hazardous material,"
"hazardous substance," "extremely hazardous waste,"
"restricted hazardous waste," "contaminant," "toxic waste" or
"toxic substance" under any provision of Environmental Law, as
well as petroleum, petroleum products, asbestos, urea
formaldehyde and polychlorinated biphenyls.
(iv) "Real Property", for purposes of this
Section 3.17 only, means any real property currently or
formerly owned, operated or leased by or for the Company or
any Subsidiary.
(v) "Release" means any release, spill,
emission, migration, leaking, pumping, injection, deposit,
disposal, discharge, dispersal or leaching into the indoor or
outdoor environment.
3.18 Tax Matters. Except as disclosed on Schedule 3.18 hereto:
(a) Except as set forth on Schedule 3.18(a) all material
Tax Returns (as defined in Section 3.18(h)) required to be filed by or with
respect to the Company or any Subsidiary have been timely filed. The Company and
its Subsidiaries have timely paid all Taxes that are due, or claimed or asserted
by any taxing authority to be due, from or with respect to them. With respect to
any period for which Taxes are not yet due, the Company has made sufficient
current accruals for all such Taxes in its financial statements (including the
Financial Statements). The Company and its Subsidiaries have made all required
estimated Tax payments sufficient to avoid any penalties. The Company and its
Subsidiaries have withheld and paid all Taxes required by all applicable laws to
be withheld or paid in connection with any amounts paid or owing to any
Employee, creditor, independent contractor or other third party. Schedule
3.18(a) sets forth each jurisdiction in which the Company or any Subsidiary paid
Taxes or filed a Tax return since January 1, 1997, including the type of Taxes
paid.
(b) There are no outstanding Contracts or waivers
extending the statutory period of limitations applicable to any claim for, or
the period for the collection or assessment of, Taxes due from or with respect
to the Company or any Subsidiary for any taxable period, and no power of
attorney granted by or with respect to the Company or any Subsidiary relating to
Taxes is currently in force. No closing agreement has been entered into by or
with respect to the Company or any Subsidiary. No audit or other proceeding by
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any Governmental Entity is pending or threatened in writing, in regard to any
Taxes due from or with respect to the Company or any Subsidiary or any Tax
Return filed by or with respect to the Company or any Subsidiary. No assessment
of Taxes is proposed against the Company or any Subsidiary or any of their
respective assets.
(c) Neither the Company nor any Subsidiary is party to,
is bound by, or has any obligation under, any Tax sharing agreement, Tax
allocation agreement, Tax indemnity agreement, or any other similar Contract.
(d) The Company has made available complete copies of (i)
all filed Tax Returns of the Company or any Subsidiary relating to the taxable
periods since January 1, 1995, (ii) any audit report issued since January 1,
1995 relating to Taxes due from or with respect to the Company or any
Subsidiary, its income, assets or operations, and (iii) any extensions of the
statute of limitations with respect to any Taxes due from or with respect to the
Company or any Subsidiary, their income, assets or operations. All income and
franchise Tax Returns filed by or on behalf of the Company or any Subsidiary
other than for those for the taxable years ended on the respective dates set
forth on Schedule 3.18(d) hereto have been examined by the relevant taxing
authority or the statute of limitations with respect to such Tax Returns has
expired.
(e) Except as set forth on Schedule 3.18(e), since
January 1, 1995, no claim has been made in writing addressed to the Company or
any Subsidiary by a taxing authority in a jurisdiction where the Company or a
Subsidiary does not file Tax Returns asserting that the Company or any
Subsidiary is or may be subject to taxation in that jurisdiction.
(f) There are no Encumbrances as a result of any unpaid
Taxes, other than Taxes not yet due and payable, upon any of the assets of the
Company or any Subsidiary.
(g) Except as set forth on Schedule 3.18 neither the
Company nor any Subsidiary has been a member of any consolidated, combined,
unitary or affiliated group of corporations for any Tax purposes.
(h) "Taxes" shall mean all taxes, charges, fees, levies,
duties and other similar governmental assessments, including, without
limitation, (i) income, gross receipts, ad valorem, premium, value added,
excise, real property, personal property, sales, use, transfer, withholding,
employment, social insurance, payroll, medicare, and franchise taxes imposed by
any body of the European Union, any state, local or foreign government, or any
subdivision, agency, or other similar Person and (ii) any interest, fines,
penalties, assessments, reassessments or additions to Taxes resulting from,
attributable to, or incurred in connection with any Tax or any contest, dispute,
or refund thereof. "Tax Returns" shall mean reports, returns and statements
required to be supplied to a taxing authority in connection with Taxes.
3.19 Insurance. Schedule 3.19 hereto sets forth a complete and
correct list and brief summary description of all insurance policies carried by,
or covering, the Company or any Subsidiary with respect to their respective
business. Complete and correct copies of each such policy have been made
available to Holding. All such policies are in full force
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and effect for such amounts as are sufficient to provide adequate insurance
coverage for the assets, properties and operations of the Company and its
Subsidiaries and for all material risks customarily insured against by a Person
engaged in a similar business. All such insurance will remain in full force and
effect with respect to periods before the Closing after giving effect to the
transactions contemplated hereby. No notice of cancellation has been received
with respect to any such policy. All premiums due thereon have been paid in a
timely manner and no event has occurred, including, without limitation, the
failure of the Company or any Subsidiary to give any notice or information or
the Company's or any Subsidiary's giving inaccurate or erroneous notice or
information, which materially limits or impairs the rights of the Company or any
Subsidiary under any such insurance policies. Except as set forth on Schedule
3.19, there are no pending claims or, to the knowledge of the Management
Shareholders, threatened claims, under the Company's or any Subsidiary's
insurance policies with respect to the Company's or any Subsidiary's property or
assets.
3.20 Books and Records. True and correct copies of the Company's
and each Subsidiary's meeting minutes and shareholder register have been
provided to Holding. Schedule 3.20 contains a list of all material transactions
approved by the Board of Managing Directors, Supervisory Board of Directors or
Shareholders, as applicable, of the Company and its Subsidiaries. The stock
record books accurately reflect all transactions in shares and depository
receipts of the Company's and each Subsidiary's capital stock. All accounting,
financial, reporting, business, tax, corporate and other similar books and
records of the Company and each Subsidiary accurately reflect the business and
financial condition of the Company or such Subsidiary. Except as set forth on
Schedule 3.20 hereto, all of the records, data, information, databases, systems
and controls maintained, operated or used by the Company or any Subsidiary in
connection with the conduct or administration of its business (including all
means of access thereto and therefrom) are located on the premises of the
Company or a Subsidiary and are under the exclusive ownership or direct control
of the Company or a Subsidiary.
3.21 Brokers' or Finders' Fees. Except as set forth on Schedule
3.21 hereto, no agent, broker, investment banker, or other Person or firm acting
on behalf of the Company or the shareholders of the Company is or will be
entitled to any broker's or finder's fee or any other commission or similar fee
directly or indirectly from the Company, any Subsidiary or any shareholder of
the Company in connection with any of the transactions contemplated by this
Agreement.
3.22 Material Customers and Suppliers.
(a) Schedule 3.22(a) hereto sets forth a complete and
correct list of the 30 largest customers of the Company and its Subsidiaries in
terms of amounts invoiced to such customers during the year ended December 31,
1998 and the six months ended June 30, 1999 (each, a "Material Customer"),
showing the total amount invoiced to each such Material Customer for such
periods, including the name of the invoicing entity. Except as set forth and
described on Schedule 3.22(a), no Material Customer has given the Company or any
Subsidiary any notice terminating, suspending or reducing in any material
respect, or specifying an intention to terminate, suspend or reduce in any
material respect in the future, or otherwise reflecting an adverse change in,
the business relationship between such customer and the Company or its
Subsidiaries (including by way of demands
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for price decreases) and there has not been any adverse change in the business
relationship of the Company or its Subsidiaries with any such customer since
June 30, 1999.
(b) Schedule 3.22(b) hereto sets forth a complete and
correct list of the material suppliers of the Company and its Subsidiaries in
terms of amounts purchased from such suppliers during the year ended December
31, 1998 and the six months ended June 30, 1999 (each, a "Material Supplier"),
showing the total amount purchased from each such Material Supplier for such
periods. Schedule 3.22(b) also correctly identifies all current outstanding
purchase orders of the Company and its Subsidiaries for goods or services with
an aggregate value of NLG 100,000 or more. Except as set forth on Schedule
3.22(b), no supplier identified on Schedule 3.22(b) has given the Company or any
Subsidiary any notice terminating, suspending or reducing in any material
respect, or specifying an intention to terminate, suspend or reduce in any
material respect in the future, or otherwise reflecting an adverse change in,
the business relationship between such supplier and the Company and its
Subsidiaries (including by way of proposed price increases) and there has not
been any adverse change in the business relationship of the Company or any
Subsidiary with any such supplier since June 30, 1999.
3.23 Bank Accounts: Powers of Attorney. Schedule 3.23 hereto sets
forth a complete and correct list showing (a) all banks in which the Company or
any Subsidiary maintains a bank account or safe deposit box (collectively, "Bank
Accounts"), together with, as to each such Bank Account, the account number, the
names of all signatories thereof and the authorized powers of each such
signatory and, with respect to each such safe deposit box, the number thereof
and the names of all persons having access thereto and (b) the names of all
persons holding powers of attorney from the Company or any Subsidiary, true and
correct copies which have been delivered to Holding.
3.24 Intellectual Property Rights.
(a) Schedule 3.24(a)(1) sets forth a complete list of all
of the Company's and its Subsidiaries' Intellectual Property. As used herein,
the term "Intellectual Property" shall mean software licenses and know-how
licenses, trade names, trademarks, copyrights, service marks, trade secrets,
technical knowledge, know-how, computer software (excluding non-customized
computer software available to the Company and its Subsidiaries on an over the
counter basis through normal commercial channels) and other confidential
proprietary information and related ownership, use and other rights. Except as
set forth on Schedule 3.24(a)(2), the Company or a Subsidiary has the right to
use, free and clear of any claims or rights of others, all Intellectual Property
owned or used by it in the operation of its business, and such use does not, to
the knowledge of the Management Shareholders, infringe on any patent, trademark,
copyright, service ▇▇▇▇ or trade name, or misappropriate any other Intellectual
Property of others.
(b) To the knowledge of the Management Shareholders,
neither the Company nor any Subsidiary has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual Property
rights of third parties, and neither the Company nor any Subsidiary has received
any charge, complaint, claim or notice alleging any such interference,
infringement, misappropriation, or violation. No third party has, to the
knowledge of the Management Shareholders, interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual
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Property rights of the Company and its Subsidiaries. Neither the Company nor any
Subsidiary has granted any licenses of or other rights to use any of the
Intellectual Property of the Company or any Subsidiary to any third party.
Neither the Company nor any Subsidiary has entered into any Contract to
indemnify any other Person against any charge of infringement of any
Intellectual Property.
3.25 Compliance with Laws; Permits and Licenses. The Company and
its Subsidiaries are in compliance and have complied in all material respects
with all laws, statutes, rules, regulations, codes and ordinances applicable to
their respective business, properties and operations, and have secured all
material permits, authorizations and licenses issued by federal, state, local
and foreign agencies and authorities, applicable to their business, properties,
Employees and operations. There have been no claims made or threatened against
the Company or any Subsidiary arising out of, relating to or alleging any
violation of any of the foregoing, except for claims which are no longer pending
or which are set forth on Schedule 3.25(a) hereto. Except as set forth on
Schedule 3.25(b) lists the Company and its Subsidiaries have all material
permits, licenses, approvals, franchises, notices and authorizations issued by
any Governmental Entity (collectively, "Permits") necessary for the Company and
its Subsidiaries to operate their business. The Company and its Subsidiaries are
in compliance in all respects with all terms required for the continued
effectiveness of each such Permit, and there is not pending, or to the knowledge
of the Management Shareholders, threatened non-renewal or revocation of any such
Permit. No other Permits, in addition to the Permits currently held by the
Company and its Subsidiaries, are necessary to conduct the business of the
Company and its Subsidiaries as it is now conducted. All such Permits are
renewable by their terms or in the ordinary course of business without the need
to comply with any special qualification procedures or to pay any amounts other
than routine filing fees. None of such Permits will be adversely affected by
consummation of the transactions contemplated hereby. Neither any present or
former shareholders of the Company or any Subsidiary or Employees, or any other
Person, holds, owns or has any proprietary, financial or other interest (direct
or indirect) in any Permits which the Company or any of its Subsidiaries owns,
possesses or uses in the conduct of its business as now or previously conducted.
3.26 Certain Business Practices; Potential Conflicts of Interest.
(a) None of the Company, any Subsidiary or any agents, Employees or present or
former shareholders of the Company or any Subsidiary has (i) used any of the
Company's or any Subsidiary's funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity, (ii)
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from the
Company's or a Subsidiary's funds, or (iii) made any other unlawful payment from
the Company's or any Subsidiary's funds.
(b) Except as set forth on Schedule 3.26(b), neither any
shareholder of the Company or any Subsidiary nor any director, officer, or
affiliate of the Company or any Subsidiary (i) owns, directly or indirectly, any
significant interest in, or is a director, officer, employee, consultant or
agent of, any Person which is a competitor, lessor, lessee or customer of, or
supplier of goods or services to, the Company or any Subsidiary, (ii) owns,
directly or indirectly, in whole or in part, any real property, leasehold
interests or other property the use of which is necessary for the conduct of the
business of the Company
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or any Subsidiary, or (iii) has any cause of action or other suit, action or
claim whatsoever against, or owes any amount to the Company or any Subsidiary
other than claims in the ordinary course of business.
3.27 Projections. Attached hereto as Schedule 3.27 are projected
balance sheets at December 31, 1999 and 2000 and projected income statements for
the years ending December 31, 1999 and 2000 (the "Projections"). Such
Projections have been prepared by the Company in good faith and are based upon
reasonable assumptions, which assumptions are set forth on Schedule 3.29.
3.28 Subsidies. Except as set forth on Schedule 3.28, there is no
outstanding or current subsidy, aid, tax holiday, grant program, loan at a
preferential rate, special contract or lease or similar benefit which has been
made available to the Company or any Subsidiary (including by way of guaranty or
other assurance) by a Governmental Entity (each, a "Subsidy"). The Company and
each Subsidiary is in material compliance with, and has neither breached or
violated in any material respect, any representation, condition or undertaking
made by it to obtain or to maintain any Subsidy. Neither the execution of this
Agreement, nor the performance of any of the transactions contemplated herein
will, pursuant to the express terms of any Subsidy, result in the cancellation,
limitation or reduction of any such Subsidy or require any repayment of, any
reapplication for or reissuance of, or any posting of additional security for
the maintenance of, any Subsidy.
3.29 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 U.S. $15,000,000 or more
and will not control (as that term is defined under Section 801.1(b) of the
United States ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended
(the "HSR Act")) any U.S. issuer (as defined in the HSR Act) that has annual net
sales or total assets of U.S. $25,000,000 or more.
3.30 Disclosure. No representation or warranty by the Management
Shareholders contained in this Agreement, and no statement contained in any
document (including, without limitation, the Financial Statements and the
Schedules hereto), list, certificate or other instrument furnished or to be
furnished by or on behalf of the Management Shareholders, the Company or its
Subsidiaries to the Holding or any of its representatives in connection with the
transactions contemplated hereby, contains or will contain any untrue statement
of a material fact necessary, in light of the circumstances under which it was
or will be made, in order to make the statements herein or therein not
misleading or necessary in order fully and fairly to provide the information
required to be provided in any such document, list, certificate or other
instrument.
3.31 Material Consents. All consents, required Permits and
approvals ("Material Consents") that are material to the ability of the Holding
to continue to operate the Company and its Subsidiaries in the ordinary course
of business consistent with past practices are identified on Schedule 3.31
attached hereto.
3.32 Adverbe Amendment. The Management Shareholders are not aware
of any item contained in the due diligence reports or the data room index
incorporated into the Disclosure Schedules to the Stock Purchase Agreement
between certain shareholders of
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Groupe Adverbe International S.A. and the Buyer that should be separately
disclosed on the Disclosure Schedules in the absence of the due diligence
reports and the data room index.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE MANAGEMENT
SHAREHOLDERS AND THE STICHTING
The Management Shareholders and the Stichting make the following
representations and warranties to Holding and Buyer each of which is true and
correct as of the date hereof and shall be unaffected by any investigation
heretofore or hereafter made by Holding:
4.1 Organization. The Stichting is a legal entity duly organized
and validly existing under the laws of the Netherlands, and has all requisite
power and authority (corporate or otherwise) to own, lease and operate the
properties and assets it now owns, leases or operates and to carry on its
business as presently conducted. The Stichting is duly qualified or licensed to
transact business in each of the jurisdictions where such qualification or
licensing is required by reason of the nature or location of the properties and
assets owned by it, or, except where the failure to be so qualified or licensed
would not have a material adverse effect on the Stichting's ability to timely
fulfill its obligations in full under this Agreement (a "Stichting Material
Adverse Effect").
4.2 Authority; Absence of Conflicts.
(a) The Stichting has full power and authority (corporate
or otherwise) to execute, deliver and perform this Agreement and to consummate
the transactions contemplated hereby under its governing documents and the
Powers of Attorney granted by the Holders. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly approved by all necessary or required action of the Stichting and the
Holders under the Power of Attorney, and no other actions on the part of the
Stichting or the Holders is necessary to authorize and approve the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by the
Stichting and each Management Shareholder and, assuming this Agreement
constitutes a valid and binding obligation of Holding and Buyer, constitutes the
valid and binding obligation of the Stichting and each Management Shareholder,
enforceable against it in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws of
general applicability relating to or affecting creditors' rights and by general
equitable principles.
(b) Except as set forth on Schedule 4.2(b), neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby, nor compliance with the terms hereof, will (i)
conflict with or violate any provision of the organizational documents of the
Stichting or the Power of Attorney granted by the Holders, (ii) violate,
conflict with or result in a breach of or default (or constitute any event which
with the lapse of time or the giving of notice or both would constitute a breach
or default) under any of the terms, conditions or provisions of any Contract to
which the Stichting or
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any Holder is a party or by which their respective assets or properties are
bound, (iii) result in the creation of any Encumbrance on the Shares, to be
transferred by the Stichting under the terms of this Agreement, (iv) conflict
with, violate or result in a breach of or constitute a default under any law,
statute, rule, judgment, order, decree, injunction, ruling, treaty, convention
or regulation of any Governmental Entity to which the Stichting or any Holder or
any of their respective assets or properties are subject, or (v) require the
Stichting or any Holder to give notice to, or obtain an authorization, approval,
order, license, franchise, declaration or consent of, or make a filing with, any
third party, including, without limitation, any Governmental Entity, except with
respect to the foregoing clauses (ii), (iv) and (v) where any such violation,
conflict or breach would not result in a Stichting Material Adverse Effect.
4.3 Title to Shares. The Stichting owns the Shares of record free
and clear of any Encumbrance. After the consummation of the transactions
contemplated hereby Buyer will own the Shares, beneficially and of record and
free and clear of any Encumbrance. The Powers of Attorney from the Holders give
the Stichting full power to transfer all right, title and interest, beneficial
and legal, in and to the Shares.
4.4 Brokers' or Finders' Fees. Except as set forth on Schedule 4.4
hereto, no agent, broker, investment banker, or other Person or firm acting on
behalf of the Stichting or any Holder is or will be entitled to any broker's or
finder's fee or any other commission or similar fee directly or indirectly from
the Company, any Subsidiary, Stichting or Holder in connection with any of the
transactions contemplated by this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF HOLDING AND BUYER
Holding and Buyer make the following representations and warranties to
the Company, the Stichting and the Management Shareholders, each of which is
true and correct as of the date hereof and shall be true and correct as of the
Closing Date and shall be unaffected by any investigation heretofore or
hereafter made by the Management Shareholders:
5.1 Organization and Corporate Power. Holding and Buyer are
corporations duly organized, validly existing and in good standing under the
laws of the state of Delaware and have full corporate power and authority to
own, lease and operate the properties and assets which they now own, lease or
operate and to carry on their business as presently conducted or proposed to be
conducted pursuant to existing plans.
5.2 Authority; Absence of Conflicts.
(a) Holding and Buyer have full corporate power and
authority to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
approved by the Boards of Directors of Holding and Buyer, and no other corporate
actions on the part of Holding and Buyer are necessary to authorize and approve
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby. This Agreement has been
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duly and validly executed and delivered by Holding and Buyer and, assuming this
Agreement constitutes a valid and binding obligation of the Company, the
Stichting and the Management Shareholders, constitutes the valid and binding
obligation of Holding and Buyer, enforceable against them in accordance with
its terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws of general applicability relating to or
affecting creditors' rights and by general equitable principles.
(b) Except with respect to consents already obtained,
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby nor compliance with the terms hereof will (i)
conflict with or violate any provision of the Articles of Incorporation or
Bylaws of Holding and Buyer, (ii) violate, conflict with or result in a breach
of or default (or constitute any event which with the lapse of time or the
giving of notice or both would constitute a breach or default) under any of the
terms, conditions or provisions of any material Contract to which Holding and
Buyer are a party or by which Holding's and Buyer's assets or properties
are bound, (iii) conflict with, violate or result in a breach of or constitute a
default under any law, statute, rule, judgment, order, decree, injunction,
ruling, treaty convention or regulation of any Governmental Entity to which
Holding and Buyer or any of their assets or properties are subject, or (iv)
require Holding and Buyer to give notice to, obtain an authorization, approval,
order, license, franchise, declaration or consent of, or make a filing with, any
third party, including, without limitation, any Governmental Entity other than
notices or approvals under applicable non-U.S. competition, antitrust or
premerger notification laws and notices, waivers or approvals under applicable
securities laws of the Netherlands ("Holding Consents").
5.3 Outstanding Capital Stock; Issuance of Shares.
(a) The authorized capital stock of Holding consists of
150,000,000 shares of Holding Common Stock and 10,000,000 shares of preferred
stock ("Holding Preferred Stock"), par value $0.01 per share. As of the date
hereof, Holding has, in the aggregate, 86,862,177 shares of Holding Common Stock
issued and outstanding. All of the issued and outstanding shares of Holding
Common Stock have been duly authorized and are validly issued, fully paid and
non-assessable, and none of such shares were issued in violation of any
preemptive rights of Stockholders. Holding also has outstanding (a) options to
purchase up to 6,592,054 shares of Holding Common Stock ("Holding Options") and
(b) stock purchase rights to purchase up to 955,687 shares of Holding Common
Stock ("Holding Rights"). Except for the Holding Options, Holding Rights,
3,054,055 shares of capital stock of 1293220 Ontario Inc. that are exchangeable
for up to 3,054,055 shares of Holding Common Stock and certain rights of ▇▇▇▇▇▇
▇▇▇▇▇ to subscribe for 106,666 shares of Holding Common Stock, there are no
options, warrants, calls, subscriptions, conversion or other rights, agreements
or commitments obligating Holding to issue any additional shares of capital
stock of Holding or any other securities convertible into, exchangeable for or
evidencing the right to subscribe for any shares of capital stock of Holding.
Except for the 310,000 phantom stock units issued under Holding's Deferred
Compensation Plan, there are no stock appreciation or similar rights to
participate in the value of the equity of Holding.
(b) Holding Common Stock to be issued to the Shareholders
under the terms of this Agreement, when issued as contemplated by this
Agreement, will be duly
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authorized, validly issued, fully paid and nonassessable and not issued in
violation of any preemptive rights of Stockholders.
5.4 Legal Proceedings. There are no suits, actions, proceedings,
claims or investigations pending or, to the knowledge of Holding and Buyer,
threatened, challenging the validity or propriety of, or otherwise relating to
or involving, this Agreement or the transactions contemplated hereby.
5.5 Brokers' or Finders' Fees. No agent, broker, investment
banker, or other Person or firm acting on behalf of Holding or Buyer is or will
be entitled to any broker's or finder's fee or any other commission or similar
fee directly or indirectly from Holding or Buyer in connection with any of the
transactions contemplated by this Agreement, other than customary fees and
expenses of attorneys, accountants and similar professionals.
5.6 Financial Statements.
(a) Holding has delivered to the Stichting true and
complete copies of (a) the unaudited balance sheets of ClientLogic Corporation
and its consolidated subsidiaries at May 1, 1999 and June 1, 1999 and a
statement of operations for the six months ended June 30, 1998 and June 30, 1999
(the "Holding Financial Statements"). Such Holding Financial Statements have
been prepared in accordance with United States generally accepted accounting
principles ("U.S. GAAP") (except for the absence of footnotes and normal
year-end adjustments) consistently applied throughout the periods involved and
such balance sheets, fairly present the financial position, assets and
liabilities (whether accrued, absolute, contingent or otherwise) of ClientLogic
Corporation and its consolidated subsidiaries at the dates indicated and such
statements of operations of ClientLogic Corporation and its consolidated
Subsidiaries for the periods indicated the Holding Financial Statements are
attached hereto as Schedule 5.6(a).
(b) Attached hereto as Schedule 5.6(b) are the projected
income statements for the years ended December 31, 1999 and 2000 (the "Buyer
Projections"). Such Buyer Projections have been prepared in good faith and are
based upon reasonable assumptions.
ARTICLE VI
COVENANTS
6.1 Non-Competition; Confidentiality.
(a) Until the second anniversary of the termination of
his or her employment with the Company (such period being referred to herein as
the "Noncompetition Term"), each Management Shareholder agrees to refrain from,
anywhere in the world, directly or indirectly through any affiliate (whether
individually or as a principal, officer, director, employee, shareholder,
investor, consultant, advisor, partner, joint venturer, agent, equity owner, or
in any other capacity whatsoever);
(i) engaging or participating in any activity
with respect to the marketing or sale of services that compete
with the business of the Company
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and its Subsidiaries as conducted as of the Closing Date;
provided, however, that the foregoing shall not be construed
to preclude any Management Shareholder or any of their
respective affiliates from making any investments in the
securities of any Person, whether or not engaged in
competition with the business of the Company and its
Subsidiaries as conducted as of the Closing Date, to the
extent that such securities are actively traded on a national
securities exchange or in the over-the-counter market in the
United States or any foreign securities exchange and such
investment does not exceed one percent (1%) of the issued and
outstanding shares of such Person or give such Management
Shareholder or any of its affiliates the right or power to
control or participate directly in making the policy decisions
of such Person; or
(ii) causing or attempting to cause (A) any
customer to whom the Company or any Subsidiary supplies
services to terminate any purchase or other similar contract
or relationship with the Company or any Subsidiary after the
Closing or to replace the Company as a supplier of services,
in whole or in part, with any other Person, or (B) any
supplier to the Company or any Subsidiary to terminate any
supply or other similar contract or relationship with the
Company; or
(iii) except in furtherance of the business of the
Company encouraging, soliciting, or inducing any manager,
officer, supervisor, or other Employee of the Company or any
Subsidiary to terminate his or her employment relationship
with the Company or any Subsidiary or to become employed by
any Person other than the Company or any Subsidiary.
(b) From and after the date hereof, the Management
Shareholders will not, and will cause their respective affiliates not to,
directly or indirectly, disclose, reveal, divulge or communicate to any Person
other than authorized officers, directors and employees of Holding, the Company,
its Subsidiaries or affiliates of Holding or the Company or use or otherwise
exploit for its own benefit or for the benefit of anyone other than the Company
or Holding, any Confidential Information (as defined below). The Management
Shareholders agree that they shall not have any obligation to keep confidential
any Confidential Information if and to the extent disclosure thereof is
specifically required by law; provided, however, that in the event disclosure is
required by applicable law, such Management Shareholder shall provide the
Company and Holding with prompt notice of such requirement prior to making any
disclosure so that the Company and Holding may seek an appropriate protective
order. For purposes of this Section 6.1 "Confidential Information" shall mean
any confidential information with respect to the conduct or details of the
business of the Company or any Subsidiary, including, without limitation,
methods of operation, customers, and customer lists, products, proposed
products, former products, proposed, pending or completed acquisitions of any
company, division, product line or other business unit, prices, fees, costs,
plans, designs, technology, inventions, trade secrets, know-how, software,
marketing methods, policies, plans, personnel, suppliers, competitors, markets
or other specialized information or proprietary matters. The term Confidential
Information does not include, and there shall be no obligation hereunder with
respect to, information that (i) is generally available to the public on the
date of this
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Agreement, or (ii) becomes generally available to the public other than as a
result of a disclosure by the Management Shareholder or not otherwise
permissible thereunder, or (iii) the Management Shareholder learns from other
sources where such sources have not violated their confidentiality obligation
to the Company or Holding or their respective affiliates.
(c) Each Management Shareholder severally acknowledges
that the geographic boundaries, scope of prohibited activities, and the
Noncompetition Term contained in this Section 6.1 are reasonable and no broader
than necessary to protect the investment by Holding in the Company and Holding's
and its affiliates ongoing interests in the Company and do not and will not
impose any unreasonable burden upon any Management Shareholder, or their
respective affiliates. Each Management Shareholder severally agrees that (i) any
breach by it of any of the provisions contained in this Section 6.1 would
cause irreparable damage to Holding for which monetary damages and other
remedies at law may not be adequate and (ii) Holding will be entitled as a
matter of right to obtain, without posting any bond whatsoever, a restraining
order, an injunction, specific performance, or other form of equitable or
extraordinary relief from any court of competent jurisdiction to restrain any
threatened or further breach of this Section 6.1 or to require any Management
Shareholder to perform its respective obligations under this Section 6.1, which
right to equitable or extraordinary relief will not be exclusive of, but will be
in addition to, all other remedies to which Holding may be entitled under this
Agreement, at law, or in equity (including, the right to recover monetary
damages). If, during any calendar month during the Noncompetition Term a
Management Shareholder is not in compliance with the terms of this Section 6.1,
Holding will be entitled, in addition to all other remedies to which it may be
entitled, to specifically enforce such non-complying party's compliance with the
terms of this Section 6.1 for an additional number of calendar months (over and
above the number of calendar months included within the Noncompetition Term)
equal to the number of calendar months during which such noncompliance occurred.
Each Management Shareholder hereby agrees to waive proof of actual damages in
any proceeding for equitable or extraordinary relief.
6.2 Redemption of Depository Receipts. After the Closing, the
Stichting shall take all necessary action to cause all depository receipts
representing shares of Company Capital Stock to be redeemed according to the
procedures set forth in the Stichting's governing documents and the laws of the
Netherlands. Upon receipt of consideration pursuant to Article I hereunder, the
Stichting will pay over the applicable pro rata consideration to the Holders or
their representatives.
6.3 Agreement Regarding Management. Unless waived or amended in
writing by Buyer or a duly instructed by a Governmental Entity upon proper
authority, the Managing Shareholders agree that they shall not and shall not
cause the Company to, with the prior approval of the Buyer: (i) to acquire,
hold, rent, let, dispose of or encumber real estate with annual rental value of
greater than NLG 500,000; (ii) to borrow moneys except from the Company's
bankers and to determine the maximum sum to be borrowed from those bankers;
(iii) to lend money's, except for the extension of credit to the Company's
customers for a period less than six months; and to issue loans to the Company's
employees up to a sum corresponding to six month's salary of the employee
involved; (iv) to act on the Company's behalf as plaintiff or defendant in legal
proceedings or arbitration cases, with
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the exception of summary proceedings and the attachments before judgments or in
such cases where the amount in dispute is less than NLG 500,000; (v) to reach
compromises and settlements in disputes not related to the Company's day to day
management; (vi) to pledge or transfer title to accounts receivable, goods or
fixed assets of the Company other than in the ordinary course of business or as
part of regular asset leasing transactions; (vii) to hire employees in the
Company or as Managing Director of subsidiary companies at an annual base salary
of more than NLG 200,000; (viii) to do any act involving the payment of a sum or
an obligation of more than NLG 500,000, except for cash-management activities
for clients carried out in the ordinary course of business; (ix) to guarantee as
surety or guarantor the obligations of third parties, including employees; (x)
to establish or close the Company's principal or branch offices; (xi) to issue
or acquire or dispose of shares or debentures in the Company and/or any of its
subsidiaries, except where such transactions are amongst the Company and its
subsidiaries for optimization of the corporate structure; (xii) to issue or
acquire or dispose of options in the Company, except as part of an agreed upon
employee share option plan other than the senior management share option plan;
(xiii) to apply for the listing or delisting of the debentures on any stock
exchange; (xiv) to establish or terminate permanent, direct or indirect
co-operation with another company or legal entity, if such co-operation or
termination is of particular strategic importance; (xv) to participate directly
or indirectly in the capital of another company; (xvi) to make capital
investments within the budget of greater than NLG 500,000 and outside the budget
of greater than NLG 200,000 or other financial investments over NLG 200,000;
(xvii) to amend the Company's articles; (xviii) to dissolve the Company; (xix)
to apply for voluntary liquidation or suspension of payments; (xx) to terminate
the employment of thirty employees at once or within a relatively short period
of time; (xxi) to change significantly the working conditions of thirty or more
employees, except for regular annual salary increases or bonus determinations;
(xxii) to decrease the Company's issued capital.
ARTICLE VII
CLOSING DELIVERIES
7.1 Documents being delivered by the parties at Closing.
(a) Shares and Sale Warrants. At Closing, the Stichting,
Holding, Buyer and the Company shall execute a notarial deed of transfer whereby
the Shares are transferred to Buyer and the transfer shall be registered in the
Shareholders Registry of the Company.
(b) Insurance. The Management Shareholders' Vendors
Indemnity and Warranty Insurance Policy and Buyer's Indemnity and Warranty
Insurance Policy (collectively the "Insurance Policies") shall have been
delivered to the parties together with evidence satisfactory to the Holding that
all insurance premiums for the Insurance Policies have been paid by the
Stichting.
(c) Stockholders Agreement. At Closing, each Holder
acquiring Holding Common Stock under the terms of this Agreement shall execute
and deliver a joinder agreement to the Stockholders Agreement of Holding in
effect on the Closing Date.
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(d) Legal Opinion. Holding shall receive an opinion of
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the Company, the Stichting, the Management
Shareholders and the Holders, dated as of the Closing Date in form satisfactory
to Holding and its counsel. The Stichting shall receive an opinion of Weil,
Gotshal & ▇▇▇▇▇▇ LLP dated as of the Closing Date and in form satisfactory to
the Stichting's counsel.
(e) Escrow Agreement. The Escrow Agreement shall have
been duly executed and delivered by the parties thereto.
(f) Resignation of Directors. Each member of the
Supervisory Board of the Company designated by Buyer shall have tendered their
resignations to the Company, as applicable, to be effective as of the Closing
Date.
(g) Delivery of Certificates. Each of the Stichting, the
Management Shareholders and the Company shall have delivered to Holding and
Buyer such good standing certificates, officers' certificates and similar
documents and incumbency certificates as counsel for Holding and Buyer shall
have reasonably requested.
(h) Subscription Agreements. Each Holder acquiring
Holding Common Stock and Holding shall have executed and delivered a
Subscription Agreement in form satisfactory to Holding and its counsel.
(i) Delivery of Certificates. Holding and Buyer shall
have delivered to the Stichting, Management Shareholders or the Company such
good standing certificates, officers' certificates and similar documents and
incumbency certificates as counsel for the Shareholders shall have reasonably
requested.
(j) Amendments. The Stichting shall execute and deliver
the Option Amendments and the Warrant Amendments.
(k) Guarantee and Confidentiality Agreement. Buyer and
Advent International plc ("Advent") shall have executed and delivered a
Guarantee and Confidentiality Agreement providing for certain undertakings on
behalf of Advent.
(1) Employee Stock Option Plan. The Company shall have
delivered to the holders of Options under the Company's Employee Stock Option
Plan termination letters in form satisfactory to Holding and its counsel.
ARTICLE VIII
THE EARNOUT
8.1 Additional Payments.
(a) If the Company and its Subsidiaries consolidated
earnings before interest, taxes, depreciation and amortization ("EBITDA"),
including Groupe Adverbe International S.A. ("Adverbe")' contribution to the
Company's consolidated EBITDA calculated as since June 30, 1999 for the periods
following the Closing of the Adverbe transaction and no other acquisitions
following the Closing Date, calculated in accordance with Dutch GAAP in effect
as of the Closing Date, exceeds NLG 6,000,000 for the year
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ended December 31, 1999, Holding shall pay to Jules T.H.M. Kortenhorst, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Jan Baurdoux, Carien van der Laan, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and
▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ (the "Participating Shareholders") an amount equal to the
excess of actual EBITDA for 1999 over NLG 6,000,000 to the extent such amount
does not exceed NLG 4,000,000 (the "First Additional Payment"), in accordance
with the Article VIII on or before February 15, 2000.
(b) If the First Additional Payment is less than NLG
4,000,000 and the Company and its Subsidiaries consolidated EBITDA, including
Adverbe's contribution to the Company's consolidated EBITDA for the periods
following the Closing of the Adverbe transaction and no other acquisitions
following the Closing Date, calculated in accordance with Dutch GAAP in effect
as of the Closing Date, exceeds NLG 18,700,000 for the year ended December 31,
2000 (the "Second Additional Payment"), Holding shall pay to the Participating
Shareholders an amount equal to the excess of actual EBITDA for 2000 over NLG
18,700,000 to the extent the total of the First Additional Payment and the
Second Additional Payment do not exceed NLG 4,000,000 (together with the First
Additional Payment, the "Payments"), in accordance with this Article VIII on or
before February 15, 2001.
8.2 Each Participating Shareholder's Share of the Payments. Each
Participating Shareholder's share of the Payments shall be equal to the number
of such Shareholder's Shares Options and Exchange Warrants divided by the number
of all Participating Shareholder's Shares, Options and Warrants.
8.3 Method of Payment. Each Participating Shareholder's share of
the Payments shall be made by check in NLG, mailed to each Participating
Shareholder at such Participating Shareholder's address set forth on the
signature pages hereto, or such other method agreed to by the Holding and each
Participating Shareholder.
8.4 Management Shareholder's Termination. In the event a
Management Shareholder is terminated for cause, as defined in such Management
Shareholder's employment agreement, or a Participating Shareholder voluntarily
terminates his employment with the Company prior to December 31, 1999 in the
case of the First Additional Payment or December 31, 2000 in the case of the
Second Additional Payment, such Participating Shareholder shall not participate
in any such Payment made after the date of such termination.
ARTICLE IX
MISCELLANEOUS
9.1 Expenses. The Stichting shall be responsible for the expenses
incurred by the Management Shareholders, the Holders, the Stichting and the
Company and its Subsidiaries in connection with the transactions provided for
herein or contemplated hereby, and the Stichting shall not cause or permit the
Company or any Subsidiary to pay or be liable for such costs other than costs
not to exceed NLG 150,000. The Holding and Buyer will be responsible for the
expenses incurred by them in connection with the transactions contemplated
hereby. Stichting shall be responsible for the payment of any premiums on the
Insurance Policies.
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9.2 Attorneys' Fees. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the party for
whom judgment is finally granted by a court in connection with such action shall
be entitled to recover in such action its reasonable attorneys' fees, costs and
necessary disbursements in addition to any other relief to which it may be
entitled.
9.3 Brokers. Holding and Buyer shall indemnify and hold harmless
the Stichting, and the Stichting shall, indemnify and hold harmless Holding and
Buyer (and from and after the Closing the Company and its Subsidiaries), from
and against any liability, claim, loss, damage, or expense incurred by Holding
and Buyer and the Company and its Subsidiaries, respectively, relating to any
fees or commissions owed to any broker, finder, or financial advisor as a result
of actions taken by Holding, Buyer, the Management Shareholders, the Stichting,
the Holders, and the Company and its Subsidiaries, respectively, in connection
with this Agreement or the transactions contemplated hereby; provided that the
foregoing does not apply to any fee payable to ▇▇▇▇▇▇▇ and Suddards arising out
of the acquisition of Adverbe.
9.4 Notices. Any notice, request, demand or other communication
given by any party under this Agreement (each a "notice") shall be in writing,
may be given by a party or its legal counsel, and shall be deemed to be duly
given (i) when personally delivered at that party's address as it appears below
or another address of which that party has given written notice to the other
parties hereto, of (ii) when transmitted by telex (or equivalent service), the
sender having received the answer back of the addressee, or (iii) when delivered
by facsimile transmission, the sender having received machine confirmation
thereof.
(a) Notice to the Company, Stichting or the Management
Shareholders prior to the Closing shall be sufficient if given to and these
parties choose their domicile for the purpose of receiving any writ or other
service of process at the following address:
Advent International plc
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
U.K.
Facsimile No.: ▇▇ (▇) ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
and to:
Cordena Call Management ▇.▇.
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Facsimile No.: ▇▇ (▇) ▇▇▇ ▇▇ ▇▇ ▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ Gebouw
▇▇▇▇▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
Postbox 2720, 1000 CS Amsterdam
Facsimile No: ▇▇ (▇) ▇▇▇ ▇▇▇▇▇▇▇
Attention: Mic van Bremen
(b) Notice to the Company after the Closing or to Holding
and Buyer shall be sufficient if given to:
ClientLogic Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
with a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
PricewaterhouseCoopers N.V. Legal Services
Prins ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Facsimile No.: ▇▇(▇▇) ▇▇▇ ▇▇▇▇
Attention: Wietse de Jong
9.5 Transfer Taxes. The Stichting shall be responsible for the
payment of, and shall indemnify and hold Holding and Buyer and the Company
harmless from and against, any and all sales, use, transfer, recording, stamp,
documentary, real estate or other similar Taxes attributable to purchase and
sale of the Holders' Company Capital Stock, Options or Warrants. All payments
under this Agreement shall be reduced by and made net of any applicable
withholding Taxes.
9.6 Successors and Assigns. 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
Holding and Buyer may (i) assign its rights and obligations to any affiliate of
Holding or Buyer or (ii) make a collateral assignment of its rights under this
Agreement to any lender who provides funds to Holding or Buyer for the
acquisition of the
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Company without the written consent of the Company; provided that any such
assignment shall not relieve Holding or Buyer from its obligations hereunder.
The Company, the Management Shareholders and the Stichting shall execute
acknowledgements of such assignment(s) and collateral assignments in such forms
as Holding, Buyer or Holding's or Buyer's lender(s) may from time to time
reasonably request.
9.7 Entire Agreement and Modification. This Agreement, the
Schedules and Annexes hereto and agreements executed concurrently herewith (all
of which are hereby incorporated by reference into and considered part of this
Agreement) supersede all prior agreements and understandings among the parties
or any of its respective affiliates (written or oral) relating to the subject
matter of this Agreement, and are intended to be the entire and complete
statement of the terms of the agreement among the parties, and may be amended or
modified only by a written instrument executed by all of the parties. The waiver
by one party of any breach of this Agreement by any other party shall not be
considered to be a waiver of any succeeding breach (whether of a similar or a
dissimilar nature) of any such provision or other provision or a waiver of any
such provision itself. No representation, inducement, promise, understanding,
condition or warranty not set forth herein has been made or relied upon by any
of the parties.
9.8 Certain Interpretive Matters. Unless the context otherwise
requires, (a) all references to Sections, Articles, Annexes or Schedules are to
Sections, Articles, Annexes or Schedules of or to this Agreement, (b) each term
defined in this Agreement has the meaning assigned to it, (c) "or" is
disjunctive but not necessarily exclusive, (d) words in the singular include the
plural and vice versa, (e) the term "affiliate" means any Person controlled by
or under common control with the applicable referenced Person and (f)
"knowledge," in the case of the Company, any Subsidiary or the Stichting, shall
refer to the actual knowledge, after due inquiry, of Management Shareholders.
All references to "NLG" will be to lawful currency of the Netherlands. No
provision of this Agreement will be interpreted in favor of, or against, either
of the parties hereto by reason of the extent to which either such party or its
counsel participated in the drafting thereof or by reason of the extent to which
any such provision is inconsistent with any prior draft hereof or thereof.
9.9 Governing Law. This Agreement, and the respective rights,
duties and obligations of the parties hereunder, shall be governed by and
construed in accordance with the laws of the Netherlands, without giving effect
to the conflicts of laws provisions thereof. Except as otherwise set forth in
Section 1.4, all disputes arising in connection with this Agreement, shall be
finally settled by binding arbitration in accordance with the Arbitration Rules
of the International Chamber of Commerce ("ICC"). The arbitral tribunal shall be
composed of three neutral, impartial arbitrators. Holding shall have the right
to select one arbitrator who shall be an attorney licensed to practice in the
United States. The Management Shareholders, the Stichting or the Company shall
have the collective right to select one arbitrator. The third arbitrator shall
be a person with experience in the Company's industry and shall be selected to
serve as an arbitrator upon the agreement of the Holding and the opposing party
or parties. The place of arbitration shall be Amsterdam. The arbitral procedure
shall be conducted in the English language.
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9.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, and such
counterparts shall together constitute one and the same instrument.
9.11 Further Assurances. Each of the parties shall, at any time and
from time to time after the Closing Date, and at the expense of the other
parties but without further consideration, execute and deliver such further
instruments, assignments or documents and other papers and take such further
actions as may be reasonably required to carry out the provisions hereof and the
transactions contemplated hereby. Each party shall use its reasonable efforts to
fulfill or obtain the fulfillment of the conditions to the Closing.
9.12 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.13 No Recourse. No past, present or future director, officer,
employee, shareholder, incorporator or partner, as such, of Holding, Buyer, the
Company, its Subsidiaries or the Stichting (except to the extent any of the
foregoing is a party to the Agreement) shall have any liability for any
obligations of Holding, Buyer, the Company or the Stichting under this Agreement
or for any claim based on, in respect of or by reason of such obligations or
their creation.
9.14 Public Statements. The Holding and Buyer, on the one hand, and
the Company and the Stichting, on the other hand, will consult with the other
before issuing, and will provide the other with a reasonable opportunity to
review and comment upon, any press release or other public statements with
respect to the transactions contemplated by this Agreement, and shall not issue
any such press release or make any such public statements prior to such
consultation except as may be required by applicable law or judicial process.
9.15 Specific Performance. In the event of a breach or threatened
breach by any party hereto of any of his, her or its obligations hereunder to
consummate the transactions provided for herein any other party hereto shall be
entitled to specific performance with respect to said obligation. Nothing herein
shall be construed as prohibiting any party hereto from pursuing any other
remedies available for such breach or threatened breach, including the recovery
of damages.
9.16 Notary. The Notary who will execute the transfer deed is a
civil law notary of ▇▇▇▇▇ & ▇▇▇▇▇▇▇/▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, which firm acts as the
external legal advisors of the Stichting and the Management Shareholders. Each
party hereby acknowledges that it is aware of the provisions of the "Guidelines
concerning associations between civil law notaries ("notarissen") and
barristers/solicitors ("advocaten") as established by the Board of the Royal
Professional Organization of Civil Law Notaries ("Koninklijke Notariele
Beroepsorganisatie") and agrees that ▇▇▇▇▇ & ▇▇▇▇▇▇▇/▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ may advise
and act on behalf of the Stichting and the Management Shareholders with respect
to this Share Purchase Agreement and any agreements and/or any disputes related
to or resulting from this agreement, without prejudice to the obligations of the
civil law notary of ▇▇▇▇▇ &
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▇▇▇▇▇▇▇/▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ to all parties with respect to the execution of the
share transfer deed.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement in two or
more counterparts, each of which shall be deemed one and the same instrument, as
of the day and year first above written.
HOLDING:
CLIENTLOGIC HOLDING CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Title: Chief Financial Officer
---------------------------------
BUYER:
CLIENTLOGIC INTERNATIONAL
HOLDING, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Title: President
---------------------------------
COMPANY:
CORDENA CALL MANAGEMENT B.V.
By: /s/ JULES T.H.M. KORTENHORST
---------------------------------
Name: Jules T.H.M. Kortenhorst
---------------------------------
Title: Managing Director
---------------------------------
STICHTING:
STICHTING ADMINISTRATIEKANTOOR
CORDENA CALL MANAGEMENT
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Bestuurder
---------------------------------
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇▇
---------------------------------
Title:
---------------------------------
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MANAGEMENT SHAREHOLDERS
/s/ JULES T.H.M. KORTENHORST
---------------------------------
Name: Jules T.H.M. Kortenhorst
Address: ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address: Huize de Bark
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