Execution Copy
Exhibit 4.10
SHARE PURCHASE AGREEMENT
dated 20 October 2005
between VIATEL HOLDING (EUROPE) LTD
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
hereinafter: "SELLER"
and VIATEL HOLDING (BERMUDA) LTD
Canon's Court, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇
hereinafter: "VHB"
and SWISSCOM FIXNET AG
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇-▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
hereinafter: "PURCHASER"
concerning The sale and purchase of all existing shares of CYBERNET (SCHWEIZ)
AG
Share Purchase Agreement dated 20 October 2005 Execution Copy* 2/2
TABLE OF CONTENTS
List of Annexes.............................................................. 5
PREAMBLE..................................................................... 6
1 Definitions.............................................................. 6
2 Sale and Purchase........................................................ 9
2.1 Objects of Sale and Purchase..................................... 9
2.2 Purchase Price................................................... 10
2.3 Adjustment of the Purchase Price................................. 10
3 Representations and Warranties of Seller and VHB......................... 12
3.1 Capacity of Seller............................................... 12
3.2 Capacity of VHB.................................................. 13
3.3 Incorporation and Authority of the Company....................... 14
3.4 Capital Structure of the Company................................. 14
3.5 Authorisations................................................... 14
3.6 Compliance with Laws and Regulations............................. 14
3.7 Financial Statements............................................. 14
3.8 Litigation....................................................... 15
3.9 Employees........................................................ 15
3.10 Social Security and Pensions..................................... 15
3.11 Taxes............................................................ 15
3.12 Insurance........................................................ 16
3.13 Assets........................................................... 16
3.14 Intellectual Property............................................ 16
3.15 Customer Contracts............................................... 16
3.16 Absence of Certain Changes or Events............................. 16
3.17 Data, Files, Records............................................. 17
3.18 Fair Disclosure.................................................. 17
3.19 Business Acquisition............................................. 17
3.20 Intercompany Loans and Waivers................................... 17
3.21 Broker's Fee..................................................... 17
3.22 No other Representations and Warranties.......................... 17
4 Purchaser's Representations and Warranties............................... 17
4.1 Incorporation and Authority of Purchaser......................... 17
4.2 Effect of Execution of the Agreement............................. 17
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4.3 Financing............................................................ 17
5 Indemnification.............................................................. 17
5.1 Indemnification by Seller and/or VHB................................. 17
5.1.1 General Principle............................................. 17
5.1.2 Liability of Seller and VHB................................... 17
5.1.3 De Minimis Threshold.......................................... 17
5.1.4 Threshold..................................................... 17
5.1.5 Maximum Recovery (Cap)........................................ 17
5.1.6 Exceptions.................................................... 17
5.1.7 Exclusions.................................................... 17
5.2 Indemnification by Purchaser......................................... 17
5.3 Survival and Notice of Claims........................................ 17
5.4 Third Party Claims................................................... 17
6 Covenants.................................................................... 17
6.1 Filings and Notices to Authorities................................... 17
6.2 Conduct from Signing to Closing...................................... 17
6.3 Indemnification...................................................... 17
6.4 Tax Indemnity........................................................ 17
6.5 Company's Board Members.............................................. 17
6.6 Information to Employees............................................. 17
6.7 Insurance............................................................ 17
6.8 General Obligation of Purchaser following Closing.................... 17
6.9 Release from Security Documentation.................................. 17
6.10 Access to the Company................................................ 17
6.11 Access to Information after the Closing Date......................... 17
6.12 Business Forecasts................................................... 17
6.13 Preservation of Records.............................................. 17
6.14 Absence of Non-Compete............................................... 17
6.15 Enforcement of other Divestiture Confidentiality Agreements.......... 17
7 Conditions Precedent to Closing.............................................. 17
7.1 Conditions to Obligations of Each Party.............................. 17
7.2 Conditions to Obligations of Purchaser............................... 17
7.3 Condition to Obligations of Seller................................... 17
8 Closing...................................................................... 17
8.1 Date and Location.................................................... 17
8.2 Seller's Obligations................................................. 17
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8.3 Purchaser's Obligations............................. 17
9 Miscellaneous............................................... 17
9.1 Transaction Costs................................... 17
9.2 Confidentiality..................................... 17
9.3 Public Announcements................................ 17
9.4 Waiver/Remedies..................................... 17
9.5 Entire Agreement.................................... 17
9.6 Amendments and Modifications........................ 17
9.7 Duty to cooperate................................... 17
9.8 Notices............................................. 17
9.9 Severability........................................ 17
9.10 Assignment.......................................... 17
9.11 Drafted by all Parties.............................. 17
9.12 Governing Law....................................... 17
9.13 Dispute Resolution.................................. 17
9.14 Counterparts........................................ 17
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LIST OF ANNEXES
Annex 1 Disclosure Letter
Annex 2 Escrow Agreement
Annex 3 List of Security Documentation
Annex 4 Agreed Form of Termination of Intercompany Arrangements
Annex 5 Agreed Form of Releases
Annex 6 Data Room Index
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PREAMBLE
WHEREAS
a) Cybernet (Schweiz) AG is a Swiss company limited by shares
registered with the Commercial Register of the Canton Zurich, with a
share capital of CHF 100'000.- (one-hundred thousand Swiss Francs),
divided into 100 fully paid up bearer shares with a nominal value of
CHF 1'000.- each (hereinafter referred to as the "COMPANY").
b) In March 2003, the Company acquired all assets, liabilities and
employees relating to its activity in the field of communication
services (the "BUSINESS") by way of a business acquisition from a
third party (the "BUSINESS ACQUISITION").
c) In April 2004 and in June 2005, VHB was refinanced by funds granted
by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Incorporated and other investors (together
the "INVESTORS"), whereby VHB, Seller, and all their affiliates
(together the "VIATEL GROUP") entered into financing and security
agreements (the "SECURITY DOCUMENTATION"), under which, amongst
others, the shares and assets of the Company have been fully pledged
in order to guarantee the payment obligations of VHB.
d) The Company is a wholly owned subsidiary of Seller, which is a
wholly owned subsidiary of VHB.
e) Seller deems the sales process and the purchase price offered by
Purchaser to be fair and the latter corresponding to the Company's
market value, and therefore, Seller is willing to sell 100% of the
Company's shares to Purchaser and Purchaser is willing to purchase
all such shares.
f) Purchaser has been provided access to information on the Company and
its management and has undertaken a due diligence investigation.
NOW THEREFORE, the Parties hereto agree as follows:
1 DEFINITIONS
Adjustment Amount As defined in Section 2.3
Adjustment Period As defined in Section 2.3
Agreement This agreement and any and all present and
future Annexes and amendments thereto
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Annex Any and all annexes to this Agreement
Business As defined in the Preamble
Business Day Any day on which banks in Zurich,
Switzerland, are open for the transaction of
normal commercial business
Business Acquisition As defined in the Preamble
CHF Swiss Francs, the lawful currency of
Switzerland
Closing, Closing Date As defined in Section 8.1
Company As defined in the Preamble
Data Room Index A list of the documents disclosed
to Purchaser in the data room (in agreed
terms) and attached hereto as Annex 6
Disclosure Letter Formal letter (in agreed terms) of even date
attached hereto as Annex 1 and delivered by
Seller to Purchaser as at Signing (and
updated at Closing (in agreed terms, whereby
the Parties shall use reasonable best efforts
to agree on a final form 5 (five) Business
Days prior to Closing), to the extent
permitted under Section 5.1.7)
Escrow Agent Dr. ▇▇▇▇▇▇ ▇▇▇▇, Wenger & Vieli, Zurich
Escrow Agreement The escrow agreement to be entered into by
Seller, Purchaser and the Escrow Agent
substantially in the form attached hereto in
Annex 2
Escrow Amount As defined in Section 8.3(a)
Financial Statements As defined in Section 3.7
Indemnifiable Party As defined in Section 5.4
Indemnifying Party As defined in Section 5.4
Independent Accountant As defined in Section 2.3
Intellectual Property Right Any patent, trademark, design, domain name,
copyright, right to use software (licenses),
right in databases, and all other
intellectual property rights (including
applications for the protection thereof), in
each case whether registered or unregistered
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Intercompany Payable The amount of CHF 18,168,909.41, transferred
as receivable (Forderung) to VHB under the
Transfer Agreement and transferred as payable
(Zahlungsverpflichtung) to the Company under
the Business Acquisition
Investors As defined in the Preamble
Key Person(s) ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Liabilities Any losses, liabilities, damages, charges,
actions, proceedings, claims and demands
Lien Any lien, charge, encumbrance, or security
interest, including but not limited to
interests arising from options, pledges,
mortgages, indentures, security agreements,
rights of first refusal or rights of
preemption, irrespective of whether such Lien
arises under any agreement, covenant, other
instrument, the mere operation of statutory
or other laws or by means of a judgment,
order or decree of any court, judicial or
administrative authority, and shall also mean
any approval or consent required from a third
party to the exercise or full vesting of a
right or title
Material Adverse Event Any event, change or occurrence between
Signing and Closing which, individually or
together with any other event, change or
occurrence, has a material adverse effect on
the assets, liabilities, revenues, profits or
prospects of the Company that is so
substantial as to fundamentally impair its
value or its ability to operate the Business
in the same manner as it is conducted as of
the date hereof
Notified Claims As defined in Section 5.3
Parties Seller and VHB and Purchaser
Party Seller or VHB or Purchaser, as the context
may require
Purchase Price As defined in section 2.2
Purchaser As defined on the cover page of this
Agreement
Security Documentation The financing and security agreements entered
into between VHB or the Company or Seller and
others
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dated 21st April 2004 and June 2005 unless
otherwise stated, as listed in Annex 3
Seller As defined on the cover page of this
Agreement
Shares As defined in section 2.1
Signing, Signing Date The date and time of signing of this
Agreement
Tax, Taxes All tax liabilities, including income taxes
(personal or corporate), capital taxes, stamp
duties (both on the issuance and on the
transfer of securities), withholding taxes,
value added taxes and all other taxes,
duties, levies or imposts payable to any
competent taxing authority in any
jurisdiction, as well as any interest,
penalties, costs and expenses reasonably
related thereto
Transfer Agreement The transfer agreement between Cybernet
Internet Services International, Inc., VHB,
Cybernet (Schweiz) AG and Viatel AG dated 4th
March 2003
Threshold As defined in Section 5.1.4
VHB As defined on the cover page of this
Agreement
Viatel Group As defined in the Preamble
Waiver Agreement(s) The two Agreements on Waiver of Receivables
made between VHB, the Company and Seller
dated 30 March 2005 and the Agreement on
Waiver of Receivables made between Viaphone
AG, the Company and Seller dated 30 March
2005
2 SALE AND PURCHASE
2.1 OBJECTS OF SALE AND PURCHASE
Subject to the terms and conditions of this Agreement, Seller undertakes
to sell and, at the Closing Date, transfer to Purchaser and Purchaser
undertakes to purchase from Seller the full and beneficial ownership, free
and clear from any Liens, of 100% of the issued and outstanding shares of
the Company, i.e. 100 fully paid-up bearer shares with a nominal value of
CHF 1'000.- each (the "SHARES").
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2.2 PURCHASE PRICE
The purchase price for the Shares shall be CHF 15,000,000.00 (fifteen
million Swiss Francs) (the "PURCHASE PRICE"), subject to the adjustment in
accordance with the provisions of Section 2.3.
2.3 ADJUSTMENT OF THE PURCHASE PRICE
The Purchase Price shall be adjusted (in accordance with the formula set
out below) if the net revenue generated by the Company's Customers
(extrapolated on a yearly basis) should decrease by CHF 1,000,000.00 (one
million Swiss Francs) during the time period between Signing and the
Closing Date (the "ADJUSTMENT PERIOD"), it being agreed that the
provisions of this Section 2.3 shall not apply to any loss in net revenue
which Seller reasonably believes is caused by (i) Purchaser (or other
relevant affiliate of Purchaser) increasing the prices payable by the
Company under the Contract for Broadband Connectivity Services Version 9.0
or the Contract for Data Transport Services Version 4.0 between Swisscom
Fixnet Wholesale and the Company (together the "Supplier Agreements") or
(ii) the making of any material amendment by Purchaser (or other relevant
affiliate of Purchaser) to the other terms and conditions of such Supplier
Agreements.
The total adjustment amount shall be calculated pursuant to the following
formula (the "ADJUSTMENT AMOUNT"):
If,
(i) (ASV- NCV) * 12 < CHF 1,000,000 means no adjustment of Purchase Price
ii) (ASV-NCV) * 12 > or equal to CHF 1,000,000 means a price adjustment of
(ASV- NCV)* 12 will be deducted from the Purchase Price
Whereby:
ASV shall mean the actual monthly sales volume of all Customers
who have or have been given notice of termination of their
agreement with the Company or have been disconnected (other
than for reasons of maintenance or temporary service outage)
during the Adjustment Period (the "TERMINATED CUSTOMERS"). The
ASV of all Terminated Customers during the Adjustment Period
will be added up; it being agreed that for the purposes of
each such calculation, the actual monthly sales volume shall
be measured as an average of the previous 3 (three) months
sales volume or such lesser number of months as the relevant
Customer has been a Customer of the Company; and
NCV shall mean the aggregate of the actual monthly sales volume of
all new Customers acquired by the Company during the
Adjustment Period and any net increase in actual monthly sales
volume
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generated, during the Adjustment Period, by existing Customers
of the Company. The NCV of all new Customers during the
Adjustment Period will be added up and the NCV of all existing
Customers will be measured on a per month basis; it being
agreed that for the purposes of each such calculation, the
actual monthly sales volume shall be measured as an average of
the previous 3 (three) months sales volume or such lesser
number of months as the relevant Customer has been a Customer
of the Company.
Customer For the purposes of this Section 2.3, Customer shall mean all
connectivity (mostly xDSL), hosting and data center customers
of the Company.
The Adjustment Amount shall only be due if the net revenue generated by
the Company's Customers (extrapolated on a yearly basis) for the
Adjustment Period decreases by CHF 1,000,000.00 (one million Swiss
Francs), or more, whereupon the full Adjustment Amount shall be payable by
Seller to Purchaser.
Within 20 (twenty) Business Days following Closing, Seller shall deliver
to Purchaser a calculation of the adjustment, if any, together with copies
of the relevant documentation supporting such calculation. Prior to such
delivery, Seller shall so far as practicable consult with Purchaser with a
view to eliminating any potential disagreement.
Within 20 (twenty) Business Days following the delivery to Purchaser of
Seller's notification and absent Purchaser notifying Seller within such
period as to any dispute it may have as to Seller's determination, the
Adjustment Amount calculated pursuant to this Section 2.3 shall be paid to
Purchaser in cash from the Escrow Amount in accordance with the Escrow
Agreement. Any difference between the Adjustment Amount and the Escrow
Amount shall be paid by Seller to Purchaser in cash in immediately
available funds by wire transfer.
In case of a dispute over the Adjustment Amount, which Seller and
Purchaser are unable to resolve (acting in good faith), Seller and
Purchaser shall appoint an independent certified accountant, who shall
have the function of an expert (Schiedsgutachter) as that term is defined
in Section 258 of the Zurich Code of Civil Procedure, and not of an
arbitrator ("INDEPENDENT ACCOUNTANT"). If the Parties are unable to agree
on the appointment of the Independent Accountant within 20 (twenty)
Business Days, the president of the Zurich Chamber of Commerce shall, upon
the application of either Seller or Purchaser, appoint an Independent
Accountant independently to establish, on behalf of both Parties, the
Adjustment Amount.
Seller and Purchaser shall ensure that the Independent Accountant will be
furnished with all documents and information needed for the resolution of
the dispute. Based thereon, the Independent Accountant shall determine the
final and binding Adjustment Amount, which shall be paid to Purchaser
within 5 (five) Business Days from the notification by the Independent
Accountant in cash from the Escrow Amount in accordance with the Escrow
Agreement. Any difference
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between the Adjustment Amount and the Escrow Amount shall be paid by
Seller to Purchaser in cash in immediately available funds by wire
transfer within 5 (five) Business Days from the notification by the
Independent Accountant.
The determination by the Independent Accountant shall be requested to be
delivered within 20 (twenty) Business Days of his appointment and shall be
final and binding on the parties except in the event of fraud, gross
negligence or manifest error on the part of the Independent Accountant as
a consequence of which the relevant part of his or her determination shall
be void and the matter be remitted to the Independent Accountant for
correction.
The costs and expenses (including VAT) of the Independent Accountant shall
be borne by Seller and Purchaser in equal shares.
For the purposes of the calculation of the Adjustment Amount by Seller
under this Section 2.3, Purchaser acknowledges that on and from Closing
(a) Seller is entitled to retain copies of the relevant documentation
supporting the calculation of the Adjustment Amount, which shall be kept
strictly confidential and (b) should Seller request, Purchaser shall
procure that Seller is given reasonable access (during normal business
hours) to the management and documents of the Company to the extent
necessary or reasonable to Seller to verify the determination by the
Independent Accountant.
3 REPRESENTATIONS AND WARRANTIES OF SELLER AND VHB
Subject to the limitations set forth in the Agreement, Seller and VHB
hereby represent and warrant to Purchaser as of the date of this Agreement
and as of the Closing Date the following matters except that those
representations and warranties which are explicitly made as of a specific
date shall be true and correct only as of such date. The expression "to
the best knowledge of Seller" and any equivalent expressions used in this
Agreement refers to matters, facts or circumstances which the Key Persons
know or should have known at the Signing Date (for such Representations
and Warranties given as per the Signing Date) or at the Closing Date (for
such Representations and Warranties confirmed as per the Closing Date)
given their position, duty and function within the Company. The expression
"to the best knowledge of the board of Seller" or "to the best knowledge
of the board of VHB" and any equivalent expressions used in this Agreement
refers to matters, facts or circumstances which the members of the board
of directors of Seller, or of VHB respectively, know or should have known
at the Signing Date (for such Representations and Warranties given as per
the Signing Date) or at the Closing Date (for such Representations and
Warranties confirmed as per the Closing Date) given their position, duty
and function.
3.1 CAPACITY OF SELLER
Seller is duly incorporated and validly existing under the laws of its
place of incorporation and has full power and authority to sell, transfer
and deliver to Purchaser the Shares and to perform all other undertakings
under this
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Agreement. This Agreement constitutes valid, legal and binding obligations
of Seller, enforceable in accordance with its terms and conditions.
The execution and delivery of this Agreement by Seller will not violate
any provisions of the articles of association of Seller or any agreement,
other than mentioned in this Agreement, which Seller is a party to. Seller
does not require any governmental consent of any nature (other than
mentioned in this Agreement) to enter into this Agreement and consummate
the sale of the Shares under this Agreement.
The execution and delivery of this Agreement by Seller, the performance by
Seller of its obligations hereunder and the consummation by Seller of the
sale of the Shares contemplated hereby have been duly authorised by all
requisite corporate action on the part of Seller.
Seller is the sole legal and beneficial owner of the Shares, free and
clear of any Liens other than under the Security Documentation set forth
in Annex 3, and each Share is fully paid and non-assessable. Upon delivery
of the Shares provided for in Section 8.2(a), Purchaser will receive good
and valid title to the Shares, free and clear of all Liens.
There are no proceedings or investigations whatsoever pending or, to the
best knowledge of the board of Seller, threatened against Seller which
would compromise the consummation of the transactions under this
Agreement. Seller is currently not the subject of any action or
proceedings with a view to prevent or settle financial difficulties
(including, but not limited to, receivership, bankruptcy proceedings or
any similar actions), and no such proceedings are anticipated.
3.2 CAPACITY OF VHB
VHB is duly incorporated and validly existing under the laws of its place
of incorporation and has full power and authority to enter into, and to
perform all undertakings under, this Agreement. This Agreement constitutes
valid, legal and binding obligations of VHB, enforceable in accordance
with its terms and conditions.
The execution and delivery of this Agreement by VHB will not violate any
provisions of the bye-laws of VHB or any agreement, other than mentioned
in this Agreement, which VHB is a party to. VHB does not require any
governmental consent of any nature (other than mentioned in this
Agreement) to enter into this Agreement.
The execution and delivery of this Agreement by VHB and the performance by
VHB of its obligations hereunder have been duly authorised by all
requisite corporate action on the part of VHB.
There are no proceedings or investigations whatsoever pending or, to the
best knowledge of the board of VHB, threatened against VHB which would
compromise the consummation of the transactions under this Agreement. VHB
is currently not the subject of any action or proceedings with a view to
prevent or settle financial
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difficulties (including, but not limited to,
receivership, bankruptcy proceedings or any similar actions), and no such
proceedings are anticipated.
3.3 INCORPORATION AND AUTHORITY OF THE COMPANY
The Company is duly incorporated in Switzerland and validly existing under
Swiss law and has the full corporate power and authority to carry on its
Business as presently conducted.
3.4 CAPITAL STRUCTURE OF THE COMPANY
The share capital of the Company is structured as described in the
Preamble and, as of the Closing Date, shall be fully covered.
The Shares have been issued and all contributions thereto have been paid
in compliance with Swiss law. There are no outstanding rights that could
require the Company to issue or sell any of its capital stock.
3.5 AUTHORISATIONS
The Company is in the possession of all necessary licenses and
authorisations to operate its Business in Switzerland as currently
conducted. The Company complies with all requirements necessary for the
continuance of these licenses and authorisations.
3.6 COMPLIANCE WITH LAWS AND REGULATIONS
Neither the Company, nor its directors, officers and employees have
breached, since the Business Acquisition, any legal rules and regulations
whatsoever which could reasonably be expected to materially affect the
Business, the liabilities or the financial condition of the Company.
3.7 FINANCIAL STATEMENTS
The audited statutory financial statements of the Company for the business
year 2004 (the "2004 FINANCIAL STATEMENTS") were prepared in accordance
with Swiss applicable rules and give a true and fair view of the financial
position of the Company as at the date indicated and the results of the
operations for the financial period included therein. To the extent that
liabilities which are contingent in nature would not have been required by
Swiss applicable rules to be recognised as liabilities in the 2004
Financial Statements, such contingent liabilities (as were outstanding as
at the date indicated) have been disclosed in the notes to the 2004
Financial Statements. The review of the Company's financial statements as
per 31 July 2005 (the "2005 FINANCIAL STATEMENTS" - the 2004 Financial
Statements and the 2005 Financial Statements being jointly referred to as
the "FINANCIAL STATEMENTS") has been performed in accordance with rule 910
of the Swiss Auditing Standards.
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3.8 LITIGATION
There is no pending and, to the best of Seller's knowledge, threatened
litigation, arbitration, administrative proceeding, governmental inquiry
or investigation involving the Company.
3.9 EMPLOYEES
To the best knowledge of Seller, the Company has at all times and in all
respects in relation to each of its employees complied with all material
obligations imposed on it by any relevant law, ordinance and agreement.
The Company has no present obligation to make any severance payment or pay
any compensation for loss of office or employment or a redundancy payment
to any present or former employee or director, nor will such severance,
compensation or redundancy payments be triggered as a consequence of the
transaction contemplated by this Agreement.
None of the Key Persons has given notice to terminate his employment, nor
has notice to terminate been given by the Company. Subject to the letter
of intent executed between ▇▇▇▇ ▇. ▇▇▇▇▇ and Purchaser relating to the
terms of employment to be effective following the Closing, no amendment to
the terms on which the Key Persons are engaged (including remuneration and
ancillary fringe benefits) has been made, in the case of all Key Persons
other than ▇▇▇▇ ▇▇▇▇▇, since 31 March 2005, and in the case of ▇▇▇▇ ▇▇▇▇▇,
since 16 June 2005.
3.10 SOCIAL SECURITY AND PENSIONS
The Company is in compliance with all applicable pension and social
security laws. All social security, pension fund, or similar payments due
by the Company in favour of the employees under the law for any period
ending before the Closing Date have been fully paid or are fully provided
for. All employees of the Company are contractually bound to and will
benefit from the performance of the Company's pension fund to the extent
legally required. All contributions required to be made as at Closing
under the terms of the law (as regards social security) have been made in
a timely manner or have been adequately provisioned.
3.11 TAXES
All tax returns required to be filed prior to Closing by or with respect
to Taxes payable or reimbursable by the Company have been filed in a
timely manner. All such tax returns (i) have been prepared in the manner
required by applicable law, (ii) are true, correct and complete, and (iii)
accurately reflect the liability for Taxes of the Company. All Taxes (x)
relating to a tax period prior to Closing, (y) caused or arising from acts
or omissions prior to or at Closing, or (z) on hidden reserves as per
Closing, have been timely paid or adequately reserved against. The Company
is neither a party to any action or proceeding by any governmental Tax
authority for non-payment of Taxes, nor has it received notice from such
body of any claim for such non-payment of Taxes, and no tax return of any
of the
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Company is currently under tax audit by any taxing authority and no
written notice or other communication of any such tax audit has been
received.
3.12 INSURANCE
All insurance policies held by the Company covering the Company, its
employees or its Business are in full force and effect, and the Company is
not in default with premium payment under any of them.
There is no material claim outstanding under any of the insurance policies
(or under any policies previously held by the Company), all material
claims have been settled in full and there are no circumstances existing
which are likely to give rise to such a claim.
All incidents that occurred and became known before the Closing Date and
that could result in a claim under any insurance policy have been or will
be notified to the relevant insurers.
3.13 ASSETS
The Company has good title to or the valid right secured by contract to
use, free and clear of any Liens other than under the Security
Documentation set forth in Annex 3, all assets as reflected in the
Financial Statements and needed for the continued conduct of the Business
as it is currently being conducted; all such assets are in good working
order (fair wear and tear excepted) and have been properly maintained.
3.14 INTELLECTUAL PROPERTY
The Company is entitled to use all Intellectual Property Rights required
to conduct the Business as presently conducted. The Company has not
received any complaint, claim or notice alleging any infringement,
violation or misappropriation of third party Intellectual Property Rights,
and, to the best knowledge of Seller, there is no basis for any such
complaint, claim or notice. The Company has not agreed to indemnify any
person or business entity for or against any infringement,
misappropriation or other conflict with respect to such item.
3.15 CUSTOMER CONTRACTS
As of the Signing Date, all contracts with direct, resale and wholesale
customers are valid, binding, enforceable in accordance with their terms
and in full force and effect in all material respects. The Company has
properly performed all of its obligations arising out of these contracts.
No grounds for termination exist other than arising out of the ordinary
course of business.
3.16 ABSENCE OF CERTAIN CHANGES OR EVENTS
Up to and on the Signing Date, the Business has in all respects been
conducted in the ordinary and usual course, consistent with past practice,
since 31 July 2005.
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In particular, the Company has not incurred any Liabilities other than
those arising from the ordinary course of business, no action has been
taken outside the ordinary course of business and no changes have occurred
which affect negatively the assets, business, financial and earnings
position of the Company outside of the ordinary course of business.
3.17 DATA, FILES, RECORDS
To the best knowledge of Seller, the Company has complied in all material
respects with all relevant legal requirements with respect to data
protection. All files, systems, data, books and records of the Company are
complete and accurate and have been maintained in accordance with good
business practices and the applicable legal requirements and, at the
Closing, will be in the possession of the Company.
3.18 FAIR DISCLOSURE
All information disclosed by Seller or the Company to Purchaser is true,
complete and not misleading and provides a fair and accurate picture of
the business and financial situation of the Company. There is no material
fact, which a reasonable purchaser would use for the assessment of the
transactions under this Agreement, which has not been disclosed.
3.19 BUSINESS ACQUISITION
There are no Liabilities of whatsoever nature resulting from the Business
Acquisition, or any activity prior to the Business Acquisition, except as
reflected in the Financial Statements. In particular, the Intercompany
Payable is fully and irrevocably settled, including any potential tax
liabilities relating thereto, so that the Company is free and clear from
any Liability arising from, or relating to, the Intercompany Payable.
3.20 INTERCOMPANY LOANS AND WAIVERS
As of the Closing Date, the Company is not party to any loan granted
within the Viatel Group, including, but not limited to, any loan arising
out of the Downstream Facility Agreements of 21st April 2004 and June 2005
and the Intercompany Treasury Agreement of 19 December 2002.
The Waiver Agreements are valid and enforceable and in accordance with
applicable law and the articles of incorporation of any party thereto.
3.21 BROKER'S FEE
Neither Seller nor VHB nor the Company has employed any broker, adviser,
finder or other intermediary in connection with the transactions
contemplated by this Agreement to whom it would be obligated to pay a
broker's, finder's or similar fee or commission, except to Ernst & Young.
Such fees and commissions will be paid by Seller or VHB.
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Neither Seller nor VHB nor the Company has established a management
incentive plan in connection with the transactions contemplated by this
Agreement under which it would be obligated to pay an incentive fee,
except to ▇▇▇▇ ▇▇▇▇▇. Such incentive fee, including any potential social
security payable thereon, will be paid by Seller or VHB.
3.22 NO OTHER REPRESENTATIONS AND WARRANTIES
Seller and VHB do not make any other implied or express representations or
warranties other than those set forth in Section 3 of this Agreement.
4 PURCHASER'S REPRESENTATIONS AND WARRANTIES
Purchaser represents and warrants to Seller as follows:
4.1 INCORPORATION AND AUTHORITY OF PURCHASER
As of Signing and the Closing Date, Purchaser is duly incorporated and
validly existing under the laws of Switzerland and has full power and
authority to enter into this Agreement, to carry out its obligations
hereunder and to consummate the purchase of the Shares contemplated
hereby. This Agreement constitutes valid, legal and binding obligations of
Purchaser, enforceable in accordance with its terms and conditions. The
execution and delivery of this Agreement by Purchaser, the performance by
Purchaser of its obligations hereunder and the consummation by Purchaser
of the purchase of the Shares contemplated hereby have been duly
authorised by all requisite corporate action on the part of Purchaser.
4.2 EFFECT OF EXECUTION OF THE AGREEMENT
The execution and delivery of this Agreement by Purchaser do not violate
any provisions of the articles of incorporation of Purchaser or any
agreement, which Purchaser is a party to. Purchaser does not require any
governmental consent of any nature other than mentioned in this Agreement
in Section 7 to enter into this Agreement and to consummate the purchase
of the Shares contemplated hereby. There are no proceedings or
investigations whatsoever pending against Purchaser which could compromise
the consummation of the transactions contemplated hereby.
4.3 FINANCING
As of Signing and the Closing Date, Purchaser has, and/or has available to
it, all funds necessary to consummate the transactions contemplated by
this Agreement.
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5 INDEMNIFICATION
5.1 INDEMNIFICATION BY SELLER AND/OR VHB
5.1.1 GENERAL PRINCIPLE
Any and all claims of Purchaser against Seller and/or VHB arising out of
any breach of the representations or warranties of Seller and/or VHB
contained in this Agreement shall exclusively be based on this Section 5.
The liability of Seller and VHB shall be joint and several.
5.1.2 LIABILITY OF SELLER AND VHB
In the event of any breach of the representations and warranties by Seller
and/or VHB as contained in Section 3 of this Agreement, Seller and/or VHB
shall indemnify Purchaser for all costs, reasonable expenses and damages
suffered by Purchaser. Subject to Section 7, any other contractual or
extra-contractual action or relief, in particular rescission of this
Agreement ("Wandelung") pursuant to art. 205 of the Swiss Code of
Obligations, is hereby expressly excluded.
5.1.3 DE MINIMIS THRESHOLD
There shall be liability of Seller and/or VHB only with respect to such
claims or series of related claims which, individually, exceed CHF 40'000
(forty thousand) each.
5.1.4 THRESHOLD
There shall be liability of Seller and/or VHB only with respect to such
claims or series of related claims as defined in Section 5.1.3 above
which, in the aggregate exceed CHF 500'000 (five hundred thousand, the
"Threshold"), whereupon Purchaser shall be entitled to recover all claims.
5.1.5 MAXIMUM RECOVERY (CAP)
Subject to Section 5.1.6, Seller's and/or VHB's liability for
misrepresentation and breach of the representations and warranties set out
in Section 3 shall not exceed a total amount equal to 20% of the Purchase
Price.
5.1.6 EXCEPTIONS
None of the limitations set out in Sections 5.1.3, 5.1.4 and 5.1.5 shall
apply to any willful or grossly negligent misrepresentation or breach of
warranty.
None of the limitations set out in Sections 5.1.3, 5.1.4 and 5.1.5 shall
apply to the representations and warranties set out in Sections 3.1
(Capacity of Seller), 3.2 (Capacity of VHB), 3.4 (Capital Structure of the
Company), 3.11 (Taxes), 3.19 (as with regard to the Intercompany Payable
only) and 3.20 (Intercompany Loans and Waiver) of this Agreement. For
claims relating to such representations
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and warranties, Seller's and/or VHB's liability shall not exceed a total
amount equal to the Purchase Price.
5.1.7 EXCLUSIONS
Seller's and/or VHB's liability shall be excluded or, as the case may be,
reduced, if and to the extent that:
a) the factual basis of the matter giving rise to a claim was fairly
disclosed in the Disclosure Letter or in the Data Room Index
(whereby it being agreed and understood that matters relating to the
representations and warranties set out in Sections 3.4 (Capital
Structure of the Company), 3.8 (Litigation), 3.19 (as with regard to
the Intercompany Payable only) and 3.20 (Intercompany Loans and
Waivers) of the Agreement shall not be deemed disclosed by reference
to the documents listed in the Data Room Index, but exclusively by
reference to the Disclosure Letter) in a manner that permitted
Purchaser to reasonably accurately assess the impact of such facts,
matters or circumstances.
Where a representation and warranty is deemed to be made on the
Signing Date and on the Closing Date, Seller shall have the right to
update the Disclosure Letter until Closing, except with respect to
the representations and warranties set forth in Sections 3.4
(Capital Structure of the Company), 3.7 (Financial Statements), 3.19
(as with regard to the Intercompany Payable only) and 3.20
(Intercompany Loans and Waivers), provided that such event so
disclosed has occurred between the Signing Date and the Closing
Date, in which case such disclosure (save where relating to an event
that has occurred outside the ordinary and usual course of business)
shall exclude any indemnification by Seller and/or VHB to the
Purchaser. For the avoidance of doubt any and all claims of
Purchaser arising out of any such disclosure made in respect of an
event that has occurred outside the ordinary and usual course of
business shall be exclusively based on this Section 5.
The parties agree that the provisions of art. 200 of the Swiss Code
of Obligations are hereby waived and replaced by the above; or
b) such breach is remedied by specific performance of Seller, or VHB,
as the case may be, as soon as reasonably practicable but not later
than within 60 days following receipt of Purchaser's notice as per
Section 5.3 hereunder; or
c) Purchaser has received recovery for such damages or loss under any
title whatsoever from a third party (including but not limited to
recovery under any insurance policy), or, if non-recovery is the
result of Purchaser's and, after Closing, the Company's failure to
exercise its commercially reasonable efforts to obtain recovery; or
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d) the loss could have been avoided by Purchaser and, after Closing, by
the Company had they complied with their legal obligation under
Swiss law to minimize damages; or
e) such damage or loss arises or increases as a result of (i) any new
issued or modified legislation (including but not limited to tax
legislation) after the Signing Date, or (ii) modified accounting
principles after the Closing Date; or (iii) any failure to maintain
insurance coverage at an appropriate level after the Closing Date;
or
f) the claim has been properly and specifically reserved for in the
Financial Statements or in the accounts of the Company disclosed to
Purchaser in the Data Room Index; or
g) as a result of a claim for misrepresentation or breach of warranty,
any tax payable by the Company is reduced; or
h) the factual basis of the matter giving rise to a claim resulted in,
and the resulting loss was recovered by Purchaser, through an
adjustment of the Purchase Price in accordance with Section 2.3.
5.2 INDEMNIFICATION BY PURCHASER
Following the Closing, Purchaser shall indemnify Seller for all costs,
reasonable expenses and damages suffered by Seller arising out of any
misrepresentation or breach of warranty of Purchaser contained in Section
4 of this Agreement.
5.3 SURVIVAL AND NOTICE OF CLAIMS
The representations and warranties of the Parties contained in Section 3
and 4 above shall be valid and enforceable if notified in accordance with
this Section as follows:
(a) unless otherwise set out in this Section 5, on or before 12 (twelve)
months after the Closing Date;
(b) with regard to the representations and warranties in Section 3.10
(Social Security and Pensions) and 3.11 (Taxes), on or before the
later of (i) 7 (seven) years after the Closing Date or (ii) on or
before 6 (six) months after the assessment for the relevant Taxes
has been determined and become legally-binding (rechtskraftig
festgesetzt); and
(c) with regard to the representations and warranties in Section 3.1
(Capacity of Seller), 3.2 (Capacity of VHB), 3.19 (as with regard to
the Intercompany Payable and activities of the Company prior to the
Business Acquisition only), and 3.20 (Intercompany Loans and
Waivers) on or before the later of 5 (five) years after the Closing
Date.
Notice of claims, if any, shall be given in writing until such date,
however, in any case no later than 30 (thirty) Business Days after the
date on which the notifying
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party has obtained knowledge of the existence of such claims ("NOTIFIED
CLAIMS"), provided, however, that failure to give a notice of claim
consistent with this Section shall not reduce the liability of Seller and
VHB unless they can demonstrate that damage has been caused or aggravated
by virtue of Purchaser's failure to give timely notice in accordance with
this Section, in which case Seller's and VHB's liability shall be reduced
accordingly. The provisions of art. 201 and art. 210 of the Swiss Code of
Obligations are hereby waived and replaced by the above.
Notified Claims shall survive the deadlines set out in the first paragraph
hereof provided the notifying party submits its claims to the arbitration
court as set forth in Section 9.13, or otherwise interrupts the statute of
limitation from expiring (Verjahrungsunterbruch) within 12 (twelve) months
following the date of the notice of claims.
5.4 THIRD PARTY CLAIMS
If any claim is made against the Company and/or Seller and/or VHB or
Purchaser that, if sustained, would give rise to an indemnity according to
this Agreement, Seller and VHB and Purchaser, as the case may be, shall
promptly (and in any event within 30 (thirty) Business Days) notify the
other Party (the "INDEMNIFYING PARTY") of the claim and shall grant the
other, or the other's designee, at the Indemnifying Party's sole expense,
the opportunity to defend or settle the claim. The Indemnifying Party
shall have the right to defend or settle, at its own expense and by its
own counsel, any such matter involving the asserted liability of the Party
seeking indemnification.
If the Indemnifying Party undertakes to compromise or defend any such
asserted liability, it shall promptly notify the other Party hereto
entitled to indemnification (the "INDEMNIFIABLE PARTY") of its intentions
to do so.
The Indemnifiable Party shall cooperate with the Indemnifying Party or its
counsel in the defense against any such asserted liability and in any
compromise thereof. Such cooperation shall include, but not be limited to,
furnishing the Indemnifying Party with any books, records or information
reasonably requested by the Indemnifying Party. If the Indemnifying Party
desires to compromise any such asserted liability and the Indemnifiable
Party refuses to consent to compromise, then the Indemnifying Party's
liability under this Section with respect to such asserted liability shall
be limited to the amount so offered in compromise, provided, however, that
the Party which has filed the claim declares that it would have accepted
such compromise offer. Under no circumstance shall the Indemnifiable Party
compromise any such asserted liability without the written consent of the
Indemnifying Party which shall not be unreasonably withheld or delayed.
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6 COVENANTS
6.1 FILINGS AND NOTICES TO AUTHORITIES
Purchaser is responsible for any filing or notification to any competent
governmental, regulatory or similar authority and to obtain any necessary
approval in connection with and arising out of the purchase of the Shares,
in particular, but without limitation, from the Swiss Federal Office of
Communications (OfCom) and/or from the Swiss competition authorities.
Seller undertakes to cooperate with Purchaser to the extent necessary with
regard to all required notifications or filings.
6.2 CONDUCT FROM SIGNING TO CLOSING
Seller undertakes to conduct the Company's business from Signing until
Closing in the ordinary and usual course consistent with its customary
practice in the past 12 (twelve) months prior to the Signing.
Unless specifically provided in this Agreement, Seller and, as the case
may be, VHB shall not, and shall procure that the Company shall not
without prior written approval of Purchaser (or, if applicable Merger
Control Laws do not so permit, prior consultation of Purchaser) do any of
the following from the date of this Agreement through to the Closing Date:
(a) do anything that could materially interfere with, inhibit or impair
the consummation of the transactions contemplated under this
Agreement;
(b) do anything which could have a Material Adverse Effect;
(c) make any change in the terms of employment of any director, officer
or employee of any of the Company other than in accordance with
existing agreements, collective bargaining arrangements or normal
prior practice;
(d) increase the number of employees of the Company other than as
required by the ordinary and usual course of its business;
(e) amend, modify or terminate or consent to the termination of any
contract with direct, resale and wholesale customers, or amend,
waive, modify, terminate or consent to the termination of any of its
rights thereunder other than where such conduct is in the ordinary
and usual course of its business;
(f) amend, modify or terminate or consent to the termination of any
lease agreement other than where such conduct is in the ordinary and
usual course of its business;
(g) pay, pre-pay, delay or postpone the payment of invoices other than
where such conduct is in the ordinary and usual course of its
business;
(h) pay, discharge or satisfy any claim, liability or obligation other
than where
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such conduct is in the ordinary and usual course of its business;
(i) enter into, or increase or extend any liability under, any guarantee
or indemnity other than where such conduct is in the ordinary and
usual course of its business;
(j) make, increase or extend any loan or advance or grant any credit to
any third person or incur any indebtedness or other liability other
than in the ordinary and usual course of its business;
(k) borrow any money or incur any indebtedness or other liability as
against a third party in excess of CHF 100'000 in the aggregate;
(l) declare, make or pay any dividend or other distribution, payable in
cash, stock, property or otherwise, with respect to any of the
Shares;
(m) change its method of accounting in effect at the date of this
Agreement;
(n) (i) make any investment in the voice service business other than
where such conduct is in the ordinary and usual course of its
business, or (ii) make any investment in fixed and intangible assets
in excess of CHF 70,000 in the aggregate per month;
(o) cancel, compromise, waive, or release any right or claim (or series
of related rights and claims) outside the ordinary and usual course
of its business;
(p) grant, create or allow to be created any Lien over any of its assets
other than charges arising by operation of law or in the ordinary
and usual course of its business;
(q) agree to do any of the things referred to above.
Seller and VHB hereby undertake, and procure to cause the Company, fully
and promptly to inform Purchaser whenever they contemplate to do, or cause
to be done, or propose to be done, an action that is or may be effected by
the restrictions set forth in this Section or if an event occurs that
could materially interfere with the consummation of the transactions
contemplated by this Agreement.
6.3 INDEMNIFICATION
Seller and VHB jointly and severally agree to fully indemnify Purchaser
if, between 30 June 2005 and the Closing Date:
(a) any dividends or other distributions have been paid or made by the
Company to or in favour of any of Seller or VHB or any person
related to them;
(b) any payments (or transfer of any other asset) have been made or have
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been agreed to be made by the Company to or in favour of any of
Seller or VHB or any person related to them;
(c) share or loan capital of the Company held by Seller, VHB or a person
related to them has been redeemed, repurchased or repaid;
(d) shareholder debt has been issued or increased by Seller or VHB (or
any person or entity related to them) to the Company;
(e) the Company has waived, or agreed to waive, any claim against Seller
or VHB (or any person or entity related to them);
(f) the Company has agreed to provide any service, or deliver any good
or product to Seller or VHB (or any person or entity related to
them) outside the ordinary course of business or at terms which are
not at arm's length.
6.4 TAX INDEMNITY
After the Closing, Seller and VHB will be responsible for, will pay, and
will indemnify and hold harmless Purchaser and the Company for and against
any and all liabilities, costs and expenses resulting from, arising out
of, or relating to Taxes of the Company and the Business (i) with respect
to any time prior to Closing; (ii) caused or arising from acts or
omissions on or before the Closing; or (iii) on hidden reserves as per the
Closing - such indemnification and other liability being due only if, and
to the extent, such liabilities, costs and expenses are not adequately
covered by a provision in the Financial Statements. For the purposes of
the indemnity given by the Seller and VHB under this Section 6.4 it is
agreed that the provisions of Section 5, with the exception of Section
5.1.5 (Cap), will apply, save that the Seller's and/or VHB's liability
under this Section 6.4 shall not exceed a total amount equal to the
Purchase Price and any claim brought by Purchaser under this Section 6.4
shall be subject to the same time restrictions as are set out in Section
5.3 (b).
6.5 COMPANY'S BOARD MEMBERS
Purchaser undertakes to hold immediately after Closing and on the same day
of Closing an extraordinary shareholders' meeting, which will (a)
acknowledge the resignation of all former board members of the Company and
(b) grant full discharge to all board members of the Company for any
period until the Closing Date in accordance with art. 698 of the Swiss
Code of Obligations.
6.6 INFORMATION TO EMPLOYEES
Information for the employees of Company with respect to the transactions
pursuant to this Agreement shall be agreed upon by Seller and Purchaser in
respect of time, form and contents, and be made prior to or simultaneous
with any public announcement.
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6.7 INSURANCE
Purchaser is aware that in principle, effective 23:59 CET on the Closing
Date, the Company covered by group insurance programs relating to business
and product liability insurance entered into by Seller or affiliates of
Seller will cease to be insured under such programs. Purchaser may enter
into new insurance contracts with regard to the Company as Purchaser may
deem necessary and appropriate. Seller and Purchaser will closely
cooperate so as to ensure that there is no unnecessary loss in insurance
coverage.
6.8 GENERAL OBLIGATION OF PURCHASER FOLLOWING CLOSING
Purchaser shall refrain from doing any acts or things that might give
third parties (including but not limited to contractual partners and
customers) reason to believe that following Closing the Company is part of
the Viatel Group.
6.9 RELEASE FROM SECURITY DOCUMENTATION
Seller and VHB shall promptly after Signing, but no later than with effect
as of Closing, procure the release from the guarantees made or given by
the Company in respect of the obligations of VHB and thereby the release
of any and all Lien over the Shares and assets of the Company, as set
forth in Annex 3.
In respect of any guarantee given by the Company for obligations of any
member of the Viatel Group, Seller and VHB shall jointly and severally
indemnify and hold harmless Purchaser in respect of all claims and
liabilities arising out of, or in connection with, such guarantees
(including costs and expenses incurred in connection therewith).
6.10 ACCESS TO THE COMPANY
Subject to any constraints under applicable law, Seller shall procure that
Purchaser and Purchaser's legal and financial advisors and auditors are
given reasonable direct access to the management, legal and financial
advisors and auditors and documents of the Company to the extent this is
necessary or reasonable for Purchaser or its advisors to conduct the
actions contemplated under Article 6.1.
6.11 ACCESS TO INFORMATION AFTER THE CLOSING DATE
Each Party agrees that it will co-operate with and make available to the
other Party, during normal business hours, all books and records and
information (without substantial disruption of employment) retained and
remaining in existence after the Closing Date which are necessary or
relevant in connection with any tax filing, inquiry or dispute, in any
third party litigation or any other matter requiring any such records or
information in relation to the performance of this Agreement. The Party
requesting any such information shall bear all reasonable out of pocket
costs and expenses (including, but not limited to reasonable attorneys'
fees, but excluding reimbursements for salaries and employee benefits)
incurred in connection with providing such information.
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Specifically, Seller may require certain financial information relating to
the Business for periods prior to the Closing Date for the purpose of
filing federal, state, local and/or foreign tax returns and other
governmental reports, and Purchaser agrees to furnish such information to
Seller at Seller's request.
6.12 BUSINESS FORECASTS
In connection with Purchaser's investigation of the Business, Purchaser
has received from Seller certain projections, forecasts and other planning
and budget information for the Business. Purchaser acknowledges that there
are uncertain-ties inherent in attempting to make such forward-looking
projections, forecasts, plans and budgets, that Purchaser is familiar with
such uncertainties, that Purchaser is taking full responsibility for
making its own evaluation of the adequacy and accuracy of all
forward-looking estimates, projections, forecasts, plans and budgets so
furnished with, and that Purchaser will not assert any claim against
Seller and/or affiliates of Seller and/or any entity which is part of the
Business and/or any of their employees or advisers, respectively, or hold
any such entities and/or persons liable with respect thereto.
6.13 PRESERVATION OF RECORDS
Purchaser agrees that it shall preserve and keep all books and records
relating to the Company for the period prior to the Closing Date in
Purchaser's possession for a period of at least 10 years from the Closing
Date. After such 10 year period, Purchaser shall be entitled to dispose of
any such books and records, unless Seller gives at least 90 calendar days
prior written notice requesting, at Seller's cost and expense, to remove
and retain all or any part of such books and records as Seller may select.
6.14 ABSENCE OF NON-COMPETE
For the avoidance of doubt, this Agreement does not contain or imply any
non-compete obligation for any of the Parties.
6.15 ENFORCEMENT OF OTHER DIVESTITURE CONFIDENTIALITY AGREEMENTS
Following the Closing, Seller shall give Purchaser all support reasonably
requested (at no cost to Seller), in particular, but not limited to,
powers of attorney and authorizations, to enforce the confidentiality
agreements that Seller or their advisors have concluded with other
potential purchasers of the Shares in the Company.
6.16 PAYMENT OF BROKER'S AND MANAGEMENT INCENTIVE FEES
Seller and/or VHB have entered into arrangements with Ernst & Young in
relation with the transaction contemplated under this Agreement. All costs
relating to such arrangements will be borne by Seller and/or VHB and will
not result in any obligations or disadvantages to Purchaser.
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The Company has entered into an incentive arrangement with ▇▇▇▇ ▇▇▇▇▇ that
is linked to the successful consummation of the transaction contemplated
under this Agreement. Within 20 (twenty) Business Days following the
Closing Date, Seller shall pay to Purchaser in cash by wire transfer the
incentive fee and social security payable thereon (if any) to be paid by
the Company to ▇▇▇▇ ▇▇▇▇▇ as a result of the successful consummation of
the transaction contemplated under this Agreement.
7 CONDITIONS PRECEDENT TO CLOSIN
7.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY
The respective obligations of the Parties to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction or
waiver (where permitted) by all Parties hereto, on or by the Closing Date,
of the following conditions:
(a) the approval under Swiss Merger Control Law has been obtained
without any condition, requirement or limitation (except where such
condition, requirement or limitation is immaterial to the ordinary
course of business of either the Company, or Purchaser, or
Purchaser's group), at or prior to the Closing Date, and the waiting
period relating thereto has expired or been terminated by the
competent authority;
(b) no action shall be pending or threatened and no order, law,
injunction or decree of any court, administrative body or
arbitration tribunal exists which has the effect of making illegal
or otherwise preventing or prohibiting, or which seeks to enjoin,
restrain, impede or levy a substantial difficulty on, the
consummation of the transactions contemplated hereunder; and
(c) the passing, at a duly convened and held general meeting of VHB, of
a resolution to approve the sale of the Shares by Seller.
7.2 CONDITIONS TO OBLIGATIONS OF PURCHASER
The respective obligations of Purchaser to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction or
waiver, on or by the Closing Date, of the condition that:
(a) no Material Adverse Event shall have occurred;
(b) save as disclosed to Purchaser, the representations and warranties
of Seller and VHB pursuant to Section 3 that are qualified with
reference to materiality shall be true and correct, and the
representations and warranties that are not so qualified shall be
true and correct in all material respects, in each case as of the
date of this Agreement and the Closing Date, except that those
representations and warranties that are explicitly made as of a
specific time shall be true and accurate as of such time only.
Subject to the other terms of this Agreement, this Section 7.2(b)
does not
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preclude or limit Purchaser from making a claim for
misrepresentation or breach of warranty;
(c) no Key Person (other than ▇▇▇▇ ▇▇▇▇▇▇▇) shall have left or announced
his intention to leave the Company;
(d) Seller shall have obtained the consents for the release of the
Company (including its Shares) from the Security Documentation in
the form set out in Annex 5; and
(e) Seller and/or VHB shall have performed in all material respects all
of its obligations undertaken in this Agreement or pursuant hereto
that are to be performed on or by the Closing Date.
7.3 CONDITION TO OBLIGATIONS OF SELLER
The respective obligations of Seller to effect the transactions
contemplated under this Agreement shall be subject to the satisfaction or
waiver, on or by the Closing Date, of the condition that:
(a) Purchaser shall have performed in all material respects all of its
obligations undertaken in this Agreement or pursuant hereto that are
to be performed on or by the Closing Date; and
(b) All representations and warranties of Purchaser pursuant to Section
4 shall be true and correct in all material respects as of the date
of this Agreement and the Closing Date.
8 CLOSING
8.1 DATE AND LOCATION
The closing of this Agreement ("CLOSING") shall take place in the offices
of Bar & ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇. ▇▇, ▇▇▇▇▇▇ at the latest 5 (five)
Business Days after all conditions precedent in Section 7 have been
satisfied or waived, or at such other date and location as mutually agreed
upon by Seller and Purchaser (the "CLOSING DATE").
If Closing will not take place within 6 (six) months from the Signing Date
at the latest, Seller may terminate this Agreement with immediate effect,
all provisions of this Agreement thereby ceasing to be effective, except
for Sections 9.1-9.4 and 9.12- 9.13, unless Seller and/or VHB failed to
use all reasonable efforts to procure the satisfaction of the condition.
If Closing will not take place within 6 (six) months from the Signing Date
at the latest, Purchaser may terminate this Agreement with immediate
effect, all provisions of this Agreement thereby ceasing to be effective,
except for Sections 9.1-9.4 and 9.12- 9.13, unless Purchaser failed to use
all reasonable efforts to procure the satisfaction of the condition.
Share Purchase Agreement dated 20 October 2005 Execution Copy* 30/30
All actions taken at Closing shall be deemed to have occurred
simultaneously. If any such action has not occurred on Closing Date,
Closing shall not be deemed to have occurred.
8.2 SELLER'S OBLIGATIONS
At Closing,
(a) Seller shall deliver to Purchaser certificates representing the
Shares and do all such other acts and deliver such documents as may
be required under applicable law to transfer all of the shares of
the Company from Seller to Purchaser;
(b) Seller shall deliver to Purchaser an updated Disclosure Letter (if
any) in agreed form and to the extent permitted under Section 5.1.7
(a);
(c) Seller shall deliver to Purchaser a copy of the minutes of the
general meeting of VHB as evidence of the satisfaction of the
condition set out in Section 7.1(c);
(d) Seller shall deliver to Purchaser a certified copy of any power of
attorney under which any of the transfers or other documents
referred to in this Article 8.2 are executed, including evidence
satisfactory to Purchaser or necessary pursuant to applicable law of
the binding authority of any person signing on behalf of Seller;
(e) Seller shall deliver to Purchaser a certificate dated the Closing
Date as to the satisfaction of the conditions set out in Section
7.2;
(f) Seller shall deliver to Purchaser resignation letters of the members
of the board of directors of the Company, declaring their
resignation as of the Closing Date as members of the board of
directors waiving any rights of any kind towards the Company;
(g) Seller shall deliver to Purchaser evidence as to the termination (at
no cost and without any remaining liabilities for the Company) of
all intercompany arrangements among the Company and Seller or any of
its affiliates in the form attached hereto as Annex 4;
(h) Seller shall deliver to Purchaser duly executed declarations, in the
form attached hereto as Annex 5, from each relevant party to the
Security Documentation irrevocably and unconditionally releasing and
acquitting, as of the Closing Date, the Company (including the
Shares) from any and all obligations under the Security
Documentation as set forth in Annex 3;and
(i) Seller shall deliver to Purchaser three original copies of the
Escrow Agreement in the form attached hereto as Annex 2 duly signed
by the Escrow Agent and Seller.
Share Purchase Agreement dated 20 October 2005 Execution Copy* 31/31
8.3 PURCHASER'S OBLIGATIONS
At the Closing:
(a) Purchaser shall transfer the amount of CHF 1'500'000 (one million
five hundred thousand Swiss Francs) (the "ESCROW AMOUNT") in cash by
electronic transfer in immediately available funds to the account of
the Escrow Agent;
(b) Purchaser shall pay the Purchase Price less the Escrow Amount in
cash by electronic transfer in immediately available funds in favour
of Seller to VHB's bank account no. ▇▇▇▇▇▇▇▇ at Lloyds TSB Bank;
(c) Purchaser shall deliver to Seller a certificate dated the Closing
Date as to the satisfaction of the conditions set out in Sections
7.1(a) and 7.3;
(d) Purchaser shall countersign the Escrow Agreement; and
(e) Purchaser shall deliver to Seller a certified copy of any power of
attorney under which any of the transfers or other documents
referred to in this Section 8.3 are executed, including evidence
satisfactory to Seller or necessary pursuant to applicable law of
the binding authority of any person signing on behalf of Purchaser.
9 MISCELLANEOUS
9.1 TRANSACTION COSTS
All costs relating to this Agreement shall be borne by the Parties hereto,
with each Party bearing its own costs (including but not limited to
attorney's fees, financial advisers, taxes and any other tax or cost that
a Party shall bear by operation of law, etc.), whereas the security
transfer tax, if any, shall be borne by Purchaser.
9.2 CONFIDENTIALITY
Each Party will hold, and will use its reasonable best efforts to cause
its affiliates, and their respective representatives and advisers to hold
at all times, in strict confidence from any person (other than its
affiliates or their representatives or advisers), (i) unless compelled to
disclose by judicial or administrative process (including, without
limitation, in connection with obtaining the necessary governmental
approvals of this Agreement and the transactions contemplated hereby) or
by other requirements of law or regulations derived therefrom or (ii)
unless disclosed in an action or proceeding brought by a Party in pursuit
of its rights or in the exercise of its remedies hereunder, all documents
and information concerning the other Party or any of its affiliates
furnished to it by such Party or its representatives and advisers in
connection with this Agreement or the transactions contemplated hereby,
except to the extent that such documents or information can be shown to
have been:
Share Purchase Agreement dated 20 October 2005 Execution Copy* 32/32
(a) previously known by the Party receiving such documents or
information;
(b) in the public domain (either prior to or after the furnishing of
such documents or information hereunder) through no fault and by
reason other than a breach of this confidentiality agreement of such
receiving Party; or
(c) later acquired by the receiving Party from another source if the
receiving Party is not aware that such source is under an obligation
to another party hereto to keep such documents and information
confidential;
provided, however, that following the Closing the foregoing restrictions
will not apply to Purchaser's use of documents and information concerning
the Company furnished by Sellers hereunder.
In the event the transactions contemplated hereby are not consummated,
upon the request of the other Party, each Party hereto will, and will
cause its affiliates and their respective representatives and advisers to,
promptly (and in no event later than 10 (ten) Business Days after such
request) return or cause to be returned all copies of documents and
information, including, but not limited to, (i) the data room documents
and (ii) the documents and information furnished pursuant to Article 6.1,
furnished by the other Party in connection with this Agreement or the
transactions contemplated hereby, except for one copy that may be retained
by each adviser to either Party hereto for the files which they are
required to keep in their capacity as professional advisers and which
shall be kept strictly confidential.
9.3 PUBLIC ANNOUNCEMENTS
Immediately upon Signing, Seller and Purchaser shall jointly communicate
and inform the press and the public regarding the transactions
contemplated by this Agreement. Thereafter, both Seller and Purchaser
shall consult each other before issuing any press release or otherwise
making any public statement with respect to this Agreement and shall not
issue any such press release or make any such public statement prior to
such consultation and without the other Party's prior written approval.
The restrictions set out in this Section 9.3 shall not apply, however, to
the extent that the issue of any public statement is required under any
applicable law or by any securities exchange or regulatory or governmental
body, it nevertheless being agreed that the issue of any such public
statement shall be made after consultation with the other Party where
possible.
9.4 WAIVER/REMEDIES
Except if applicable law or this Agreement require the exercise of a right
within a certain period of time, no delay on the part of any Party in
exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver or partial exercise on the part of
the Parties of any right, power or privilege hereunder, preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege which is not precluded by this Agreement.
Share Purchase Agreement dated 20 October 2005 Execution Copy* 33/33
9.5 ENTIRE AGREEMENT
This Agreement together with the Annexes and all documents referred to
herein constitutes the entire Agreement between the Parties with respect
to the subject matter of this Agreement and shall replace all other prior
agreements or understandings of the Parties relating thereto.
9.6 AMENDMENTS AND MODIFICATIONS
This Agreement may not be amended or modified except by a document in
writing duly executed by the Parties hereto. This undertaking itself may
only be modified by an agreement in writing.
9.7 DUTY TO COOPERATE
Seller, Purchaser and the Company undertake to cooperate fully, as and to
the extent reasonably requested by the other Party, in connection with the
filing of tax returns and any audit, litigation or other proceedings in
order to safeguard their interests vis-a-vis third parties.
9.8 NOTICES
Notices hereunder shall be in writing. Notice shall be deemed received
upon receipt of a registered letter addressed as follows:
If to Seller and/or VHB:
Viatel Holding (Europe) Limited and/or Viatel
Holding (Bermuda) Limited
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇/Group General Counsel
Inbucon House
Wick Road
UK - ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Fax: ▇▇▇ (▇) ▇▇▇▇ ▇▇▇
Email: ▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
with a copy to:
Bar & ▇▇▇▇▇▇
Attn. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇ -▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
Fax: ▇▇▇ ▇▇ ▇▇▇ ▇▇ ▇▇
Email: ▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇
Share Purchase Agreement dated 20 October 2005 Execution Copy* 34/34
If to Purchaser:
Swisscom Fixnet AG
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇
▇▇ - ▇▇▇▇ ▇▇▇▇
Fax: ▇▇▇ ▇▇ ▇▇▇ ▇▇ ▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
with each a copy to:
Swisscom AG
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Senior Counsel
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇
▇▇ - ▇▇▇▇ ▇▇▇▇
Fax: ▇▇▇ ▇▇ ▇▇▇ ▇▇ ▇▇
Email: ▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Homburger Rechtsanwalte
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇/▇▇
▇▇-▇▇▇▇ ▇▇▇▇▇▇
Fax: ▇▇▇ ▇▇ ▇▇▇ ▇▇ ▇▇
Email: ▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇
9.9 SEVERABILITY
Each provision of this Agreement shall be interpreted in such manner as to
be effective and valid under the applicable law, but if any provision of
this Agreement shall be unenforceable or invalid under applicable law,
such provision shall be ineffective only to the extent of such
unenforceability or invalidity and be replaced by such valid and
enforceable provision which the Parties consider, in good faith, to match
as closely as possible the invalid or unenforceable provision and
attaining the same or a similar economic effect. The remaining provisions
of this Agreement shall continue to be binding and in full force and
effect.
9.10 ASSIGNMENT
No Party may assign, in whole or in part, or delegate all or any part of
its rights, interests or obligations under this Agreement to any person
without the prior written approval of the other Party. Any assignment or
delegation made without such approval shall be null and void.
9.11 DRAFTED BY ALL PARTIES
The Parties agree that they jointly negotiated and prepared this Agreement
and that it shall not be construed against any Party on the grounds that
such Party prepared or drafted the same.
Share Purchase Agreement dated 20 October 2005 Execution Copy* 35/35
9.12 GOVERNING LAW
This Agreement shall be governed and construed in accordance with the
internal substantive law of Switzerland (excluding Swiss Private
International Law and International Treaties in particular the United
Nations Convention on Contracts for the International Sale of Goods of
1980).
9.13 DISPUTE RESOLUTION
All disputes arising out of or in connection with this Agreement,
including disputes on its conclusion, binding effect, amendment and
termination shall be resolved, to the exclusion of the ordinary courts, by
an arbitration in accordance with the Swiss Rules of International
Arbitration of the Swiss ▇▇▇▇▇▇▇▇ of Commerce in force on the date when
the Notice of Arbitration is submitted in accordance with these Rules. The
number of arbitrators shall be three. The seat of the arbitration shall be
in Zurich. The arbitral proceedings shall be conducted in English.
9.14 COUNTERPARTS
This Agreement is executed in three counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same
agreement.
SIGNATURES ON NEXT PAGE
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SIGNATURES
______________, this _____________
VIATEL HOLDING (EUROPE) LTD
________________________________ __________________________________
Name: /s/▇▇▇▇ ▇▇▇▇▇ Name:
Title: CEO Title:
VIATEL HOLDING (BERMUDA) LTD
________________________________ __________________________________
Name: /s/▇▇▇▇ ▇▇▇▇▇ Name:
Title: CEO Title:
______________, this _____________
SWISSCOM FIXNET AG
________________________________ __________________________________
Name:/s/ ▇▇▇▇▇ ▇▇▇▇▇ Name:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Title: CFO Title: Head of Fixnet SME
Share Purchase Agreement dated 20 October 2005 Execution Copy* 37/37
ANNEX 1
DISCLOSURE LETTER
FROM:
Viatel Holding (Europe) Ltd, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
and
Viatel Holding (Bermuda) Ltd, Canon's Court, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇
[PLACE/DATE]
TO:
SWISSCOM FIXNET AG
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇-▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
DISCLOSURE LETTER
Dear Sirs
We refer to the Share Purchase Agreement (the "Agreement") dated today to be
entered into today between Viatel Holding (Europe) Ltd (the "Seller") and Viatel
Holding (Bermuda) Ltd ("VHB") and Swisscom Fixnet AG (the "Purchaser") for the
sale and purchase of all existing shares of Cybernet (Schweiz) AG.
This letter together with the schedule and annexes hereto is the Disclosure
Letter referred to in the Agreement and constitutes formal disclosure to the
Purchaser for the purposes of the Agreement of the facts and circumstances which
are or may be inconsistent with the representations and warranties referred to
in Section 3 of the Agreement (the "Representations and Warranties"). Such facts
and circumstances will be deemed to qualify the Representations and Warranties
accordingly.
1. PRELIMINARY MATTERS
1. Terms defined in the Agreement shall have the same meaning in this
letter.
2. References in this letter to sections shall, unless the context
otherwise requires, be to those sections in Section 3 of the
Agreement. Such references are for convenience only and shall not
alter the construction of
Share Purchase Agreement dated 20 October 2005 Execution Copy* 38/38
this letter nor in any way limit the effect of any of the
disclosures, all of which are made against the Representations and
Warranties as a whole. A disclosure or qualification made by
reference to any particular section shall be deemed to be made also
in respect of any other section to which the disclosure or
qualification may be applicable.
3. The disclosure for any matter or document shall not imply any
representation, warranty or undertaking not expressly given in the
Agreement nor shall such disclosure be taken as extending the scope
of any of the Representations and Warranties.
2. DISCLOSURES
1. By way of disclosure, the following matters are disclosed or deemed
disclosed to the Purchaser:
i) All matters contained or referred to in Schedule 1.
ii) All matters the factual basis of which was fairly disclosed in
any of the documents contained in the data room and listed in
the Data Room Index provided, however, that the Parties have
agreed that matters relating to the Representations and
Warranties set out in Sections 3.4 (Capital Structure of the
Company), 3.8 (Litigation), 3.19 (as with regard to the
Intercompany Payable only) and 3.20 (Intercompany Loans and
Waivers) of the Agreement shall not be deemed disclosed by
reference to the documents listed in the Data Room Index, but
exclusively by reference to Schedule 1 hereto.
iii) All matters disclosed, provided for, noted or referred to in
the audited financial statements of the Company of 31 December
2004.
iv) All matters disclosed, provided for or referred to in the
financial statements as of 31 July 2005 as reviewed by
Deloitte & Touche AG.
v) All matters which are a matter of public record and/or
otherwise within the public domain.
2. In addition to anything disclosed in the Agreement and/or from the
documents listed in the Data Room Index, the matters set out in
Schedule 1 of this letter shall be disclosed additionally,
respectively specifically as to matters set out in section 1(ii)
above, or reinforced in relation to the Representations and
Warranties.
Sincerely yours,
Viatel Holding (Europe) Ltd
Share Purchase Agreement dated 20 October 2005 Execution Copy* 39/39
_______________________________
Name
Title:
Viatel Holding (Bermuda) Ltd
_______________________________
Name
Title:
Swisscom Fixnet AG acknowledges the receipt of this letter on [DATE]
_______________________________ _______________________________
Name: Name:
Title: Title:
Share Purchase Agreement dated 20 October 2005 Execution Copy* 40/40
ANNEX 2
ESCROW AGREEMENT (AGREED FORM)
Share Purchase Agreement dated 20 October 2005 Execution Copy* 41/41
ANNEX 3
LIST OF SECURITY DOCUMENTATION
US LAW GOVERNED SECURITY DOCUMENTS
1. Investment and Note Purchase Agreement between VHB and the
Purchasers (as defined therein) (Data Room Index Ref:I.1.2.1.33);
2. Convertible Senior Secured Loan Notes issued by VHB to Noteholders;
3. Registration Rights Agreement between VHB and the Investors (as
defined therein) and ▇▇▇▇ ▇▇▇▇▇ (Data Room Index Ref:I.1.2.1.30);
SWISS LAW GOVERNED SECURITY DOCUMENTS
1. Share Pledge Agreement between the Seller and the Law Debenture
Trust Corporation plc regarding a pledge of all shares of Viaphone
AG and the Company (Data Room Index Ref:I.1.2.1.31);
2. Receivables Assignment between the Company and the Law Debenture
Trust Corporation plc (Data Room Index Ref:I.1.2.1.32); and
3. Bank Account Assignment Agreement dated 24 March 2005 between
Cybernet (Schweiz) AG and The Law Debenture Trust Corporation p.l.c.
regarding The Assignment of Claims under Bank Accounts of the
Assignor (Data Room Index Ref: I.1.2.1.37),
ENGLISH LAW GOVERNED SECURITY DOCUMENT
1. Security Trust and Intercreditor Deed made between VHB and the Law
Debenture Trust Corporation plc (Data Room Index Ref:I.1.2.1.35);
2. Security Agreement between the Seller and the Law Debenture Trust
Corporation plc.
Share Purchase Agreement dated 20 October 2005 Execution Copy* 42/42
ANNEX 4
AGREED FORM OF TERMINATION OF INTERCOMPANY ARRANGEMENTS
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ANNEX 5
AGREED FORM OF RELEASES
Share Purchase Agreement dated 20 October 2005 Execution Copy* 44/44
ANNEX 6
DATA ROOM INDEX
