Contribution Agreement - eBay Belgium Holdings SA and eBay Inc.
CONTRIBUTION AGREEMENT
This Contribution Agreement is entered into on February 21, 2001 (hereinafter
the "AGREEMENT"),
BETWEEN:
- eBay Belgium Holdings S.A., a societe anonyme en cours de formation,
hereafter referred to as "EBH",
- eBay Inc., a corporation organized under the laws of the State of
Delaware, U.S.A., whose principal offices are located at 2145 Hamilton
Avenue, San Jose, CA 95125, U.S.A., represented by Matthew Bannick, duly
authorized for the purposes hereof,
hereafter referred to as the "US PARENT",
(EBH and the US Parent are hereafter together referred to as the "EBAY
COMPANIES")
AS PARTIES OF THE FIRST PART,
AND:
- Pierre-Francois Grimaldi, a French national born on April 28, 1955 at
Saint-Maur, residing Poggio Di Nazza, 20240 Ghisonaccia, France,
- Marc Piquemal, a French national born on July 3, 1971 at Toulouse,
residing 24, rue Saint-Antoine, 75004 Paris, France,
- GS Capital Partners III, L.P., a limited partnership organized under the
laws of the state of Delaware, whose principal offices are located 85,
Broad Street, New-York, New-York 10004 represented by Jean-Christophe
Germani, duly authorized for the purposes hereof,
- GS Capital Partners III, Offshore, L.P., a company organized under the
laws of the Cayman Islands, whose principal offices are located c/o
Maples and Calder, P.O. Box 309,
1
<PAGE> 2
Grand Cayman, Cayman Islands represented by Jean-Christophe Germani,
duly authorized for the purposes hereof,
- Goldman Sachs & Co Verwaltungs GmbH, a company organized under the laws
of Germany, whose registered offices are located Messe Turm, 60308
Frankfurt am Main, Germany, represented by Jean-Christophe Germani, duly
authorized for the purposes hereof,
- Stone Street Fund 1999, L.P., a company organized under the laws of the
state of Delaware, whose principal offices are located 85, Broad Street,
New York, New York 10004, represented by Jean-Christophe Germani, duly
authorized for the purposes hereof,
- Cisalpina Gestioni S.p.A. a company organized under the laws of Italy,
registered with the Registry of commerce of Milan, whose registered
offices are located Via Arrigo, Boito 10, 20121 Milan, Italy,
represented by Mauro Castiglioni, duly authorized for the purposes
hereof,
AS PARTIES OF THE SECOND PART,
Pierre-Francois Grimaldi, Marc Piquemal, GS Capital Partners, III, L.P., GS
Capital Partners III, Offshore L.P., Goldman Sachs & Co Verwaltungs GmbH , Stone
Street Fund 1999, L.P., and Cisalpina Gestioni S.p.A are hereafter collectively
referred to as the "CONTRIBUTORS". In addition, Pierre-Francois Grimaldi and
Marc Piquemal are sometimes referred to as the "FRENCH INDIVIDUAL SHAREHOLDERS".
GS Capital Partners III L.P., GS Capital Partners III Offshore L.P., Goldman
Sachs & Co Verwaltungs GmbH and Stone Street Fund 1999 are sometimes referred to
as the "GS SHAREHOLDERS".
2
<PAGE> 3
RECITALS
1. EBH wishes to acquire, either directly or indirectly, all of the
outstanding shares of iBazar SA, a French societe anonyme whose
registered offices are located 1, rue de Flandre, 75019 Paris,
registered under number 388 387 425 RCS Paris (the "Company") as of the
Closing Date (the "CLOSING DATE SHARES"). The Contributors own the
majority of the shares of the Company, and wish to contribute all of
their shares in the Company as of the Closing Date (the "CONTRIBUTORS'
SHARES") to EBH, and to cause the other shareholders of the Company as
of the Closing Date to contribute or sell their shares in the Company to
EBH or to the US Parent.
2. E-Merge SA, David van Tieghem, Jean-Luc Goemaere and Jean-Michel Loots
(hereafter the "BELGIAN SHAREHOLDERS") also own shares of the Company.
In addition, the Company has issued a number of warrants (bons de
createur d'entreprise) and stock options (options de souscription
d'actions) in favor of the managers and employees of its group, each
warrant or stock option giving the right to subscribe to shares of the
Company. The Parties wish to take appropriate steps so that the shares
owned by the Belgian Shareholders and the shares that will be owned by
the beneficiaries of such warrants and stock options who will exercise
their right to acquire shares of the Company shall be purchased for cash
by EBH or by the US Parent. The Belgian Shareholders and the
beneficiaries of such warrants and stock options who will exercise their
right to acquire shares of the Company shall be referred to as the
"CASHED OUT SHAREHOLDERS".
3. Except for newly created shares issued as a result of the exercise by
the beneficiaries of the warrants and stock options mentioned in
PARAGRAPH 2. above, between the date hereof and the Closing Date, of
their right to acquire shares of the Company, the Company's share
capital as of the Closing Date shall be as follows:
SHAREHOLDERS A SHARES B SHARES TOTAL
------------ -------- -------- -----
Pierre-Francois Grimaldi 30,476,664 0 30,476,664
Marc Piquemal 5,380,000 0 5,380,000
GS Capital Partners III L.P. 2,983,804 3,472,276 6,456,080
GS Capital Partners III, Offshore, L.P. 820,276 954,576 1,774,852
Goldman Sachs & Co Verwaltungs GmbH 137,748 160,300 298,048
Stone Street Fund 1999, L.P. 201,492 234,484 435,976
Cisalpina Gestioni S.p.A 0 1,792,115 1,792,115
E-MERGE SA 63,844 0 63,844
David van Tieghem 74,447 0 74,447
Jean-Luc Goemaere 74,447 0 74,447
Jean-Michel Loots 15,681 0 15,681
TOTAL 40,228,403 6,613,751 46,842,154
3
<PAGE> 4
4. EBH is used by the US Parent as an investment vehicle for its
international acquisition activities. The US Parent further intends,
prior to the Closing Date, to contribute to EBH, either directly or
through an Affiliate, its shares of the common stock of the Korean
company Internet Auction Co., Ltd., representing slightly more than 50%
of the capital of such company (the "US PARENT CONTRIBUTION").
5. The US Parent and the Contributors have agreed that, as of the Closing
Date:
(i) the Contributors shall contribute all of the Contributors' Shares
to EBH; and
(ii) the Cashed Out Shareholders will sign documents allowing transfer
of all of their shares in the Company to EBH or the US Parent
(the "SOLD SHARES").
6. For the purpose of the contribution mentioned under Paragraph 5 (i)
above, the Parties have agreed that as a result of such contribution,
the Contributors shall hold no more than thirty-five percent (35%) of
the shares of EBH. The by-laws of EBH to be in effect after such
contribution are attached as SCHEDULE 6.1.2. hereto.
7. On the basis of the preceding recitals, and in consideration of the
representations and warranties contained herein, the Parties agree as
follows:
ARTICLE 1 -- CERTAIN DEFINITIONS
Capitalized terms used in this Agreement are used as defined in this SECTION 1
or elsewhere in this Agreement (such terms to be equally applicable to the
singular and plural forms thereof).
Additional Contribution shall have the meaning set forth in SECTION 2.2.2. of
this Agreement.
Affiliate shall mean, with respect to any Party to this Agreement, any legal
entity directly or indirectly controlling or controlled by or under direct or
indirect common control with such Party (including without limitation its
respective officers, directors and employees). For this purpose, "control" means
the ownership of more than 50% of the outstanding share capital or the right to
appoint a majority of directors or comparable governing bodies.
Agreement shall mean this Agreement and the Exhibits and Schedules attached
hereto as the same may be amended from time to time in accordance with the terms
set forth herein.
Arbitrator shall have the meaning set forth in SECTION 11.1. of this Agreement.
Audited Year End Balance Sheets shall have the meaning set forth in SECTION 7.10
of this Agreement.
Belgian Shareholders shall have the meaning set forth in Paragraph 2 of the
Recitals of this Agreement.
4
<PAGE> 5
Belgian Shares shall have the meaning set forth in SECTION 2.2.1. of this
Agreement.
Benefit Plans shall have the meaning set forth in SECTION 4.14.8. of this
Agreement.
Breach shall have the meaning set forth in SECTION 9.2.1. of this Agreement.
Cashed Out Shareholders shall have the meaning set forth in PARAGRAPH 2 of the
Recitals to this Agreement.
Closing shall have the meaning set forth in SECTION 7.2. of this Agreement.
Closing Date shall have the meaning set forth in SECTION 7.1. of this Agreement.
Closing Date Shares shall have the meaning set forth in PARAGRAPH 1 of the
Recitals to this Agreement.
Company shall have the meaning set forth in PARAGRAPH 1 of the Recitals of this
Agreement.
Company Permits shall mean any and all permits, authorizations, approvals,
registrations, waivers, variances, concessions and licenses granted by a
governmental authority (excluding when it relates to Owned Intellectual Property
and Licensed Intellectual Property).
Compensation shall have the meaning set forth in SECTION 4.14.1. of this
Agreement.
Contribution shall have the meaning set forth in SECTION 2.1. of this Agreement.
Contributors shall have the meaning set forth on PAGE 2 of the Recitals of this
Agreement.
Contracts shall mean any and all oral or written contracts, excluding any
Company Permits, entered into by the Company or by its Subsidiaries.
Contributed Shares shall have the meaning set forth in SECTION 2.1. of this
Agreement.
Contributors' Shares shall have the meaning set forth in PARAGRAPH 1 of the
Recitals to this Agreement.
Deferred Equity Rights shall mean all warrants and stock options (including the
Issued Warrants and the Issued Stock Options), convertible bonds, subscriptions
or other securities granting the right, by conversion, exchange, reimbursement
or otherwise, to subscribe to or to purchase any of the authorized or
outstanding securities of the relevant company. Previously issued Deferred
Equity Rights that may have terminated or are void shall not be considered
"Deferred Equity Rights" for purposes of this Agreement.
EMU Compliant shall have the meaning set forth in SECTION 4.21 of this
Agreement.
Encumbrance means any security interest, pledge, mortgage, lien, charge,
encumbrance or restriction of any kind, including, without limitation, any
restriction on the use, voting, transfer,
5
<PAGE> 6
receipt of income or other exercise of any attributes of ownership. excluding
restrictions created by applicable laws which apply to all assets of a similar
kind.
Escrow Agreement shall have the meaning set forth in SECTION 2.2.1. of this
Agreement.
Loss shall have the meaning set forth in SECTION 9.1.1. of this Agreement.
French Individual Shareholders shall have the meaning set forth on PAGE 2 of
this Agreement.
Financial Statements shall have the meaning set forth in SECTION 4.7.1. of this
Agreement.
French GAAP shall mean the generally accepted accounting principles in France
applied on a consistent basis.
GS Shareholders shall have the meaning set forth on PAGE 2 of this Agreement.
Indemnified Party shall have the meaning set forth in SECTION 9.3.1. of this
Agreement.
Indemnifying Parties shall have the meaning set forth in SECTION 9.3.1. of this
Agreement.
Intellectual Property Rights shall mean (i) inventions patentable, and all
improvements thereto; (ii) patents, patent applications; (iii) trade secrets;
(iv) trademarks, trade names, copyrights and domain names in each case
registered; (v) software; (vi) data bases; and (vii) other intellectual
property; including all copies and tangible embodiments of the information
described in clauses (i)-(vii) above, owned or used by the Company or by its
Subsidiaries.
Investments shall mean any legal entity other than the Company or the
Subsidiaries, and other than SICAV or mutual funds, in which the Company or the
Subsidiaries have a direct or indirect equity interest.
Interested Person shall mean (i) any entity directly or indirectly controlling,
controlled by, or under common control with any Contributor, (ii) any
Contributor, (iii) any director, officer, senior employee of the entities
mentioned in (i) and (ii), and (iv) any entity in which any of the persons named
in (i), (ii) and (iii) has a direct or indirect interest.
Issued Stock Options shall mean all stock options issued by the Company prior to
the date hereof.
Issued Warrants shall mean all warrants ("bons de createur d'entreprise") issued
by the Company prior to the date hereof.
Law shall mean all statutory laws, rules and regulations of all governmental,
judicial, legislative, executive, administrative or regulatory authorities
(national, local, foreign or otherwise) understood to be, in the case of France,
droit positif and jurisprudence at the time applicable.
Legal Proceedings shall have the meaning set forth in SECTION 4.22.1. of this
Agreement.
6
<PAGE> 7
Legal Requirements shall mean any and all Laws or Permits applicable to the
relevant involved company and/or Subsidiary.
Licensed Intellectual Property shall mean Intellectual Property Rights that are
held by the Company or its Subsidiaries under a license granted by a third
party.
Contributor's Best Knowledge means that the particular fact was known, or not
known, as the context requires, to the French Individual Shareholders and/or to
the senior management of the Company or of its Subsidiaries as listed in
SCHEDULE 1 after a reasonable investigation or due diligence exercised by such
persons (or by the principal executive officers of such persons they are not a
natural person).
Material Contract shall have the meaning set forth in SECTION 4.10.1. of this
Agreement.
Owned Intellectual Property shall mean Intellectual Property Rights that are
owned by the Company or its Subsidiaries.
Party shall mean any or all of the parties to this Agreement.
Shareholders' Agent shall have the meaning set forth in SECTION 12.10. of this
Agreement.
Sold Shares shall have the meaning set forth in PARAGRAPH 5 of the Recitals to
this Agreement.
Subsidiaries shall mean all legal entity directly or indirectly controlled by
the Company. For this purpose, "control" means the ownership of more than 50% of
the outstanding share capital or the right to appoint a majority of directors or
comparable governing bodies.
Tax and Taxes means any taxes, parafiscal contributions and social
contributions, of any nature imposed, assessed, or collected under any law or
payable pursuant to any tax sharing or similar contract, including, without
limitation, (i) all income, value-added, registration, transfer, excise, real or
personal property, capital, withholding, stamp, sales taxes, state taxes, local
taxes, "taxe professionnelle" and other employment related taxes concerning the
employees of the Company or of its Subsidiaries, or any other taxes or charges
in the nature of the taxes described above, and any assessments, duties, fees,
or other governmental charges (including interest and penalties associated
therewith), (ii) parafiscal charges ("taxes parafiscales") or "redevances",
(iii) employment contributions and social security contributions, (iv) any
liability for the payment of any amounts of the type described in clause (i)
above arising as a result of being a member (or ceasing to be a member) of any
corporate group, or being included (or required to be included) in any tax
return relating thereto, (v) any liability for the payment of any amounts of the
type described in clauses (i) and (ii) above as a result of any obligation to
indemnify or otherwise assume or succeed to the liability of any third party,
and (vi) any penalties, fines, charges, surcharges and interest in connection
with the items mentioned under (i) through (v).
US Parent Contribution shall have the meaning set forth in the fourth paragraph
of the Recitals of this Agreement.
7
<PAGE> 8
ARTICLE 2 -- CONTRIBUTION OF THE CONTRIBUTED SHARES
2.1. CONTRIBUTION OF THE CONTRIBUTED SHARES -- ALLOCATION OF SHARES OF EBH
Subject to the conditions precedent set forth in SECTION 6 hereafter,
the Main Contributors shall, on the Closing Date, contribute all of the
Main Contributors' Shares to EBH (the "CONTRIBUTION"), and EBH shall
accept such Contribution. The shares to be contributed to EBH pursuant
to the Contribution are hereafter referred to as the "CONTRIBUTED
SHARES".
2.2. ALLOCATION OF SHARES OF EBH -- ESCROW
2.2.1. As a consideration for the Contribution, EBH shall issue, on the Closing
Date, 46,613,735 new B shares of EBH (the "BELGIAN SHARES"). As a result
of the Contribution, the Contributors shall hold up to thirty-five
percent (35%) of the share capital of EBH. The Belgian Shares shall be
issued to the Contributors pursuant to the terms of this Agreement and
the Escrow Agreement. Eighty-five percent (85%) of the Belgian Shares
(i.e., 39,621,675 Belgian Shares) shall be issued in the registered or
the bearer form as notified by each Contributor to EBH prior to Closing
Date and delivered to the Contributors on the Closing Date in accordance
with table attached to this Agreement as EXHIBIT 2.2.1.(a). The
remaining fifteen percent (15%) of the Belgian Shares (the "ESCROWED
SHARES") shall be issued in the bearer form and remitted to the escrow
agent for the benefit of the Main Contributors and deposited in an
escrow account to be established by the US Parent, EBH and the
Contributors pursuant to the escrow agreement set forth in EXHIBIT
2.2.1(b) (the "ESCROW AGREEMENT").
2.2.2. Should EBH acquire, prior to the Closing Date, in addition to the US
Parent Contribution, other contributions of assets or shareholdings
("ADDITIONAL CONTRIBUTIONS"), the share percentage which shall be
acquired by the Contributors as a result of the Contribution shall be
reduced pro rata to the reduction of the percentage of the value of the
total assets of EBH that are represented by the Contribution.
ARTICLE 3 - ADDITIONAL CONSIDERATION
Should the minority shareholding of the Company in the capital of Oreka be sold
within the fifteen (15) months following the date hereof, the Contributors shall
receive from EBH or the US Parent an additional consideration ("AC") calculated
(in Euros) as follows:
AC = 0.5 x [[(P - 549,289) (1 - CGT)] - [(4,500,000 - 549, 289) (1 - CGT)]]
Where "P" is the consideration received by the Company as a result of the
disposal of its Oreka shares and "CGT" is the statutory capital gain tax rate
applicable to corporations (currently 40%).
8
<PAGE> 9
If the result of such calculation is a negative amount, no money shall be paid
by any Party to any other Party in respect of the disposal of the Oreka shares.
Such AC should not, in any case, exceed 10% of the par value of the total
Belgian Shares. AC shall be paid as soon as practicable following payment, by
the purchaser of Oreka shares, of the price to the Company. Should the
consideration be received by the Company in several installments, or should it
be paid in shares or other non-cash instruments, AC shall start to be paid when
the Company has already received cash (or non-cash instruments immediately
saleable for cash) in excess of 4,500,000 Euros.
ARTICLE 4 -- REPRESENTATIONS AND WARRANTIES BY CONTRIBUTORS
The French Individual Shareholders (and, with respect to the representations and
warranties contained in SECTIONS 4.5, 4.2.7 AND 4.4.3. (with respect to the
Contributors), the other Contributors) represent, warrant and agree to and with
the US Parent, as of the date hereof and as of the Closing Date (except for
those representations and warranties referring only to one of those two dates),
as follows, recognizing expressly that (i) the US Parent relies solely on the
representations and warranties contained herein, notwithstanding any information
to which the US Parent or its counsel may have had access during the course of
the negotiations or during its due diligence exercise, (ii) that the US Parent
has no responsibility to make any additional investigations regarding factual
matters that are the subject of such representation and warranties, and (iii)
that no representation shall be interpreted as limiting in any way whatsoever
the generality of any other representation herein unless the disclosure relating
to a particular representation clearly on its face applies to another
representation.
4.1. ORGANIZATION AND STANDING
4.1.1. Except as set forth in SCHEDULE 4.1.1., the Company and its Subsidiaries
are duly incorporated and validly existing under their respective
applicable Laws, with all requisite power and authority to conduct
lawfully their businesses as presently conducted (including, without
limitation, to own and use their assets as presently owned and used, and
to perform all of their obligations under their Contracts).
4.1.2. Except as set forth in SCHEDULE 4.1.2., all the corporate decisions
taken by the Company or its Subsidiaries, or their respective
shareholders or officers (mandataires sociaux) with regard to the
Company or its Subsidiaries (including, without limitation, capital
increases or reductions, contribution of shares or assets,
transformations into another corporate form, change of name or of
registered offices, issuance of shares or Deferred Equity Rights), have
been taken in full compliance with their respective applicable Legal
Requirements.
9
<PAGE> 10
4.1.3. The Company is a societe anonyme whose registered offices are located 1,
rue de Flandre, 75019 Paris, registered under number 388 387 425 RCS
Paris.
4.1.4. An up-to-date version of the Company's and its Subsidiaries' by-laws is
attached hereto as SCHEDULE 4.1.4.
4.2. CAPITALIZATION OF THE COMPANY
4.2.1. As of the date hereof, the Company has a share capital of Euros
2,342,107.70 divided into 40,228,403 A Shares and 6,613,751 B Shares,
with a par value of Euros 0.05 each.
4.2.2 SCHEDULE 4.2.2. sets forth a list of all Deferred Equity Rights issued
by the Company an in force as of the date hereof, and indicates the
identity of all of the holders of such Deferred Equity Rights and the
number of shares of the Company they may acquire as a result of the
exercise of such rights. No Deferred Equity Rights shall exist upon
contribution of the Contributed Shares and transfer of the Sold Shares,
except for Deferred Equity Rights which will become void in accordance
with their terms or if earlier exercised, will be subject to a drag
along right as set forth in Article 3 of the "Engagement Contractuel"
attached to the Shareholders Agreement found in SCHEDULE 4.2.11.
4.2.3. Except as set forth in SCHEDULE 4.2.3., between the date hereof and the
Closing Date, there shall be no modification in the share capital of the
Company other than modifications resulting from the exercise of Deferred
Equity Rights.
4.2.4. Deleted.
4.2.5. Except as set forth in SCHEDULE 4.2.5., all the share capital of the
Company and of its Subsidiaries has been fully paid-up.
4.2.6. All of the Contributors' Shares are and shall have been as of the
Closing Date issued in full compliance with all applicable Legal
Requirements and are shall have been duly authorized and validly issued.
4.2.7. Except as set forth in SCHEDULE 4.2.7., the Contributors own and shall
own on the Closing Date the full property of all of the all of the
Contributors' Shares, free and clear of all Encumbrance.
4.2.8. Except for the Issued Warrants and the Issued Stock Options set forth in
SCHEDULE 4.2.2, the Company and its Subsidiaries have issued no Deferred
Equity Rights that are still in force, and the Company and its
Subsidiaries are under no obligation to issue such Deferred Equity
Rights.
4.2.9. The Company and its Subsidiaries have issued no non-voting preferred
shares, "founder's share" (part de fondateur) or similar shares, or
shares with double or multiple voting rights, and each share of the
Company and of its Subsidiaries is entitled to one voting right.
10
<PAGE> 11
4.2.10. Except as set forth in SCHEDULE 4.2.10. hereto, the Company and its
Subsidiaries are not under any obligation, directly or indirectly, to
contribute capital in any corporation, partnership, joint venture,
proprietorship, or other similar entity.
4.2.11. Except as set forth in SCHEDULE 4.2.11. hereto, the transfer, as
contemplated herein, of the Contributors' Shares is neither barred nor
restricted by applicable Legal Requirements, by the by-laws of the
Company or of the relevant Subsidiary, as the case may be, by
shareholders' agreements, or by any other regulation.
4.2.12. Upon completion of the Closing transactions referred to in SECTION 7
hereafter, all of the Contributed Shares shall be contributed to EBH.
4.3 SUBSIDIARIES -- INVESTMENTS
4.3.1. SCHEDULE 4.3.1. sets forth a list of all of the Subsidiaries and
Investments and indicates the percentage of the Company's or of the
Subsidiaries' direct or indirect interest in each such Subsidiaries and
Investments. The information contained in SCHEDULE 4.3.1. is complete
and accurate. The Company or its Subsidiaries have no interest in any
other company or legal entity (including, in particular, any company or
entity for which the Company or its Subsidiaries may be held liable
without limitation), except for SICAV or mutual funds shares acquired in
the ordinary course of their businesses.
4.3.2. Hortensia B.V., iBazar UK Ltd, iBazar Pro SARL, iBazar Pro NL BV, VAC
and iBazar Belgium SA are non operating companies, have no employees and
have no assets other than those listed in SCHEDULE 4.3.2., and have no
operations and no liabilities except those associated with maintaining
the existence of the companies and the ownership of their assets, which
liabilities (including contingent liabilities) are not in excess of
Euros 25,000 per company; and no event, fact or circumstance having its
origin prior to the Closing Date shall create any liability in excess of
25,000 Euros for any such companies.
It is proposed that the specific condition precedent set forth in
Section 6.2.15 be fulfilled through the transfer of the totality of the
shares of Forum on the Net to iBazar. Should this be the solution
confirmed by the Parties, the French Individual Shareholders would, in
respect of Forum on the Net, make the same representations and give the
same warranties as those set forth in the first paragraph of this
SECTION 4.3.2 in respect of the six non operating companies mentioned
above (except that the only assets of Forum on the Net are the domain
names "massbazar.fr", "ebay.fr" and the trademark "eBay").
4.3.3. Except as set forth in SCHEDULE 4.3.3., no event, fact or circumstance
concerning the Investments and having its origin prior to the Closing
Date shall create any liability for the Company or its Subsidiaries.
4.3.4. Except as set forth in SCHEDULE 4.3.4.,at the Closing Date, none of the
Contributors shall own, directly or indirectly, any interest in any of
the Subsidiaries or Investments.
4.3.5. The Company has good, valid and marketable title to the shares of the
Subsidiaries, free and clear of Encumbrances (other than those contained
in the charter documents of the Subsidiaries and those mandated by Legal
Requirements).
11
<PAGE> 12
4.4. CORPORATE RECORDS -- BANKRUPTCY
4.4.1. Except as set forth in SCHEDULE 4.4.1., the Company's and the
Subsidiaries' corporate records, including, without limitation, their
by-laws (statuts), minute books, shareholders accounts and, generally,
all registers and corporate documents required to be created, kept,
maintained, amended, and/or updated by applicable Legal Requirements,
have been so created, kept, maintained, amended, and/or updated by the
Company or its Subsidiaries, as the case may be, in all material
respects with such Legal Requirements, and are accurate, up to date, and
complete in all material respects.
4.4.2. Except as set forth in SCHEDULE 4.4.2., the filings of the Company and
of the Subsidiaries with the Offices of the Clerk of the Commercial
Court or with the relevant administration pursuant to applicable Legal
Requirements are complete and up-to-date in all material respects.
4.4.3. The Contributors, the Company and its Subsidiaries have never been
subject to any bankruptcy, dissolution, liquidation, temporary stay of
proceedings or similar procedure and have never been insolvent or
incapable of paying their debts, and to the best knowledge of the
Contributors, no such proceedings are threatened by any third party in
connection with any such procedure; except as indicated in SCHEDULE
4.4.3., no receiver has been appointed to administer all or parts of the
assets of the Contributors, the Company or of its Subsidiaries and, to
the Contributors' Best Knowledge, no proceedings are threatened in
connection with any such appointment.
4.4.4. The Company or its Subsidiaries (and their respective officers and
managers), shall incur no liability of any nature whatsoever in
connection with the liquidation of Uplift Technology and of Cation SARL.
4.5. AUTHORITY, ENFORCEABILITY, NO CONSENTS
4.5.1. Each Contributor has all power, authority and capacity to conclude and
execute this Agreement and all other agreements and transactions
contemplated herein, and to perform its obligations provided for
therein.
4.5.2. This Agreement and all other agreements contemplated herein have been or
will be as of the Closing Date (or at a later time to the extent
expressly stated herein) duly executed and delivered by each of the
Contributor and constitute or will constitute legal, valid and binding
obligations enforceable against each of the Contributors.
4.5.3. Neither the execution and delivery by each of the Contributors of this
Agreement or any of the other Exhibits attached hereto, nor the
performance by each of the Contributors of its obligations hereunder and
thereunder, require the consent or approval of, or filing with, any
person or any authority.
12
<PAGE> 13
4.6. NO VIOLATION
Except as set forth in SCHEDULE 4.6., the execution, delivery or
performance of this Agreement or any other agreement or transaction
contemplated herein, will neither (i) result in a violation or breach of
the terms, conditions or provisions of, or constitute a default under,
the by-laws of the Company or its Subsidiaries or any Material Contract
under which the Company or its Subsidiaries are bound, (ii) violate or
affect the validity of any Company Permit, nor (iii) result in the
creation or execution of an Encumbrance upon the assets or the shares or
the Company or of its Subsidiaries nor (iii) violate any applicable
Legal Requirements.
4.7. FINANCIAL STATEMENTS
4.7.1. The unaudited consolidated balance sheet, income statement and certain
notes thereto of the Company as of December 31, 2000 attached hereto as
SCHEDULE 4.7.1. (the "FINANCIAL STATEMENT"), have been prepared in
accordance with GAAP applicable to each Subsidiary - and the
consolidation complies with French GAAP - in accordance with past
practice, are true and accurate and set out a fair view of the results
of operations and of the financial position of the Company and of its
Subsidiaries (sont sinceres et donnent une image et fidele de du
patrimoine, de la situation financiere et du resultat de l'entreprise)
as of December 31, 2000. All liabilities are properly reserved against
in the Financial Statements in accordance with applicable GAAP.
4.7.2. Deleted.
4.7.3. The Company or its Subsidiaries have no indebtedness, liability, claim
or obligation of any nature, fixed or contingent, liquidated or
unliquidated, secured or unsecured of a type that would be recorded in
the company's financial statements if applied on a consistant basis,
except (i) liabilities specifically described and reflected at their
precise accounting value in the Financial Statements, (ii) fixed
liabilities incurred in the ordinary course of business on commercially
reasonable terms since December 31, 2000, (iii) fixed commercial
obligations to perform pursuant to executory Contracts entered into in
the ordinary course of business on commercially reasonable terms,
consistent with past practices, and not in default, (iv) liabilities of
less than Euros 75,000 and (v) liabilities specifically disclosed and
reflected at their precise accounting value in SCHEDULE 4.7.3. hereto.
To the Contributors' Best Knowledge, there is no existing condition,
situation or set of circumstances which will result in any such
liabilities except for the liabilities identified in this SECTION
4.7.3.
4.7.4. Deleted.
4.7.5. With the exception of the items that are mentioned expressly and
specifically in the Financial Statements, and except as set forth in
SCHEDULE 4.7.5. hereto, the Company or its Subsidiaries do not have or
have not consented to, as the case may be, any off-balance-sheet
commitments ("engagements hors-bilan"), sureties, guarantees, letters of
credit, comfort letters or similar commitments.
13
<PAGE> 14
4.8. BANK ACCOUNTS
SCHEDULE 4.8. sets forth a complete and accurate list of all the bank
accounts of the Company and of its Subsidiaries, and of the current
mandates and powers of signature in respect to such bank accounts.
4.9. TAXES
4.9.1. Except as set forth in SCHEDULE 4.9.1., the Company and/or its
Subsidiaries, as the case may be, have (i) filed or made when due all
required Tax forms, declarations and statements, including, without
limitation, those relating to corporate income, professional, and value
added taxes, custom duties and charges, and social security
contributions, which are correct and complete in all respects, (ii)
fully paid when due, or reserved all Taxes in the Financial Statements
which they owed as of December 31, 2000 in accordance with French GAAP
as consistently applied by the Company, and (iii) retained copies of all
written information or statements made to the tax authorities or, as the
case may be, to any competent authority.
4.9.2. The Financial Statements properly reflect any amount of unpaid Taxes of
the Company or of its Subsidiaries due, accrued or otherwise
attributable to the period ending December 31, 2000.
4.9.3. The Company or its Subsidiaries have not benefited from any Tax
advantages which may be cancelled or which they may have to reimburse
due to the contribution of the Contributed Shares to EBH or the transfer
of the Sold Shares to the US Parent.
4.9.4. Except as set forth in SCHEDULE 4.9.4, no election or position has been
taken by the Company or its Subsidiaries that would have the effect of
(i) deferring any profits or Taxes from a period prior to the Closing
Date to a period after the Closing Date, or (ii) accelerating any item
of deduction, depreciation or loss from a period commencing after the
Closing Date to a period ending on or prior to the Closing Date.
4.9.5 Except as set forth in SCHEDULE 4.9.5., the Company and its Subsidiaries
are fully entitled to benefit from their Tax credits. No event, fact or
circumstance having its origin prior to the Closing Date shall result in
the obligation by the Company or its Subsidiaries to reimburse to the
relevant tax administration all or part of amounts paid by the Tax
administration to the Company or its Subsidiaries in connection with
such Tax credit including, without limitation, in connection with their
VAT credit ("credit de TVA").
4.9.6 All documents under which the Company or its Subsidiaries have any right
or interest and which attract stamp or transfer duty in France or
elsewhere have been duly stamped, and the Company or its Subsidiaries
have duly paid all stamp and transfer duties to which they were or are
liable.
14
<PAGE> 15
4.9.7. Except as disclosed in SCHEDULE 4.9.7., neither the Company nor its
Subsidiaries have, within the past three years, been the subject of any
investigation, audit or visit by any Tax authority and there has been no
Tax reassessment of the Company or of its Subsidiaries.
4.9.8. The Company or its Subsidiaries will have no liabilities with respect to
Taxes due to the contribution of the Contributed Shares to EBH or the
transfer of the Sold Shares to the US Parent.
4.10. CONTRACTS
4.10.1 SCHEDULE 4.10.1. contains an accurate and complete list of all Contracts
(other than employment agreements) to which the Company or its
Subsidiaries are a party or which have been notified in writing to the
Company or its Subsidiaries and by which any of their assets or
properties are bound or affected and which (i) involve the obligation
(including contingent obligations) to pay by or to the Company or its
Subsidiaries over the term of the Contract, amounts in excess of Euros
75,000 in the aggregate or (ii) may not be terminated without penalty
exceeding Euros 75,000 upon less than a sixty (60) days prior notice
(the "MATERIAL CONTRACTS").
4.10.2 (i) All Contracts listed in SCHEDULE 4.10.2.(a) hereafter are binding
and enforceable (subject to unavailability of specific performance, or
the consequences of insolvency or bankruptcy) according to their terms
and the applicable Law by the Company or its Subsidiaries in accordance
with their respective terms. In addition, to the Contributors' Best
Knowledge, and except as set forth in SCHEDULE 4.10.2., all Material
Contracts and all Contracts mentioned in SECTION 4.10.3. hereafter
(other than those listed in SCHEDULE 4.10.2.(a)) are binding and
enforceable according to their terms and Law by the Company or its
Subsidiaries in accordance with their respective terms.
15
<PAGE> 16
(ii) Except as set forth in SCHEDULE 4.10.2., neither the Company nor
its Subsidiaries are in default in any material respect under any of
their Material Contracts or in respect of any Contract mentioned in
SECTION 4.10.3. hereafter and, to the Contributors' Best Knowledge,
there is no basis for any valid claim of default or violation under any
such Material Contract.
(iii) Except as set forth in SCHEDULE 4.10.2., no notice or other
written communication alleging any actual, alleged or possible
violation, breach or default under any Material Contract or in respect
of any Contract mentioned in SECTION 4.10.3. hereafter has been received
by the Company or any of its Subsidiaries. No other party to a Material
Contract has requested that such Material Contract be amended or
terminated.
4.10.3 Except as set forth in SCHEDULE 4.10.3., neither the Company nor its
Subsidiaries are a party to any Contract containing an undertaking on
their part not to compete in any business, industry or geographical area
to comply with exclusivity provisions.
4.10.4. Except as set forth in SCHEDULE 4.10.2., all Contracts conform to, and
were entered into accordance with, applicable Legal Requirements in all
material respects.
4.10.5. Except for the Contracts listed in SCHEDULE 4.10.5., none of the
Material Contracts contains a clause allowing a person or legal entity
other than the Company or its Subsidiaries, as the case may be, to
terminate or modify such agreement because or due to the contribution of
the Contributed Shares to EBH or the transfer of the Sold Shares to the
US Parent.
4.10.6. Except as set forth in SCHEDULE 4.10.6., the Company or its Subsidiaries
are not parties to any joint-venture, societe en participation, or to
any comparable arrangement involving sharing of profits or of
liabilities.
4.10.7. The Company or its Subsidiaries do not have any obligation to indemnify,
in whatever form (including through a price reduction or any other
mechanism) in connection with (i) the contribution agreement with
Liberty Surf dated July 24, 2000, (ii) the share transfer agreement with
BIBOP -- CARIRE dated March 16, 2000 and (iii) the transfer of the
shares of Telestore SARL to Pierre - Francois Grimaldi (See SCHEDULE
4.10.7.).
4.11. ASSETS - PERMITS
4.11.1. Except as set forth in SCHEDULE 4.11.1., the Company and its
Subsidiaries have good, valid and marketable title to the assets owned
by them (excluding the Owned Intellectual Property and the Licensed
Intellectual Property), free and clear of Encumbrances. The assets
validly used by the Company and its Subsidiaries (including the Owned
Intellectual Property and the Licensed Intellectual Property) are
sufficient for the operation of the Company and of its Subsidiaries as
presently conducted.
16
<PAGE> 17
4.11.2. Except for normal wear and tear, all the buildings and equipments used
by the Company or its Subsidiaries are in a good state of operating
condition and repair.
4.11.3. SCHEDULE 4.11.3. sets forth an accurate and complete list of all Company
Permits and includes the expiration date and renewal status of all such
Company Permits. Except as otherwise specified in SCHEDULE 4.11.3., the
Company Permits are sufficient for the operation of the Company and of
its Subsidiaries as presently conducted, in full compliance with
applicable Legal Requirements. Except as otherwise specified in SCHEDULE
4.11.3. (i) all Company Permits are in full force and effect, (ii) any
applications for renewal of any Permit due prior to the Closing Date
have been or shall be timely filed prior to such Closing Date, (iii) no
proceeding or other legal action to modify, suspend, revoke, withdraw,
terminate or otherwise limit any such Company Permit is pending or, to
Contributors' Best Knowledge, threatened, (iv) the Company and its
Subsidiaries have made all payments required to be made under all
Company Permits, and have acted in full compliance with the terms and
requirements of such Permits, (V) no event has occurred and no condition
or circumstance exists that constitutes a violation or failure to comply
with any Company Permit, and (vi) no administrative or governmental
actions have been taken or, to the Contributors' Best Knowledge,
threatened in connection with the expiration, continuance or renewal of
such Permits which could affect the ability of the Company or of its
Subsidiaries to own any assets, to operate, use or maintain any assets
or to conduct any of their operations in substantially the same manner
in which such operations were conducted on the date hereof.
4.12. COMPLIANCE WITH LEGAL REQUIREMENTS
Except as set forth in SCHEDULE 4.12., the Company and its Subsidiaries
are each in material compliance with all Legal Requirements applicable
to them.
4.13. INSURANCE
4.13.1. SCHEDULE 4.13.1. contains a complete and accurate list of the insurance
policies that currently insure the assets or operations of the Company
or of its Subsidiaries, and contains a description of the main features
and of any unusual clause of said insurance policies (including a
description of the insured risks and of the limits and franchises to any
claim under the relevant insurance policy).
4.13.2. Except as set forth in SCHEDULE 4.13.2., all premiums due and payable
regarding such policies are and/or have been fully paid, no such
premiums are subject to retroactive adjustment, and such policies are,
in respect of the nature of the risks insured against and the amount of
coverage provided, in force.
4.13.3. The Company and its Subsidiaries (i) have not failed to give any notice
or to present any claim under such insurance policies in a timely
fashion, (ii) have not received any
17
<PAGE> 18
notification of the cancellation of any such policies or that any of
them will not be renewed, (iii) have never been refused insurance for
any reason, and have not, since January 1, 1999, incurred any
liabilities with respect to risk insured in excess of their insurance
coverage.
4.13.4. Since January 1, 1999, the Company and its Subsidiaries have not
received from any of their past or present insurance carriers a notice
of denial of coverage, or a notice reserving the insurer's rights under
the policy, including the right to deny coverage.
4.14. EMPLOYEE MATTERS
4.14.1. SCHEDULE 4.14.1. contains a list of all employees and officers
(mandataires sociaux) of the Company and its Subsidiaries as at the date
hereof. Such list indicates such employees' current and committed future
(if any) Compensation, and any current or future liability or commitment
of the Company or of its Subsidiaries towards such employee or officer
more favorable than the requirements of applicable Legal Requirements or
of the applicable collective bargaining agreement. "COMPENSATION" shall
include the employee or officer's gross annual compensation (whether in
the form of salaries, commissions, profit sharing, vacation pay, or
other supplemental advantages and compensation - but not including
advantages resulting from the Issued Warrants and the Issued Stock
Options). None of the employees or officers mentioned above has notified
the Company or, as the case may be, a Subsidiary, of his intention to
resign from his duties or to terminate his employment agreement.
4.14.2. The standard employment agreements of the Company and of its
Subsidiaries are attached hereto as SCHEDULE 4.14.2..
4.14.3. SCHEDULE 4.14.3. lists (i) any employment contract that differs in any
material way from the provisions of the Company's or the Subsidiaries'
standard employment contracts, (ii) any arrangements involving loans or
guarantees given by the Company or its Subsidiaries to or for any
employee (indicating the amount involved), (iii) any arrangements
involving any indebtedness of the Company or its Subsidiaries to any
employee other than accrued salaries, bonuses, vacation time, and
expenses (indicating the amount involved), other than indebtedness
resulting from Issued Stock Options and Issued-Warrants.
4.14.4. SCHEDULE 4.14.4. contains a complete and accurate list of the collective
bargaining agreements applicable to the Company and its Subsidiaries.
4.14.5. Except as set forth in SCHEDULE 4.14.5., neither the Company nor its
Subsidiaries are experiencing, or have experienced in the past, any
strikes, slowdowns, or other collective labor disputes, and, to the
Contributors' Best Knowledge, none are expected.
4.14.6. Except as set forth in SCHEDULE 4.14.1. or referred to in SECTION
4.14.1. above, no employee or officer of the Company or its Subsidiaries
has been granted any advantage, of any nature whatsoever, more favorable
than the requirements of applicable Legal
18
<PAGE> 19
Requirements or of the applicable collective bargaining agreement. In
particular, without limitation, neither the Company nor its Subsidiaries
have any obligation toward any employee for a termination notice period
or for a termination indemnity greater than the notice period and
indemnity required by applicable Legal Requirements and by the
applicable collective bargaining agreement.
4.14.7. The Company is not required to comply with the provisions of the law of
January 19, 2000 relating to the 35 hours work week until January 1,
2002.
4.14.8. There are no health or life insurance, pension, profit-sharing,
retirement, bonus, incentive, profit-sharing, stock-option, warrants,
insurance, severance or other employee benefit plans or arrangements, in
which any employee of the Company or its Subsidiaries participates (the
"BENEFIT PLANS") except those listed in SCHEDULE 4.14.8. and except for
the Issued Warrants and the Issued Stock Options or the Benefit Plans
which are required by applicable Legal Requirements or the applicable
collective bargaining agreement. The Company and its Subsidiaries comply
in all material respects with their obligations under applicable Legal
Requirements and pursuant to the applicable collective bargaining
agreement in connection with the Benefit Plans.
4.14.9. All liabilities relating to the Benefit Plans as of December 31, 2000,
including, without limitation, any retirement Benefit Plans, have been
properly reserved against in the Financial Statements or are otherwise
clearly and completely disclosed in the notes to the Financial
Statements to the extent required by applicable GAAP. Except as set
forth in SCHEDULE 4.14.9., the contribution of the Contributed Shares to
EBH or the transfer of the Sold Shares to the US Parent through the
cashing out of the Cashed Out Shareholders will not create any
liabilities under any Benefit Plans or any Contracts with employees and
shall not result in any Tax or other liability for the US Parent, EBH or
the Company.
4.14.10.Except as set forth in SCHEDULE 4.14.10., there are no scheduled or
agreed upon future increases in the amount of the Benefit Plans or of
the Compensation of the employees and directors of the Company or of its
Subsidiaries, other than those required by applicable Legal Requirements
or by the applicable collective bargaining agreement.
4.14.11.No key employee of the Company or its Subsidiaries listed in SCHEDULE
6.2.10. has indicated his or her intention to terminate his or her
employment.
19
<PAGE> 20
4.15. INTELLECTUAL PROPERTY RIGHTS
4.15.1. SCHEDULE 4.15.1. sets forth a list of all Owned Intellectual Property
Rights. All Owned Intellectual Property is fully owned and, where
applicable, validly registered in the name of the Company or of its
Subsidiaries, free and clear of all Encumbrances. Except as set forth in
SCHEDULE 4.15.1., there exist no proceedings contesting the validity or
enforceability of, or the right of the Company or of its Subsidiaries to
use or otherwise exploit, the Owned Intellectual Property and, to the
Contributors' Best Knowledge, no such proceedings are threatened. Except
as set forth in SCHEDULE 4.15.1. and to the Contributors' Best
Knowledge, none of the Owned Intellectual Property is being infringed
upon or appropriated by third parties. Except as set forth in SCHEDULE
4.15.1. there are no geographic restrictions on the use by the Company
or by its Subsidiaries of the Owned Intellectual Property. SCHEDULE
4.15.1. also includes a list of all Intellectual Property Rights
submitted for registration and rejected by the competent authority.
4.15.2. SCHEDULE 4.15.2. sets forth all Licensed Intellectual Property. All
rights to Licensed Intellectual Property have been granted pursuant to
binding and enforceable (according to their terms and Law) license
agreements. There exist no proceedings contesting the validity or
enforceability of, or the right of the Company or of its Subsidiaries to
use or otherwise exploit, the Licensed Intellectual Property pursuant to
the applicable agreements and, to the Contributors' Best Knowledge, no
such proceedings are threatened.
4.15.3. Except as set forth in SCHEDULE 4.15.3., neither the Company and its
Subsidiaries, nor any of their employees during the duration of their
employment agreement, have infringed or are infringing any Intellectual
Property Rights of a third party and, to the Contributors' Best
Knowledge and except as set forth in SCHEDULE 4.15.3., there is no
outstanding claim made by any other third party against the Company or
its Subsidiaries, or their employees, for breach of any of such third
party's intellectual property rights.
4.15.4. Except for software installed by employees for their own use without
knowledge of the Company, the Company or its Subsidiaries own or have
obtained valid rights to use all software installed on any computer used
or in connection with their businesses, and no software currently is
installed on any such computer without the Company or its Subsidiaries
having obtained the right to so install such software.
4.15.5. Except as set forth in SCHEDULE 4.15.5., none of the employees of the
Company or of its Subsidiaries own any right in the Owned or Licensed
Intellectual Property Rights.
4.15.6. Except as set forth in SCHEDULE 4.15.6., the Company and its
Subsidiaries own or have obtained valid rights to use all content used
on each of their web sites, and no third parties have any rights to the
"look and feel" (charte graphique) used on any of such web sites.
20
<PAGE> 21
4.15.6. Except as set forth in SCHEDULE 4.15.7., the Contributors do not
directly or indirectly own any trademark or domain name which may be
similar to, or be confused with, the trademarks or domain names
currently owned or used by the Company or by its Subsidiaries.
4.16. REAL PROPERTY
4.16.1. Neither the Company nor its Subsidiaries own any real property.
4.16.2. SCHEDULE 4.16.2. sets forth a list of all real property leased by the
Company or its Subsidiaries. The Company and its Subsidiaries have valid
leasehold interests in all of the real property listed in Schedule
4.16.2., and all leases and subleases listed therein are in full force
and effect. Neither the Company nor its Subsidiaries are in default in
any material respect under any of such leases or subleases. Copies of
all lease agreements and amendments thereto related to each property
listed on SCHEDULE 4.16.2. are attached to SCHEDULE 4.16.2. There are no
leases of properties formerly held by the Company or its Subsidiaries
under which the Company or its Subsidiaries have any actual or
contingent liability, except for the remaining rent under the lease
agreement entered into between the Company and Telestore SARL.
4.17. PERSONAL PROPERTY
The Company or its Subsidiaries have good title or valid leasehold
interests, in each instance free and clear of any rights in favor of
third parties (except for those reflected in the Financial Statements)
to the owned or leased tangible personal property and assets used by
them in their businesses.
4.18. ENVIRONMENTAL MATTERS
The Company and its Subsidiaries have complied in all material respects
with all applicable environmental Legal Requirements. Neither the
Company nor any Subsidiary has ever received any notice from any person
or entity relating to any actual, alleged or potential liability arising
from such requirements.
4.19. COMPUTER SYSTEMS
21
<PAGE> 22
4.19.1 Except as set forth in SCHEDULE 4.19.1., all computer systems used by
the Company or its Subsidiaries were acquired new and have not been
reconditioned, have been properly used, maintained and serviced in
accordance with the manufacturer's instructions and have at all material
times functioned in a manner which would be satisfactory to a reasonably
skilled person engaged in the same type of business.
4.19.2. The Company and its Subsidiaries have in place adequate back-up
arrangements designed to ensure continuance of theirs businesses without
loss of customer data and without additional expense, in the event of
computer hardware or software breakdown, malfunction or in the event of
power failure.
4.20. DATA PRIVACY COMPLIANCE
4.20.1. Except as set forth in SCHEDULE 4.20.1., neither the Company nor its
Subsidiaries have disclosed, obtained, processed or transferred among
themselves or to third parties any personal data in violation of
applicable Legal Requirements.
4.20.2. Except as set forth in SCHEDULE 4.20.2., the Company and its
Subsidiaries have at all times maintained adequate data protection
registrations in respect of themselves and have obtained, processed and
disclosed personal data within the terms of such registrations.
4.21. EMU COMPLIANCE
4.21.1. Except as provided on SCHEDULE 4.21.1., all the computer, information
processing and reporting systems used by the Company are EMU Compliant,
where "EMU COMPLIANT" means:
(a) the use of Euro denominated data will not cause any interruptions or
errors in performance of the hardware, software or facilities;
(b) the hardware, software and facilities will convert (i) any currency
unit used by the hardware, software or facilities into Euros, and (ii)
Euros into any currency unit used by the hardware, software or
facilities accurately, consistently and in accordance with all Legal
Requirements and applicable GAAP;
(c) the hardware, software and facilities will perform rounding
calculations accurately, consistently and in accordance with all Legal
Requirements and applicable GAAP, and that rounded values will not cause
any interruptions or errors in performance;
(d) the hardware, software and facilities will operate using financial
data expressed in either or both the original currency and Euros,
without interruption or error, and with interfaces between original
currency and Euro denominated functions which do not cause any
interruptions or errors in performance; and
(e) data which have been converted, processed or manipulated for use by
the hardware, software or facilities will not cause any interruptions or
errors in performance.
4.21.2. Any and all representations, warranties or guarantees made by the
Company or its
22
<PAGE> 23
Subsidiaries, as the case may be, to customers of the Company of its
Subsidiaries to the effect that the software, hardware, computer systems
or other computer equipment used by the Company or by its Subsidiaries
is EMU Compliant are true and accurate in all respects.
4.22. ABSENCE OF MATERIAL CHANGES
Except as set forth in SCHEDULE 4.22, since December 31, 2000, the
Company and its Subsidiaries have not:
(a) suffered any material adverse change, whether or not caused by
any deliberate act or omission which would affect their
operations, assets, liabilities, or business prospects;
(b) issued or sold any debt securities;
(c) incurred any liabilities, indebtedness, or obligations, or
entered into any contract or agreement, except in the ordinary
course of business and for amounts not exceeding, individually,
Euros 75,000, or Euros 250,000 in the aggregate and except for
intra-group financing transactions in the ordinary course of
business consistent with past practice;
(d) paid any amount on any indebtedness except when due and in the
ordinary course of business;
(e) forgiven, cancelled, released or reduced any debts or claims owed
to the Company or its Subsidiaries, except in the ordinary course
of business and for amounts, in the aggregate, not exceeding
Euros 100,000;
(f) suffered any damage or destruction to, or loss of, any assets
(whether or not covered by insurance), with a net book value in
excess of Euros 100,000 in the aggregate, and/or Euros 50,000 on
an individual basis;
(g) disposed of any assets with a net book value in excess of Euros
250,000 in the aggregate, and/or Euros 75,000 on an individual
basis;
(h) written up or written down the carrying book value of any of
their significant assets. For the avoidance of doubt, any
depreciation resulting solely from the passage of time,
consistent with past practices and in accordance with applicable
GAAP shall not be considered a write-down of assets;
(i) changed the costing system or depreciation methods of accounting
for their assets;
(j) acquired and/or disposed of any interest in any corporation,
partnership, joint venture or other entity;
23
<PAGE> 24
(k) redeemed, purchased or otherwise acquired, or sold, granted or
otherwise disposed of, directly or indirectly, any of its capital
stock or securities or any rights to acquire such capital stock
or securities, including stock options or warrants, or agreed to
change the terms and conditions pertaining to the exercise of any
such rights;
(l) modified or amended the terms of any of the Material Contracts,
except for insignificant modifications or amendments incidental
to renewals made in the ordinary course of business;
(m) settled any civil claim made or action commenced against the
Company or its Subsidiaries, except in the ordinary course of
business, with the consent or on the advice of an insurance
carrier (to the extent such claim is covered), and without
admission of liability;
(n) settled, pleaded guilty to, paid a fine in respect of, or
consented to the entry of any penalty, order, or injunction
regarding, any criminal, penal, or administrative charges or
proceedings filed or commenced against the Company or its
Subsidiaries;
(o) distributed or authorized the distribution of dividends;
(p) entered into any other commitment or transaction or experienced
any other event that has, or is reasonably expected to have, a
material adverse effect on the condition, operations, business,
or future prospects of the Company or its Subsidiaries;
(q) sold or licensed any Intellectual Property Rights;
(r) made any other decision out of the ordinary course of business.
4.23. LEGAL PROCEEDINGS
4.23.1. SCHEDULE 4.23.1 sets forth a true, complete and correct list of all
unsettled legal claims, proceedings, arbitration, mediations, or
investigations notified to the Company or its Subsidiaries instituted or
otherwise involving the Company or its Subsidiaries (or any of their
directors and/or officers acting in their official capacity), and of all
legal actions, claims or demands, which, to the Contributors' Best
Knowledge, could lead to material proceedings, arbitration, mediations
or investigations against the Company or its Subsidiaries (or any of
their directors and/or officers acting in their official capacity),
whether civil, criminal, regulatory, or administrative in nature (the
"LEGAL PROCEEDINGS"). The list in SCHEDULE 4.23.1. sets forth the total
alleged liability of the Company or its Subsidiaries for each of the
listed Legal Proceedings, together with a description of the nature of
the Legal Proceedings and of the demands made by or against the third
party.
24
<PAGE> 25
4.23.2. Except as set forth in SCHEDULE 4.23.1., the Company or its Subsidiaries
are not now, nor to Contributors' Best Knowledge are they reasonably
expected to become, subject to any court, arbitral, or administrative
order, injunction, decree, or decision the continued effect of which, or
the default, violation, contempt, or non respect of which could
reasonably be expected to have an adverse effect on the operations or
financial condition of the Company or its Subsidiaries.
4.24. INTERESTED PERSONS AND BROKERS
4.24.1. Except for debts for accrued salaries, bonuses, vacation time or
expenses, and except as listed in SCHEDULE 4.24., the Company or its
Subsidiaries have no claims against, or debt to any Interested Person
and no Interested Person has any claims against or owes money to the
Company or its Subsidiaries.
4.24.2. Except as listed in SCHEDULE 4.24., the Company or its Subsidiaries have
entered into no Contract, transaction or business dealing with any
Interested Person which is still in force. To the Contributors' Best
Knowledge, no Interested Person is a competitor of the Company or of its
Subsidiaries, except (as the case may be) for the Interested Persons to
GS Shareholders or Cisalpina.
4.24.3 The Company and its Subsidiaries have incurred no liability towards, and
are not bound to make any payment to, any broker, agent, investment
banker, finder or other intermediary in connection with the contribution
of the Contributed Shares to EBH or the transfer of the Sold Shares to
the US Parent.
4.25. SUBSIDIES AND OTHER ADVANTAGES
4.25.1. The Company or its Subsidiaries have not benefited from any subsidies or
any similar advantages which may be cancelled or which they may have to
reimburse due to the contribution of the Contributed Shares to EBH or
the transfer of the Sold Shares to the US Parent.
4.25.2. None of the Contributors, the Company, its Subsidiaries, or any
shareholder, director, officer, employee, agent or other representative
thereof, acting in his capacity of representative and on behalf of the
Company or its Subsidiaries, has made, directly or indirectly, any
payment or promise to pay, or gift or promise to give, or authorized
such a promise or gift, of any money or other tangible or intangible
item of value, to (i) any foreign official (as such term is defined
under the Foreign Corrupt Practices Act of 1977) for the purpose of
influencing any such official or inducing him/her to use his/her
influence to affect any act or decision of any authority, or (ii) any
foreign political party or official thereof or candidate for foreign
political office for the purpose of influencing any official act or
decision of such party, official or candidate, or inducing such party,
official or candidate to use his/her/its influence to affect any act or
decision of any
25
<PAGE> 26
authority, in each case in order to assist the Company or its
Subsidiaries to obtain or retain business for, or direct business to,
the Company or its Subsidiaries.
4.26. ACCURACY OF SCHEDULES AND CERTIFICATES
4.26.1. All information concerning the Company and its Subsidiaries contained
herein and in each attached Schedule is accurate.
4.26.2. The French Individual Shareholders have disclosed in the relevant
Schedules of this SECTION 4 all information about facts or circumstances
which they reasonably believe could have a material adverse effect on
the Company or its Subsidiaries (excluding any information relating to
general economic or political events, trends or occurrences).
ARTICLE 5 -- REPRESENTATIONS AND WARRANTIES BY THE US PARENT
5.1. ORGANIZATION OF EBH
The US Parent warrants to the Contributors as follows as of the Closing
Date:
5.1.1. As of the Closing Date, EBH shall be a duly organized in the form of a
societe anonyme, validly existing and in good standing under Belgian
Laws.
5.1.2. Prior to the Contribution, the shareholders of EBH shall exclusively be
the US Parent, and one other shareholder owning one share of EBH.
5.1.3. The US Parent or one of its Affiliates shall have made the US Parent
Contribution.
5.1.4. As of the Closing Date, EBH shall have issued no Deferred Equity Rights,
and shall be under no obligation to issue any such Deferred Equity
Rights.
5.1.5. As of the Closing Date, EBH, shall be under no obligation, directly or
indirectly, to invest in any corporation, partnership, joint venture,
proprietorship, or other form of business.
5.1.6. Subject solely to the provisions of SECTION 2.2.2, as of the Closing
Date, EBH shall have no material assets or liabilities other than those
resulting from the US Parent Contribution and, if EBH elects to cash out
the Cashed Out Shareholders, the Sold Shares and the sums loaned to EBH
in order to finance the acquisition of such Sold Shares.
5.1.7. The execution, delivery or performance of this Agreement or any other
agreement or transaction contemplated herein, will neither conflict
with, or result in a violation or breach of the terms, conditions or
provisions of, or constitute a default under, the
26
<PAGE> 27
articles of incorporation of EBH or any agreement or other instrument
under which EBH shall be bound.
5.1.8. Subject solely to the provisions of SECTION 2.2.2., the Contributors
shall, as a result of the Contribution, own 46 613 735 Belgian Shares
(including the shares held in escrow pursuant to SECTION 2.2.), which
shall represent no more than thirty-five percent (35) % of the share
capital of EBH.
5.2. ORGANIZATION AND AUTHORITY OF THE US PARENT
The US Parent warrants to the Contributors as follows as of the date
hereof and as of the Closing Date:
5.2.1. The US Parent is a corporation organized under the Laws of the State of
Delaware.
5.2.2. The US Parent is duly organized, validly existing and in good standing
under applicable Law.
5.2.3. The US Parent has never been subjected to any bankruptcy, liquidation,
temporary stay of proceedings or similar procedure and have never been
insolvent or incapable of paying their debts, and to the US Parent's
best knowledge, no such proceedings are threatened in connection with
any such procedure; no receiver has been appointed to administer all or
parts of the assets of the US Parent and, to the US Parent's best
knowledge, no proceedings are threatened in connection with any such
appointment.
5.2.4. No interested party has requested the dissolution of the US Parent on
any ground provided for by applicable Legal Requirements and, to the US
Parent's best knowledge, no proceedings are threatened in connection
with such a request.
5.2.5. The US Parent has all power, authority and capacity to conclude and
execute this Agreement and all other agreements and transactions
contemplated herein.
5.2.6. This Agreement and all other agreements contemplated herein have been or
will be as of the Closing Date (or at a later time to the extent
expressly stated herein) duly executed and delivered by the US Parent
and are or will constitute legal, valid and binding obligations
enforceable against the US Parent and EBH, provided, however, that no
representation or warranty is made with respect to Article 5 of the
Registration Rights Agreement, a copy of which is attached at SCHEDULE
5.2.6.
5.2.7. The execution, delivery or performance of this Agreement or any other
agreement or transaction contemplated herein, will neither conflict
with, or result in a violation or breach of the terms, conditions or
provisions of, or constitute a default under, the articles of
incorporation of the US Parent or any material agreement or other
material instrument under which the US Parent is bound.
27
<PAGE> 28
5.2.8. The US Parent has filed all forms, reports and documents required to be
filed by it with the SEC since January 1, 1999, and has made available
to the Contributors such forms, reports and documents in the form filed
with the SEC. All such required forms, reports and documents (including
those that the US Parent may file subsequent to the date hereof) are
referred to herein as the "Parent SEC Reports". As of their respective
dates, the Parent SEC Reports (i) were prepared in accordance with the
requirements of the Securities Act or the Exchange Act, as the case may
be, and the rules and regulations of the SEC thereunder applicable to
such Parent SEC Reports, and (ii) did not at the time they were filed
(or if amended or superseded by a filing prior to the date of this
Agreement, on the date of such filing) contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statement therein, in the
light of the circumstances under which they were made, not misleading.
Except as disclosed in the Parent SEC Reports filed by the US Parent and
publicly available prior to the date this representation is made, there
has not been any material adverse change in the condition (financial or
otherwise), assets, liabilities, business, operations, customers or
prospects of the US Parent.
5.2.9. Each of the audited consolidated financial statements of the US Parent
(including any related notes and schedules thereto) included (or
incorporated by reference) in its Annual Report on its most recent Form
10-K and Form 10-Q is accurate and complete and fairly presents, in
conformity with GAAP applied on a consistent basis through the periods
involved (except as may be noted therein), and in conformity with the
SEC's Regulation S-X, the consolidated financial position of Parent and
its consolidated subsidiaries as of its date and the consolidated
financial position of Parent and its consolidated subsidiaries as of its
date and the consolidated results of operations and changes in financial
position for the period then ended.
ARTICLE 6 -- CONDITIONS PRECEDENT
The Closing shall be subject to the fulfillment (or waiver by the relevant
Parties, as the case may be) of the conditions precedent mentioned hereafter:
6.1. CONDITIONS PRECEDENT RELATING TO THE US PARENT AND TO EBH
6.1.1 The US Parent shall have performed and complied with, in all material
respects, all material agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the
Closing.
6.1.2. The US Parent shall have incorporated (immatricule) with the relevant
Registry of Commerce EBH, in the form of a societe anonyme governed by
the laws of Belgium and the by-laws attached at SCHEDULE 6.1.2..
28
<PAGE> 29
6.1.3. The US Parent or one of its Affiliates shall have contributed to EBH
assets that shall have a value at least equal to 65% of the total value
of EBH immediately after Closing.
6.1.4. The shareholders of EBH shall have approved the Contribution as set
forth in SECTION 2.1.1. above.
6.1.5. The US Parent shall have undertaken in writing to acquire all of the
Sold Shares from the Cashed Out Shareholders, for a price per share
equal to $ 2.31, on the Closing Date.
6.2. CONDITIONS PRECEDENT RELATING TO THE COMPANY AND TO THE CONTRIBUTORS
6.2.1. The Contributors shall have performed and complied with, in all material
respects, all material agreements and covenants required by this
Agreement to be performed or complied with by them on or prior to the
Closing.
6.2.2. Except for newly created shares issued between the date hereof and the
Closing Date as a result of the exercise by the beneficiaries of Issued
Warrants or Issued Stock Options, the Company's share capitalization
shall be as set forth in PARAGRAPH 3 of the Recitals.
6.2.3. Deleted.
6.2.4. Deleted.
6.2.5. Deleted.
6.2.6. The shareholders listed in SCHEDULE 6.2.6. shall have executed all
documents necessary for the transfer of their shares in the Subsidiaries
to the legal entities or individual shareholders listed in SCHEDULE
6.2.6., for a consideration set forth in such SCHEDULE 6.2.6. as of the
closing.
6.2.7. All necessary consents, waivers, approvals, notices or filings in
respect of any Material Contracts, including, without limitation, those
agreements listed in SCHEDULE 6.2.7 to which any of the Contributors or
the Company is a party, and which would be breached, terminated or
materially modified or pursuant to which a material obligation would be
imposed on the Company or its Subsidiaries as a result of the completion
of the transaction described in this Agreement, shall have been
obtained, given or made.
6.2.8. All approvals by, notices or reports to, and filings with, any authority
in connection with the transactions contemplated hereby which, if not
made or obtained, could result in criminal sanctions, material civil
sanctions or in restrictions in the future operation of the business of
the Company or its Subsidiaries, shall have been made or obtained.
29
<PAGE> 30
6.2.9. Since the date of execution of this Agreement, there shall not have been
any material adverse change in the condition (financial or otherwise),
assets, liabilities, business, operations, customers or prospects of the
Company. There shall not have been any event or circumstance
constituting a breach of any representation or warranty contained in
Section 4 which has caused or will cause a material adverse change.
6.2.10. As of the Closing Date, no more than one of the employees listed in
Column A of SCHEDULE 6.2.10. attached hereto and no more than three of
the employees listed in Column B of such schedule shall have left the
Company or indicated in writing their intention to leave the Company.
6.2.11. The US Parent shall have received (a) duly executed letters of
resignation, waivers and releases, as applicable, in form and substance
reasonable and customary in the relevant country, and to be effective as
of the Closing Date, from the directors and officers of the Company and
its Subsidiaries and from the representatives of the Company on the
board of Oreka, (b) executed waivers and releases from the Contributors,
substantially in the form set forth as SCHEDULE 6.2.11 attached hereto.
6.2.12. The Contributors shall have caused the Company and its Subsidiaries to
convene, prior to the Closing Date, a Board of Directors' meeting and/or
a shareholders' meeting, as the case may be, of the Company and of its
Subsidiaries, in order to appoint, effective on the Closing Date, the
new officers of the Company and/or of its Subsidiaries chosen by the US
Parent.
6.2.13. Deleted.
6.2.14. The audited financial statements as of December 31, 2000 shall have been
remitted to EBH or the US Parent and the comparison with the Financial
Statements attached hereto shall not reveal an adverse discrepancy of
more than ten percent (10 %) in any of aggregate revenue, expenses,
assets or liabilities, provided, however, that deviations due to changes
in the reserves ("provisions") shall be disregarded for purposes of this
Section 6.2.14 to the extent such deviations are less than 10,000,000
Euros in the aggregate.
6.2.15. SPECIFIC CONDITION PRECEDENT
As the US Parent has required the transfer of the domain name
"massbazar.fr" as a condition precedent to Closing, in consideration of
the transactions contemplated herein, Mr. Marc Piquemal, who owns the
majority of the capital of Forum on the Net SARL (which company owns the
domain names "massbazar.fr", "ebay.fr" and the trademark "eBay"), has
offered to put it as a condition precedent to Closing that such domain
names and trademark be transferred to iBazar upon Closing, in a spirit
of good cooperation with the US Parent, which the other Contributors
wish to join. It is proposed that this condition precedent be fulfilled
through the transfer of the totality of the shares of Forum on the Net
to iBazar for nominal consideration. Consequently, should this be the
solution confirmed by the Parties, the French Individual Shareholders
30
<PAGE> 31
would make the representation and give the warranty set forth in the
second paragraph of SECTION 4.3.2 hereof. The Parties recognize and
agree that, should the Closing not take place, the existence of this
condition precedent shall not constitute any admission nor any waiver of
any of their respective rights or claims.
6.3. CONDITIONS PRECEDENT RELATING TO THE AGREEMENT
6.3.1. No proceedings which may materially affect this Agreement or the
transactions contemplated hereby shall have been initiated by any person
or governmental authority or threatened in writing by any governmental
authority seeking to enjoin or otherwise restrain or to obtain an award
for material damages from any Party hereto in connection with the
consummation of the transactions contemplated hereby or to prohibit or
limit the exercise by the US Parent or EBH of any material rights
pertaining to the ownership of the Company or any of the Subsidiaries or
claiming to own any capital stock or Deferred Equity Rights of the
Company other than the Issued Warrants and the Issued Stock Options set
forth in SCHEDULE 4.2.2. or the right to receive any consideration as
the result of the transactions.
6.3.2. The labor councils or similar bodies of the Company and/or of its
Subsidiaries, if required by mandatory provisions of applicable Legal
Requirements or by contractual obligations entered into by the Company
and/or its Subsidiaries, shall have been consulted or shall have granted
their approval or opinion (avis), as required by Legal Requirements,
prior to the execution of this Agreement or prior to the transactions
contemplated hereby as the case may be.
6.3.3. Since the date of execution of this Agreement, there shall not have been
any change in political or economic circumstances, or Laws, that would
make the transactions contemplated hereby impractical or illegal.
6.3.4. No filing shall have been made by any person, including the US Parent,
EBH and the Company for composition, corporate reorganization or
bankruptcy of the US Parent, EBH or the Company; the US Parent, EBH or
the Company shall not have become insolvent or unable to pay any debts
as they become due and shall not have explicitly or implicitly suspended
payment of any debts as they became due.
6.3.5. Antitrust clearances shall have been obtained from the relevant
authorities of France and Spain, authorizing the transactions
contemplated herein without condition or qualification.
6.4. GENERAL PROVISIONS RELATING TO THE CONDITIONS PRECEDENT
6.4.1. Each Party to this Agreement shall do whatever is in its power so that
the conditions precedent listed above be fulfilled as soon as
practicable, subject to the provisions of Sections 7.6 and 7.7 below.
31
<PAGE> 32
6.4.2. The conditions precedent listed under SECTION 6.1. above inure
exclusively for the benefit of the Contributors, and can be waived only
in writing by the Contributors. The conditions precedent listed under
SECTION 6.2. above inure exclusively for the benefit of the US Parent,
and can be waived only in writing by the US Parent. The conditions
precedent listed under SECTION 6.3. above inure for the benefit of all
Parties, and can be waived only in writing by all Parties. For the
avoidance of doubt, the waiver by the US parent of the condition
precedent mentioned under SECTION 6.2. above shall not prohibit the US
Parent from seeking indemnification from the Contributors as a result of
a Breach of any of the representations and warranties contained in
SECTION 4 above.
ARTICLE 7 -- COVENANTS
The Contributors and the Company covenant to and agree with the US Parent as
follows:
7.1. ACCESS
The US Parent shall, from the date hereof until the Closing Date, be
entitled, through its employees and representatives, to make such
investigations of the property and such examination of the books,
records and financial condition of the Company and its Subsidiaries, as
the US Parent may reasonably request during normal business hours. No
investigation by the US Parent shall, however, diminish or obviate in
any way, or affect the US Parent's right to rely upon, any of the
representations, warranties, covenants or agreements of the Contributors
contained in this Agreement.
7.2. PRE-CLOSING OPERATIONS
From the date hereof until the Closing Date, without the US Parent's
prior written consent, which consent shall not be unreasonably withheld
with respect to Sections 7.2.2, 7.2.5 AND 7.2.6 below, the Contributors
shall cause the Company and its Subsidiaries not to, and the Company and
its Subsidiaries shall not take any of the following actions:
7.2.1 conduct its business in any manner or take or omit to take any action
that would jeopardize the continuance of its material business
relationships or cause any of Contributors' representations and
warranties contained in this Agreement to be untrue at any time between
the date hereof through and including the Closing Date;
7.2.2 except as expressly provided in this Agreement, enter into, amend,
modify, terminate or permit to expire any Material Contracts or any
Company Permits, or default (or take or omit to take any action that,
with or without the giving of notice or passage of time or otherwise,
would constitute a default) on any of its obligations under any Material
Contracts or any Company Permits;
7.2.3 except as expressly provided in this Agreement, amend its Articles of
Incorporation, or change its name or business;
32
<PAGE> 33
7.2.4 except as expressly provided in this Agreement, enter into, amend,
modify, terminate or permit to expire any agreement or transaction with
or for the benefit of any of its Affiliates;
7.2.5 except as expressly provided in this Agreement, make any change to the
compensation, benefit plans or other material terms of employment of its
employees, except for (i) non-recurring bonuses the gross amount of
which shall not exceed 5,000 Euros per individual and 50,000 Euros in
the aggregate, provided that the individual threshold of 5,000 Euros may
be raised to 15,000 Euros should a proposal be submitted to the US
Parent and not expressly rejected by it within the two business days
following submission, and (ii) severance payments in an amount not
exceeding six months gross salary of the relevant employee plus any
applicable social contributions.
7.2.6 (i) make any investments (whether in cash or other assets) exceeding
50,000 Euros (excluding investments in money market funds and other cash
equivalent investments), (ii) make any capital expenditures exceeding
100,000 Euros other than as set forth in SCHEDULE 7.2.6. attached
hereto, which sets forth anticipated expenditures until the Closing
Date, (iii) incur, guarantee or otherwise become liable with respect to
indebtedness exceeding 50,000 Euros other than bridge short-term loans
(use of line of credit) to settle the accounts of the Company or any of
its Subsidiaries, consistent with past practices, (iv) extend any loans
or other credits in excess of 50,000 Euros, or (v) sell, transfer, lease
or otherwise dispose of assets in any transaction or series of related
transactions, other than in the ordinary course of business, with a fair
market value in excess of 100,000 Euros, in each of the above (i)
through (v) cases, whether individually or in the aggregate;
7.2.7 issue, sell, redeem or acquire any shares of the Company or its
Subsidiaries, or other rights or options to acquire the foregoing;
7.2.8 declare or pay dividends or other distributions (in cash or other
property) on, or redeem, purchase or otherwise acquire any shares of the
Company;
7.2.9 dispose of or permit to lapse any rights to the use of any Intellectual
Property Rights;
7.2.10 discharge any liability of the Company or its Subsidiaries except in the
ordinary course of business, or prepay any liabilities of the Company or
its Subsidiaries, except in the ordinary course of business; or
7.2.11 agree to or make any commitment to take any of the actions prohibited by
this SECTION 7.2.
7.3 FURTHER ASSURANCE
The Contributors shall, and shall cause the Company, the Company's
Subsidiaries and the Cashed Out Shareholders to, and the US Parent shall
and shall cause EBH to, at any time and from time to time, at the
request of the US Parent or of the Contributors, as the case may be,
make, execute and deliver such assignments, deeds, bills of sale,
filings, conveyances and other instruments, agreements, consents and
assurances, and
33
<PAGE> 34
take or cause to be taken all action as the US Parent ot the
Contributors, as the case may be, may reasonably request, for the
consummation or confirmation of the transactions contemplated under this
Agreement.
7.4 EXCLUSIVITY
Except as regards the purchase of the Sold Shares, unless and until this
Agreement is terminated, none of Contributors shall, and none of
Contributors shall cause, suffer or permit any of their directors,
officers, employees, investment bankers, accountants, attorneys, or
other representatives, agents or advisors (as applicable) to, initiate
or solicit, directly or indirectly, any inquiries, or make any proposal,
or engage in any negotiations or discussions with any person, or provide
any confidential information related to the Company's business to any
person, with respect to the acquisition, business combination, or
purchase of any asset of the Company or its Subsidiaries (other than in
the ordinary course of business and in conformity with past practice),
or any direct or indirect equity interest in the Company or any of its
Subsidiaries, or otherwise facilitate any effort or attempt to seek any
of the foregoing.
7.5 NON-COMPETITION; NON-SOLICITATION
7.5.1. For a period of one (1) year from the date hereof, none of Contributors
shall, and shall cause their respective Affiliates not to, directly or
indirectly, compete with the business of the US Parent or the business
of the Company as at the date hereof, whether through investments in or
through the starting of a business which competes or would compete with
the businesses of the US Parent or the Company. The provisions of this
Section 7.5.1 shall not apply to the GS Shareholders nor to Cisalpina
Gestioni SpA.
7.5.2 For a period of two (2) years from the date hereof, none of the
Contributors shall, and shall cause their respective Affiliates not to,
solicit, directly or indirectly, any director, officer or other employee
of the Company or its Subsidiaries.
7.6. REGULATORY APPROVALS
The US Parent and the Contributors shall file, as soon as practicable
after the date of this Agreement, all notices, reports and other
documents required to be filed with any governmental body with respect
to the transactions contemplated by this Agreement, and to submit
promptly any additional information requested by any such governmental
body. Each of the US Parent and the Contributors shall (1) give the
other party prompt notice of the commencement of any legal proceeding by
or before any governmental body with respect to the transactions
contemplated by this Agreement, (2) keep the other party informed as to
the status of any such legal proceeding, and (3) promptly inform the
other party of any communication to or from any governmental body
regarding the transactions contemplated under this Agreement. The US
Parent and the Contributors will consult and cooperate with one another,
and will consider in good faith the views of one another, in connection
with any analysis, appearance,
34
<PAGE> 35
presentation, memorandum, brief, argument, opinion or proposal made or
submitted in connection with any legal proceeding under or relating to
any antitrust or fair trade law. In addition, except as may be
prohibited by any governmental body or by any Law, in connection with
any legal proceeding relating to any antitrust or fair trade law, each
of the US Parent and the Contributors will permit authorized
representatives of the other party to be present at each meeting or
conference relating to any such legal proceeding and to have access to
and be consulted in connection with any document, opinion or proposal
made or submitted to any governmental body in connection with any such
legal proceeding.
7.7 NO OBLIGATION TO MODIFY BUSINESS
Notwithstanding anything to the contrary contained in this Agreement, US
Parent shall not have any obligation under this Agreement: (i) to
dispose or cause any of its subsidiaries to dispose of any assets; (ii)
to discontinue or cause any of its subsidiaries to discontinue offering
any product, or to commit to cause Company or any of its Subsidiaries to
discontinue offering any product; (iii) to license or otherwise make
available, or cause any of its subsidiaries to license or otherwise make
available, to any person, any technology, software or other proprietary
asset, or to commit to cause the Company or any of its Subsidiaries to
license or otherwise make available to any person any technology, or
other proprietary asset; (iv) to hold separate or cause any of its
subsidiaries to hold separate any assets or operations (either before or
after the Closing Date), or to commit to cause Company or any of its
Subsidiaries to hold separate any assets or operations; or (v) to make
or cause any of its subsidiaries to make any commitment (to any
governmental body or otherwise) regarding its future operations of the
Company or its Subsidiaries. US Parent shall have the right to terminate
this Agreement if any Law or legal authority shall make any condition
described in (i) through (v) of this Section a requirement for the
completion of any transaction contemplated under this Agreement.
7.8. AUDITED YEAR END BALANCE SHEET
Within thirty (30) days after the execution of this Agreement, Main
Contributors shall cause the Company to deliver to the US Parent a set
of 2000 year end Financial Statements audited by Ernst & Young (the
"AUDITED YEAR END BALANCE SHEET").
ARTICLE 8 - CLOSING
8.1. TIME AND PLACE OF CLOSING
Closing shall take place at a mutually agreed place, and at a mutually
agreed date upon the satisfaction of the conditions precedent set forth
in SECTION 6 above or the waiver in writing of such conditions by the
relevant Parties, as the case may be, not later than ten
35
<PAGE> 36
(10) business days following such satisfaction and/or waiver and in no
event later than May 15, 2001 (the "CLOSING DATE").
8.2. CLOSING DELIVERIES
On the Closing Date, the Parties shall perform the following actions and
such other actions as may be necessary to effect the transactions
contemplated in this Agreement (collectively the "CLOSING").
8.2.1. Deleted.
8.2.2. The Parties shall execute all contribution instruments and agreements,
and undertake all legal actions necessary pursuant to Belgian and French
corporate Law, in order to implement the transactions described in this
Agreement including, but not limited to the Registration Rights
Agreement.
8.2.3. The Contributors shall remit to the US Parent the payment, if relevant,
referred to in Article 3(c)(i) of that certain agreement of same date,
entitled "Cash Out Agreement".
8.2.4. The Contributors shall transmit to the US Parent the letters and
documents referred to in SECTION 6.2.11.
8.2.5. The Contributors and the US Parent shall transmit to each other
evidence, in form and substance satisfactory to the US Parent or the
Contributors, respectively, of the fulfillment of the conditions
precedent set forth in SECTION 6 hereof which the Contributors and the
US Parent, respectively, had to fulfill.
8.2.6. The Contributors and the Belgian Company shall sign the Escrow
Agreement.
8.2.7. The French Individual Shareholders shall remit to the US Parent all
documents effecting the transfer of the domain names "massbazar.fr",
"ebay.fr" and the trademark "eBay" to iBazar.
ARTICLE 9 - INDEMNIFICATION
9.1. INDEMNIFICATION BY THE CONTRIBUTORS
9.1.1. Subject to the terms and conditions contained herein, the Contributors
agree, within the limits set forth in SECTION 9.3. below, to severally
("non solidairement"), in accordance with this Agreement and the Escrow
Agreement, indemnify EBH, the US Parent, the Company or its
Subsidiaries, at the choice of EBH or the US Parent (and their
respective officers, directors, affiliates, employees and agents) of all
losses, claims, obligations, demands, assessments, penalties,
liabilities, costs, and damages, including,
36
<PAGE> 37
without limitation and as the case may be, any legal expenses and
reasonable attorneys' fees and expenses (collectively referred to as
"LOSSES"), asserted against or incurred by EBH, the US Parent, the
Company or its Subsidiaries and their respective officers, directors,
affiliates, employees and agents, and resulting from the breach by any
of the Contributors, of any of the Contributors' representations or
warranties provided for in SECTION 4 or of any of their obligations
pursuant to this Agreement (hereafter a "BREACH"). For the avoidance of
doubt, it is expressly agreed that, despite the fact that only the
French Individual Shareholders are making representations and giving
warranties pursuant to this Agreement, the other Contributors shall be
liable under the indemnification provisions contained in this Agreement
as if they had made the same representations and given the same
warranties as the French Individual Shareholders.
9.1.2 The amount of liability owed by the Contributors to EBH in respect of
the Losses pursuant to SECTION 9.1.1. shall first be paid from the
Escrow amount, before any payment thereof by the Contributors to EBH, in
accordance with the provisions of the Escrow Agreement. To the extent
such amount of liability exceeds the Escrow amount, the Contributors
shall pay such amount of liability in excess of the Escrow amount to
EBH, within thirty (30) days of notice thereof from US Parent to the
Contributors.
9.1.3. (a) In calculating the amount of a Loss, there shall be deducted
therefrom the amount of any specific reserve or provision
included in the Financial Statements with respect to the specific
facts or circumstances giving rise to such Loss;
(b) Any Tax reassessment which would solely result in transferring
the burden of the Tax from one financial year to another shall
only be taken into account to the extent of the definitive Loss
resulting from such reassessment, including penalties, increases,
interest or fines, if any, relating to the transfer of the Tax
burden.
(c) In calculating the amount of a Loss pursuant to SECTION 9.1.,
there shall be deducted therefrom any sum (for example, an
insurance payment) that the US Parent, EBH, the Company or one of
the Company's Subsidiaries have received or will receive relative
to an event resulting in the Breach. This sum will be deducted
when calculating the Loss if such sum is received prior to the
payment of the Loss pursuant to SECTION 9.1. This sum will be
repayable to the Contributors if such sum is received after the
payment of the Loss pursuant to SECTION 9.1.
(d) In calculating the amount of a Loss pursuant to SECTION 9.1.,
there shall be taken into account the amount of any Tax decrease,
saving or recovery actually made by the Company or the Company's
Subsidiaries attributable to such Loss and the amount of any Tax
increase or other Tax disadvantage resulting from the payment of
the indemnification relating to such Loss. For the purpose of
clarification, the Parties expect the gains and losses arising
from the implementation of this clause to offset unless there has
been an intervening change in tax rates.
37
<PAGE> 38
(e) the amount of any Loss (other than the related tax consequences)
shall be assessed on a consolidated basis.
(f) No claim for indemnification may be made against the Contributors
when the relevant Breach exclusively results from a change of
Law, a change of regulation or of its interpretation, a change of
Tax or accounting rules or a change of an accounting method after
the Closing Date.
(g) No claim for indemnification may be made against the Contributors
in connection with the valuation of fixed assets as shown in the
Audited Year End Balance Sheet, except if the Loss is a result of
the non existence of these fixed assets.
9.1.4. In addition, the amount of indemnification payable by the Contributors
as a result of a Loss relating to a Breach concerning a particular
Investment or Subsidiary shall be reduced by a percentage set forth, for
each relevant Investment or Subsidiary, in SCHEDULE 9.1.4. hereto. For
the avoidance of doubt, and subject only to the provisions of SECTION
9.1.3., any Loss concerning the Company or any Investment or Subsidiary
not listed in SCHEDULE 9.1.4. shall be indemnified to its full extent,
notwithstanding the shareholding owned by EBH, the US Parent, or an
Affiliate of the US Parent in the relevant company.
9.1.5. The Parties shall cooperate in good faith in order to mitigate any Loss
(namely EBH shall perform or shall cause the Company perform all
obligations with respect to the possibility to defend a claim according
to the agreements referred to in SECTION 4.10.7.).
9.1.6. Notwithstanding the fact that a Loss may result from a default or an
inaccuracy relating to more than one of the provisions of this
Agreement, the Contributors' liability may only be sought once in
respect of any given damage, it being agreed that the US Parent shall
then determine the provision of this Agreement on which remedies will be
sought.
9.2. INDEMNIFICATION BY THE US PARENT
9.2.1. Subject to the terms and conditions contained herein, the US Parent
agrees to indemnify, defend, and hold harmless the Contributors (and
their respective officers, directors, affiliates, employees and agents)
from and against all Losses (as defined in SECTION 9.1. above) asserted
against or incurred by the Contributors and their respective officers,
directors, affiliates, employees and agents, and resulting from the
breach by the US Parent of any of the representation or warranty
provided for in SECTION 5 and of any of its obligations pursuant to this
Agreement (hereafter a "BREACH").
9.2.2. The rules set forth in SECTION 9.1. above shall apply mutatis mutandis
to any indemnification of a Loss by the US Parent to the Contributors.
9.3. INDEMNIFICATION PROCEDURE
38
<PAGE> 39
9.3.1.
a. To claim indemnification under this Section, EBH or Parent, on
behalf of itself or any other party with right to indemnification
under SECTION 9.1. of this Agreement with respect to the matter
covered by the Claim Notice (each an "INDEMNIFIED PARTY"), shall,
within sixty (60) days of the occurrence of an event which gives
rise or which is reasonably likely to give rise to a right of
indemnification under this SECTION 9 (fifteen (15) days in the
event of a tax reassessment notice received from a tax
authority), give notice (a "Claim Notice") of the facts
constituting the basis for the claim of possible Breach to the
Shareholders Agent and the Escrow Agent. The Claim Notice shall
contain a brief summary of the facts constituting the basis for
the claim of a Breach and a non-binding estimate of the amount of
the alleged Loss. Failure to give timely notice of a Breach shall
not affect the rights of any party to be indemnified under this
SECTION 9, except to the extent such failure to so notify
materially and adversely affects the Indemnifying Parties ability
to reduce the amount of the losses.
b. Within forty (40) business days after the Claim Notice is given,
the Shareholder's Agent shall deliver to EBH and the US Parent
and the Escrow Agent a written response (a "Response Notice") in
which the Shareholders' Agent: either (A) agrees to accept the
amount set forth in the Claim Notice (the "Claimed Amount"), or
(B) agrees to accept part, but not all, of the Claimed Amount, or
(C) indicates that none of the Claimed Amount is accepted. Any
portion of the Claimed Amount that is not accepted in the
Response Notice shall be the "Contested Amount". If a Response
Notice is not received by EBH and US Parent within forty (40)
business days after the Claim Notice is given, the Shareholder's
Agent shall be deemed to have not accepted any portion of the
Claimed Amount.
c. If any amount of a Claim Notice is accepted by the Shareholders'
Agent (an "Agreed Amount"), the Escrow Agent shall be authorized
by such Response Notice to deliver the Agreed Amount from the
Escrow Fund to the Indemnified Party(ies) designated by EBH (the
"Designated Indemnitee(s)") in accordance with the Escrow
Agreement. If the Escrow Fund is not sufficient to pay the full
Agreed Amount, the portion not paid from the Escrow Fund to the
Designated Indemnitee(s) shall be paid by the Contributors to the
Shareholders' Agent, and by the Shareholders' Agent to the
Designated Indemnitee(s), within thirty (30) days of the date
such Response Notice is received.
d. If the Shareholders' Agent delivers a Response Notice pursuant to
which there is a Contested Amount, the Shareholders' Agent and a
representative of the Indemnified Party or Parties shall
negotiate in good faith to attempt to resolve the dispute related
to the Contested Amount. If the Shareholders' Agent and the
Indemnified Party or Parties resolve such dispute, such
resolution shall be binding on all of the Contributors and the
Indemnified Party or Parties, and (i) a settlement agreement
shall be signed by the Indemnified Party or Parties and the
Shareholders' Agent and jointly sent to the Escrow Agent, and
(ii) if the Escrow Fund is not sufficient to pay the full amount
of such negotiated settlement, the
39
<PAGE> 40
Contributors shall pay the Shareholders' Agent, and the
Shareholders' Agent to the Designated Indemnitee(s) the amount
not paid from the Escrow Account as part of such settlement.
e. If the Indemnified Party or Parties and the Shareholders' Agent
are unable to resolve this dispute within sixty (60) business
days of the date of the Response Notice, either Party may
initiate arbitration as provided in SECTION 11. of this
Agreement. The final decision of the arbitrators shall be
furnished to the Shareholders' Agent, EBH and the US Parent on
behalf of the Indemnified Party or Parties and the Escrow Agent
in writing, and shall constitute a conclusive determination of
the amount of the Contested Amount the Indemnified Party or
Parties are entitled to recover, binding on the Contributors, the
Indemnified Party or Parties and the Escrow Agent and may not be
contested by any of them. If the Escrow Fund is not sufficient to
pay the full amount of such award, the Contributors shall pay to
the Shareholders Agent, and the Shareholder's Agent shall pay to
the Designated Indemnitee(s) the amount not paid from the Escrow
Account within thirty (30) days of such determination.
f. The obligations of the Contributors are in proportion to the
liability limits set forth in SCHEDULE 9.4.3. EBH, the US Parent,
and any Designated Indemnitee(s) shall have the right to enforce
the settlement agreement or the arbitral award, as the case may
be, against any Contributor who fails to make a payment required
under clauses (d) or (e) above and each Contributor hereby agrees
to accept such enforcement.
g. The rules set forth in this Section 9.3.1 shall apply mutatis
mutandis to any indemnification of a loss by the US parent to the
Contributors.
9.3.2. In case of a claim made by EBH or the US Parent, the Contributors or
their duly empowered counsels shall have reasonable access to the books
and documents of the Company and of its Subsidiaries relating to the
Loss, at the premises of the Company and of its Subsidiaries or in any
other place chosen by the US Parent or EBH in the same town as the
Company or the relevant Subsidiary, during normal working hours. The
Company's and the relevant Subsidiary's staff shall cooperate and lend
its reasonable assistance to the Contributors or their counsels.
9.3.3. If the event giving rise to indemnification involves the claim of any
third party, either Party may, by written notice to the other Party or
Parties, delay the procedures set forth in Section 9.3.1 (following
delivery of the claim notice) until resolution of the third party claim
by settlement or judicial or arbitral decision. The Indemnified Party or
Parties shall have sole control over, and shall assume all expenses with
respect to, the defense, settlement, adjustment or compromise of the
notified claim, provided that: (i) the Indemnifying Party(ies) may, if
it so choose(s), employ counsel at its own expense to assist in the
handling of such claim, and (ii) the Indemnified Party or Parties shall
obtain the prior written approval of the Indemnifying Party, which shall
not be unreasonably withheld, before entering into any settlement,
adjustment or compromise of such claim or ceasing to defend against such
claim.
40
<PAGE> 41
9.4. LIMITS OF INDEMNIFICATION
9.4.1 The Party seeking indemnification shall not be entitled to
indemnification pursuant to this SECTION 9 unless a claim for such
indemnification is asserted in writing to the other Party (i) within two
years after the Closing Date, or (ii) as concerns any Tax and social
security matters, on or before December 31, 2004, except for tax fraud
and registration taxes, for which claims may be made on and until
December 31, 2011.
9.4.2. The duty to indemnify pursuant to this SECTION 9 shall not apply unless
the aggregate amount of the indemnification due under this Agreement is
greater than a threshold of 1.000.000 Euros, but if such threshold is
exceeded by any claim or by any group of claims, the full amount of
Losses shall be indemnified and any future claims shall not be subject
to this threshold.
9.4.3. The total amount that each Contributor may be required to pay as
indemnification pursuant to this SECTION 9 shall not exceed the amount
set forth in SCHEDULE 9.4.3.
9.4.4. The total amount that the US Parent may be required to pay as
indemnification pursuant to this SECTION 9 shall not exceed the amount
set forth in SCHEDULE 9.4.4.
9.4.5. No claim or group of claims (based upon the same cause or of
substantially the same nature) in which Losses do not exceed 20,000
Euros shall apply to any provision of this ARTICLE 9 including the
threshold of SECTION 9.4.2.
9.4.6. The limitations contained in this Section 9.4 shall not apply to
Breaches constituting fraud or intentional misrepresentation.
ARTICLE 10 -- TERMINATION
10.1 TERMINATION PRIOR TO CLOSING
At any time on or prior to the Closing, EBH or the US Parent, as one
party, or the Contributors, as the other party, may immediately
terminate this Agreement by giving written notice of termination to the
other Parties, if:
(a) the Closing has not occurred on or prior to May 15, 2001;
(b) it becomes evident that any of the conditions precedent to EBH's,
the US Parent's or Contributors' closing obligations, as set
forth in SECTION 6 of this Agreement, as applicable, will not be
able to be satisfied on or prior to such date; provided, however,
that failure of such occurrence or the non-satisfaction of such
conditions precedent is not attributable to the Party seeking to
terminate this Agreement; or
(c) if the other Parties agree in writing to the termination.
41
<PAGE> 42
Should the US Parent terminate this Agreement on the grounds that the
conditions precedent set forth in SECTIONS 6.2.7 AND 6.2.9 have not been
satisfied, the US Parent shall then be required to pay to the
Contributors a break-up fee of ten million (10,000,000) Euros. This
break-up fee shall be payable in full upon notice of termination by the
US Parent.
10.2. EFFECT OF TERMINATION
In the event of a termination of this Agreement, this Agreement shall
forthwith become null and void, except for SECTIONS 11, 12.5., 12.10 AND
12.11.; provided, however, that the termination of this Agreement shall
not relieve any Party of any liability for breach of this Agreement
prior to the date of termination.
ARTICLE 11 -- GOVERNING LAW AND ARBITRATION
11.1 This Agreement and the rights and obligations of the Parties hereto
shall be governed by and construed and enforced in accordance with the
Laws of the Republic of France.
11.2. All disputes between the Parties arising out of or in relation to this
Agreement (including any questions as to the validity or enforceability
of this arbitration clause) shall be resolved through arbitration, in
accordance with the Rules of Arbitration of ICC, carried out by an
arbitration panel composed of one or several arbitrators, each of them
fluent in English and French (each an "ARBITRATOR"), designated in
accordance with said Rules. The Arbitration proceedings shall take place
in Paris, France and shall be conducted in the English language,
provided that any Party may submit any evidence in French without an
English translation.
11.3. The expenses of the arbitration proceedings shall be borne by the
Parties in accordance with the applicable determinations of the
arbitration panel.
ARTICLE 12 -- MISCELLANEOUS
12.1. AMENDMENT
This Agreement may be amended, modified, or supplemented only by an
instrument in writing executed by all the Parties hereto.
42
<PAGE> 43
12.2. ASSIGNMENT
The US Parent may at any time prior to the Closing Date assign all or
any part of its rights and/or obligations under this Agreement to any of
its Affiliates and the US Parent may, at any time after the Closing
Date, assign all or any part of its rights and/or obligations under this
Agreement to any of its Affiliates or any other person. Any assignee of
the US Parent shall succeed to and be possessed of the rights of the US
Parent hereunder to the extent of the assignment made, provided,
however, that any such assignment by the US Parent shall not relieve the
US Parent of its obligations hereunder. In addition, at any time after
the Closing, the US Parent may assign all or any part of its rights
relating to the representations and warranties and to the
indemnification procedure in this Agreement to any person who/which
acquires either the stock of the Company or of its Subsidiaries, or
substantially all of the assets of the Company or of its Subsidiaries,
by sale, merger or otherwise. In addition, should all or part of the
Company or of any Subsidiary be transferred to a third party, the US
Parent shall nonetheless retain the right to avail itself of the
representations and warranties and of the indemnification procedure
contained in this Agreement, as if such transfer had not taken place.
12.3. PARTIES IN INTEREST - NO THIRD PARTY BENEFICIARIES
Except as otherwise provided herein, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the
respective heirs, legal representatives, successors and assigns of the
Parties hereto. Neither this Agreement nor any other agreement
contemplated herein shall be deemed to confer upon any person not a
Party hereto or thereto any rights or remedies hereunder or thereunder.
12.4. WAIVER
No waiver by any Party of any default or breach by another Party of any
representation, warranty, covenant or condition contained in this
Agreement, or in any exhibit or any document, instrument, or certificate
contemplated herein, shall be deemed to constitute a waiver of any
subsequent default or breach by such Party of the same or any other
representation, warranty, covenant or condition. No act, delay, omission
or course of dealing on the part of any Party in exercising any right,
power, or remedy under this Agreement or at Law shall operate as a
waiver thereof or otherwise prejudice any of such Party's rights, powers
and remedies. All remedies shall be cumulative and the election of any
one or more shall not constitute a waiver of the right to pursue other
available remedies.
12.5. COSTS, EXPENSES AND LEGAL FEES
43
<PAGE> 44
Whether or not the transactions contemplated herein are consummated,
each Party hereto shall bear its own costs and expenses (including
attorneys' fees), except that each Party hereto agrees to pay the costs
and expenses (including reasonable attorneys' fees and expenses)
incurred by the other Party in successfully (i) enforcing any of the
terms of this Agreement, or (ii) proving that the other Party breached
any of the terms of this Agreement.
12.6. ENTIRE AGREEMENT
This Agreement and the agreements attached hereto as schedules and
transactions contemplated herein constitute the entire agreement of the
Parties regarding the subject matter hereof, and supersede all prior
agreements and understandings, both written and oral, among the Parties,
or any of them, with respect to the subject matter hereof.
12.7. MASTER AGREEMENT
Should any of the provisions of this Agreement be in conflict with the
provisions of any other contracts and agreements entered into by the
Parties and relating to the implementation of this Agreement in
accordance with applicable local Legal Requirements, this Agreement
shall control.
12.8. SEVERABILITY
If any provision of this Agreement is held to be illegal, invalid, or
unenforceable under present or future Legal Requirements effective
during the term hereof, such provision shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision was never a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by its
severance herefrom.
12.9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties shall survive the Closing and shall
not be affected by any investigation or finding made by the Parties
hereto prior to the date hereof or the Closing Date.
12.10. NOTICES AND REPRESENTATION OF THE CONTRIBUTORS
For the purposes of the Contribution as defined hereabove and of this
Agreement, the Contributors hereby appoint Goldman Sachs International
("GSI") as their representative (the "SHAREHOLDERS' AGENT"), who, in
their name and on their behalf,
44
<PAGE> 45
shall sign all documents required for the completion of the
Contribution, make all notices and communications, receive all notices
or make all declarations, receive all payments which are to be made
pursuant to this Agreement or as a consequence thereof or arising
therefrom, to, or on behalf of, the Contributors. In view of the mutual
interest it represents for the Contributors, such power of attorney is
irrevocable even in the event of death or liquidation of any of the
Contributors.
Should GSI, hereby appointed, be unable to perform his duties or be
unwilling to continue to act as the Shareholders' Agent, for any reason
whatsoever, Ernst & Young will replace GSI as Shareholders' Agent. In
such case, Ernst & Young must notify to each Contributor, to the Escrow
Agent and to the US Parent that he is henceforth acting as the
Shareholders' Agent. Should Ernst & Young, hereby appointed, be unable
to perform his duties or be unwilling to continue to act as the
Shareholders' Agent, for any reason whatsoever, the Contributors will
appoint one of themselves within fifteen (15) days following the day on
which the inability or the refusal of Ernst & Young to perform his
duties shall have been ascertained. Failing the appointment of a new
agent within the 15-day period mentioned above, such agent will be
appointed by the President of the Commercial Court of Paris ruling in
summary form ("en refere"), such ruling not being challengeable in
appeal.
For the purpose of this Agreement, all Contributors shall be
represented, and all consents and approvals of the Contributors shall be
validly granted, by the Shareholders' Agent and all payments to be made
by EBH or the US Parent to the Contributors shall be made to the
Shareholders' Agent, who/which shall, as the case may be, allocate the
payment among the Contributors under its sole responsibility. In
addition, all notices given to the Shareholders' Agent shall be deemed
to have reached each of the Contributors.
Any notice or communication hereunder or in any agreement entered into
in connection with the transactions contemplated herein must be in
writing and given (i) by depositing the same in the mail, addressed to
the Party to be notified, postage prepaid and registered with return
receipt requested and received, (ii) by sending the same by express
courier, or (iii) by delivering the same in person. Such notice shall be
deemed received on the date on which it is hand-delivered or on the
second business day following the date on which it was sent by express
courier. If sent by registered mail, such notice shall be deemed
received on the third business day following the date on which it is so
mailed, when mailed within the same country, or on the tenth business
day following the date on which it is so mailed, when mailed from a
country different from the country of destination.
For purposes of giving notice, the addresses of the Parties shall be:
45
<PAGE> 46
For the Contributors:
Goldman Sachs International
Peterborough Court
133 Fleet Street
London
England
For EBH:
eBay Inc.
2145 Hamilton Avenue
San Jose
CA 95125
U.S.A.
to the attention of the General Counsel
For the US Parent:
eBay Inc.
2145 Hamilton Avenue
San Jose
CA 95125
U.S.A.
to the attention of the General Counsel
Any Party may change its address for notice by written notice given to the other
Parties in accordance with this SECTION 12.10.
12.11. CONFIDENTIALITY - PUBLICITY AND DISCLOSURES
12.11.1. Each Party shall keep this Agreement and its terms confidential, and
shall make no press release or public disclosure, either written or
oral, regarding the transactions contemplated herein without the prior
knowledge and written consent of the other Party hereto. The foregoing
shall not prohibit any DISCLOSURE: (i) required by Legal Requirements
or regulatory authorities to be made by one of the Parties, provided
that the Party required to make such disclosure shall first consult
with the other Parties with respect to the form and substance of the
proposed disclosure; (ii) to attorneys, accountants, investment
bankers, or other agents of the Parties assisting the Parties in
connection with the transactions contemplated herein; and (iii) by the
US Parent in order to comply with the law or the regulations of the
Stock Exchange (Nasdaq) on which the US Parent is traded; and by the
Contributors in order to meet the Condition
46
<PAGE> 47
Precedent under SECTION 6.2. of this Agreement or to purchase the
shares of the Cashed Out Shareholders.
12.11.2. In the event that the transactions contemplated herein are not
consummated for any reason whatsoever, the Parties hereto agree not to
disclose any confidential, proprietary and/or non public information
they may have concerning the affairs of the other Parties, except for
information that is required by Legal Requirements to be disclosed;
provided that, in the event that the transactions contemplated herein
are not consummated, nothing contained herein shall be construed to
prohibit the Parties hereto from operating businesses in competition
with those of other Parties.
47
<PAGE> 48
IN WITNESS WHEREOF, the Parties have signed this Agreement in 8 originals on the
date first above written.
The US Parent Pierre-Francois Grimaldi
/s/ Matthew J. Bannick /s/ Pierre-Francois Grimaldi
--------------------------- -----------------------------
By: Matthew J. Bannick
Marc Piquemal
/s/ Marc Piquemal
---------------------------
GS CAPITAL PARTNERS III, L.P.
By: GS Advisors III, L.L.C.
Its General Partner
/s/ Jean-Christophe Germani
------------------------------
By: Jean-Christophe Germani
48
<PAGE> 49
GS CAPITAL PARTNERS III, GOLDMAN, SACHS & CO
OFFSHORE, L.P. VERWALTUNGS GmbH
By: GS Advisors III, L.L.C.
Its General Partner
/s/ Jean-Christophe Germani /s/ Jean-Christophe Germani
------------------------------ -------------------------------
By: Jean-Christophe Germani By: Jean-Christophe Germani
STONE STREET FUND 1999, L.P. Cisalpina Gestioni S.p.A
By: Stone Street 1999, L.L.C.
Its General Counsel
/s/ Jean-Christophe Germani /s/ Mauro Castiglioni
------------------------------ -------------------------------
By: Jean-Christophe Germani By: Mauro Castiglioni
49