UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
February 22, 2000
CI4NET.COM, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-4032991
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1 Rockefeller Plaza - Suite 1600
New York, New York 10020
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number (212) 225-6581
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Item 2. Acquisition or Disposition of Assets
On February 22, 2000, the Company, acquired approximately 79% of
the outstanding capital stock of System SpA ("Systeam"), a
company organized in Italy (the "Acquisition"). The aggregate
purchase price for the Acquisition was $12,175,142, of which
$8,390,085 was paid in cash and the remainder was paid in the
form of 630,844 shares of common stock of the Company each valued
at $6 per share, which value was determined in December 1999
before the reverse merger of the Company (which at such time was
named Leisure Concepts International, Inc.). The source of funds
for the cash portion of the purchase price was from the Company's
recent private placement of preferred stock.
Systeam is an Information Technology system integrator with
revenue of approximately $9.5 million in 1999 and a staff of 230.
Founded in 1989, Systeam is committed to delivering high quality,
robust software solutions that add value to customer
organizations by providing tangible and measurable business
benefits.
On March 1, 2000, the Company issued a press release which
reported the Acquisition. The press release is filed as an
exhibit to this Current Report on Form 8-K.
Item 7. Financial Statements and Exhibits
At this time, it is impracticable to provide the required
financial statements for Systeam. The Company however expects to
file such financial statements, including any required pro forma
financial statements, as an amendment to this Form 8-K as soon as
practicable, but not later than sixty(60) days after this report
is to be filed. In addition, a copy of the agreement relating to
the Acquisition will be filed by amendment as an exhibit hereto
as soon as practicable.
Exhibit 10 Letter Agreement
Exhibit 99.1 Press Release.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange
Act of 1934, the registrant caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: March 10, 2000
Ci4net.com Inc.
(Registrant)
/s/ Kevin R. Leech
Chairman
<PAGE>
Exhibit 99.1
Ci4net.com Acquires Systeam, a Leading Italian E-systems
Integrator; Prof. Admiro Allione, Ex-ceo of Stream Joins the
Board of Directors of Systeam
LONDON, March 1 -- ci4net.com, Inc. (OTC Bulletin Board: CIFN),
the Econet 4 Europe, today announced the acquisition of Systeam
SpA, one of Italy's leading e-systems integrators with an
extensive portfolio of blue chip clients. The addition of
Systeam to ci4net.com's Econet will enable more rapid development
of business throughout Europe and will directly benefit
ci4net.com's partner companies by giving the support of a leading
e-systems integrator as they grow their online business.
As part of its strategic approach, ci4net.com is pleased to
announce that Prof. Admiro Allione, ex-CEO of Stream, Italy's
leading digital TV broadcaster, whose major shareholders are
Telecom Italia, News Corp, and the Cecchi Gori Group, will be
joining the board of directors of Systeam.
Sig. Nicola di Tomaso, President of Systeam SpA, said, "We are
delighted to be part of the ci4net.com Econet. In the age of the
Internet, companies seeking to take their businesses online are
increasingly looking for rapidly delivered global technology
solutions. Today's move will now enable Systeam to service the
e-solutions needs of customers throughout Europe and the world."
Systeam was established in Rome in 1989, and is now one of the
leading Italian e-systems integrators. Its roster of clients
includes many well-known corporations such as Telecom Italia,
Team BMG and Cecchi Gori Home Video. Among the services it offers
are e-consulting for the creation of small to large scale
e-commerce web sites, the integration of networking,
telecommunications and multimedia systems and the implementation
of solutions for digital TV, document management, customer
relationship management and help desk support.
Fundamental to the future of Systeam is its Research and
Development team. Among its areas of focus are interactive
digital TV, WAP technology, antifraud management systems,
biometric recognition, information security and
telecommunications traffic monitoring management systems.
A spokesperson for ci4net.com commented: "The strategic
acquisition of Systeam SpA is the latest in a series of important
developments as ci4net.com moves to become the Ecrce to further
their businesses. We now have over 500 support and
infrastructure staff providing a robust and developing foundation
for our e-commerce activities."
About Systeam
Systeam is an Information Technology system integrator with
revenue of approx. $9.5 million in 1999 and a staff of 230.
Founded in 1989, Systeam is committed to deliver high quality,
robust software solutions that add value to customer
organizations by providing tangible and measurable business
benefits. Systeam develops local and global solutions to
e-commerce opportunities using the latest technology and system
advances.
About ci4net.com
ci4net.com is a European economic network, or "Econet". The
Company currently owns 50% or more of 26 Internet companies
involved in Business-to-Business, Business-to-Consumer,
e-Commerce and infrastructure. ci4net.com is focused on adding
value at all stages of a company's development via its network.
ci4net.com can provide infrastructure technologies, operational
and management resources and synergistic access to a network of
portfolio companies. For more information visit the Web site
http://www.ci4net.com.
U.K. Contacts:
Martin Forrest, + 44-171-232-4592, or Paul Bimson,
+44-171-232-4599
Both with Cubitt Consulting, http://www.cubitt-consult.co.uk
U.S. Contacts:
Investors: David Pasquale, 917-639-4277 Media: Connie Lee,
917-639-4112.
C14NET.com Inc
ONE ROCKFELLER PLAZA
SUITE 1600
NEW YORK, NEW YORK. 10020
TEL.: 212 445 6581 FAX: 212 265 4680
New York, January 18, 2000
To the attention of all shareholders in Systeam S.p.A.
C/o Systeam S.p.A.
Viale degli Eroi di Cefalonia, 37
00128 Rome
Italy
Dear Sirs,
On January 7, 2000, we have submitted to you our final proposal
in relation to the acquisition of the majority of the
registered stock in Systeam S.p.A. ('the Proposal"). Since
then, we have entered into some discussion for the further
negotiation of the Proposal. At the end of such negotiation,
we have decided to amend the Proposal as follows:
THE PRESENT CONTRACT PROPOSAL IS DRAWN UP BY:
1. C14NET.com Inc., a company incorporated under the laws of
Delaware - USA, with its headquarters in ONE ROCKFELLER
PLAZA SUITE 1600 NEW YORK, NEW YORK, 10020 (hereinafter
referred to as "Cl4NET");
AND ADDRESSED TO:
2. the following shareholders of SYSTEAM (hereinafter
Collectively referred to as "Shareholders A'):
2.1 Nicola DI TOMASO, born on March 30, 1951 in Rome, Italy,
resident in Rome, Via G. Mengoni no 5;
2.2 Gabriella COLOMBO. born on November 8, 1935 in Seregno
(Milan), Italy, resident in Rome, Via A. Bertoloni no. 26/A:
2.3 Sandro SANTIVETTI, born on February 8, 1959 in Palombara
Sabina (Rome). Italy, resident in Palombara Sabina, Strada
Privata XVIA no. 8;
2.4 Luigi CARAMICO, born on October 28, 1965, in Rome, Italy,
resident in Rome, Via R.G. Lante, no.78,
AS WELL AS TO:
3. the following other shareholders of SYSTEAM (hereinafter
collectively referred to as "Shareholders B"):
3.1 ATAS GROUP LTD, a company established in Tortola, British
Virgina Islands, with representative office at 8 Rue de La
Candalle - 1205 Geneve, Switzerland;
3.2 OXCAL VENTURE CORP., a company established under the laws of
California, with its headquarters in Palisades, Avenida de
la Herradura, California, 90272, USA;
3.3 A.P.I. INVEST, a company established under the laws of
Denmark, with its headquarters in Rosenkaret 13 DK 2860
Soborg, Denmark;
3.4 George P. BAUER, born on May 5, 1931, in Michigan, USA,
resident in Dunning Road New Canaan, CT 06840 USA;
3.5 Mark DUMONT, born on May 1, 1943 in Brussels, Belgium,
resident in Conches, 37 Chemin Jean-Achard, CH 123 1,
Switzerland;
3.6 Nicola SAVORETTI, born on September 16, 196.4, in Torino,
Italy resident in Moscow, Volkhonka no. 6/1, appt. 18,
121019 Russia;
3.7 Ben Christian RISPOLI, born on March 20, 1955, in
Stoccolraa, Svezia, resident in Principato di Monaco, La
Donatello, 13 Avenue Des Papalins, MC 9800 Monaco;
3.8 Ilde D'INNOCENTI, born on August 2, 1963, in Rome, Italy,
resident in Frascati (Roma), Via S.Paolo Apostolo no.28;
3.9 COYOTE Network Systems Inc., a company established under the
laws of California, with its headquarters in 4360 Park
Terrace Drive, Westlake Village, 91361, California, USA;
3.10 Stefano PAPI, born on October 28, 1959, in Roma, Italy,
resident in Roma, Via R. Forster n. 127;
3.11 Giuseppe CENSI, born on September 16, 1951, in Roma, Italy,
resident in Paliano (Frosinone), Corso Vittorio Emanuele,
11', no.40;
WHEREAS
(a) CI4NET carries on business as an Internet holding company;
(b) CI4NET is currently trading on the Nasdaq, OTC:BB market,
symbol CIFND;
(c) SYSTEAM carries on business as a software &
telecommunications consulting and developing company;
(d) SYSTEAM holds quotas of the following companies;
- - Systeam Consulting s.r.l. 100%, issued and entirely paid
up capital equal to ITL
20,000,000.
- - Sysmedia s.r.l. 100%, issued and entirely paid up
capital equal to ITL 20,000,000.
- - Smartech s.r.l. 100%, issued and entirely paid up
capital equal to ITL 51,000,000;
- - Systeam US 100%
(e) SYSTEAM has a fully issued and paid up capital equal to
ITL. 5,086,000,000, represented by a total number of 5,086,000
ordinary shares, each for a par value of ITL 1,000, held by its
shareholders as follows:
(i) Shareholder A:
Nicola DI TOMASO, 804,984 shares, equal to 15.827% of
the capital;
Gabrielia COLOMBO, 804,984 shares, equal to 15.827% of
the capital;
Sandro SANTIVETTI, 278,779 shares, equal to 5,481 % of
the capital;
Luigi CARAMICO, 219,264 shares, equal to 4.311 % of
the capital.
(ii) Shareholders B:
ATAS GROUP LTD, 287,692 shares, equal to 5.657% of the
capital;
OXCAL VENTURE CORP., 143,846 shares, equal to 2.828%
of the capital;
A.P.I. INVEST, 92,472 shares, equal to 1.818% of the
capital;
George P. BAUER, 143,846 shares, equal to 2.828% of
the capital;
Mark DUMONT, 143,846 shares, equal to 2,828 % of the
capital;
Nicola SAVORETTI, 143,846 shares, equal to 2.828 % of
the capital;
Ben Christian RISPOLI, 283,327 shares, equal to 5.571%
of the capital;
llde D'INNOCENTI, 283,327 shares, equal to 5.571 % of
the capital:
COYOTE Network Systems Inc., 431,538 shares, equal to
8.485% of the capital,
Stefano PAPI, 219,265 shares, equal to 4.311 % of the
capital;
Giuseppe CENSI, 804,984 shares, equal to 15,827% of
the capital.
(f) On September 30, 1999, CI4NET Submitted to Shareholders A
and B, a preliminary proposal for the acquisition of the
majority of the registered stock of SYSTEAM.
(g) C14NET, Shareholders A and Shareholders 13 have, since
then, carried out negotiations aimed at defining all terms and
conditions of the acquisition by CI4NET of a majority
participation in the registered stock of SYSTEAM.
(h) As a result of the aforementioned negotiations, CI4NET
decided to submit to the Shareholders A and the Shareholders B,
the following definitive proposal for the acquisition of the
majority of the registered stock of SYSTEAM,
(i) The present proposal will be valid until January 24, 2000.
After such term, in the absence of the acceptance by the
Shareholders A and the Shareholders B, the present proposal will
be automatically null and void. The acceptance in writing by
the Shareholders A and the Shareholders B of this proposal, with
no conditions attached, shall finally bind all the parties
hereto to the terms and conditions of Ems proposal.
In light of the foregoing, which has integral and substantial
value to the terms agreed hereinafter, the parties agreed the
following:
1. INTRODUCTION, ENCLOSURES AND DEFINITIONS
1.1 Introduction and enclosures - The recitals and the
annexes form an integral, essential and inseparable part of the
present Proposal, that if accepted, will constitute an integral
part of all present agreements between the parties as regards
its subject matter.
1.2 Definitions - For the purposes of the present Proposal
(and in addition to the definitions contained elsewhere herein)
the following definitions shall have the following meanings (the
definitions in the plural contained in the present Proposal will
have the same significance attributed when used in the singular
and vice versa):
1.2.1 "Systeam Subsidiaries": the companies of which SYSTEAM
hold, totally or partially, their capital and listed in the
whereas clauses under (d);
1.2.2 "Systeam Group"' Systeam S.p.A., together with the
Systeam Subsidiaries;
1.2.3 "Shares in C14NET": registered and/or freely tradable
shares of CI4NET publicly traded on the Nasdaq with no
restrictions;
1.2.4 "Closing": the completion of the sale and purchase of
the Shares A (as defined in Clause 2.1 below) and the Shares B
(as defined in Clause 2.3 below) to occur on the Closing Date;
1.2.5 "Closing Date": 31 January 2000;
1.2.6 "Proposal": the present contract Proposal made by
C14NET and addressed to Shareholders A and Shareholders B.
2. SALE OF SHARES
2.1 Sale of Shares A - At the Closing, CI4NET will
purchase from each Shareholder A, and each Shareholder A
will sell to C14NET, 50% of the stock individually held
by them in SYSTEAM, represented by the following ordinary
shares (hereinafter referred to as "Shares A"), each at
the nominal value of ITL, 1,000:
2.1.1 Nicola DI TOMASO, 402,492 shares, equal to 7.914 % of
the capital;
2.1.2 Gabriella COLOMBO, 402,492 shares, equal to 7.914 % of
the capital;
2.1.3 Sandro SANTIVETTI, 139,390 shares, equal to 2.741 % of
the capital;
2.1.4 Luigi CARAMICO, 109,632 shares, equal to 2.156% of the
capital.
2.2 The sale of Shares A shall take place in consideration
of the compensation determined for each of Shareholders
A, pursuant to Clause 3.1 of the present Proposal.
2.3 Sale of Shares B - At the Closing, C14NET will
purchase from each Shareholder B, and each such
Shareholder B will sell to CI4NET, 100% of the stock
individually held by there in SYSTEAM and represented by
the following ordinary shares (hereinafter referred to as
"Shares B"), each at the nominal value of ITL 1,000:
2.3.1 ATAS GROUP LTD, 287,692 shares, equal to 5,657% of
the share capital;
2.3.2 OXCAL VENTURE CORP., 143,846 shares, equal to 2.828%
of the share capital;
2.3.3 A.P.I. INVEST, 92,472 shares, equal to 1.818% of the
share capital;
2.3.4 George P. BAUER, 143,846 shares, equal to 2.828 % of
the share capital;
2.3.5 Mark DUMONT, 143,846 shares, equal to 2.828% of the
share capital;
2.3.6 Nicola SAVORETTI, 143,846 shares, equal to 2.828 %
of the share capital;
2.3.7 Ben Christian RISPOLI, 283,327 shares, equal to
5.571% of the share capital;
2.3.8 Ilde D'INNOCENTI, 283,327 shares, equal to 5.571% of
the share capital;
2.3.9 COYOTE Network Systems Inc., 431,538 shares equal to
8.485% of the share capital;
2.3.10 Stefano PAPI 219,265 shares, equal to 4.311% of the
share capital;
2.3.11 Giuseppe CENSI 804,984 shares, equal to 15.827% of
the share capital.
2.4 The sale of the Shares B shall take place in
consideration of the compensation determined for each of the
Shareholders B, in accordance with Clause 3.2 of the present
Proposal.
2.5 New composition of shareholders in SYSTEAM - After
completion of the share transactions described in Clauses 2.1
and 2,3 the registered stock fully underwritten and paid up in
SYSTEAM will be subdivided in the following manner:
2.5.1 CI4NET, 4,031,995 shares, equal to 79.276% of the
share capital;
2.5.2 Nicola DI TOMASO, 402,492 shares, equal to 7.914%
of the share capital;
2.5.3 Gabrielia COLOMBO, 402,492 shares, equal to 7.914%
of the share capital;
2.5.4 Sandro SANTIVETTI, 139,389 shares, equal to 2.741%
of the share capital;
2.5.5 Luigi CARAMICO, 109,632 shares, equal to 2.156 % of
the share capital.
3. CONSIDERATION
3.1 Consideration for the @e of Sh2res A - For the sale of
Shares A, each Shareholders A and C14NET have agreed the
following consideration and methods of payment:
3.1.1 Nicola DI TOMASO - in total US Dollars 1,252,644,
of which US Dollars in 626,322 cash at the Closing and US
Dollars 626,322 in no. 104,387 Shares in C14NET to be
delivered within 90 (ninety) days from the Closing, without
prejudice to Clause 3.3 below;
3.1.2 Gabriella COLOMBO: in total US Dollars 1,252,644,
of which US Dollars 626,322 in cash at the Closing and US
Dollars 626,322 in no. 104,387 Shares in C14NET to be
delivered within 90 (ninety) days from the Closing, without
prejudice to Clause 3.3 below;
3.1.3 Sandro SANTIVETTI: in total US Dollars 433,810,
of which US Dollars 216,905 in cash at the Closing and US
Dollars 216,905 in no. 36,151 Shares in C14NET to be
delivered within 90 (ninety) days from the Closing, without
prejudice to Clause 3.3 below;
3.1.4 Luigi CARAMICO- in total US Dollars 341,267, of
which US Dollars 170,634 in cash at the Closing and US
Dollars 170,634 in no. 28,439 Shares in C14NET to be
delivered within 90 (ninety) days from the Closing, without
prejudice to Clause 3.3 below.
Consideration for the sale of Shares B - For the sale of Shares
B, each Shareholders B and C14NET have agreed the following
consideration and methods of payment:
3.2.1 ATAS GROUP LTD: in total US Dollars 895,361, of
which US Dollars 447,681 in cash at the Closing, and US
Dollars 447,681 in no. 74,614 Shares in C14NET to be
delivered within 90 (ninety) days from the Closing, without
prejudice to Clause 3.3 below;
3.2.2 OXCAL VENTURE FUND LP: in total US Dollars
414,104 in cash at the Closing;
3.2.3 A.P.I. INVEST: in total US Dollars 287,793, of
which US Dollars 143,897 in cash at the closing and US
Dollars 143,897 in no. 23,983 Shares in C14NET to be
delivered within 90 (ninety) days from the Closing, without
prejudice to Clause 3.3 below;
3.2.4 George P. BAUER: in total US Dollars 447,680, of
which US Dollars 223,840 in cash at the Closing and US
Dollars 223,840 in no. 37,307 Shares in C14NET to be
delivered within 90 (ninety) days from the Closing, without
prejudice to Clause 3.3 below;
3.2.5 Mark DUMONT: in total US Dollars 447,680, of
which US Dollars 223,840 in cash at the Closing and US
Dollars 223,840 in no. 37,307 Shares in CI4NET to be
delivered within 90 (ninety) days from the Closing, without
prejudice to Clause 3.3 below;
3.2.6 Nicola SAVORETTI: in total US Dollars 447,680, of
which US Dollars 223,840 in cash at the Closing and US
Dollars 223,840 in no. 37,307 Shares, in CI4NET to be
delivered within 90 (ninety) days from the Closing, without
prejudice to Clause 3.3 below;
3.2.7 Ben Christian RISPOLI: in total US Dollars
881,776, of which US Dollars 440,888 in cash at the Closing
and US Dollars 440,888 in no. 73,481 Shares in C14NET to be
delivered within 90 (ninety) days from the Closing, without
prejudice to Clause 3.3 below;
3.2.8 Ilde D'INNOCENTI: in total US Dollars 881,776, of
which US Dollars 440,888 in cash at the Closing and US
Dollars 440,888 in no. 73,481 Shares in C14NET to be
delivered within 90 (ninety) days from the Closing, without
prejudice to Clause 3.3 below;
3.2.9 COYOTE Network Systems Inc.: in total US Dollars
1,242,313 in cash at the Closing;
3.2.10 Stefano PAPI: in total US Dollars 631,221 in cash
at the Closing;
3.2.11 Giuseppe CENSI: in total US Dollars 2,317,390 in
cash at the Closing.
3.3 CI4NET. those Shareholders A and those Shareholders B who
have elected, as indicated ill Clauses 3.1 and 3.2. to
respectively sell the Shares A and the Shares B for a
consideration partially composed of Shares in C14NET, agree
that, should the Shares in C14NET not be delivered by the
end of the ninetieth day following the Closing. C14NET
will pay, within the same term of ninety days, an amount
equal to the agreed value of the Shares in C14NET
determined on the basis of a value of US Dollars 6 for each
Share in CI4NET, as follows:
(1) Caramico Luigi: US Dollars 170,634;
(2) Colombo Gabriella: US Dollars 626,322;
(3) Santivetti Sandro: US Dollars 216,905-1
(4) Ben, Christian Rispoli: US Dollars 440,888;
(5) Atas Group L.T.D.: US Dollars 447,681;
(6) A.P.J. Invest: US Dollars 143,897;
(7) George P. Bauer: US Dollars 223,840;
(8) Marc Dumont: US Dollars 223,840;
(9) Nicola Savoretti: US Dollars 223,840;
(10) Nicola Di Tomaso: US Dollars 626,322;
(11) Ilde D'Innocenti: US Dollars 440,888;
Provided that each Shareholder A and each Shareholder B shall
have the right to waive their right to receive the above cash
amount and to request the delivery as soon as practicable of the
Shares in C14NET. From the Closing, each Shareholder A and each
Shareholder B shall enjoy a piggyback right, according to which
any filing for registration of Shares in CI4NET shall
automatically include the Shares delivered to each Shareholder A
and each Shareholder B pursuant to the present Clause 3.
3.4 At the Closing, CI4NET will issue to all Shareholders A and
those Shareholders B who have elected under Clauses 3.1 e 3.2 to
accept Shares in CI4NET an instrument substantially in the form
of Annex I - satisfactory to all Shareholders A and all such
Shareholders 8 issued by HSBC Bank and collected by Monte dei
Paschi di Siena of New York on behalf of all the Shareholders,
which will enable such Shareholders A and Shareholders B to
obtain the cash amounts set out in Clause 3.3 if such Shares in
C14NET shall not have been delivered to all Shareholders A and
all Shareholders B within 90 days from the Closing.
4. TRANSFER OF SHARES A AND SHARES B AND CONNECTED UNDERTAKING
4.1 At the closing:
4.1.1 Each of the Shareholders A and the Shareholders B will
transfer respectively the Shares A and the Shares B to
CI4NET by endorsing the share certificates, such
endorsement being certified by a Notary Public, subject to
the Notary receiving confirmation in writing from Monte dei
Paschi di Siena, New York that (he amounts due at Closing
by C14NET (determined in accordance with Clauses 3.1 and
3.2) have been credited to the escrow account identified in
Clause 4.1.2 below. The transfer of the Shares A and the
Shares B will take place in front of the Notary, by
delivery of the share certificates to C14NET and related
annotation in the company books of SYSTEAM. It is
expressly agreed that the sale of the Shares A and the
Shares B shall be regulated by all the terms of the present
Proposal which will remain effective even after date of the
transfer of Shares A and Shares B.
4.1.2 CI4NET will pay the Shareholders A and the
Shareholders B the full cash portion set out in Clauses 3.1
and 3.2, by means of transfers of bank funds immediately
available in the escrow account in US Dollars in Monte dei
Paschi di Siena, New York whose details shall be given in
writing to CI4NET not less than 3 days before the Closing.
4.1.3 After having transferred the Shares A and the Shares
B, the Notary will confirm to Monte dei Paschi di Siena,
New York that the transfer has been perfected and
immediately thereafter Monte dei Paschi di Siena shall
credit the amounts standing on the escrow account to the
Shareholders A and the Shareholders B and confirm in
writing to the Notary that this has been done.
4.1.4 CI4NET will deliver to the Shareholders A and the
Shareholders B the bank instrument stated in Clause
3,4 above.
4.1.5 The "fissato bollato" for the payment of the
taxes on the transfer of the shares will be signed
by all the parties.
4.1.6 C14NET and SYSTEAM shall execute the loan
agreement referred to in Clause S. I below.
4.2 All expenses, including notarial and escrow bank
expenses, inherent to the tr@er and the delivery of the
Shares A and the Shares B will be borne by C14NET.
4.3 Should CI4NET fail to comply with any of its obligations
to be performed at the Closing pursuant to this Clause 4
by the Closing Date, this agreement shall, at the request
of the Shareholder, and the B Shareholders, be
terminated. In such case, without prejudice to the right
to recover any additional damages, C14NET shall reimburse
by way of penalty all legal costs accrued up to the date
of termination up to a maximum amount of US Dollars 200,000.
5. FINANCIAL SUPPORT PROVIDED BY CI4NET TO SYSTEAM
5.1 Within seven days from the Closing, CI4NET will make
funds available (US Dollars 1,000,000) to SYSTEAM in
accordance with the terms of a loan agreement in the
form of Annex 2 hereto.
6. STIPULATED SHAREHOLDERS AGREEMENT
6.1 The Shareholders B and the Shareholders A agree that
on the Closing the ordinary Shareholders' meeting of
SYSTEAM will be convened in order to appoint a new
Board of Directors and a new Board of Auditors,
conforming with the provisions that follow (and to
accept the resignations of those persons who do not so
conform).
6.2 The Board of Directors will be composed of five
members, CI4NET will nominate the majority of the
members of the new Board of Directors, thus 3
directors, whilst the Shareholders A will nominate the
remaining 2 directors. The Chairman of the Board of
Directors, with the power to legally represent
SYSTEAM, will be nominated by the Board of Directors
and selected from the directors indicated by the
Shareholders A. The Managing Director (Amministratore
Delegato) will be nominated by the Board of Directors
and selected from those directors indicated by CI4NET.
6.3 The Board of Auditors will be composed of three
effective auditors and two substitute auditors.
C14NET will indicate two effective auditors and one
substitute auditor. The Shareholders A will indicate
one effective auditor and one substitute, 'Me Chairman
of the Board will be nominated from those effective
auditors indicated by C14NET.
6.4 The provisions of Clauses 6.2 and 6.4 will remain
valid and applicable until the exercise or the expiry
of the deadline for the exercise of the put option
provided for in Clause 8 below.
7. FURTHER COMMITMENTS OF THE PARTIES
7.1 Unless otherwise agreed by CI4NET and each of the
Shareholders A, CI4NET and the Shareholders A agree
that all employment and/or professional service
agreements currently in place between SYSTEAM and the
aforementioned Shareholders A will remain valid, on
the conditions and economic terms not less favourable
than those currently contained in the aforementioned
contracts (as represented in Annex 3 of the present
Proposal), for not less than twenty four months from
the Closing. CI4NET and the Shareholders A shall
comply with all the terms and conditions contained in
the aforementioned contracts.
7.2 CI4NET agrees to renew the consultancy agreements
entered into between SYSTEAM and Mr Valerio Veltroni
and Mr Ben Christian Rispoli for a term not less than
one year from the Closing, on the conditions and
economic terms not less favourable than to those
currently contained in their respective consultancy
agreements (as represented in Annex 4 of the present
Proposal)
7.3 CI4NET hereby agrees to approve and put in place a
stock option plan in favour of all employees and
consultants including Shareholders A for a number of
shares equal to 10% of the entire underwritten and
determined registered stock of SYSTEAM at a price per
SYSTEAM share equal to the Price Payable hereunder by
CI4NET for each share of SYSTEAM. Within 36 months
from, the closing, should SYSTEAM have not been quoted
on any stock market, in Italy and/or abroad, the
Shareholders A holding stock options in SYSTEAM shall
have the right to convert said stock options into
stock options in CI4NET (at a conversion rate
determined by reference to the ratio between a share
in C14NVT and the corresponding number of shares in
SYSTEAM applied hereunder on the basis of their
respective prices/values applied in this Proposal)
conferring the right to purchase Shares in C14NET at a
price equal to US Dollars 6.
7.4 CI4NET grants to the Shareholders A, in equal parts
and severally, the right to acquire from SYSTEAM
collectively 30% of shares in AmeriCOM USA/Adcast
owned by SYSTEAM at the Closing at a price equal to
the price paid at the time by SYSTEAM. The said right
may be exercised at any moment following the Closing
and until June 30, 2000.
8. PUT OPTION
8.1 CI4NET hereby grants to each of the Shareholders A, an
option ("Put Option") for the sale to CI4NET of all
the shares in SYSTEAM that are held by each of the
aforementioned Shareholders A on the date the Put
Option is exercised. Therefore, CI4NET shall be
irrevocably bound to purchase the shares in SYSTEAM
that are offered by those Shareholders A exercising
the Put option. The Put Option may be exercised by
each of the Shareholders A, at any time during the
period from the end of the twenty fourth month
following the Closing and the end of the twenty
seventh month following the Closing, through a written
communication sent to CI4NET at least 15 days in
advance of the date of the proposed sale of the
SYSTEAM shares under the Put Option.
8.2 The transfer of the shares according to the Put option
can only relate to all (and not part) of the SYSTEAM
shares held by the Shareholders A on the date the Put
Option is exercised and will be made at a price - for
each SYSTEAM share transferred under the Put Option -
equal to US Dollar 3,112, and will be paid half in
cash and half in Shares in C14NET to be delivered on
the date of transfer of the Shares in Systeam at the
following payment conditions:
8.2.1 Nicola DI TOMASC): in total US Dollars
1,252,644, of which us Dollars in 626,322 cash and US
Dollars 626,322 in no. 104,387 Shares in CI4NET
8.2.2 Gabrielia COLOMBO: in total US Dollars
1,252,644, of which US Dollars 626,322 in cash and US
Dollars 626,322 in no. 104,387 Shares in C14NET
8.2.3 Sandro SANTIVETTI: in total US Dollars
433,809, Of which US Dollars 216,904 in cash and US
Dollars 216,905 in no. 36,151 Shares in C14NET
8.2.4 Luigi CARAMICO: in total US Dollars 341,267,
of which US Dollars 170-634 in cash and US Dollars
170,634 in no. 28,439 Shares in CI4NET
8.3 CI4NET and the Shareholders A agree that the
price for the exercise of the Put option will not be
subject to any modification as a consequence Of the
possible reduction, or reduction to zero, Of the
registered stock Of SYSTEAM.
8.4 The SYSTEAM shares for which the Put Option is
granted will be transferred to C14NET on the date set
out in the notice issued pursuant to Clause 8.1. At the
same time of the transfer of the shares, CI4NET will pay
each of the Shareholders A exercising the Put Option the
price determined pursuant to Clause 8.2.
9. REPRESENTATIONS AND WARRANTIES
9.1 Representations and Warranties of Shareholders A and
Shareholders B
Subject to Clauses 9.1.17 and 9.1.18 below and with regard
to SYSTEAM and to SYSTEAM Subsidiaries, including where
only the name SYSTEAM appears from hereon, each
Shareholders A and each Shareholders B represent and
warrant that:
9.1.1 Registered stock and shares in SYSTEAM
SYSTEAM is duly established and validly operating under
the laws of the respective jurisdictions. The By-laws
of SYSTEAM, as applicable at the time of the Closing,
are enclosed in the present Proposal under Annex 5. All
of the Shares A and the Shares 13 respectively of
Shareholders A and Shareholders B, that accept the
present Proposal, are entirely free of burdens.
SYSTEAM is a shelf company that has not carried out any
business activity since the date of its incorporation.
9.1.2 Third Parties' rights on the Shares of SYSTEAM
No agreements of any kind granting to any person rights
in respect of the Shares exist, nor will exist, at the
Closing.
9.1.3 Administration, net worth and other documents
(a) No distribution of dividends, concerning the
financial year 1999, has occurred or has been approved,
nor will occur or will be approved, prior to the
Closing.
(b) SYSTEAM keeps its books, accounting records and
documents as Prescribed in due respect of all applicable
laws and regulations.
(c) The financial accounts of SYSTEAM and the balance
sheet of SYSTEM as of September 30, 1999 and the long
form report issued by Deloitte and Touche on December 6,
1999 attached to the present Proposal as Annex 6, fairly
reflect the situation of SYSTEAM as Of September 30,
1999. Said financial accounts are substantially true,
correct and complete and in particular all material
liabilities (including contingent liabilities) are
clearly shown or provided for and truly represented.
(d) Save as otherwise provided for hereunder, up to
the present date and up to the Closing there are not,
nor will there be, circumstances or acts of management
different from those deriving from the ordinary and
prudent management which have materially worsened
SYSTEAM's assets and liabilities, its economical and
financial situation, in respect of what is represented
in the financial statements as of September 30, 1999.
9.1.4 Relationships with Coyote and Easynet
The financial and contractual relationships between
SYSTEAM, Coyote and Easynet have been fully settled in a
clean cut manner by means of a settlement agreement
between SYSTEAM, Easynet and Coyote. No shareholders'
agreement exists between SYSTEAM and/or its Shareholders
A and Shareholders B and/or the shareholders of Easynet.
Save as otherwise provided for under the above mentioned
settlement agreement, only commercial relationships are
carried out between SYSTEAM and Easynet.
9.1.5 Guarantees and Powers of Attorney
No guarantees, comfort letters or similar agreements or
undertakings have been issued, nor ire outstanding, to
third parties by SYSTEAM, except as provided in Annex 7.
No powers of attorney, granted by SYSTEAM, is in force
at the date hereof.
9.1.6 Compliance with the law
SYSTEAM has conducted its business in all material
respects in accordance with all applicable laws and
regulations and there is no order or decree of any
authority outstanding against SYSTEAM which may have a
material adverse effect upon the assets or business of
the company.
9.1.7 Assets and activity of SYSTEAM
(e) SYSTEAM is not and will not be in a state of
bankruptcy at the Closing, it will be carrying out and
will continue to carry out its regular activity, being
in possession of all the permits and authorisations
necessary for such a purpose. No bankruptcy proceedings
are pending or threatened.
(f) All material assets held by SYSTEAM, whether
owned outright or through leasing contracts or otherwise
disposed by SYSTEAM, are suitable for the company's
activity, and are free of mortgages, pledges, bonds,
encumbrances, burdens, restriction in use, or claims of
any nature whatsoever, except as stated in SYSTEAM's
records.
(g) SYSTEAM owns the real properties listed under
Annex 8.
(h) The location of the real properties in which
SYSTEAM carries out its activities are regulated by
valid and enforceable contracts enclosed under Annex 9.
The premises fit the needs connected with tile activity
currently carried out by SYSTEAM and will be found in
good conditions.
9.1.8 Relationship with employees and consultants
(a) The gross annual global payments, seniority
allowances and substitute indemnities of the employees
of SYSTEAM accrued up to the date herewith are, in
accordance with the detailed information, contained in
Annex 10, currently paid or due. SYSTEAM warrants that
no other employees other than those indicated in the
above detailed information are currently employed by
SYSTEAM.
(b) SYSTEAM is not bound by any material obligation
to increase any amount payable under any employment
agreement, written or verbal, or from agreements
concerning pension schemes or services or other
agreements which provide for the payment of bonuses and
incentives, profit sharing, options or rights to
underwrite or receive shares in SYSTEAM, deferred
compensations, insurance, pensions, severance
indemnities or, in general, payments, performances or
benefits ill addition to, or more favourable than, those
which are provided by the laws or the collective bargain
agreements.
(c) There is, nor will there be, at the Closing,
court proceeding initiated against SYSTEAM by any agent,
broker, consultant or professional claiming that its
contractual relationship with SYSTEAM is characterised
as a permanent employment relationship (contratto di
lavoro subordinato a tempo indeterminato).
(d) SYSTEAM has always fulfilled, and will fulfil up
to the Closing, all its obligations vis-a-vis its
employees (including those relating to their duties,
rank and holidays), directors, agents, brokers and
cousultants and it has always fully and timely
fulfilled, and will fulfil up to the Closing, all its
financial obligations regarding withholding taxes,
including income tax, social security contributions and
'ENASARCO" contributions, and to withhold (and duly
provide against in full, deposit or pay to the competent
authorities) all amounts required by law or by agreement
to be withheld from the wages of its employees,
directors, agents, brokers and consultants.
9.1.9 Patents Trademarks and Intellectual Property Rights
(e) SYSTEAM puts in place all the necessary actions
to protect their intellectual property products from
infringements by third parties, in accordance with all
Italian applicable laws.
(f) As far as the Shareholders A and the Shareholders
B are aware. the activity of SYSTEAM, the use of Proper
hardware, the use of the products of SYSTEAM by its
clients and the use by SYSTEAM of patents, trademarks,
know-how and intellectual property, does not give rise
to any infringement of rights of intellectual property
of third parties.
(g) Annex II contains a complete list of the
registrations made, relative to trademarks, patents for
inventions, ornamental models owned or utilised by
SYSTEAM presently expressed by SYSTEAM, upon which no
inventor or third party may claim any intellectual
property right, or right of utilisation and/or
exploitation. The registrations are fully effective and
SYSTEAM is able to claim to be the sole owner of
intellectual property rights and may protect said rights
towards any claim from third parties.
(h) No intellectual property right is owned by any of
the Shareholders A and/or the Shareholders B, nor, as
far as they are aware, is owned by managers or staff,
previously or actually employed by SYSTEAM.
9.1.10 Software
SYSTEAM is, and will be at the Closing, entitled to use
the software currently used to carry out its business.
9.1.11 Fiscal Situation
(i) SYSTEAM has filed, within the statutory terms,
all mandatory tax returns and social security filing due
to be filed up to the date of this Proposal, and will
file all filings the above returns due to be filed from
the date of present Proposal up to the Closing. SYSTEAM
has paid, or has made the necessary provisions for
payment of, all taxes and duties for social security
contributions and administrative charges pertaining to
its activity, payment that was due up to the date of
present Proposal and, similarly, the necessary
provisions will be made for the payment of all taxes and
duties for social security contributions and
administrative charges that fall due or will accrue from
the date of present Proposal up to the Closing. SYSTEAM
has withheld all the required withholding taxes, or has
made provisions for the required amounts for the payment
of withholding taxes, or has timely paid such
withholding taxes, SYSTEAM is not currently subject to
any assessment, audit or verification procedure in
respect to taxes, duties, social security contributions
and/or administrative charges.
j. In 1995, SYSTEAM presented a request for a conditional
amnesty for the payment of social security
contributions.
9.1.12 Litigation
There are no pending judicial proceedings against
SYSTEAM, not any pending decrees, injunctions or other
measures or legal actions (either civil, criminal or
administrative) pending due to the activity of SYSTEAM
that may have substantial relevance against the same.
9.1.13 Contracts
SYSTEAM is a contractual party in the contracts as
indicated in Annex 12.
9.1.14 Agreements subject to termination or amendments
There are no agreements binding SYSTEAM that provide
clauses which explicitly entitle the counterpart to
withdraw from, anticipate termination or amend the
existing relationships with SYSTEAM at the Closing as a
mere consequence of the Proposal being executed and
performed.
9.1.15 Management of the Company until the Closing
(a) From the date of acceptance of the present
Proposal and until the Closing, the activity of SYSTEAM
will be limited to matters of ordinary management.
(b) From the date of acceptance of the present
Proposal, any extraordinary management activity shall be
previously authorised in writing by CI4NET. In
particular, except unless otherwise agreed with CI4NET,
SYSTEAM will not (i) authorise increases in the names of
its directors, employees, agents or consultants, except
where said increases are mandatory by law, on the basis
of collective agreements or contracts compliant to the
customs of the company; (ii) resolve, on capital
increases of the company, distribution or dividends;
(iii) modify the actual company by-laws; (iv) negotiate
finance with banks and/or credit institutions for
amounts superior to ITL 500 million.
9.1.16 Confirmation of the Representations and Warranties
Should the present Proposal be accepted, at the Closing,
the Shareholders A and the Shareholders B hereby
undertake that all representations and warranties made
in accordance with this Clause 9 are true and correct as
at the Closing.
9.1.17 Duration of the Representations and Warranties
and Limitation of Liability
The representations and warranties listed in this Clause
9.1 shall remain in force and effect for 12 months after
the Closing. After expiration of the said period, no
liability of any of the Shareholders A and the
Shareholders B shall exists as to breaches of said
representations and warranties for which no notice of
breach has been given as at the date of expiration.
The Shareholders A and the Shareholders B are jointly
and severally liable in relation to any violation of the
representation and warranties detailed in this Clause
9.1 provided that (i) the maximum total liability of all
Shareholders A and all Shareholders B is equal to the
aggregate amount of US Dollars 750,000 and (ii) the
maximum individual and/or joint liability of each
Shareholders A and Shareholders B is limited to the
amount of US Dollars 50,000.
9.1.18 CI4NET acknowledges that except for those
indicated in this Clause 9.1 no further
representation and/or warranty, is released
or supplied to C14NET by any of die any of
the Shareholders A and/or Shareholders 19 in
relation to this Proposal.
9.2 Representations and Warranties by CI4NET
CI4NET makes the following representations and warranties to
each Shareholder A and to each Shareholder B:
9.2.1 CI4NET has been duly constituted and is validly
operating under the laws of Delaware,
9.2.2 All the issued and existing shares of C14NET have
been duly authorised and issued and have been
integrally signed and are not subject to
extraordinary contributions.
9.2.3 The present Proposal has been duly authorised and
signed by CI4NET and, if duly accepted, will
constitute a valid and binding contract for
CI4NET, conforming to its terms and conditions.
9.2.4 CI4NET has the full right, faculty and power to
fulfil all the obligations arising out of the
present Proposal.
10. CLAIMS AGAINST SYSTEAM
The Shareholders A and the Shareholders B declare, with
effect from the Closing, that they do riot have any claim
against SYSTEAM of whatsoever nature, with the sole
exception of the Shareholders A and Messrs. Valerio
Veltroni and Ben Christian Rispoli in relation to the
accrued compensations for the employment relationship and
consultant's assignments respectively, as stated @ the
Clauses 7.1 and 7.2 above, for an amount not exceeding US
Dollars 40,000.
11. MISCELLANEOUS
11.1 Any expenses or tax-related costs arising from or in
connection with the execution of the acceptance of this
Proposal will be borne by the parties co whom it
pertains pursuant to the applicable laws and regulations
and, save for clause I 1 .2 below, each party will bear
its own costs in relation to any legal or financial
advice sought.
11.2 Any amendment made to this Proposal will not be
effective or binding unless made in writing and signed
be the party affected by such amendment.
11.3 This Proposal supersedes any prior oral or written
agreement between the parties in relation to the
subject-matter hereof and absorbs any procedural phase
described in the recitals and, as a result, no right or
claim will be effective in relation to such procedure
except under the terms and conditions mentioned in this
agreement.
11.4 Any communication which must be given or is permitted
under this Proposal must be in writing and sent by
registered post with notice of return or telefax with
confirmation sent by registered post with notice of
return and such communication will be deemed validly
served on the addressee if addressed as follows:
if to CI4NET: CI4NET.com Inc.
One Rockfeller Plaza
Suite 1600
New York, NY 10020
if to Shareholders A: c/o Systeam S.p.A.
Viale Eroi di Cefalonia, 37
00128 Rome
Italy
if to Shareholders B: c/o Ben Christian Rispoli
Rispoli & Cie
Gildo Pastor Center
7, Rue du Gabian
MC 98000 MONACO
or to any other address communicated in the manner
mentioned above by one party to the other.
12. ARBITRATION AND GOVERNING LAW
12.1 In case of any dispute arising over the
interpretation, validity or effectiveness of the
present Proposal and of the related acceptance,
the parties agree to meet in order to reach an
amicable solution to said dispute. In the case
the parties do not reach an agreement within
thirty days from the time the most diligent party
attempted to fix the above mentioned meeting, the
solution of such dispute will be referred to a
sole arbitrator that will be appointed by the
President of the Arbitration Court of the
International Chamber of Commerce in Paris. The
arbitration will be held in Rome in the Italian
language. For all that is not expressly provided
by the present arbitration clause, the provisions
contained in Articles 832 et seg. of the Italian
Civil Procedure Code shall apply.
12.2 Any disputes that cannot be settled by
arbitration by virtue of mandatory provisions of
law applicable to the arbitration Clause shall be
submitted to the jurisdiction of Italian Courts
and to the exclusive competence of the Court of
Rome.
12.3 This Proposal shall be governed by and
interpreted in accordance with Italian law.
..........
The present Proposal of contract is binding, firm and
irrevocable if accepted before January 24, 2000.
In faith,
CI4NET.COM Inc.
If you retain that the above Proposal, as amended, meets the
agreements reached between us for the acquisition of the
majority registered stock of SYSTEAM, we request that you sign a
copy of present Proposal as full and integral acceptance of it
and send the same to us.
I hereby accept all the terms and conditions of the above
Proposal:
Name: Nicola Di Tomaso
Date:
Signature: /s/
