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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 24, 1999
OBJECTSHARE, INC.
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(Exact Name of Registrant as Specified in Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
0-23132 77-0143293
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(Commission File Number) (IRS Employer Identification No.)
16811 HALE AVENUE, SUITE A,
IRVINE, CALIFORNIA 92606-5020
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(Address of Principal Executive Offices) (Zip Code)
(949) 833-1122
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(Former Name or Former Address, if Changed Since Last Report)
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OBJECTSHARE, INC.
FORM 8-K
INDEX
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INFORMATION INCLUDED IN THE REPORT PAGE
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Item 5. Other Events.......................................................... 3
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.... 3
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ITEM 5: OTHER EVENTS.
On November 24, 1999, ObjectShare, Inc. a Delaware corporation (the
"Registrant"), completed the sale of all of the stock (the "Sale") of
ObjectShare, Gmbh, a German corporation and ObjectShare (U.K.) Limited, an
English corporation (collectively, the "Subsidiaries") to Valtech S.A. a French
societe anonyme ("Valtech") and its wholly-owned subsidiary Valtech Limited, a
company incorporated in England and Wales (Valtech U.K.), respectively, in
exchange for total consideration of (i) approximately $1,600,000 in cash and
(ii) the cancellation of certain intercompany indebtedness owed by the
Subsidiaries to the Registrant. As a result of this transaction, the Registrant
has no remaining operations in Europe.
The Sale was effected pursuant to, and this Form 8-K is qualified in its
entirety by, the (i) German Master Agreement, dated November 22, 1999, by and
between Valtech and the Registrant, and (ii) U.K. Master Agreement, dated
November 22, 1999, by and between Valtech U.K. and the Registrant, each of
which is attached as an exhibit hereto.
ITEM 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
The following exhibits are filed herewith:
5.1 German Master Agreement, dated November 22, 1999, by and between
Valtech and the Registrant, related to the sale of ObjectShare, Gmbh.
The Registrant will furnish supplementally a copy of the German Master
Agreement's schedules and exhibits to the Commission upon request.
5.2 U.K. Master Agreement, dated November 22, 1999, by and between Valtech
U.K. and the Registrant, related to the sale of ObjectShare (U.K.)
Limited. The Registrant will furnish supplementally a copy of the U.K.
Master Agreement's schedules and exhibits to the Commission upon
request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
OBJECTSHARE, INC.,
a Delaware corporation
Date: December 8, 1999 By: /s/ EUGENE L. GODA
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Chief Executive Office, President and
Chairman of the Board and
Chief Financial Officer
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INDEX TO EXHIBITS
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<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
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5.1 German Master Agreement, dated November 22, 1999, by and
between Valtech and the Registrant, related to the sale of
ObjectShare, Gmbh. The Registrant will furnish supplementally
a copy of the German Master Agreement's schedules and exhibits
to the Commission upon request.
5.2 U.K. Master Agreement, dated November 22, 1999, by and between
Valtech U.K. and the Registrant, related to the sale of
ObjectShare (U.K.) Limited. The Registrant will furnish
supplementally a copy of the U.K. Master Agreement's schedules
and exhibits to the Commission upon request.
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EXHIBIT 5.1
GERMAN MASTER AGREEMENT
DATED NOVEMBER 22, 1999
BETWEEN THE UNDERSIGNED:
VALTECH S.A., a French societe anonyme with a share capital of FRF 4,089,390
having its registered office at Immeuble Lavoisier - Quartier Gambetta, 4 Place
des Vosges, La Defense V, 92400 Courbevoie, France, registered at the Commercial
and Companies Registry of Nanterre, under the number 389 665 167, represented by
Mr. Olivier Cavrel, duly authorized for the purposes hereof,
hereinafter referred to as "VALTECH S.A." or the "PURCHASER"
OF THE ONE PART,
AND
OBJECTSHARE, INC., a U.S. corporation with a share capital of 12,470,863 shares,
having its registered office at 16811 Hale Avenue, Suite A, Irvine, California
92606, U.S.A., represented by Mr. Meier-Schulz acting under a power of attorney
a certified copy of which is set out on SCHEDULE (i) as granted by ObjectShare's
Chief Executive Officer, Mr. Eugene Goda.
hereinafter referred to as "OBJECTSHARE" or the "SELLER"
OF THE OTHER PART,
Valtech S.A. and ObjectShare shall hereinafter be referred to jointly as the
"PARTIES" and individually a "PARTY".
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WHEREAS
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A. Valtech S.A. is a listed company on the Nouveau Marche and carries out
a business of project management in the computer field and, in
particular, provides training and consulting services.
B. ObjectShare has two wholly-owned European subsidiaries:
- ObjectShare GmbH, a German corporation (hereinafter called the
"Company"), having its registered corporate seat at Munich
with office at Lochhamer Strasse 11, D-82152 Martinsried,
registered with the Commercial Register of the Local Court
Munich under HRB 101275, and which has a registered nominal
share capital of DM 100,000.00 consisting of one share in the
same amount. The Company carries out its business in the
computer field and in particular consulting and training
services in Smalltalk software. The Company has a wholly-owned
subsidiary in Switzerland, ObjectShare AG (hereinafter called
the "Subsidiary"), a Swiss corporation having its registered
office at c/o Froriep Renggli, Bellerive str. 201, CH-8034
Zurich.
- ObjectShare (U.K.) Limited, an English corporation
(hereinafter called the "English Company"), having its
registered office at Waverly House, Farnham Business Park,
Weydon Lane, Farnham, SURREY GU9 8QT, and which carries out
its business in the computer field and in particular
consulting and training services in Smalltalk software.
C. ObjectShare wishes to sell (i) the Share to Valtech S.A. and Valtech
S.A. wishes to purchase such Share upon the terms and conditions set
forth herein and (ii) the shares of the English Company to Valtech
(U.K.) Limited (hereinafter called "Valtech U.K."), a wholly-owned
subsidiary of Valtech S.A. and Valtech U.K. wishes to purchase such
shares. These two transactions are interdependent and shall be
performed simultaneously.
D. It is agreed between the Parties that the contemplated sale of the
Share is subject to the simultaneous transfer by ObjectShare of the
whole of its shares in the English Company to Valtech U.K. for a price
of USD 560,000 (the "English Price").
E. The Price referred to in Article 2.1 below and the English Price have
been reduced by an aggregate amount of USD 150,000 representing a bonus
of a total amount of USD 150,000 (the "Bonus") to be shared between the
employees of respectively the Company, the English Company and the
Subsidiary that ObjectShare has undertaken to pay and that will be paid
after Closing by Valtech U.K. and Valtech S.A.
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DEFINITIONS
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For the purposes of this Agreement, the following words and phrases shall have
the following meanings, respectively:
"AGREEMENT" shall mean the present master agreement.
"AUDITOR" shall mean Ernst & Young.
"BALANCE SHEET DATE" shall mean March 31, 1999.
"BONUS" shall mean a bonus of a total amount of USD 150,000 to be shared between
the employees of respectively the Company, the English Company and the
Subsidiary that ObjectShare has undertaken to pay and that will be paid after
Closing by Valtech U.K. and Valtech S.A.
"CLOSING DATE" shall mean the date of the fulfillment of the last of the
conditions precedent referred to in Article 3 below and in any case, no later
than November 24, 1999.
"COMPANY" shall mean ObjectShare GmbH.
"DM" shall mean Deutsche Marks.
"ENCUMBRANCE" shall mean any encumbrance or security interest whatsoever
including (without limitation) any charge, mortgage, floating charge, pledge,
assignment in security, lien, right of Redemption, option, right to acquire,
conversion right, third party right, interest and claim, right of set off, right
of counterclaim, title retention, conditional sale agreement, trust arrangement
and any other preferential right, agreement or arrangement having similar
effect.
"ENGLISH COMPANY" shall mean ObjectShare (U.K.) Limited.
"ENGLISH CONTRACT" shall mean the agreement between ObjectShare and Valtech U.K.
for the acquisition by the latter of the whole of the shares of the English
Company.
"ENGLISH PRICE" shall mean the price agreed by and between ObjectShare and
Valtech U.K. for the purchase and sale of the whole of its shares in the English
Company to Valtech U.K. for a price of USD 560,000 (the "English Price").
"FRF" shall mean French Francs.
"FINANCIAL STATEMENTS" shall mean the balance sheet, profit and loss account,
together with annexed documents of the Company and the Subsidiary as
consolidated on March 31, 1999, and annexed as SCHEDULE 6.1.4.1.
"INTERIM FINANCIAL STATEMENTS" shall mean the balance sheets and profit and loss
statements of the Company and the Subsidiary on October 31, 1999, not audited
nor certified by the Auditors of the Company, and annexed as Schedule 6.1.4.1.
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"MANAGING DIRECTOR" OR "MANAGING DIRECTORS" shall mean the Geschaftsfuhrer of
the Company.
"OBJECTSHARE" shall mean ObjectShare, Inc., a Delaware corporation.
"PRICE" shall mean the price agreed by and between ObjectShare and Valtech S.A.
for the purchase and sale of the Share which shall be USD 1,040,000.
"PURCHASER" shall mean Valtech S.A..
"RIGHTS" shall mean patents, trademarks, trade names, copyrights, logos,
designs, software and other intellectual property rights used by the Company and
the Subsidiary, a list of which is attached on SCHEDULE 6.1.10.1.
"SHARE" shall mean the sole share in the nominal amount of DM 100,000.00 in the
Company.
"SIGNATURE DATE" shall mean the date upon which the Parties hereto enter into
this Agreement.
"SUBSIDIARY" shall mean the Company's wholly-owned Swiss subsidiary, i.e.
ObjectShare A.G..
"TERRITORY" shall mean United Kingdom of Great Britain, Germany and Switzerland.
"USD" shall mean United States Dollars.
"VALTECH U.K." shall mean Valtech (U.K.) Limited.
"YEAR 2000 COMPLIANT" shall mean that neither performance nor functionality is
affected by dates, prior to, during and after the year 2000, for the purposes of
Article 6.1.19.
"POUND STERLING" shall mean Pound Sterling.
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. SALE AND PURCHASE
1.1 ObjectShare shall sell and transfer and Valtech S.A. or a nominee shall
purchase and accept transfer of the Share in accordance with the terms
and conditions of this Agreement together with all rights now or
hereafter attaching thereto.
1.2. Valtech S.A. will have title to the Share and all rights and dividends
related thereto and will be subrogated in all rights and obligations
related to the Share as from the Closing Date.
1.3. The Parties are aware that due to the obligation under subArticle 1.1
the whole Agreement is void and unenforceable under German Law until
the transfer of the Share
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has been notarized. The parties therefore will give their best efforts
to conclude the respective share transfer Agreement as soon as possible
and in any event no later than the Closing Date.
2. PRICE
2.1 The sale of the Share is agreed to and accepted for an aggregate
purchase price of USD 1,040,000 (hereafter the " Price").
2.2 The Price shall be paid at the Closing Date by Valtech S.A. by bank
wire transfer to an account specified by ObjectShare which shall
provide good and valid receipt therefore to Valtech S.A.
3. CONDITIONS PRECEDENT
3.1 SALE OF THE SHARE
The obligations of the Parties hereunder are subject to the fulfillment
of the following conditions precedent:
3.1.1 Transfer by ObjectShare of all of its rights, title and
interest in and to the Share to Valtech S.A. for a price of
USD 1,040,000 on the Closing Date at the latest;
3.1.2 N/A
3.1.3 The Representations and Warranties contained in Article 6
hereof are true in all material respect as of the Closing
Date;
3.1.4 N/A
3.1.5 Absence of action or proceeding before any court or
governmental body pending or threatening wherein a judgement,
decree or order which would prevent the acquisition of the
Share or cause such transaction to be unlawful or rescinded;
3.1.6 The obtaining of all necessary consents by governmental or
regulatory agencies that are required for the acquisition of
the Share;
3.1.7 Delivery of an executed agreement Re: Cancellation of
Intercompany Debt (the "Intercompany Debt Agreement") to be
effective on the Closing Date which provides that ObjectShare
shall unconditionally and irrevocably agree that upon the
consummation of this transaction the Company be released and
discharged from each and every liability, obligation and
undertaking of any nature whatsoever (whether actual or
contingent) which the Company owes to ObjectShare on the
Closing Date;
3.1.8 Receipt by ObjectShare of a fairness opinion by Duff & Phelps,
LLC.
3.2 ObjectShare acknowledges that the acquisitions by Valtech S.A. and
Valtech U.K. respectively of (i) the Share and (ii) the shares of the
English Company are integral parts of the same operation which
realization cannot occur without the completion of both.
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3.3 The above conditions are for the benefit solely of Valtech S.A. who may
waive all or any of them in whole or in part.
3.4 The Parties shall use all reasonable endeavors to ensure that the above
conditions are fulfilled as soon as reasonably practicable.
4. CLOSING
4.1 Closing shall take place at the offices of S.G. Archibald, 136 avenue
Charles de Gaulle, 92207 Neuilly-sur-Seine Cedex, France simultaneously
in, London and Munich on the Closing Date, provided that on such date
the conditions precedent mentioned in Article 3 above have been
fulfilled.
4.2 On the Signature Date, ObjectShare shall procure that a board meeting
of the Company is held at which the directors:
4.2.1 change the Company's and the Subsidiary's registered office as
Valtech S.A. directs;
4.2.2 revoke all existing mandates of the operation of the bank
accounts of the Company and of the Subsidiary and issue new
mandates giving authority to those persons nominated by
Valtech S.A.;
4.2.3 change the Company's and the Subsidiary's accounting reference
date as Valtech S.A. directs;
4.2.4 appoint the persons nominated by Valtech S.A. as directors of
the Company and of the Subsidiary and the secretary of the
Company and of the Subsidiary with effect from the end of the
meeting;
4.2.5 accept the resignation of the Auditors of the Company and of
the Subsidiary and appoint new auditors as Valtech S.A.
directs.
4.2 On the Signature Date, ObjectShare shall deliver to Valtech S.A.:
4.2.1 a duly notarized share transfer agreement between ObjectShare
and Valtech S.A. in respect of the Share in favor of Valtech
S.A.;
4.2.2 all minutes of shareholders' meetings in the possession of
the Company and the Subsidiary together with all other
documents relating thereto;
4.2.3 the unconditional resignation of the directors and the
dismissal of the managing director except Mr. Meier-Schulz and
Mr. Weber of the Subsidiary and of the Company;
4.2.4 the resignation in the agreed form of the Auditors of the
Company;
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4.2.5 a certificate signed by ObjectShare confirming, in accordance
with Article 3.1.3 hereof, that the Representations and
Warranties contained in Article 6 hereof remain true and
accurate in all material respects as of the Closing Date; and
4.2.6 such other documents or instruments Valtech S.A. may
reasonably request for the valid completion of the operations
provided for in this Agreement.
4.2.7 Receipt by ObjectShare of a fairness opinion from Duff &
Phelps, LLC;
4.2.8 authorization from Silicon Valley Bank relating to the sale of
the Shares and release of the liens;
4.2.9 the executed English Contract;
4.2.10 the executed Intercompany Debt Agreement referred to in
Article 3.1.7 above.
4.4 At the Closing Date, Valtech S.A. shall deliver to ObjectShare
certified copy of the minutes of the board of directors of Valtech S.A.
approving the purchase of the Shares.
4.5. At the Closing Date, Valtech S.A. shall pay to ObjectShare by bank wire
transfer to Silicon Valley Bank, 38 Technology Drive, Suite #150,
Irvine, CA 92618, Account #0330814670, ABA #121140399, the Price and
ObjectShare shall give to Valtech S.A. a receipt therefore.
5. OBJECTSHARE'S OBLIGATIONS PENDING CLOSING
5.1 As from the Signature Date and up to and including the Closing Date,
ObjectShare shall ensure Valtech S.A. that:
5.1.1 the businesses of the Company and of the Subsidiary shall be
carried on in the ordinary course and in a prudent and
appropriate manner and that any material adverse change in any
of such businesses shall be forthwith notified to Valtech S.A.
in writing to the extent of the knowledge of the Company or of
the Subsidiary;
5.1.2 the Company and the Subsidiary shall comply with all relevant
laws and regulations and, in particular, but without prejudice
to the generality of the foregoing, with all applicable German
employment law requirements in relation to the subject matter
of this Agreement;
5.1.3 save with the prior written consent of Valtech S.A. the
Company and the Subsidiary shall not modify their articles of
association, undertake any merger, spin-off or other form of
reorganization or propose, declare or pay any dividend or
grant any mortgage, pledge or security, or take any other
measure which may encumber or otherwise affect the free
disposition of their respective assets;
5.1.4 save with the prior written consent of Valtech S.A. there
shall be no increase or undertakings to increase the
compensation payable or other benefits due to any employees of
the Company (such as premiums, profit sharing, pension or
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retirement rights or other similar benefits) nor shall the
Company hire or dismiss any corporate officers or executive
employees;
5.1.5 N/A
5.1.6 save with the prior agreement of Valtech S.A. the Company and
the Subsidiary shall not enter into any contracts which are
subject to unusual or unduly onerous terms, or which are
outside the normal course of business of the Company or of the
Subsidiary;
5.1.7 the Company and the Subsidiary shall not undertake any capital
or non-routine expenditure save where such expenditure is
essential to preserve the value of an asset of the Company or
of the Subsidiary;
5.1.8 the Company and the Subsidiary shall neither grant nor receive
any loan from a third party for an aggregate sum in excess of
DM 30,000.
6. REPRESENTATIONS AND WARRANTIES
6.1. ObjectShare makes the representations and gives the warranties in the
sense of an independent guarantee agreement pursuant to Section 305 BGB
(German Civil Code) (herein called the "Representations and
Warranties") set forth below:
6.1.1.A CORPORATE EXISTENCE AND CAPITALIZATION OF THE COMPANY
6.1.1.A.1 the Company is a German corporation duly organized,
validly existing under the laws of Germany, whose
corporate seat is at Munich, registered with the
Commercial Register of the Local Court Munich at HRB
101275, whose nominal share capital is 100,000.00;
6.1.1.A.2 a certified true and up-to-date copy of the articles
of association of the Company is attached as
SCHEDULE 6.1.1.A.2 hereto; the minutes and other
corporate records of the Company are accurate and
up-to-date; the Company 's filings with the
commercial register are complete and up-to-date in
all respects; the extract from the Commercial
Register of the Local Court Munich dated November
17, 1999 regarding the Company attached hereto as
SCHEDULE 6.1.1.A.2 is true and accurate;
6.1.1.A.3 the Company is not in a state of insolvency or in
suspension of payments and is not and has never been
subject to a judicial reorganization or judicial
liquidation proceedings or any other conciliation or
collective bankruptcy proceedings;
6.1.1.A.4 except for possible minor infringements, the Company
(i) has the corporate power and authority and holds
all governmental and other authorizations and
permits to own all of its properties and other
assets and to carry on its business as it is
currently being conducted, and (ii) is in compliance
with all laws and regulations to which it is
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subject. To its best knowledge, the Company is not
in default with respect to any judgement or order of
any court, arbitral tribunal or government
department or agency;
6.1.1.A.5 the Company is, and has not over the last five years
been, directly or indirectly a member of any
partnership, joint venture, economic interest group
or any other organization or structure having
unlimited liability;
6.1.1.A.6 other than the Subsidiary, the Company has not since
1994 (i) held any shares in any corporation or (ii)
exercised any mandate as board member or manager of
any corporation or (iii) acted as de facto manager
of any corporation.
6.1.1.B CORPORATE EXISTENCE AND CAPITALIZATION OF THE SUBSIDIARY
6.1.1.B.1 the Subsidiary is a Swiss corporation duly
organized, validly existing under the laws of
Switzerland, whose registered office is at c/o
Froriep Renggli, Bellerive str. 201, CH-8034 Zurich.
The Subsidiary has authorized share capital of CHF
100,000 which is divided into 100 registered shares
with a nominal value of CHF 1,000;
6.1.1.B.2 a certified true and up-to-date copy of the articles
of association and by-laws of the Subsidiary is
attached as SCHEDULE 6.1.1.B.2 hereto; the minutes
and other corporate records of the Subsidiary are
accurate and up-to-date; the Subsidiary's filings
with the Handelsregister des Kantonss Zurich are
complete and up-to-date in all respects; the extract
from the Handelsregister des Kantonss Zurich dated
November 4, 1999 regarding the Subsidiary attached
hereto as SCHEDULE 6.1.1.B.2 is true and accurate;
6.1.1.B.3 the Subsidiary is not in a state of insolvency or in
suspension of payments and is not and has never been
subject to a judicial reorganization or judicial
liquidation proceedings or any other conciliation or
collective bankruptcy proceedings;
6.1.1.B.4 except for possible minor infringements and to its
best knowledge, the Subsidiary (i) has the corporate
power and authority and holds all governmental and
other authorizations and permits to own all of its
properties and other assets and to carry on its
business as it is currently being conducted, and
(ii) is in compliance with all laws and regulations
to which it is subject. The Subsidiary is not in
default with respect to any judgement or order of
any court, arbitral tribunal or government
department or agency;
6.1.1.B.5 the Subsidiary is, and has not over the last five
years been, directly or indirectly a member of any
partnership, joint venture, economic interest group
or any other organization or structure having
unlimited liability;
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6.1.1.B.6 the Subsidiary has not since incorporation (i) held
any shares in any corporation or (ii) exercised any
mandate as board member or manager of any
corporation or (iii) acted as de facto manager of
any corporation.
6.1.2 THE SHARE
6.1.2.1 the Share represents the whole of the share capital
of the Company, is fully paid, and is freely
transferable;
6.1.2.2 there exists no agreement or undertaking pursuant to
which any person is or could become entitled to
request the issue of new shares by the Company. The
Company has not issued any securities which could
give rise to a capital increase or the issue of
securities granting the right to any amount which the
Company may distribute or voting rights or which
could result in any limitation of the rights attached
to the Share. The provisions of this Article 6.1.2.2
apply to the Subsidiary;
6.1.2.3 ObjectShare has full and valid title to the Share set
out against its name on SCHEDULE 6.1.2.3 or as
otherwise specified hereto free from any lien charge
or Encumbrance or any other third party rights and at
the Closing Date such title shall be validly
transferred to Valtech S.A. or to such person or
persons as Valtech S.A. may specify. All the
authorizations which must be obtained prior to the
transfer of the Share, in application of the
Company's Articles of Association and the law, have
been or will, at the Closing Date, have been
obtained.
6.1.3 EFFECTS OF THE TRANSFER OF THE SHARE
6.1.3.1 the transfer of the Share to or in accordance with
the instructions of Valtech S.A. will not result in :
(i) save for exceptions provided in SCHEDULE
6.1.3 (I), any breach of any agreement or
undertaking by the Company or the
Subsidiary;
(ii) Except as provided in SCHEDULE 6.1.3 (II),
the legal right for any person having
dealings with the Company or the Subsidiary
(a) to terminate any agreement or contract
or to modify the effects thereof, or (b) to
claim the reimbursement of any subsidy or
grant or loan or advance;
(iii) the modification, cancellation or revocation
of any permit, authorization or license of
any kind whatsoever, necessary or desirable
for the operations of the Company's or of
the Subsidiary's activities or the
modification, cancellation or revocation of
any preferential tax regime or subsidy or
other assistance granted by public or
quasi-public authorities;
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(iv) the possibility for a third party to invoke
any guarantee, surety, letter of comfort or
any other document having an equivalent
effect which may have been granted by or in
favor of the Company or the Subsidiary.
6.1.4 FINANCIAL STATEMENTS OF THE COMPANY AND THE SUBSIDIARY
6.1.4.1 copies of the Financial Statements and of the Interim
Financial Statements dated October 31, 1999 are
annexed as SCHEDULE 6.1.4.1;
6.1.4.2 the Financial Statements were prepared in the same
form as required by law and in accordance with such
accounting standards applicable in Germany for the
Company and in Switzerland for the Subsidiary and
show a true and fair view of, and accurately reflect
the assets and liabilities of the Company at, and its
profit and losses for the financial period ended on,
the Balance Sheet Date;
6.1.4.3 the Financial Statements were prepared and show a
true and fair view of, and accurately reflect the
position of the Company and the Subsidiary at, and
the results of their respective operations for the
financial period ended on, the Balance Sheet Date;
6.1.4.4 The Interim Financial Statements have been prepared
in all material respects on a basis consistent with
the Financial Statements and show a true and fair
view of, and accurately reflect the assets and
liabilities of the Company and the Subsidiary, and
their profits and losses for the financial period
ended October 31, 1999, except that the Interim
Financial Statements (i) may not have the notes
thereto, and (ii) may be subject to nominal
adjustments which will not be materially adverse in
the aggregate;
6.1.4.5 at the Balance Sheet Date the Company and the
Subsidiary had no liabilities or obligations (due,
payable, certain, contingent, conditional or
otherwise and including, without limitation, any
obligation resulting from a factoring or leasing
agreement or from current, pending or threatened
litigation) other than those set out, or for which
adequate provision has been made, in the Interim
Financial Statements, to the extent such liabilities
or obligations should be included in the Financial
Statements;
6.1.4.6 the depreciation appearing in the Financial
Statements has been determined in accordance with
applicable laws and such accounting standards as set
out in Article 6.1.4.2;
6.1.4.7 all the accounts, books and records of the Company
and the Subsidiary have been fully, properly and
accurately kept and completed and record all material
transactions to which the Company and the Subsidiary
have been a party. They give a true, complete and
fair view of the financial, contractual and business
position of the Company and of the Subsidiary, fixed
and current assets and liabilities (actual and
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contingent), debtors, creditors and inventories and
work in progress of the Company and of the
Subsidiary.
6.1.4.8 The Financial Statements include (i) all debts,
prepayments and other current assets at the lower of
cost and net realizable value after making full and
proper provision for all bad debts and doubtful debts
and all other amounts considered to be irrecoverable;
and (ii) all liabilities and commitments of the
Company (whether actual or contingent or deferred and
whether or not disputed) for which the Company is or
may become liable to and including the Balance Sheet
Date and the Financial Statements make full and
proper provision for the same as required to be
included in accordance with all applicable laws and
accounting standards, principles, practices, policies
and conventions generally accepted in Germany. The
accounting reference date of the Company has not been
changed from the same month and day as on the Balance
Sheet Date.
6.1.5 RECEIVABLES
6.1.5.1 the trade and other receivables of the Company and
the Subsidiary as shown in the Financial Statements
and any receivables which have arisen since the
Balance Sheet Date are valid and have been recovered,
or are recoverable in full, within the relevant legal
or contractual time-limits (subject, in the case of
receivables shown in the Financial Statements or the
Interim Financial Statements, to any provision for
bad and/or doubtful debts appearing therein), except
as provided on SCHEDULE 6.1.5. Any receivables which
have arisen since the date of the Interim Financial
Statements will then be recoverable in a manner which
is consistent with the Company's and the Subsidiary's
past practices;
6.1.5.2 none of the debts which are shown in the Financial
Statements, or which have arisen since the Balance
Sheet Date, have been outstanding for more than 60
days from the Company's due date for payment or have
been released such that the debtor has paid, or will
pay, less than the full amount of his debt, and all
debts have realized, or will in the normal course of
collection, realize their full value as set out in
the Financial Statements or in the books of the
Company (subject to any provision made in the
Financial Statements for bad and doubtful debts)
within 120 days of their due date for payment.
6.1.6 STOCK
6.1.6.1 There is no stock in trade.
6.1.7 TAXES
6.1.7.1 the provisions for taxes and the provisions for
social and parafiscal charges (including, but not
limited to, social security contributions, and
contributions to complementary welfare and pension
schemes) which
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appear in the Financial Statements are sufficient for
the payment of all taxes, social and parafiscal
charges due or accrued at the Balance Sheet Date
(regardless of the date of the event which is the
origin of the taxes, social or parafiscal charges and
regardless of the date on which payment thereof is
due). The Company and the Subsidiary have filed all
national, departmental and local tax and social
declarations, including advance filings
(Voranmeldungen) at the required time and have kept
copies of the originals filed. All State,
departmental and local taxes, and duties (including,
but not limited to, corporation tax, value added tax,
trade tax, registration tax, land tax and customs
duties) and all social and parafiscal charges owed by
the Company and/or the Subsidiary or payable at the
date hereof have been paid within the legal time
limits; all related charges for late payment and
penalties, if any, have been paid;
6.1.7.2 the Company and the Subsidiary have withheld all tax
and/or social or parafiscal charges to be withheld by
them in respect of wages, license fees, interest or
any other sum payable by them.
6.1.8 OWNERSHIP OF ASSETS
6.1.8.1 the Company and the Subsidiary have full and
unencumbered title to all their assets. All tangible
assets (both real estate and otherwise) are properly
constructed and in good condition, subject only to
normal wear and tear, and have been consistently and
properly maintained. Except as disclosed on SCHEDULE
6.1.8 none of such tangible assets is out of order or
has any apparent defect which prevents or could
prevent its use in the future in accordance with the
purpose for which it was intended;
6.1.8.2 the carrying on of business and the use by the
Company and the Subsidiary of their respective assets
is in accordance with all material applicable legal
or regulatory requirements, particularly with regard
to health and safety.
6.1.9 LEASES
6.1.9.1 set out in SCHEDULE 6.1.9 are details of all lease
agreements to which the Company and the Subsidiary
are a party whether as lessor or lessee;
6.1.9.2 each of the leases of real or personal property to
which the Company or the Subsidiary is a party,
either as lessor or lessee, is valid and enforceable
in accordance with its terms. Save as mentioned in
SCHEDULE 6.1.9 none of such leases contains any
unusual provisions;
6.1.9.3 no notice to terminate has been given to the Company
or the Subsidiary in respect of any of the leases
referred to in SCHEDULE 6.1.9 and neither the Company
nor the Subsidiary has been responsible for any act
or omission which could justify the lessor in
terminating any such lease;
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6.1.9.4 ObjectShare declares that if required, it has
notified the contracting parties to the leases listed
in SCHEDULE 6.1.9, of the change of control deriving
from the sale of the Share and that these contracting
parties gave their consent to the change of control
if required in the Company and the Subsidiary in
favor of Valtech S.A.
6.1.10 INTELLECTUAL PROPERTY
6.1.10.1 SCHEDULE 6.1.10.1 contains a list of Rights used by
the Company and the Subsidiary in their respective
businesses. The Rights used by the Company and the
Subsidiary in their respective businesses are owned
by the Company and/or the Subsidiary free from any
charge or Encumbrance save as specified in the said
SCHEDULE 6.1.10 or are used pursuant to valid
licenses from third parties of which details as all
of which are given in the said SCHEDULE 6.1.10;
6.1.10.2 To the knowledge of Company or Subsidiary, neither
has infringed, nor does it either currently infringe,
any Right belonging to any third party;
6.1.10.3 none of the directors or employees of the Company or
of the Subsidiary owns, directly or indirectly, in
whole or in part, any patent, trademark or other
intellectual or industrial property right to which
the Company or the Subsidiary has license or which
are necessary or desirable for their commercial
activities as presently carried on;
6.1.10.4 ObjectShare shall, for transitional purposes, permit
the Company to use its current corporate name,
without paying any royalty to a third party, for a
period of not greater than 12 months following the
Closing Date. Subsequent to the 12 month period,
Purchaser and the Company shall not be permitted to
use any name or names identical or similar to, or
including the words "Object" or "Share" or any
distinctive mark, style or logo used by the Company
in connection with any activity whatsoever.
6.1.11 CONTRACTS
6.1.11.1 set forth in SCHEDULE 6.1.11.1 hereto is a list of
all the contracts, commitments, agreements and
guarantees or other undertakings or arrangements to
which the Company and the Subsidiary are a party
which (i) account for more than 10 per cent of the
consolidated turnover of the Company and the
Subsidiary for the financial period ended on the
Balance Sheet Date; or (ii) are for a period of more
than 12 months; or (iii) provide for capital
expenditure or the disposal of capital assets for an
aggregate amount in excess of DM 30,000; or (iv)
contain any exclusivity commitment by, or for the
benefit of, the Company or the Subsidiary; or (v)
contain any commitment by any party not to compete
with any other; or (vi) are otherwise material to
assets, liabilities, profits, losses and state of
affairs of the Company or of the Subsidiary and the
management, development and marketing of the Company
or of the Subsidiary (hereinafter called "Material
Contracts" in each case whether written or verbal);
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<PAGE> 15
6.1.11.2 neither the Company, nor the Subsidiary (i) has
entered into any Material Contract which gives rise
to duties or liabilities which are unusual in
relation to the normal rules of proper management of
a commercial enterprise, and (ii) is not in material
breach of any of its obligations under any Material
Contract;
6.1.11.3 except as disclosed on SCHEDULE 6.1.11.3, all
Material Contracts, agreements or arrangements,
whether written or verbal, to which the Company or
the Subsidiary is a party represent valid enforceable
obligations. None has been entered into in violation
of applicable laws or regulations and the Company and
the Subsidiary and the other contracting parties have
respected their obligations thereunder. No such
contract, agreement or arrangement was entered into
outside the normal course of business or is illegal
or liable to be declared null and void;
6.1.11.4 except as set forth in SCHEDULE 6.1.11.4, the
transfer of the Share on the Closing Date will not
result in the accelerated maturity of any loan or
guarantee agreement or any other payment to be made
to any third party under any other contract or
arrangement to which the Company or the Subsidiary is
a party;
6.1.11.5 except as set forth in SCHEDULE 6.1.11.5, the
execution and performance of this Agreement (i) do
not and will not result in the termination of any
Material Contract or any other instrument or
arrangement to which the Company or the Subsidiary is
a party or by which any of them may be bound or
affected, (ii) do not and will not conflict with or
result in any violation or breach by the Company or
the Subsidiary under any Material Contract or other
instrument or arrangement, and (iii) will not grant
to any other contracting party the right to terminate
or modify any such Material Contract or other
instrument or arrangement;
6.1.11.6 to the knowledge of Eugene Goda or Michael
Meier-Schulz, neither ObjectShare nor the Company has
received any written notice whatsoever pursuant to
which any of the 20 largest customers or suppliers of
the Company listed on SCHEDULE 6.1.11.6 has disclosed
its intention to cease or substantially reduce its
commercial relationship with the Company for any
reason whatsoever including, without limitation, as a
result of the transfer of the Shares to Valtech S.A.;
6.1.11.7 neither the Company nor the Subsidiary is bound by
any contract, commitment or other arrangement
directly or indirectly with ObjectShare's corporate
officers or any of their spouses, parents or children
or any legal entity controlled by any of them.
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6.1.12 PERSONNEL
6.1.12.1 set out in SCHEDULE 6.1.12.1 are:
(i) a list of all the employees and managing
directors of the Company and of the
Subsidiary including their age, seniority
and present annual remuneration (including
any right to bonus, benefits in kind, profit
sharing and any departure or retirement
indemnities) and, for persons having an
employment contract for a definite period,
the date of expiration of the contract;
(ii) a list of all direct and indirect pension
benefits offered by the Company and the
Subsidiary to any of their present or former
employees or corporate officers all of which
benefits are, save as mentioned in SCHEDULE
6.1.12.1 (II), fully funded;
(iii) a list of temporary personnel, of outside
collaborators, of sales representatives and
any other persons who do not have the status
of salaried employees but who regularly
collaborate in the operations of the Company
and of the Subsidiary; and
(iv) a list of the collective bargaining and
other collective agreements applicable to
the personnel of the Company and of the
Subsidiary (including any agreement relating
to bonuses, pensions, deferred remuneration,
profit sharing or share option schemes);
(v) a list of all stock option rights of
employees and managing directors of the
Company;
6.1.12.2 the Company and the Subsidiary have satisfied, and
continue to satisfy all their material obligations
pursuant to applicable labor and social security law
in respect of its employees and its managing
directors;
6.1.12.3 no employee or managing director has any rights
vis-a-vis the Company out of stock-options granted by
the Company and/or ObjectShare, and the Company
and/or ObjectShare have duly fulfilled any claims
connected with or arising out of such rights;
6.1.12.4 none of the employees or corporate officers of the
Company or of the Subsidiary is entitled to any
benefits that are extraordinary in the light of the
prevailing industry standards in the place of
employment of such employee or officer;
6.1.12.5 except as set forth in SCHEDULE 6.1.12.4, none of the
employees of the Company or of the Subsidiary has
made it known that he/she intends to terminate
his/her employment agreement;
6.1.12.6 there have been no strikes, lock-outs, sit-ins or
other industrial action at any of the premises of the
Company or of the Subsidiary during the ten
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<PAGE> 17
months prior to the date hereof and ObjectShare has
no knowledge of any such industrial action being
threatened or pending.
6.1.12.7 Except as provided at SCHEDULE 6.1.12.6, none of the
directors, officers or senior employees of the
Company or of the Subsidiary has ceased to be
employed by the Company or by the Subsidiary (other
than through death or retirement at normal retirement
age) during the 12 month period ending with the date
of this Deed.
Except as provided at SCHEDULE 6.1.12.7 or as
provided herein, none of the directors, officers or
senior employees of the Company or of the Subsidiary
has given or received notice terminating his office
and/or employment and no director, officer or
employee will be entitled to treat his office and/or
employment as terminated as a result of the
provisions of this Agreement nor are there any facts
known to ObjectShare which clearly indicate that any
directors, officers or senior employees intend or are
likely to leave their office and/or employment other
than through normal retirement within the 12 months
following the Closing Date.
6.1.13 INSURANCE
6.1.13.1 set out in SCHEDULE 6.1.13 is a complete list of all
material policies of insurance relating to the
business activities of the Company and all the assets
owned, leased or used by it are, to the knowledge of
ObjectShare, adequately and validly insured with
reputable companies. Brief details of the policies
are set out in SCHEDULE 6.1.13;
6.1.13.2 the Company and the Subsidiary have fulfilled all of
their obligations pursuant to the insurance policies,
in particular with respect to the declarations of
risks and claims and the payment of premiums relating
to such policies. As at the date hereof neither the
Company nor the Subsidiary has received or given any
notice of termination or non-renewal or received any
notice from any of the relevant insurance companies
of their intention substantially to increase the
premiums due, or to raise the franchises or to reduce
the cover provided.
6.1.14 PRODUCT LIABILITY
ObjectShare declares that neither the Company nor the
Subsidiary has incurred any liability regarding product
liability issues.
6.1.15 ENVIRONMENT
ObjectShare declares that the neither the Company nor the
Subsidiary has incurred any liability regarding environmental
issues.
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6.1.16 LITIGATION
6.1.16.1 save for the cases brief details of which are
disclosed in SCHEDULE 6.1.16.1, there is no current,
or pending or, to our knowledge threatened,
litigation, arbitration, claim, judgement, award or
similar order, administrative proceeding,
administrative or tax investigation or any other
action or proceeding pending, submitting or
contemplated whether as plaintiff or defendant in
relation to the Company or the Subsidiary and
ObjectShare is unaware of any facts which might give
rise to any such action or proceeding.
6.1.17 ABSENCE OF CHANGES
6.1.17.1 since the date of the Interim Financial Statements
and pending the Closing Date there has not been and
will not be in relation to the Company and the
Subsidiary:
(i) any material adverse change in the financial
position, the assets, liabilities, business
or operations otherwise than in the normal
course of business (and the Company has
since the date of the Interim Financial
Statements carried on business in the
ordinary course and in the same manner as in
the past as a going concern);
(ii) any modification in the capital of the
Company or of the Subsidiary;
(iii) save with the prior written consent of
Valtech S.A., any declaration or payment of
any dividend or any other distribution of
profits or reserves;
(iv) any damage, destruction or other casualty
loss (whether or not covered by insurance)
materially affecting the business or
financial position of the Company or the
Subsidiary;
(v) any purchase or sale of securities by the
Company or the Subsidiary, no issue by them
of shares or other securities, rights or
options to purchase or subscribe shares in
the Company or the Subsidiary or which are
capable of granting the right to acquire or
subscribe securities which represent a share
in the capital of the Company or of the
Subsidiary;
(vi) any loan incurred, granted, promised or
secured by the Company or by the Subsidiary
in excess of DM 30,000;
(vii) the assumption of an obligation or liability
other than current obligations or
liabilities incurred in the normal course of
business;
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(viii) except as disclosed on SCHEDULE 6.1.17.1
(VIII), any termination, waiver, amendment
of, or default in relation to, any contract,
undertaking or arrangement (including in
relation to any of the employees);
(ix) except as provided on SCHEDULE 6.1.17.1
(IX), any increase or promised increase in
the remuneration of employees, agents, sales
representatives or corporate officers or in
any of their benefits;
(x) except as provided on SCHEDULE 6.1.17.1 (X),
any sale, lease or transfer of any tangible
or intangible assets other than items of
stock in the normal course of business, nor
any cancellation or waiver of any
receivables;
(xi) any guarantee, surety or letter of comfort
in respect of the obligations of third
parties;
(xii) any lien, security interest, pledge,
mortgage, easement, or other charge granted
over any tangible or intangible assets;
(xiii) any social disturbance, conflict, strike,
lock-out, sit-in or similar event.
6.1.18 LISTS
6.1.18.1 set out on SCHEDULE 6.1.18 are lists showing in
relation to the Company and the Subsidiary:
(i) the name and address of each person who has
received general or special powers of
attorney or who is authorized to bind the
Company;
(ii) all real estate, land, facilities or other
property owned, rented, leased or otherwise
occupied;
(iii) banks and bank accounts and credit lines
showing (a) the names of people with power
of signature, (b) the amount of each credit
line and the level of utilization and any
long, medium or short term credit or any
other financing agreement, and (c) the
amount of any borrowing guaranteed by the
Company or by the Subsidiary or any third
party;
(iv) all guarantees, sureties or endorsements
granted in favor of third parties;
(v) the name of each corporate officer and of
the gross annual remuneration (including all
benefits) of each of them;
(vi) all agency, license, distribution or
representation agreements;
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(vii) all grants, subsidies or other public
benefits which the Company or the Subsidiary
is under a contingent liability to repay;
(viii) existing material customers and suppliers.
6.1.19 YEAR 2000 COMPLIANCE UNDERTAKING
6.1.19.1 The information system of the Company, including,
among others, management tools, finance tools,
quality tools, logistics tools, maintenance tools,
data interchange tools, research and development
tools, software development tools, personnel
management tools, is Year 2000 Compliant, or will be
Year 2000 Compliant at the Closing Date .
6.1.19.2 to the knowledge of the Company, the Year 2000 date
change will not generate any logistical security
problem (including, among others, elevators, alarm
systems, automated access control systems), inside
the Company's sites
6.1.19.3 to the knowledge of the Company, the Company will not
suffer any disruption in its activities or damage to
any of its assets or incur any liability in
connection with such passage.
6.1.19.4 Since 1998, the Company has taken all required
measures to provide its clients with Year 2000
Compliant products and services.
6.1.19.5 In case of any likelihood of injury or damage due to
products or services commercialized by the Company,
the Company has taken all required measures in order
to prevent any injury or damage.
6.1.19.6 Since 1998, the Company has informed clients of
possible malfunction due to the Year 2000 date
change, for any product or service that has been
commercialized by the Company and has made available
respective updates.
6.1.20 GENERAL
6.1.20.1 all the information contained in this Agreement
including the recitals and the SCHEDULES hereto is
complete and accurate in all material respects;
6.1.20.2 there is no existing fact or event known to
ObjectShare which is likely to have an adverse effect
on the assets, business or activities of the Company
or of the Subsidiary or which could reasonably be
expected to adversely affect the willingness of
Valtech S.A. to purchase the Share upon the terms of
this Agreement which has not been disclosed to
Valtech S.A. by or on behalf of ObjectShare in
writing;
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6.1.20.3 for the purposes of Article 6.1.20.2 above
ObjectShare shall be deemed to have knowledge of a
fact or event if any of the directors or corporate
officers of the Company or of the Subsidiary had, or
would, having made reasonable inquiry, have had,
knowledge of it.
6.1.21 AUTHORITY RELATIVE TO THIS AGREEMENT
6.1.21.1 the execution and performance of this Agreement by
ObjectShare do not and will not conflict with or
result in any violation or breach of, or any default
under, any law or any obligation of ObjectShare or
any other agreement to which it is a party, nor is
there any litigation current or pending involving
ObjectShare which could prevent or hinder the
execution and performance of this Agreement;
6.1.21.2 ObjectShare has full corporate power, authority and
right to enter into this Agreement and to consummate
the transaction contemplated hereby. The board of
directors of ObjectShare have taken all necessary
corporate action duly to authorize the execution and
performance of this Agreement.
6.2 ObjectShare recognizes and accepts that Valtech S.A. has entered into
this Agreement in reliance on the Representations and Warranties. The
liability of ObjectShare in relation to the Representations and
Warranties shall be in no way limited should it be established that
Valtech S.A. was aware of the inaccuracy of one or more of the
Representations and Warranties either at the date hereof or at the
Closing Date.
6.6 AUTHORITY RELATIVE TO THIS AGREEMENT
The Purchaser has full corporate power, authority and right to enter
into this Agreement and to consumate the transaction contemplated
hereby. The board of directors of the Purchaser has taken all necessary
corporate action duly to authorize yhe execution and performance of
this Agreement.
7. INDEMNIFICATION
7.1 Without prejudice to any other rights Valtech S.A. may have,
ObjectShare undertakes to indemnify Valtech S.A. and/or the Company for
all losses, costs, damages, fees and expenses (hereafter, together with
claims made under Articles 7.2 and 7.3 below, "Damage") incurred or
suffered by Valtech S.A. and/or the Company which arise from:
7.1.1 any material failure of ObjectShare to fulfill its obligations
hereunder;
7.1.2 any breach of the Representations and Warranties;
7.1.3 any material adverse change in the stockholders equity of the
Company, the Subsidiary and the English Company on a
consolidated basis as at the date of the Interim Financial
Statements as compared with such stockholders equity at the
Closing Date.
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7.2 In case of the establishment of distributions, including hidden
distributions, resulting from the Seller being a shareholder of the
Company, the Seller hereby undertakes to indemnify and hold the
Purchaser harmless to the amount of the tax burden, including corporate
tax burden, on these distributions (Ausschuttungsbelastung) and
withholding tax, if levied.
7.3 In case there will in the future be external audits (Aubenprufungen) of
the Company or the Subsidiary regarding taxes, social and parafiscal
charges for periods prior and the period including the Closing Date,
the Seller hereby undertakes to indemnify and hold the Purchaser
harmless from any damages suffered therefrom. For the purposes hereof
the Purchaser's damage including any payment to be made to the tax
authorities service prior to the underlying tax assessment being
non-appealable.
7.4 Save for claims in respect of fiscal, parafiscal or social security
matters which may be made up to the expiry of the relevant legal
prescription period, and for claims in respect of Year 2000 compliance
(Article 6.1.19 ) which may be made up to three years following the
Closing Date, any claim for indemnification pursuant to Article 7.1
must be made not later than three years following the Closing Date by
notice in writing to ObjectShare in accordance with Article 13 hereof.
Such notice shall give brief details of the relevant facts and, so far
as practicable, an estimate of the Damage. Indemnification shall be due
if notice of the relevant facts is given within the relevant period
even if the quantification of the Damage does not take place until
after the expiration of such period.
7.5 In the event that any Damage results from a demand or claim made by a
third party Valtech S.A. shall notify ObjectShare and ObjectShare, or
its counsel, shall have access to all relevant books and other
documents of the Company and of the Subsidiary concerning such a demand
or claim, and these shall be made available at the registered offices
of the Company and/or of the Subsidiary or any other place mutually
agreed upon, subject to reasonable notice, and for a reasonable period.
ObjectShare shall have the right, at its own expense, to join in the
defense or the conclusion, by way of settlement or amicable agreement
of any such demand or claim. However, Valtech S.A. shall, following
consultation with ObjectShare, have an absolute discretion as to
whether and, if so, on what terms, to settle any such demand or claim.
7.6 All payments due under this Article 7 shall be made within one month
from the date on which notice of the Damage is given by Valtech S.A. to
ObjectShare or, if later, from the date on which the Damage is
quantified.
7.7 The total cumulative liability of ObjectShare for any and all Damage
suffered by Valtech S.A. and/or the Company together with any Damage
(as defined in the English Contract) shall be limited to $1,150,000.
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8. NON-COMPETITION
In consideration of the payment by Valtech S.A. of the Price, ObjectShare hereby
agrees that, for a period of one year from the Closing Date, it shall not,
without the prior written consent of Valtech S.A., directly or indirectly, in
any form whatsoever, through any person controlling, controlled by or under
common control with ObjectShare, alone or in association with any other person,
firm, corporation, partnership or other business organization, in the Territory,
except as expressly provided for herein:
8.1 engage in, or own or acquire any interest in (except as the owner for
investment of securities dealt on a recognized stock exchange which
does not exceed 5% in nominal value of the securities of that class) or
create any business which is engaged in the consulting and training
services related to Smalltalk software as conducted by the Company or
the Subsidiary or its/their successor in interest (herein the
"Competitive Business");
8.2 in any way, directly or indirectly, for the purpose of conducting,
engaging in any Competitive Business, (i) call upon, solicit, advise or
otherwise do, or attempt to do, business relating to the Competitive
Business with any former customers of the Company or (ii) take away or
interfere or attempt to interfere with any former customer, trade,
business or patronage of the Company relating to the Competitive
Business;
8.3 N/A
8.4 If any court or regulatory body with jurisdiction in the premises
determines all or any part of such non-competition undertaking to
exceed any authorized legal limits (whether as to duration, geographic
scope or otherwise), the present non-competition undertaking shall be
automatically reduced to its maximum authorized legal limit;
8.5 In any way hold itself out or permit itself to be held out as being
interested in, or in any way connected with, the Company;
8.6 ObjectShare undertakes not to use for any purpose or disclose to a
third party a list of clients or any other confidential information
relating to the activity, business, asset, clients, of the Company or
of the Subsidiary with respect to Small-talk software;
8.7 The non-competition undertaking defined in this Article 8 may be set
aside by obtaining Valtech S.A.'s prior written consent.
8.8 Object Share undertakes not to use, develop or exploit in any manner
whatsoever, directly or indirectly, any of the Company's proprietary
technology, software, or know-how in the Territory with respect to
Smalltalk software;
8.9 The non-competition undertaking defined in this Article 8 may be set
aside by obtaining Valtech U.K.'s prior written consent.
8.10 Object Share acknowledges that the duration, extent and application of
each of the restrictions are no greater than is necessary for the
protection of the goodwill and confidential information of the
respective businesses of the Company and the Subsidiary and the value
of the Share.
8.11 ObjectShare undertakes with Valtech S.A. (for itself and as trustee for
the Company and the Subsidiary) that it will not for the period of 12
months from the Closing Date solicit or endeavor to entice away, offer
employment to, or offer any contract for services to any person who was
a director or employee of the Company or the Subsidiary at the date of
this Agreement with a view to the specific knowledge or skills of such
person being used by, or for the benefit of, any person carrying on
business in competition with the respective businesses carried on by
the Company or the Subsidiary.
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9. SPECIFIC REPRESENTATIONS
9.1 TERMINATION OF CERTAIN FINANCIAL OBLIGATIONS
9.1.1 ObjectShare unconditionally and irrevocably agrees with and
undertakes to the Purchaser (acting for itself and as trustee
for the Company and the English Company that as of the
Closing:
(i) the Company and the English Company shall be hereby
released and discharged from (or agrees to procure
the release and discharge of; and
(ii) ObjectShare hereby waives (or agrees to procure the
waiver of) all rights against the Company and the
English Company against from or in relation to;
each liability, obligation and undertaking of any nature whatsoever (whether
actual or contingent) which the Company and/or the English Company owe(s) or has
or have before or at the Closing Date to an ObjectShare Group Company and/or its
successors.
Without in any way affecting the foregoing, ObjectShare agrees to pay
the Purchaser (acting for itself and as trustee for the Company and the
English Company) on demand an amount equal to the amount of any Damage
suffered or incurred by the Company and/or the English Company with
effect from or after the Closing Date because of or in relation to a
liability, obligation or undertaking or any nature whatsoever (whether
actual or contingent_ which the Company or the English Company owes or
has before or at the Closing Date to an ObjectShare Group Company,
and/or its successors.
9.1.2 ObjectShare hereby agrees to indemnify the Purchaser (acting
for itself and as trustee for the Company) against claims
brought by Cincom Systems, Inc. or any other third party in
relation to, or as a consequence of, the agreement dated 27
August 1999 between ObjectShare Inc. and Cincom Systems,
including losses, costs, fees and expenses reasonably incurred
by ObjectShare S.A. and/or the Company and/or the Subsidiary
related thereto.
It is agreed between the Parties that for such claims:
(i) ObjectShare shall have an absolute discretion as to
whether and, if so, on what terms to settle any such
claim, in so far as it is in the interest of the
Company and the Subsidiary;
(ii) Valtech S.A. and/or the Company and/or the Subsidiary
shall be held harmless in this respect and
consequently the duration and cap provisions of
Article 7 shall not be applicable to this case.
9.1.3 This Agreement shall be binding upon and inure to the benefit
of and shall be enforceable by ObjectShare and Valtech S.A.
and their respective successors and assignee.
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<PAGE> 25
10. ASSIGNMENT
10.1 This Agreement is personal to the Parties and cannot be assigned by any
of them save that (i) Valtech S.A. may assign its rights hereunder to
an Associated Company for which purpose the term "Associated Company"
shall mean any company which, directly or indirectly, controls or is
controlled by or is under the same Control as Valtech S.A.. and the
term "Control" shall mean the ability to exercise or to procure the
exercise, directly or indirectly, of at least 50 percent of the voting
shares of a company; and (ii) Valtech S.A. (or such Associated Company)
may freely assign its rights pursuant to Article 7 hereof to any
person(s) or corporation(s) to whom the Share may be transferred
following the Closing Date. Notwithstanding the foregoing, ObjectShare
may, without the prior consent of Purchaser, assign its rights and
obligations hereunder to the surviving corporation in a merger or
consolidation to which it is a party or to any person that acquires all
or substantially all of its capital stock or assets.
10.2 ObjectShare may only transfer its obligations hereunder if, the party
to whom the obligations are proposed to be transferred is an entity or
entities which by contract or operation of law assumes or assume
ObjectShare's obligations under and in connection with this Agreement
as if originally party to all such documents in place of ObjectShare.
Valtech S.A. shall attorn to any assignee as envisaged under this
Article 10.
11. EXPENSES
11.1 Each of the Parties shall bear all the costs and expenses incurred by
it in connection with this Agreement and its execution including, but
not limited to, the fees and disbursements of any counsel, independent
accountant or any other person whose services may have been used by the
said Party in relation hereto. However, any fees or costs associated
with any routine accountancy performed on behalf of the Company but not
in connection with this Agreement and its execution shall remain with
the Company.
12. CONFIDENTIALITY
12.1 The Parties undertake to hold in confidence and not to disclose to
third parties (except to their professional advisors and, in the case
of Valtech S.A., to any of its Associated Companies without the prior
written consent of the other, the terms and conditions of the
transaction contemplated hereby.
12.2 All announcements by or on behalf of the Parties hereto relating to the
transaction contemplated hereby shall be in terms agreed by the
Parties.
Save that Valtech S.A. and ObjectShare shall be entitled to make such
announcement as it respectively thinks fit to comply with (i) the
regulations of the Paris Stock Exchange on which Valtech S.A. is listed
and (ii) the NASDAQ regulations in the case of ObjectShare. However the
Parties agree that in this case they shall consult with each other
prior to making any such release with respect to the contents of this
Deed or the transactions contemplated thereby.
25
<PAGE> 26
12.3 If for any reason the transaction contemplated hereby is not completed,
the obligations of the Parties pursuant to this Article 10 will remain
in force until November 19, 2000.
13. NOTICES
13.1 Any notice required to be given hereunder shall be validly given if
sent by registered letter (with return receipt requested) or by fax,
confirmed by such registered letter, or by hand delivery against
written acknowledgement of receipt to the following addresses or to
such other address as may have been communicated by either of the
Parties to the other in accordance herewith:
for notices to ObjectShare:
---------------------------
ObjectShare, Inc.
16811 Hale Avenue, Ste. A
Irvine, California 92606 US
To the attention of the Chief Executive Officer,
Fax: (949) 253-3724
Cc: Paul Hastings Janofsky & Walker LLP
695 Town Center Drive, 17th Floor
Costa Mesa, California 92626 USA
To the attention of William J. Simpson
Fax: (714) 979-1921
for notices to Valtech U.K.:
----------------------------
Valtech (U.K.) Limited
279 Tottenham Road
London W1P6AA
to the attention of the Directors/managing Director
Fax:
------------------
cc: Valtech S.A.
To the attention of Jean-Yves Hardy, Chief Executive Officer
Fax: 33 1 41 88 23 01
cc: Archibald Andersen,
Attn.: Mr. Mark Richardson and Ms. Celine Maironi-Persin
Fax: 33 1 55 61 14 14
Notices shall be effective as of the date of receipt.
14. PROPER LAW AND JURISDICTION
14.1 This Agreement shall be governed by and construed in accordance with
the laws of Germany.
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<PAGE> 27
14.2 Any dispute arising in relation to this Agreement, its interpretation
or execution (including, without limitation, its validity, performance
or interpretation) shall be irrevocably submitted to the exclusive
jurisdiction of the German courts.
15. WAIVERS
15.1 The failure by any Party hereto promptly to avail itself in whole or in
part of any right, power or privilege to which such Party is entitled
pursuant to the terms of this Agreement shall not constitute a waiver
of such right, power or privilege which may be exercised at any time.
To be valid, waiver by any Party hereto of any such right, power or
privilege must be in writing and notified to the other Party as
provided herein.
16. HEADINGS
16.1 The descriptive words or phrases at the head of the Articles are
inserted only as a convenience and for reference purposes and are not
intended to in any way define, limit or describe the scope or intent of
the Articles which they precede.
17. WHOLE AGREEMENT
17.1 This Agreement, together with the Exhibits and Schedules, constitutes
the entirety of the agreement between the Parties with regard to the
subject matter hereof and supersedes any previous agreement or
agreements whether verbal or written with regard thereto with the
exception of the transfer Agreement regarding the Share; provided,
however, that any, scheduled exception to a specific article in this
Agreement shall apply only to that specific article and no other
article herein unless expressly provided for therein.
18. INVALIDATION
18.1 Any provision of this Agreement, which is declared illegal or
inapplicable by any jurisdiction, will thus become void but the
illegality or inapplicability of this rule will not affect other
clauses of this Agreement or affect the legality or applicability of
this provision before any jurisdiction.
19. APPLICABILITY
19.1 In case of discrepancy between this Agreement and its Schedules, the
Agreement shall prevail.
SIGNED by the Parties on the day and year first above written, in counterpart.
ObjectShare, Inc. Valtech S.A.
/s/ /s/
------------------------------ ------------------------------
By Mr. Eugene Goda By Mr. Jean-Yves Hardy
Chief Executive Officer Chief Executive Officer.
27
<PAGE> 1
EXHIBIT 5.2
U.K. MASTER AGREEMENT
DATED NOVEMBER 22, 1999
THIS DEED IS MADE BETWEEN:
VALTECH LIMITED, a company incorporated in England and Wales (registered number
3127414) whose registered office is at 279 Tottenham Court Road, London W1P6AA,
hereinafter referred to as "VALTECH U.K." or the "PURCHASER"
OF THE ONE PART,
AND
OBJECTSHARE, INC., a U.S. corporation with a share capital of 12,470,863 shares,
having its registered office at 16811 Hale Avenue, Suite A, Irvine, California
92606, U.S.A., represented by Fran Rice, duly authorized for the purposes hereof
by a power of attorney from Mr. Eugene Goda, Chairman of the board of directors
dated November 17, 1999 of which a certified copy is set out in SCHEDULE (i),
hereinafter referred to as "OBJECTSHARE" or the "SELLER"
OF THE OTHER PART,
Valtech U.K. and ObjectShare shall hereinafter be referred to jointly as the
"PARTIES" and individually a "PARTY",
<PAGE> 2
WHEREAS
- -------
A. Valtech S.A., a French societe anonyme with a share capital of FRF 4,089,390
having its registered office at Immeuble Lavoisier - Quartier Gambetta, 4 Place
des Vosges, La Defense V, 92400 Courbevoie, France, registered at the Commercial
and Companies Registry of Nanterre, under the number 389 665 167, represented by
its President Mr. Jean-Yves Hardy, is a listed company on the Nouveau Marche.
Valtech S.A. carries out a business of project management in the computer field
and, in particular, provides training and consulting services. Valtech UK is a
wholly-owned subsidiary of Valtech S.A.
B. ObjectShare has two wholly-owned European subsidiaries:
- ObjectShare (U.K.) Limited, registered in England with
registration number 2932770, (hereinafter called the
"Company"), having its registered office at Waverley House,
Farnham Business Park, Weydon Lane, Farnham, Surrey GU9 8QT,
and which has an authorized share capital of Pound
Sterling1,000 divided into shares of Pound Sterling1 each and
has issued two shares of Pound Sterling1 each which comprise
the whole of the issued share capital of the Company
(hereinafter called the "Shares"); and,
- ObjectShare GmbH, a German corporation (hereinafter called the
"German Company"), having its registered office at Lochhamer
Strasse 11, D 82152 Martinsried, Germany, and which carries
out its business in the computer field and in particular
consulting and training services related to Smalltalk
software. The German Company has a wholly-owned subsidiary in
Switzerland, ObjectShare AG (hereafter called the
"subsidiary"), a Swiss corporation having its registered
office at c/o Froriep Renggli, Bellerivestr. 201, CH 8034
Zurich.
C. ObjectShare is the legal and beneficial owner of, with full right to
transfer the legal and beneficial title to all of the Shares and wishes
to sell and Valtech U.K. wishes to purchase the whole, but not part
only, of the issued share capital of the Company upon the terms and
conditions of this Deed.
D. It is agreed between the Parties that the contemplated sale of the
Shares is subject to the simultaneous transfer by ObjectShare of the
whole of its shares in the German Company to Valtech S.A. for a price
of USD 1,040,000 (the "German Price").
E. The Price referred to in Article 2.1 below has been reduced by an
aggregate amount of USD 150,000 representing a bonus of a total amount
of USD 150,000 (the "Bonus") to be shared between the employees of
respectively the Company, the German Company and the Subsidiary that
ObjectShare has undertaken to pay and that will be paid after Closing
by Valtech U.K. and Valtech S.A.
2
<PAGE> 3
I - DEFINITIONS:
For the purposes of this Deed, the following words and phrases shall have the
following meanings, respectively:
"ACT" shall mean the Companies Act 1985 (as amended).
"AGREED FORM" shall mean a document signed for identification by or on behalf of
a Party.
"AUDITOR" shall mean Ernst & Young
"DEED" shall mean this deed.
"BALANCE SHEET DATE" shall mean March 31, 1999.
"CLOSING" shall mean the completion of the sale and purchase of the Shares in
accordance with Article 4.
"CLOSING DATE" shall mean the date of the fulfillment of the last of the
conditions precedent referred to in Article 3 below and in any case, no later
than November 24, 1999.
"COMPANY" shall mean Objectshare (U.K.) Limited.
"EMPLOYEES" shall mean directors or officers of, whether or not employed by, the
Company and the employees of the Company.
"ENCUMBRANCE" shall mean any encumbrance or security interest whatsoever
including (without limitation) any charge, mortgage, floating charge, pledge,
assignment in security, lien, right of redemption, option, right to acquire,
conversion right, third party right, interest and claim, right of set off, right
of counterclaim, title retention, conditional sale agreement, trust arrangement
and any other preferential right, agreement or arrangement having similar
effect.
"ENGLISH PRICE" shall mean the price agreed by and between ObjectShare and
Valtech U.K. for the purchase and sale of the Shares which shall be USD 560,000.
"FRF" shall mean French Francs.
"FINANCIAL STATEMENTS" shall mean the balance sheet, profit and loss account,
together with annexed documents of the Company prepared as of March 31, 1999,
and annexed as SCHEDULE 6.1.4.1.
"GERMAN COMPANY" shall mean ObjectShare GmbH.
"GERMAN CONTRACT" shall mean the agreement between ObjectShare and Valtech S.A.
for the acquisition by the latter of the whole of the shares of the German
Company.
3
<PAGE> 4
"INTERIM FINANCIAL STATEMENTS" shall mean the balance sheet and profit and loss
statement of the Company on October 31, 1999, not audited nor certified by the
statutory auditor of the Company and annexed hereto as Schedule 6.1.4.1.
"KNOWLEDGE" shall mean knowledge having made due and careful inquiry.
"OBJECTSHARE" shall mean ObjectShare, Inc., a Deleware Corporation
"OBJECTSHARE GROUP COMPANY" or "MEMBER OF OBJECTSHARE'S GROUP" means each of
ObjectShare and its parent undertakings and any subsidiary undertakings of any
of them, in each case from time to time.
"PENSION SCHEME" shall mean the pension scheme of the Company.
"PRICE" shall mean the collective price of USD 1,600,000 consisting of (i) USD
560,000 related to the Valteck U.K. purchase of all of the capital stock of
ObjectShare U.K. (ii) USD 1,040,000 related to the Valteck S.A. purchase of all
of the capital stock of ObjectShare Gmbh.
"PURCHASER" shall mean Valtech U.K..
"RIGHTS" shall mean all intellectual property rights (including those described
in SCHEDULE 6.1.10) including any and all patents, trade marks, service marks,
trade names (including internet domain names and e-mail addresses), design
rights, copyright and the right for a maker of a database to prevent extraction
and/or re-utilisation of all or a substantial part of the database (as described
in Directive 96/9/EC on the legal protection of databases) and rights in
confidential information and know-how, in each case whether registered or
unregistered and including applications for the grant of intellectual property
rights and all rights or forms of protection of intellectual property rights,
together with rights in relation to any of the above under licence, consent or
otherwise, in each case above anywhere in the world.
"SHARES" shall mean the two ordinary shares of Pound Sterling1 each in the
capital of the Company comprising the whole of the issued share capital of the
Company.
"SERVICE AGREEMENT" shall mean the service agreement in the agreed form.
"SIGNATURE DATE" shall mean the date upon which the Parties hereto enter into
this Deed.
"SUBSIDIARY" shall mean ObjectShare GmbH's wholly-owned Swiss subsidiary, i.e.
ObjectShare AG.
"TERRITORY" shall mean the United Kingdom of Great Britain, Germany and
Switzerland.
"TAXES ACT " shall mean "Income and Corporation Taxes Act 1988".
"USD" shall mean United States Dollars.
"VALTECH U.K." shall mean Valtech Limited.
4
<PAGE> 5
"YEAR 2000 COMPLIANT" shall mean that neither performance nor functionality is
affected by dates, prior to, during and after the year 2000, for the purposes of
Article 6.1.19.
"POUND STERLING" shall mean Pound Sterling.
II - INTERPRETATION PROVISIONS
In this Deed unless the context otherwise requires,
II.1 references to any statute or statutory provision include a reference
to:
(a) subordinate legislation made from time to time pursuant to that
statute or statutory provision (whether before the date of this
Deed); and
(b) that statute or statutory provision as amended, modified, replaced,
consolidated and/or re-enacted from time to time (whether before
the date of this Deed);
II.2 words denoting one gender include all other genders and words denoting
the singular include the plural and visa versa;
II.3 references to a person include individuals, bodies corporate,
unincorporated associations, partnerships, joint ventures and
government departments or agencies, and references to any of the same
include the others;
II.4 the words "the company", "body corporate", "subsidiary", "holding
company", "subsidiary undertaking", "parent undertaking", "group
undertaking", and "group" have the meanings set out in section 735,
740, 736 and 736A, 258, 259 and 262 (as appropriate) of the Act;
II.5 references to a company include any company or other body corporate,
wherever incorporated or established;
II.6 references to the Purchaser includes successors and assignees or
transferees; and
II.7 a person is deemed to be connected with another if that person is so
connected within the meaning of section 839 of the Taxes Act;
II.8 the words "include", "includes" and "including" are to be construed as
if they were immediately followed by the words "without limitation".
III - References to clauses or schedules are to clauses of, or schedules to,
this Deed.
IV - The schedules form an integral part of this Deed and references to this
Deed include the schedules to this Deed.
V - The headings to the clauses are for convenience only and do not affect the
construction or interpretation of this Deed.
VI - All warranties, representations, undertakings, indemnities, covenants,
agreements and obligations given or made by two or more persons in, and/or
pursuant to, this Deed shall,
5
<PAGE> 6
except where the contrary is expressly stated, be deemed to be given or made by
such persons jointly and severally.
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. SALE AND PURCHASE
1.1 ObjectShare shall sell with full title guarantee and Valtech UK or a
nominee shall purchase and take delivery of the whole of the Shares
free from all Encumbrances (whether known about or not) in accordance
with the terms and conditions of this Deed together with all rights now
or hereafter attaching thereto.
1.2. The Purchaser shall not be obliged to complete the purchase of any of
the Shares unless the purchase of all Shares is completed
contemporaneously.
1.3 ObjectShare hereby irrevocably waives and undertakes to procure the
waiver of all rights of pre-emption and all other restrictions
whatsoever on transfer over and in respect of the Shares of any of them
to which it or any other person may be entitled under the articles of
association of the Company or otherwise.
2. PRICE
2.1 The sale of the Shares is agreed to and accepted for an aggregate
purchase price of USD 560,000 (the "English Price" and together with
the German Price, the "Price").
2.2 The English Price shall be paid at the Closing Date by Valtech U.K. by
bank wire transfer to an account specified by ObjectShare which shall
provide good and valid receipt therefor to Valtech U.K..
3. CONDITIONS PRECEDENT
3.1 SALE OF THE SHARES
The obligations of the Parties hereunder are subject to the fulfillment
of the following conditions precedent:
3.1.1 Receipt by ObjectShare of a fairness opinion from Duff &
Phelps, LLC;
3.1.2 N/A
3.1.3 N/A
3.1.4 The continuing accuracy, as at the Closing Date, of the
Warranties contained in Article 6 hereof;
3.1.5 Delivery of an executed Agreement Re: Cancellation of
Intercompany Debt (the "Intercompany Debt Agreement") to be
effective on the Closing Date which provides that ObjectShare
shall unconditionally and irrevocably agree that upon the
consummation of this transaction that the Company be released
and discharged from each and every liability, obligation and
undertaking of any nature whatsover (whether actual or
contingent) which the Company owes to ObjectShare on the
Closing Date.
6
<PAGE> 7
3.2 N/A
3.3 The above conditions are for the benefit solely of Valtech U.K. who may
waive all or any of them in whole or in part.
3.4 ObjectShare shall use all reasonable endeavors within its powers to
ensure that the above conditions are fulfilled at the time specified in
Article 3.1.
3.5 Subject to any waiver by Valtech U.K. pursuant to Article 3.3 above, if
the above conditions are not fulfilled by November 24, 1999 at the
latest, the Deed shall, unless the deadline is extended by mutual
agreement in writing between the Parties, be considered to be null and
void or terminated save in respect of any claim Valtech U.K. may have
in respect of any pre-existing breach.
4. CLOSING
4.1 Closing shall take place simultaneously at the offices of S.G.
Archibald, 136 avenue Charles de Gaulle, 92207 Neuilly-sur-Seine Cedex,
France, London and at Munich on the Closing Date, provided that on such
date the conditions precedent mentioned in Article 3 above have been
fulfilled.
Closing will take place once all documents, certificates, money
relating to the sale of the whole of the shares of the German Company
to Valtech S.A. have been delivered to appropriate parties and
confirmation of such deliveries have been made to Seller's and
Purchaser's counsels.
4.2 On the Signature Date, ObjectShare shall procure that a board meeting
of the Company is held at which the directors:
4.2.1 approve for registration the transfer of the Shares to Valtech
UK or its nominee(s) and the entry of the transferee in the
register of members of the Company (subject only to the
transfers being subsequently presented and duly stamped);
4.2.2 change the Company's registered office as Valtech UK directs;
4.2.3 revoke all existing mandates for the operation of the bank
accounts of the Company and issue new mandates giving
authority to those persons nominated by Valtech UK;
4.2.4 change the Company's accounting reference date as Valtech UK
directs;
4.2.5 appoint the persons nominated by Valtech UK as directors and
the secretary of the Company with effect from the end of the
meeting;
7
<PAGE> 8
4.2.6 accept the resignation of the Auditors of the Company and
appoint new auditors as Valtech UK directs.
4.2.7 approve and execute on behalf of the Company the Service
Agreement.
4.3 On the Signature Date, ObjectShare shall deliver to Valtech U.K.:
4.3.1 a duly executed stock transfer form accompanied by the
indemnity for missing share certificates in respect of the
Shares in favor of Valtech U.K. or its nominees as it may
direct;
4.3.2 a certified copy of the minutes of the board of directors of
the Company in the agreed form approving the matters set out
in clause 4.2 above;
4.3.3 N/A;
4.3.4 a power of attorney in the agreed form executed by ObjectShare
in favor of Valtech UK to exercise ObjectShare's rights in
respect of the Shares and pending the entry of the names of
the Transferee in the register of members of the Company;
4.3.5 all bank mandates given by the Company and all current cheque
books of the Company;
4.3.6 N/A;
4.3.7 the documents stated in this Deed to be in agreed form;
4.3.8 evidence in a form reasonably satisfactory to Valtech UK that
persons executing this Deed by or on behalf of ObjectShare are
duly authorized to so execute;
4.3.9 the statutory books of the Company written up to date
immediately prior to closing;
4.3.10 the resignations in the agreed form of each director of the
Company and the Company Secretary each in the agreed form;
4.3.11 the resignation in the agreed form of the Auditors of the
Company containing a statement under section 394 of the Act
together with evidence of the fact that such statement has
been deposited at the Company's registered office;
4.3.12 a certificate signed by ObjectShare confirming, in accordance
with Article 3.1.4 hereof, that the Warranties contained in
Article 6 hereof remain true and accurate in all material
respects as of the Closing Date;
4.3.13 receipt by ObjectShare of a fairness opinion from Duff &
Phelps, LLC;
4.3.14 the specific certificate provided for under Article 9.3 below;
8
<PAGE> 9
4.3.15 receipt by ObjectShare of authorization from StarBase
Corporation relating to the sale of the Shares;
4.3.16 authorization from Silicon Valley Bank relating to the sale of
the Shares and release of liens;
4.3.17 the executed German Contract;
4.3.18 the executed Intercompany Debt Agreement referred to in
Article 3.1.5 above.
4.4 At the Closing Date, Valtech U.K. shall deliver to ObjectShare
certified copy of the minutes of the board of directors of Valtech
S.A./Valtech U.K approving the purchase of the Shares.
4.5 At the Closing Date, Valtech U.K shall pay to ObjectShare by bank wire
transfer to Silicon the Price and ObjectShare shall give to Valtech
U.K. a receipt therefor.
5. OBJECTSHARE'S OBLIGATIONS PENDING CLOSING
5.1 As from the Signature Date and up to and including the Closing Date,
ObjectShare shall procure that:
5.1.1 the business of the Company shall be carried on in the
ordinary course and in a prudent and appropriate manner and
that any material adverse change in any of such business shall
be forthwith notified to Valtech U.K. in writing;
5.1.2 the Company shall comply with all relevant laws and
regulations and, in particular, but without prejudice to the
generality of the foregoing, with all applicable United
Kingdom employment law regulations in relation to the subject
matter of this Deed;
5.1.3 save with the prior written consent of Valtech U.K., the
Company shall not modify its articles of association,
undertake any merger, spin-off or other form of reorganization
or propose, declare or pay any dividend or grant any mortgage,
pledge or security, or take any other measure which may
encumber or otherwise affect the free disposition of its
shares and assets;
5.1.4 save with the prior written consent of Valtech U.K., there
shall be no increase or undertakings to increase the salary
payable or other benefits due to any employees of the Company
(such as premiums, profit sharing, pension or retirement
rights or other similar benefits) nor shall the Company hire
or dismiss any corporate officers or executive employees;
5.1.5 N/A
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<PAGE> 10
5.1.6 save with the prior agreement of Valtech U.K., the Company shall
not enter into any contracts which are subject to unusual or
unduly onerous terms, or which are outside the normal course of
business of the Company;
5.1.7 the Company shall not undertake any capital or non-routine
expenditure save where such expenditure is essential to preserve
the value of an asset of the Company;
5.1.8 the Company shall neither grant nor receive any loan from a
third party for an aggregate sum in excess of Pound Sterling
10,000.
6. REPRESENTATIONS AND WARRANTIES
6.1. OBJECTSHARE REPRESENTATIONS AND WARRANTIES. ObjectShare represents and
warrants with Valtech U.K. (herein called the "Warranties" and with the
intent that "breach of warranty" and similar expressions include the
making of any misrepresentation) set forth below:
6.1.1 CORPORATE EXISTENCE AND CAPITALIZATION OF THE COMPANY
6.1.1.1 there has been due compliance with the provisions of
the Companies Act 1985 and all other legal
requirements in connection with the formation of the
Company and with the allotment and issue of shares,
debentures and other securities and the payment of
distributions and no notice or allegation has been
received that any of the forgoing is incorrect or
should be rectified.
6.1.1.2 a certified true and up-to-date copy of the
memorandum and articles of association of the Company
is attached as SCHEDULE 6.1.1.2 ; the minutes and
other corporate records of the Company are accurate
and up-to-date; the Company's filings with Companies
House are complete and up-to-date in all respects;
the extract from Companies House dated 3 November
1999 regarding the Company attached hereto as
SCHEDULE 6.1.1.2 is true and accurate.
6.1.1.3 Insolvency
The Company is not in a state of insolvency or in
suspension of payments and is not and has never been
subject to a judicial reorganization or judicial
liquidation proceedings or any other conciliation or
collective bankruptcy proceedings;
In relation to the Company:
(i) no resolution has been proposed or passed
(and no meeting has been convened and no
written resolution has been circulated with
a view to passing any resolution) for
winding up or administration or for the
presentation of a petition for winding
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<PAGE> 11
up or an administration order or for a
compromise or composition or arrangement
with creditors of any class of them;
(ii) no petition has been presented nor has an
order been made for winding up or an
administration order or interim order nor
has any application been made or order made
for the appointment of a provisional
liquidator or a judicial factor;
(iii) no application or order has been made for
the appointment of a receiver or an
administrative receiver or a manager or a
trustee or other similar officer;
(iv) no receiver administrative receiver or
manager has been appointed over an
ObjectShare Group Company or any of its
property or assets or income or undertaking
and no request for any such appointment has
been made.
6.1.1.4 except for possible minor infringements with no
implications for the continuation and/or
profitability of its business, the Company (i) has
the corporate power and authority and holds all
governmental and other authorizations and permits to
own all of its properties and other assets and to
carry on its business as it is currently being
conducted, and (ii) is and has been in compliance
with all laws and regulations to which it is subject.
The Company is not in default with respect to any
judgement or order of any court, arbitral tribunal or
government department or agency;
6.1.1.5 the Company is, and has not over the last five years
been, directly or indirectly a member of any
partnership, joint venture, economic interest group
or any other organization or structure having
unlimited liability;
6.1.1.6 the Company has not since 1994 (i) held any shares or
other securities in any corporation or any interest
of any kind in any person or (ii) exercised any
mandate as board member or manager of any corporation
or (iii) acted as de facto manager of any
corporation.
6.1.2 THE SHARES
6.1.2.1 the Shares represent the whole of the share capital
of the Company, are validly issued, fully paid, and
are freely transferable;
6.1.2.2 there exists no agreement or undertaking pursuant to
which any person is or could become entitled to
request the issue of new shares by the Company. The
Company has not issued any securities which could
give rise to a capital increase or the issue of
securities granting the right to any amount which the
Company may distribute or voting rights or which
could result in any limitation of the rights attached
to the Shares;
6.1.2.3 ObjectShare has full and valid title to the Shares
set out against its name in SCHEDULE 6.1.2.3, or as
otherwise specified in SCHEDULE 6.1.2.3
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hereto, free from any lien charge or Encumbrance or
any other third party rights and at the Closing Date
such title shall be validly transferred to Valtech
U.K. or to such person or persons as Valtech U.K may
specify. All the authorizations which must be
obtained prior to the transfer of the Shares, in
application of the Company's memorandum or articles
of association and the law, have been or will, at the
Closing Date, have been obtained.
6.1.2.4 The Company has never reduced its share capital or
redeemed, repaid or repurchased any of its share
capital or agreed to do so.
6.1.2.5 The Company has no outstanding loan capital and there
is no agreement, arrangement or option under which
any person may now or at any other time call for the
creation, allotment, issue, sale or transfer of any
loan or share capital of the Company or require any
loan or share capital of the Company to be put under
option.
6.1.3 EFFECTS OF THE TRANSFER OF THE SHARES
6.1.3.1 the transfer of the Shares to or in accordance with
the instructions of Valtech U.K. will not result in:
(i) a breach or termination of, or constitute a
default under, or require the consent of a
person under, any agreement or arrangement
to which ObjectShare or the Company is
bound, except as disclosed in SCHEDULE
6.1.3.1(i);
(ii) any party to an agreement or arrangement
with the Company being relieved of any of
its obligations or entitled to terminate any
such agreement or arrangement; or
(iii) so far as ObjectShare is aware, any customer
or supplier ceasing to deal, or
substantially reducing the level of his
dealings, with the Company or terminating or
reducing any present or future benefit or
privilege enjoyed by the Company;
(iv) a breach of the terms of any license,
judgment, order or declaration of, or
undertaking to, any court or governmental
agency or regulatory body by which
ObjectShare or the Company is bound;
(v) any licence being revoked, cancelled,
suspended, varied or not renewed or the
Company losing the benefit of any asset,
grant, subsidy, right or benefit which it
enjoys as at the date of this Deed; or
(vi) the creation or imposition of an Encumbrance
on, over or relating to any of the Shares or
any of the assets or undertakings of the
Company.
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6.1.4 FINANCIAL STATEMENTS OF THE COMPANY - FINANCIAL MATTERS
6.1.4.1 copies of the Financial Statements and Interim
Financial Statements are annexed as SCHEDULE 6.1.4.1;
6.1.4.2 the Financial Statements have been prepared on the
same basis as audited individual accounts (within the
meaning of section 226 of the Act) would be prepared,
that is on a proper and consistent basis in
accordance with all applicable laws and accounting
standards, principles, practices, policies and
conventions generally accepted in the United Kingdom,
including all exposure drafts, technical releases,
urgent issues task force abstracts, audit guidelines
and international accounting standards (whether
mandatory or not);
6.1.4.3 the Financial Statements were prepared in the same
form as required by law (within the meaning of
section 226 of the Act) and show a true and fair view
of, and accurately reflect the assets and liabilities
of the Company at, and its profit and losses for the
financial period ended on, the Balance Sheet Date;
6.1.4.4 the Interim Financial Statements have been prepared
in all material respects on a basis consistent with
the Financial Statements and show a true and fair
view of, and accurately reflect the assets and
liabilities of the Company and its profit and losses
for the financial period ended on October 31, 1999,
except that the Interim Financial Statements (i) may
not have the notes thereto, and (ii) may be subject
to normal audit and annual adjustments which will not
be materially adverse in the aggregate;
6.1.4.5 at the Balance Sheet Date the Company had no
liabilities or obligations (due, payable, certain,
contingent, conditional or otherwise and including,
without limitation, any obligation resulting from a
factoring or leasing agreement or from current,
pending or threatened litigation) other than those
set out, and for which adequate provision has been
made, in the Financial Statements;
6.1.4.6 the depreciation appearing in the Financial
Statements has been determined in accordance with
applicable laws and such accounting standards etc. as
set out in Article 6.1.4.2;
6.1.4.7 all the accounts, books and records of the Company
have been fully, properly and accurately kept and
completed and record all material transactions to
which the Company has been a Party. They give a true,
complete and fair view of the financial, contractual
and business position of the Company, fixed and
current assets and liabilities (actual and
contingent), debtors, creditors and inventories and
work in progress of the Company; such documents are
in the possession or control of the Company;
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6.1.4.8 the Financial Statements have been prepared on
consistent basis on the same basis as applied in
individual accounts within the meaning of section 226
of the Act for the financial year of the Company
ended 31 March 1996, 1997 and 1998;
6.1.4.9 the Company is not, and has not during the 5 year
period ended on the Balance Sheet Date been a party
to any agreement, arrangement or transaction pursuant
to which the Company is or was entitled to receive a
financial advantage, or is or was obliged to incur or
bear any costs, liabilities, risks or other
expenditure of any nature which is not fully
reflected in the Financial Statements or has not been
fully reflected in the Company's accounts for any
relevant period.
6.1.4.10 Bank Certificate
A statement certified by the Company bankers of the
credit or debit balances of the Company's bank and
deposit account as at a date not more than 2 business
days before the date of this Deed has been supplied
to the Purchaser and the Company has no other bank or
deposit accounts not included in such statement.
Since the date of such statement no payment out of
any account has been made except for routine payments
in the ordinary and usual course of business, and the
balances are not substantially different from those
shown in the statement.
6.1.4.11 Indebtedness
Except as disclosed in the Financial Statements or
the Interim Financial Statements the Company does not
have outstanding and has not agreed to create or
incur loan capital, borrowing or indebtedness in the
nature of borrowings including (without limitation) a
bank overdraft and an acceptance credit.
6.1.4.12 Repayment of borrowings
All of the Company's borrowings may be repaid
(without any premium or penalty) by the Company at
any time on no more than 30 days notice.
6.1.4.13 Working Capital
The Company's bank and other financial facilities
currently provide the Company with sufficient working
capital for the purposes of carrying on its business
in its present form and at its present level of
turnover.
6.1.4.14 Encumbrances
The Company has not created, or agreed to create any
encumbrance over all or any part of its property,
assets, undertaking, goodwill, reserves or share
capital nor has any person made any claim to be
entitled to any such Encumbrances.
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6.1.4.15 Creditors
The Company has at all times paid its creditors
within the times agreed with such creditors and there
are no debts exceeding Pound Sterling10,000 in
aggregate owing by the Company which are overdue for
payment by more than 4 weeks or on which the Company
may be liable to pay interest.
6.1.4.16 Accounting Reference Date and Other Matters
The Financial Statements include (i) all debts,
prepayments and other current assets at the lower of
cost and net realizable value after making full and
proper provision for all bad debts and doubtful debts
and all other amounts considered to be irrecoverable;
and (ii) all liabilities and commitments of the
Company (whether actual or contingent or deferred and
whether or not disputed) for which the Company is or
may become liable to and including the Balance Sheet
Date and the Financial Statements make full and
proper provision for the same as required to be
included in accordance with all applicable laws and
accounting standards, principles, practices, policies
and conventions generally accepted in the United
Kingdom. The accounting reference date of the Company
has not been changed from the same month and day as
on the Balance Sheet Date.
6.1.5 RECEIVABLES
6.1.5.1 the trade and other receivables of the Company as
shown in the Financial Statements and any receivables
which have arisen since the Balance Sheet Date are
valid and have been recovered, or are recoverable in
full, within the relevant legal or contractual
time-limits (subject, in the case of receivables
shown in the Financial Statements or the Interim
Financial Statements, to any provision for bad and/or
doubtful debts appearing therein), except as provided
under SCHEDULE 6.1.5.1. Any receivables which have
arisen since the date of the Interim Financial
Statements will be recoverable in a manner which is
consistent with the Company's past practices.
6.1.5.2 none of the debts which are shown in the Financial
Statements, or which have arisen since the Balance
Sheet Date, have been outstanding for more than 60
days from the Company's due date for payment or have
been released such that the debtor has paid, or will
pay, less than the full amount of his debt, and all
debts have realized, or will in the normal course of
collection, realize their full value as set out in
the Financial Statements or in the books of the
Company (subject to any provision made in the
Financial Statements or the Interim Financial
Statements for bad and doubtful debts) within 120
days of their due date for payment.
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6.1.6 STOCK
6.1.6.1 There is no stock in trade.
6.1.7 TAXATION
6.1.7.1 The Company has at all times duly made or given,
within the requisite periods, all relevant returns,
computations, payments, notices and information which
are or have been required to be made or given for any
tax purpose and submitted all claims elections,
surrenders and disclaimers assumed to have been made
for the purposes of the Financial Statements to the
relevant taxation authority.
6.1.7.2 All such returns, computations, payments, notices and
information have been made or given on a proper
basis, are up-to-date and complete and accurate in
all material respects and none of them is, or is
likely to be, the subject of any dispute with any
taxation authority, so far as the Company is aware.
6.1.7.3 The Company is in possession and control of all
records and documentation that it is obliged to hold,
preserve and retain for any tax purposes and of
sufficient information to enable it to compute its
liability to tax in so far as it relates to any event
occurring on or before Closing.
6.1.7.4 Except as disclosed at SCHEDULE 6.1.7.4, the
Financial Statements make provision or reserve for
all tax (excluding deferred tax) which is liable to
be assessed on the Company or for which it may be
accountable in respect of all periods up to and
including the Balance Sheet Date.
6.1.7.5 The Company does not account for nor has elected to
account for tax in respect of any other company
pursuant to section 36 of the Finance Act 1998 or any
other related provisions and no other company has
elected to account for tax on behalf of the Company.
6.1.7.6 Except as disclosed on SCHEDULE 6.1.7.6, there are
set out in Schedule details of all matters relating
to tax in respect of which the Company (either alone
or jointly with any other person) has, or at the
Closing Date will have, an outstanding entitlement to
make any claim for or disclaimer of: any allowance or
relief; any election; any appeal or further appeal
against an assessment to tax; the postponement of
tax.
6.1.7.7 Except as set forth on SCHEDULE 6.1.7.7, since the
Balance Sheet Date:
(a) the Company has not been involved in any
transaction which has given or may give rise
to a tax liability on the Company (or
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<PAGE> 17
would have given or might give rise to such
a liability but for the availability of any
relief, allowance, deduction or credit)
other than a tax liability of the Company
arising from transactions entered into in
the ordinary course of business;
(b) no payment has been made or liability
accrued by the Company which is or will not
be deductible in computing the taxable
profits of the Company.
6.1.7.8 No dividend has been declared or paid and no
distribution (as set out in sections 20, 209 to 211
(inclusive) and 254 Taxes Act) has been made by the
Company except as disclosed in the Financial
Statements of the Company.
6.1.7.9 No liability to tax would arise on the disposal by
the Company of any asset acquired since the Financial
Statements Date for a consideration equal to the
consideration actually given for such acquisition.
6.1.7.10 Set out in the SCHEDULE 6.1.7.10, are details of all
expenditures of a capital nature which has not and
will not qualify for capital allowances incurred by
the Company since the Balance Sheet Date.
6.1.7.11 The Company has not incurred expenditure to which the
provisions of Chapter IVA of Part II of the Capital
Allowances Act 1990 could apply.
6.1.7.12 The Company is not and has never been a close company
for the purposes of section 414 Taxes Act.
6.1.7.13 Details of all assets currently owned by the Company
in respect of which a charge may arise at the Closing
Date or on the Company ceasing to be a member of the
same group of companies as any other company in the
six years following Closing (in either case under
section 179 TCGA) are set out in SCHEDULE 6.1.7.13.
6.1.7.14 Full details of all payments which remain due to or
from the Company in respect of any claims for group
relief, surrenders of advance corporation tax or
surrenders of repayments of tax are set out in
SCHEDULE 6.1.7.14.
6.1.7.15 The Company is, and always has been, resident only in
the United Kingdom for tax purposes and is not liable
to tax in any jurisdiction other than in the United
Kingdom.
6.1.7.16 The Company has not been a party to or otherwise
involved in any transaction, scheme or arrangement to
which it could be liable under Part XVII Taxes Act or
the sole or main purpose or one of the main purposes
was avoiding or deferring a tax liability or in
respect of which the Company could be liable to tax
or increased tax as a result of the Furniss-v-Dawson
line of cases.
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6.1.7.17 The Company has duly made all such deductions as are
required by law from all payments made or deemed to
be made or treated as made by it or on its behalf and
has duly accounted to the relevant taxation authority
for all tax deducted by it and proper records have
been maintained in respect of such matters.
6.1.7.18 The Company has complied with all legislation and
regulations relating to PAYE, national insurance
contributions and the taxation of employee benefits
including (without limitation) in respect of notional
payments.
6.1.7.19 The Company is a registered and taxable person for
the purposes of value added tax ("VAT"), is not
registered, or required to register, in any other
jurisdiction in respect of VAT (or any foreign
equivalent) and has fully complied with all
provisions, regulations, notices, orders and
directions (including, for the avoidance of doubt,
the terms of any agreement reached with the
Commissioners of Customs and Excise) relating to VAT
and has made and obtained complete, correct and up to
date records, invoices and other documents as
required for all VAT purposes.
6.1.7.20 SCHEDULE 6.1.7.20 contains particulars of all
elections to waive exemption from VAT made by the
Company, any relevant associate of the Company
(within the meaning of paragraph 3(7) Schedule 10 of
the Value Added Tax Act 1994 ("VATA")) under
paragraph 2 Schedule 10 VATA and of all notices of
such elections received by the Company and from the
holder of any interest immediately superior to that
held by the Company.
6.1.7.21 The Company does not own any assets to which Part XV
of the Value Added Tax Regulations 1995 applies.
6.1.7.22 The Company has not acquired any business as a going
concern within Article 5 of the Value Added Tax
(Special Provisions) Order 1995.
6.1.7.23 All documents in the possession or control of the
Company or in respect of which the Company has any
interest in enforcing have been duly and properly
stamped and no such documents which are outside the
United Kingdom would attract stamp duty if they were
brought into the United Kingdom.
6.1.8 OWNERSHIP OF ASSETS
6.1.8.1 except as disclosed in SCHEDULE 6.1.8.1, the Company
has and is able to prove sole, full and unencumbered
legal title to and beneficial ownership of all its
assets free from any Encumbrance. All tangible assets
(both real estate and otherwise) are properly
constructed and in good condition, subject only to
normal wear and tear, and have been
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consistently and properly maintained. None of such
tangible assets is out of order or has any apparent
defect which prevents or could prevent its use in the
future in accordance with the purpose for which it
was intended;
6.1.8.2 the carrying on of business and the use by the
Company of its assets is in accordance with all
material applicable legal or regulatory requirements,
particularly with regard to health and safety;
6.1.8.3 All assets owned by the Company or used in its
business are in the United Kingdom and in the
possession of or under the exclusive control of the
Company and, where subject to a requirement for a
licence, are duly licensed or registered in the sole
name of the Company.
6.1.8.4 The Company is not trustee or constructive trustee of
any property or right it holds.
6.1.8.5 The assets owned or leased by the Company comprise
all the assets necessary for the continuation of the
business of the Company as carried on from the
Closing Date.
6.1.9 LEASES
6.1.9.1 set out in SCHEDULE 6.1.9 are details of all lease
agreements to which the Company is a party whether as
lessor or lessee;
6.1.9.2 each of the leases of real or personal property to
which the Company is a party, either as lessor or
lessee, is valid and enforceable in accordance with
its terms. Save as mentioned in Schedule 6.1.9 none
of such leases contains any unusual provisions;
6.1.9.3 no written notice to terminate has been given to the
Company in respect of any of the leases referred to
in SCHEDULE 6.1.9 and the Company has not been
responsible for any act or omission which could
justify the lessor in terminating any such lease; all
rents and other charges due have either been paid or
reserved for and there are no proposals to increase
any of the same beyond those which were paid in the
financial year of the Company ended on the Balance
Sheet Date;
6.1.9.4 ObjectShare declares that the lease dated July 1,
1994 entered into between the Company and the Miller
Group, Ltd. expired on July 31, 1999 and that a new
lease is being negotiated for a duration up until May
31, 2000 and which could be terminated with one
months prior notice; if required the Company has
validly notified the contracting parties to the
leases listed in SCHEDULE 6.1.9, of the change of
control deriving from the sale of the Shares and that
these contracting parties gave their consent if
required to the change of control in the Company in
favor of Valtech U.K.
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6.1.10 INTELLECTUAL PROPERTY
6.1.10.1 SCHEDULE 6.1.10.1 contains a list of Rights used by
the Company in its business. The Rights used by the
Company in its business are owned by the Company free
from any charge or encumbrance save as specified in
the said SCHEDULE 6.1.10.1 or are used pursuant to
valid license from third parties details of all of
which are given in the said SCHEDULE 6.1.10.1;
Each of the Rights used in the business of the
Company is valid, subsisting and enforceable and
nothing has been done or omitted which may provide
grounds for a claim that it may cease to subsist or
be valid and enforceable. Where any of the Rights is
owned by or exclusively licensed to the Company, it
is used exclusively by the Company. Each of the
Rights used in the business of the Company is not,
and will not be, the subject of a claim, challenge or
opposition from any person including an Employee as
to title, ownership, validity, enforceability,
compensation or otherwise, and the Company is not
obliged to grant any rights to any person in relation
to any Rights it owns. To ObjectShare's knowledge,
none of the confidential information or know how of
the Company has been disclosed to or used without
authorization by a third party and the Company and
any person for whose acts it may be vicariously
liable has not breached any obligation with respect
to the protection of confidential information or know
how.
6.1.10.2 the Company has not infringed, and does not infringe,
Rights belonging to third parties;
6.1.10.3 none of the directors or employees of the Company
owns, directly or indirectly, in whole or in part,
any patent, trademark or other intellectual or
industrial property right to which the Company has
license or which are necessary or desirable for its
commercial activities as presently carried on;
6.1.10.4 ObjectShare shall, for transitional purposes, permit
the Company to use its current corporate name,
without paying any royalty to a third party, for a
period of not greater than 12 months following the
Closing Date. Subsequent to the 12 month period,
Purchaser and the Company shall not be permitted to
use any name or names identical or similar to, or
including the words "Object" or "Share" or any
distinctive mark, style or logo used by ObjectShare
or the Company in connection with any activity
whatsoever.
6.1.11 CONTRACTS
6.1.11.1 set forth in SCHEDULE 6.1.11.1 hereto is a list of
all the contracts, commitments, agreements and
guarantees or other undertakings or arrangements to
which the Company is a party which (i) account for
more than 10 per cent of the turnover of the Company
for the financial period ended on the Balance Sheet
Date; or (ii) are for a period of more
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<PAGE> 21
than 12 months; or (iii) provide for capital
expenditure or the disposal of capital assets for an
aggregate amount in excess of Pound Sterling10,000;
or (iv) contain any exclusivity commitment by, or for
the benefit of, the Company; or (v) contain any
commitment by any party not to compete with any
other; or (vi) are otherwise material to the assets,
liabilities, profits, losses and state of affairs of
the Company and the management, development and
marketing of the Company (hereinafter called
"Material Contracts" in each case whether written or
verbal);
6.1.11.2 the Company (i) has not entered into any Material
Contract which gives rise to duties or liabilities
which are unusual in relation to the normal rules of
proper management of a commercial enterprise, and
(ii) is not in material breach of any of its
obligations under any Material Contract;
6.1.11.3 all Material Contracts, agreements or arrangements,
whether written or verbal, to which the Company is a
party represent valid enforceable obligations. None
has been entered into in violation of applicable laws
or regulations and the Company and the other
contracting parties have respected their obligations
thereunder. No such contract, agreement or
arrangement was entered into outside the normal
course of business or is illegal or liable to be
declared null and void;
6.1.11.4 except as disclosed at SCHEDULE 6.1.11.4, the
transfer of the Shares on the Closing Date will not
result in the accelerated maturity of any loan or
guarantee agreement or any other payment to be made
to any third party under any other contract or
arrangement to which the Company is a party;
6.1.11.5 except as disclosed at SCHEDULE 6.1.11.5, the
execution and performance of this Deed (i) do not and
will not result in the termination of any Material
Contract or any other instrument or arrangement to
which the Company is a party or by which any of them
may be bound or affected, (ii) do not and will not
conflict with or result in any violation or breach by
the Company under any Material Contract or other
instrument or arrangement, and (iii) will not grant
to any other contracting party the right to terminate
or modify any such Material Contract or other
instrument or arrangement;
6.1.11.6 to the knowledge of Eugene Goda or Michael
Meier-Schulz, neither ObjectShare nor the Company has
received any written notice whatsoever pursuant to
which any of the 20 largest customers or suppliers of
the Company listed on SCHEDULE 6.1.11.6 has disclosed
its intention to cease or substantially reduce its
commercial relationship with the Company for any
reason whatsoever including, without limitation, as a
result of the transfer of the Shares to Valtech U.K.;
6.1.11.7 the Company is not bound by any contract, commitment
or other arrangement directly or indirectly with
ObjectShare's corporate officers or any of their
spouses, parents or children or any legal entity
controlled by any of them;
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6.1.11.8 Contracts
(i) Except as listed on SCHEDULE 6.1.11.8, the
Company has not entered into any contract which
constitutes or might constitute a transaction at an
undervalue or preference, which involves obligations
or liabilities which by reason of their nature or
magnitude ought reasonably to be disclosed to the
Purchaser or is not terminable by the Company on 60
days' notice or less without payment of compensation
or which is unlikely to be fully performed within 3
months from the date of this Deed or involves a
capital commitment or annual expenditure in excess of
Pound Sterling10,000; or
(ii) In any way restricts the freedom of the Company
to carry on business in any part of the world in such
a manner as it thinks fit.
6.1.11.9 Except as provided at SCHEDULE 6.1.11.9, all of the
Material Contracts of the Company except those
between the Company and the employees are freely
assignable by the Company without the consent of any
third party.
6.1.11.10 Customers and Suppliers
During the 24 month period ending on the date of this
Deed there has been no material change in the basis
or terms on which any person is prepared to do
business with the Company (other than normal price
and quoted changes) and no such change is likely.
Since the date of the Interim Financial Statements,
no substantial customer or supplier of the Company
has ceased or indicated an intention to cease trading
with or supplying the Company or has reduced, or
indicated an intention to reduce, substantially its
level of trade with or supplies to the Company and no
such changes are likely.
The Company has not entered into any agreement or
arrangement with a customer or supplier on terms
materially different from its present standard terms
and conditions of business, a copy of which has been
supplied to the Purchaser.
Copies of all past standard terms and conditions of
business under which the Company may have any
liability (contingent or otherwise) have been
supplied to the Purchaser.
6.1.11.11 Breach of Contract
Neither the Company, nor to ObjectShare's knowledge,
any party with whom the Company has entered into a
material agreement or arrangement has defaulted under
the agreement or arrangement and there are no matters
or circumstances which might give rise to a breach of
such agreement or arrangement by or against the
Company.
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To the best of the knowledge, information and belief
of ObjectShare and the Company, there are no grounds
for any material agreement or arrangement to which it
is a party to be terminated, rescinded, voided or
repudiated and no party, to ObjectShare's knowledge,
with whom the Company has entered into a material
agreement or arrangement has given notice of its
intention to terminate or has sought to repudiate or
disclaim, such agreement or arrangement.
6.1.11.12 Connected Persons
Except as provided at SCHEDULE 6.1.11.12 and to the
knowledge of ObjectShare, there is not and has not
been since the incorporation of the Company until the
date of this Deed, any material agreement or
arrangement (whether legally enforceable or not) to
which the Company is or was a party: and
(i) in which ObjectShare or any member of
ObjectShare's Group or any director (present
or former) of ObjectShare's Group or any
person connected with any of them is or was
directly or indirectly interested; or
(ii) which is or was not of an entirely arms'
length nature; or
(iii) which involved the acquisition of any asset
or the benefit of any right for a
consideration otherwise than for full market
value at the date of such acquisition.
Except as provided at SCHEDULE 6.1.11.12, there are
no debts outstanding or contingent liabilities or any
other unfulfilled obligations (present or future,
actual or contingent) owing by or to the Company to
or by ObjectShare or any other member of
ObjectShare's Group or any shareholder or director
(present or former) of the Company or any connected
person of any of them.
6.1.11.13 Licences
Except as disclosed at SCHEDULE 6.1.11.13, the
Company has all licences required for or in
connection with carrying on its business in the place
and in the manner in which such business is now
carried on by the Company and particulars of all the
licences have been disclosed to the Purchaser.
The Company has at all times carried on its business
in compliance with the terms and conditions of each
licence and there are not facts or circumstances
which indicate that any licence may be revoked,
cancelled, suspended or not renewed. No licence is
personal to ObjectShare.
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The Company has obtained and maintained in force each
registration under the Data Protection Act 1984 or
notification under the Data Protection Act 1998
necessary or appropriate to carry on the business as
at the date of this Deed.
6.1.11.14 Competition
The Company is not party to an agreement practice or
arrangement particulars of which have or should have
been submitted to the Director General of Fair
Trading under the Restrictive Trade Practices Act
1976 or which have become non-notifiable agreements
under that Act by virtue of the Competition Act 1998.
6.1.12 PERSONNEL
6.1.12.1 set out in SCHEDULE 6.1.12.1(a) are:
(i) a list of all the employees of the Company
including their age, seniority and present
annual remuneration (including any right to
bonus, benefits in kind, profit sharing and
any departure or retirement indemnities)
and, for persons having an employment
contract for a definite period, the date of
expiration of the contract;
(ii) a list of all pension benefits offered by
the Company to any of its present or former
employees or corporate officers all of which
benefits are, save as mentioned in SCHEDULE
6.1.12.1(b), fully funded;
(iii) a list of temporary personnel, of outside
collaborators, of sales representatives and
any other persons who do not have the status
of salaried employees but who regularly
collaborate in the operations of the
Company; and
(iv) a list of the collective bargaining and
other collective agreements applicable to
the personnel of the Company (including any
agreement relating to bonuses, pensions,
deferred remuneration, profit sharing or
share option schemes);
6.1.12.2 the Company has satisfied, and continues to satisfy
all of its material obligations pursuant to
applicable employment law and the terms and contracts
with employees and those engaged under contracts for
services;
6.1.12.3 none of the employees or corporate officers of the
Company is entitled to any benefits that are unusual
in the light of the prevailing industry standards in
the place of employment of such employee or officer;
6.1.12.4 none of the employees of the Company has made it
known that he/she intends to terminate his/her
employment agreement or is due to be paid
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any redundancy or termination or similar payments.
There have been no wage or similar benefit increases
agreed which have not been disclosed in writing to
the Purchaser except as provided under SCHEDULE
6.1.12.4;
6.1.12.5 there have been no strikes, lock-outs, sit-ins or
other industrial action at any of the premises of the
Company during the ten months prior to the date
hereof and ObjectShare has no knowledge of any such
industrial action being threatened or pending.
6.1.12.6 there is no person who has accepted an offer of
employment made by the Company but whose employment
has not yet started.
6.1.12.7 except as provided at SCHEDULE 6.1.12.7 or as
provided herein, there have been no changes to the
remuneration or benefits of any kind payable or due
to any employee and no changes have been proposed
since the Balance Sheet Date or are due to be
considered. All current and pending negotiations with
the employees or any of them concerning such terms of
employment have been disclosed in full to the
Purchaser.
6.1.12.8 all contracts of employment with employees and all
consultancy agreements to which the Company is party
(including any contract for services with any
individual) can be terminated by 3 months' notice or
less without giving rise to a claim for damages or
compensation (other than a statutory redundancy
payment or statutory compensation for unfair
dismissal).
6.1.12.9 for the purposes of redundancy payments, no employee
would be entitled to any amounts exceeding the basic
statutory redundancy payment as calculated in terms
of Section 162 of the Employment Rights Act 1996 or
to include in the calculation of their continuous
employment any employment by any other person for
their employment by the Company.
6.1.12.10 Leaving the Company
Except as provided at SCHEDULE 6.1.12.10, none of the
directors, officers or senior employees of the
Company has ceased to be employed by the Company
(other than through death or retirement at normal
retirement age) during the 12 month period ending
with the date of this Deed.
Except as provided at SCHEDULE 6.1.12.10 or as
provided herein, none of the directors, officers or
senior employees of the Company has given or received
notice terminating his office and/or employment and
no director, officer or employee will be entitled to
treat his office and/or employment as terminated as a
result of the provisions of this Deed nor are there
any facts known to ObjectShare which clearly indicate
that any directors, officers or senior employees
intend or are likely to leave
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their office and/or employment other than through
normal retirement within the 12 months following the
Closing Date.
6.1.12.11 Commissions, Liabilities
There are no agreements, arrangements or schemes in
operation by or in relation to the Company under
which any of the employees is entitled to shares or a
commission or remuneration of any kind calculated by
reference in whole or in part to turnover profits or
sales of the Company.
The Company's employees currently participate in
Objectshare's stock option plans. The Company itself
does not have in existence and is not proposing to
introduce any share incentive scheme, share option
scheme or profit sharing scheme for all or any of its
directors, officers or employees.
No gratuitous payment has been made to any employee
by the Company in connection with the sale of the
Shares. Except in respect of normal accruals of
remuneration or emoluments of employment, no sum is
payable to, or for the benefit of, any Employee and
there is no legal or moral obligation or ex-gratia
arrangements or practice to pay pensions, gratuities,
super-annuation or allowances or any other benefit or
sum.
Neither ObjectShare nor the Company has made any loan
or advance to any Employee or any future or former
director, officer or employee which is outstanding.
6.1.12.11.1 Outstanding Amounts
No amounts due to, or in respect of any of the
employees (including PAYE and National Insurance and
Pension Contributions are in arrears or unpaid. None
of the employees has any accrued rights to holiday
pay or pay in lieu of holidays which have not been
provided for in full in the Financial Statements or
the Interim Financial Statements.
6.1.12.12.1 Pension Warranties
Except under the ObjectShare (UK) Ltd Personal
Pension Scheme (a Group Personal Pension Plan insured
with Scottish Equitable Life Assurance Society) ("the
Plan") the Company does not contribute to any
arrangement nor as at the Closing Date may become
liable to contribute to any arrangement for the
payment of:
(i) any relevant benefits within the meaning of
Section 612 of the Taxes Act for or in
respect of any Employee;
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(ii) benefits of any kind payable to or in
respect of any Employee on retirement,
death, disability, sickness or other similar
circumstances.
(iii) the Plan is either (1) an exempt approved
scheme within the meaning of Section 592 of
the Taxes Act or (2) capable of obtaining
such approval from the date of its
commencement, an application therefor having
been submitted on time to the Board of
Inland Revenue and has at all times complied
in all respects with the requirements of all
legislation and Inland Revenue practice
relating to pensions and ObjectShare knows
of no reason why exempt approval should be
withdrawn or withheld.
(iv) two copies of the documents constituting and
governing the Plan have been disclosed to
the Purchaser together with two copies of
all relevant explanatory booklets and
announcements and other communications to
employees relating to the Plan and the Plan
is governed solely by such documents and
there is no obligation under the Plan to or
in respect of any employee other than under
such documents.
(v) a copy of the most recent actuarial report
relating to the Plan has been given to the
Purchaser together with any subsequent
written advice from the Scheme's actuary.
(vi) pending the Closing Date no new pension or
life insurance arrangements will be entered
into or established without the express
written agreement of the Purchaser.
6.1.12.12.2
(i) Except for the Plan the Company is not nor
has it been a party to any agreement or
arrangement for the payment of or
contribution towards any pensions or similar
benefits on retirement, death or disablement
for the benefit of any employee or former
employees (including directors) or for the
benefit of dependants of any such employees
or former employees nor has any proposal to
establish any such agreement or arrangement
been announced.
(ii) The provisions of the Plan are as set out in
the leaflet prepared by Bruce & Partners
Harpenden and as disclosed to the Purchaser
("the Booklet").
(iii) An accurate list of all employees who
contribute to the Plan has been disclosed to
the Purchaser. That list shows whether the
employee is contributing on Basis 1 or Basis
2 as set out in the Booklet.
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(iv) All contributions due to the Plan have been
paid by the Company and no Employee is
entitled to contributions in excess of Basis
1 or Basis 2. The Plan is an approved plan
for the purposes of section 630 of the
Income and Corporation Taxes Act 1988.
(v) All lump sum death in service benefits
(other than a refund of contributions, if
appropriate) payable under the Plan on the
death of a member while in service are fully
covered by an insurance policy issued by
Scottish Equitable. All premiums due under
that insurance policy have been paid (and
are deducted from the Company's normal
contributions to the Plan). The only
employees covered for lump sum death in
service benefits are those employees who
contribute to the Plan.
(vi) All of the assets of the Plan are invested
with Scottish Equitable who also deal with
benefit administration.
(vii) The benefits under the Company's Permanent
Health Insurance Scheme ("PHI Scheme") are
fully covered by an insurance policy and all
premiums due under that insurance policy
have been paid. No employee of the Company
is in receipt of any benefit under the PHI
Scheme.
6.1.13 INSURANCE
6.1.13.1 set out in SCHEDULE 6.1.13.1 is a complete list of
all material policies of insurance relating to the
business activities of the Company and all the assets
owned, leased or used by it are, to the knowledge of
ObjectShare, adequately and validly insured with
reputable companies and the terms of the policies are
such as would be acceptable to a prudent entrepreneur
carrying on a similar business with similar assets.
Brief details of the policies are set out in
Schedule;
6.1.13.2 the Company has fulfilled all of its obligations
pursuant to the insurance policies, in particular
with respect to the declarations of risks and claims
and the payment of premiums relating to such
policies. As at the date hereof the Company has not
received or given any notice of termination or
non-renewal or received any notice from any of the
relevant insurance companies of their intention
substantially to increase the premiums due, or to
raise the franchises or to reduce the cover provided.
6.1.14 PRODUCT LIABILITY
ObjectShare declares that the Company has incurred no
liability regarding product liability issues.
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6.1.15 ENVIRONMENT
ObjectShare declares that the Company has incurred no
liability regarding environmental issues.
6.1.16 LITIGATION
6.1.16.1 save for the cases brief details of which are fairly
disclosed in SCHEDULE 6.1.16.1, there is no current,
to ObjectShare's knowledge threatened or pending
litigation, arbitration, claim, judgement, award or
similar order, administrative proceeding,
administrative or tax investigation or any other
action or proceeding pending, subsisting or
contemplated whether as plaintiff or defendant in
relation to the Company and ObjectShare is unaware of
any facts or circumstances which might give rise to
any such action or proceeding. The provisions shown
in the Financial Statements are sufficient to cover
any material liability (including legal fees and
other expenses) in relation to such actions.
6.1.17 ABSENCE OF CHANGES
6.1.17.1 since the date of the Interim Financial Statements
and pending the Closing Date there has not been and
will not be in relation to the Company:
(i) any material adverse change in the financial
position, the assets, liabilities, business
or operations (and the Company has since the
date of the Interim Financial Statements
carried on business in the ordinary course
and in the same manner as in the past as a
going concern);
(ii) any modification in the capital of the
Company;
(iii) save with the prior written consent of
Valtech U.K., any declaration or payment of
any dividend or any other distribution of
profits or reserves;
(iv) any damage, destruction or other casualty
loss (whether or not covered by insurance)
materially affecting the business or
financial position of the Company;
(v) any purchase or sale of securities by the
Company, no issue by it of shares or other
securities, rights or options to purchase or
subscribe shares in the Company or which are
capable of granting the right to acquire or
subscribe securities which represent a share
in the capital of the Company;
(vi) any loan incurred, granted, promised or
secured by the Company in excess of Pound
Sterling 10,000;
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<PAGE> 30
(vii) the assumption of an obligation or liability
other than current obligations or
liabilities incurred in the normal course of
business;
(viii) except as disclosed on SCHEDULE 6.1.17.1,
any termination, waiver, amendment of, or
default in relation to, any contract,
undertaking or arrangement (including in
relation to any of the employees) other than
in the normal course of business;
(ix) except as disclosed on SCHEDULE 6.1.17.1,
any increase or promised increase in the
remuneration of employees, agents, sales
representatives or corporate officers or in
any of their benefits;
(x) except as disclosed on SCHEDULE 6.1.17.1,
any sale, purchase, lease or transfer of any
tangible or intangible assets other than
items of stock in the normal course of
business, nor any cancellation or waiver of
any receivables;
(xi) any guarantee, surety or letter of comfort
in respect of the obligations of third
parties;
(xii) any lien, security interest, pledge,
mortgage, easement, or other charge granted
over any tangible or intangible assets;
(xiii) any social disturbance, conflict, strike,
lock-out, sit-in or similar event.
6.1.18 LISTS
6.1.18.1 set out in SCHEDULE 6.1.18.1 are lists showing in
relation to the Company:
(i) the name and address of each person who has
received general or special powers of
attorney or who is authorized to bind the
Company;
(ii) all real estate, land, facilities or other
property owned, rented, leased or otherwise
occupied;
(iii) banks and bank accounts and credit lines
showing (a) the names of people with power
of signature, (b) the amount of each credit
line and the level of utilization and any
long, medium or short term credit or any
other financing agreement, and (c) the
amount of any borrowing guaranteed by the
Company or any third party;
(iv) all guarantees, sureties or endorsements
granted in favor of third parties;
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(v) the name of each corporate officer and of
the gross annual remuneration (including all
benefits) of each of them;
(vi) all material agency, license, distribution
or representation agreements;
(vii) all grants, subsidies or other public
benefits which the Company is under a
contingent liability to repay;
(viii) existing material customers and suppliers.
6.1.19 YEAR 2000 COMPLIANCE UNDERTAKING
6.1.19.1 The information system of the Company, including,
among others, management tools, finance tools,
quality tools, logistics tools, maintenance tools,
data interchange tools, research and development
tools, software development tools, personnel
management tools, is Year 2000 Compliant, or will be
Year 2000 Compliant at the Closing Date.
6.1.19.2 to the knowledge of ObjectShare, the Year 2000 date
change will not generate any logistical security
problem (including, among others, elevators, alarm
systems, automated access control systems), inside
the Company's sites.
6.1.19.3 to the knowledge of ObjectShare, the Company will not
suffer any disruption in its activities or damage to
any of its assets or incur any liability in
connection with such passage.
6.1.19.4 Since 1998, the Company has taken all required
measures to provide its clients with Year 2000
Compliant products and services.
6.1.19.5 In case of any likelihood of injury or damage due to
products or services commercialized by the Company,
the Company has taken all required measures in order
to prevent any injury or damage.
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6.1.20 GENERAL
6.1.20.1 all the information contained in this Deed including
the recitals and the SCHEDULES hereto is complete and
accurate in all material respects;
6.1.20.2 there is no existing fact or event known to
ObjectShare which is likely to have an adverse effect
on the assets, business or activities of the Company
or which could reasonably be expected to adversely
affect the willingness of Valtech U.K. to purchase
the Shares upon the terms of this Deed which has not
been disclosed to Valtech U.K. by or on behalf of
ObjectShare in writing;
6.1.20.3 for the purposes of Article 6 ObjectShare shall be
deemed to have knowledge of a fact or event if any of
the directors or corporate officers of the Company
had, or would, having made reasonable inquiry, have
had, knowledge of it.
6.1.21 AUTHORITY RELATIVE TO THIS DEED
6.1.21.1 the execution and performance of this Deed by
ObjectShare do not and will not conflict with or
result in any violation or breach of, or any default
under, any law or any obligation of ObjectShare or
any other agreement to which it is a party, nor is
there any litigation current or pending involving
ObjectShare which could prevent or hinder the
execution and performance of this Deed;
6.1.21.2 ObjectShare has full corporate power, authority and
right to enter into this Deed and to consummate the
transaction contemplated hereby. The board of
directors of ObjectShare have taken all necessary
corporate action duly to authorize the execution and
performance of this Deed.
6.2 ObjectShare recognizes and accepts that Valtech U.K. has entered into
this Deed inter alia in reliance on the Warranties. The liability of
ObjectShare in relation to the Warranties shall be in no way limited
should it be established that Valtech U.K. was aware of the inaccuracy
of one or more of the Representations and Warranties either at the date
hereof or at the Closing Date.
6.3 ObjectShare further acknowledges it has also given the Warranties as
representations with the intention of inducing Valtech UK to enter into
this Deed and that Valtech has been induced to enter into this Deed on
the basis of and in full reliance upon them.
6.4 Each of the Warranties shall be construed as a separate and independent
warranty and representation such that Valtech UK shall have a separate
claim and right of action for every breach of each such warranty and
representation.
6.5 None of the information supplied by or on behalf of the Company or its
advisers or agents to Objectshare or its agents and advisers in
connection with this Deed constitutes a representation or warranty of
its accuracy by the Company to ObjectShare and ObjectShare waives each
and every claim against the Company and each director, officer or
employee which it might otherwise have in respect of such information.
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<PAGE> 33
6.6 AUTHORITY RELATIVE TO THIS DEED
The Purchaser has full corporate power, authority and right to enter
into this Deed and to consummate the transaction contemplated hereby.
The board of directors and shareholders of the Purchaser have taken all
necessary corporate action duly to authorize the execution and
performance of this Deed.
7. INDEMNIFICATION
7.1 Without prejudice to any other rights Valtech U.K. may have,
ObjectShare undertakes to indemnify Valtech U.K. and /or the Company
for all losses, costs, damages, fees and expenses (hereinafter
"Damage") incurred or suffered by Valtech U.K. and/or the Company which
arise from:
7.1.1 any failure of ObjectShare to fulfil its obligations
hereunder;
7.1.2 any breach of any Warranties;
7.1.3 any material adverse change in the stockholders/shareholders
equity of the Company and the German Company on a consolidated
basis as at the date of the Interim Financial Statements as
compared with such stockholders/shareholders equity at the
Closing Date.
7.2 Save for claims in respect of Warranties in relation to fiscal,
parafiscal or social security matters which may be made up to the
expiry of the six years from the date hereof, and for claims in respect
of Year 2000 compliance (article 6.1.19 ) which may be made up to three
years following the Closing Date, any claim for indemnification
pursuant to Article 7.1 must be made not later than three years
following the Closing Date by notice in writing to ObjectShare in
accordance with Article 13 hereof. Such notice shall give brief details
of the relevant facts and, so far as practicable, an estimate of the
Damage. Indemnification shall be due if notice of the relevant facts is
given within the relevant period even if the quantification of the
Damage does not take place until after the expiration of such period.
7.3 In the event that any Damage results from a demand or claim made by a
third party Valtech U.K. shall notify ObjectShare and ObjectShare, or
its counsel, shall have access to all relevant books and other
documents of the Company concerning such a demand or claim, and these
shall be made available at the registered office of the Company or any
other place mutually agreed upon, subject to reasonable notice, and for
a reasonable period. ObjectShare shall have the right, at its own
expense, to join in the defense or the conclusion, by way of settlement
or amicable agreement of any such demand or claim. However, Valtech
U.K. shall, after prior consultation with with ObjectShare, have an
absolute discretion as to whether and, if so, on what terms, to settle
any such demand or claim.
7.4 All payments due under this Article 7 shall be made within one month
from the date on which notice of the Damage is given by Valtech U.K. to
ObjectShare or, if later, from the date on which the Damage is
quantified.
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7.5 The total cumulative liability of ObjectShare for any and all Damage
suffered by Valtech UK and/or the Company together with any Damage (as
defined in the German Contract) shall be limited to $ 1,150,000.
8. NON-COMPETITION
ObjectShare undertakes with the Purchaser (for itself and as trustee
for the Company) that, for a period of one year from the Closing Date,
it shall not, without the prior written consent of Valtech U.K.,
directly or indirectly, in any form whatsoever through any person
controlling, controlled by or under common control with ObjectShare,
alone or in association with any other person, firm, corporation,
partnership or other business organization, in the Territory, except as
expressly provided for herein:
8.1 engage in, or own or acquire any interest in (except as the owner for
investment of securities dealt on a recognized stock exchange which
does not exceed 5% in nominal value of the securities of that class) or
create any business which is engaged in the consulting and training
services related to Small-talk software as conducted by the Company or
its/their successor in interest (herein the "Competitive Business");
8.2 in any way, directly or indirectly, for the purpose of conducting,
engaging in any Competitive Business, (i) call upon, solicit, advise or
otherwise do, or attempt to do, business relating to the Competitive
Business with any former customers of the Company existing at, or one
year prior to, the Closing Date or (ii) take away or interfere or
attempt to interfere with any former customer existing at, or one year
prior to, the Closing Date, trade, business or patronage of the Company
relating to the Competitive Business;
8.3 Do or say anything which is likely or intended to damage the goodwill
or reputation of the Company or which is intended to cause any person
to cease to do business with the Company on substantially equivalent
terms to those previously offered or lead any person not to engage in
business with the Company;
8.4 In any way hold itself out or permit itself to be held out as being
interested in, or in any way connected with, the Company;
8.5 ObjectShare undertakes not to use, develop or exploit in any manner
whatsoever, directly or indirectly, any of the Company's proprietary
technology, software, or know-how in the Territory with respect to
Small-talk software;
8.6 ObjectShare undertakes not to use for any purpose or disclose to a
third party a list of clients or any other confidential information
relating to the activity, business, asset, clients, of the Company with
respect to Small-talk software;
8.7 The non-competition undertaking defined in this Article 8 may be set
aside by obtaining Valtech U.K.'s prior written consent.
8.8 ObjectShare acknowledges that the duration, extent and application of
each of the restrictions are no greater than is necessary for the
protection of the goodwill and confidential information of the business
of the Company and the value of the Shares.
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8.9 ObjectShare undertakes with Valtech U.K. (for itself and as trustee for
the Company) that it will not for the period of 12 months from the
Closing Date solicit or endeavor to entice away, offer employment to,
or offer any contract for services to, any person who was a director or
employee of the Company at the date of this Deed with a view to the
specific knowledge or skills of such person being used by, or for the
benefit of, any person carrying on business in competition with the
business carried on by the Company.
9. SPECIFIC REPRESENTATIONS
9.1 TERMINATION OF CERTAIN FINANCIAL OBLIGATIONS
9.1.1 ObjectShare unconditionally and irrevocably agrees with and
undertakes to the Purchaser (acting for itself and as trustee
for the Company and the German Company) that as of the
Closing:
(i) the Company and the German Company shall be hereby
released and discharged from (or agrees to procure
the release and discharge of); and
ii) ObjectShare hereby waives (or agrees to procure the
waiver of) all rights against the Company and the
German Company arising from or in relation to;
each liability, obligation and undertaking of any nature
whatsoever (whether actual or contingent) which the Company
and/or the German Company owe(s) or has or have before or at
the Closing Date toan ObjectShare Group Company and successors
thereto
Without in any way affecting the foregoing, ObjectShare agrees
to pay the Purchaser (acting for itself and as trustee for the
Company and the German Company) on demand an amount equal to
the amount of any Damage suffered or incurred by the Company
and/or the German Company with effect from or after the
Closing Date because of or in relation to a liability,
obligation or undertaking of any nature whatsoever (whether
actual or contingent) which the Company or the German Company
owes or has before or at the Closing Date to an ObjectShare
Group Company and/or successors thereto.
9.1.2 ObjectShare hereby agrees to indemnify the Purchaser (acting
for itself and as trustee for the Company) against claims
brought by Cincom Systems, Inc. or any other third party in
relation to, or as a consequence of, the agreement dated 27
August 1999 between ObjectShare Inc. and Cincom Systems,
including losses, costs, fees and expenses reasonably incurred
by ObjectShare UK and/or the Company related thereto.
It is agreed between the Parties that for such claims:
(i) ObjectShare shall have an absolute discretion as to
whether and, if so, on what terms to settle any such
claim, in so far as it is in the interest of the
Company;
(ii) Valtech U.K. and/or the Company shall be held
harmless in this respect and consequently the
duration and cap provisions of Article 7 shall not be
applicable in this case.
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9.3 OBJECTSHARE WARRANTS THAT:
(i) the following amounts have been provisioned on October 31,
1999 by the Company and these provisions are full and adequate
provisions for these items:
- Pound Sterling 60,000 regarding the lease to which
the Company is a party as lessee and the undertaking
to redecorate the premises on termination of said
lease
- Pound Sterling 6,000 regarding Mr. Russell Prince
Right, former managing director of the Company in
respect of a lease-car agreement,
(ii) Mr. Robert Buick, hired as a consultant by the Company, shall
continue in such consultancy capacity to the extent both the
Company and Mr. Buick are agreeable to the same. ObjectShare
shall deliver to Valtech U.K., on the Closing Date at the
latest, a certificate providing for such specific
representation.
9.4 This Deed shall be binding upon and inure to the benefit of and shall
be enforceable by ObjectShare and Valtech U.K. and their respective
successors or assignee.
10. ASSIGNMENT
10.1 This Deed is personal to the Parties and cannot be assigned by any of
them save that (i) Valtech U.K. may assign its rights hereunder to an
Associated Company for which purpose the term "Associated Company"
shall mean any company which, directly or indirectly, controls or is
controlled by or is under the same Control as Valtech U.K. and the term
"Control" shall mean the ability to exercise or to procure the
exercise, directly or indirectly, of at least 50 percent of the voting
shares of a company; and (ii) Valtech U.K. (or such Associated Company)
may freely assign its rights pursuant to Article 7 hereof to any
person(s) or corporation(s) to whom the Shares may be transferred
following the Closing Date. Notwithstanding the foregoing, ObjectShare
may, without the prior consent of Purchaser, assign its rights and
obligations hereunder to the surviving corporation in a merger or
consolidation to which it is a party or to any person that acquires all
or substantially all of its capital stock or assets.
ObjectShare may only transfer its obligations hereunder if the party to
whom the obligations are proposed to be transferred is an entity (or
entities) which by contract or operation of law assumes (or assume)
ObjectShare's obligations under and in connection with this Deed as if
originally party to such documents in place of ObjectShare. Valtech
U.K. shall attorn to any assignee as envisaged under this Article 10.
11. EXPENSES
11.1 Each of the Parties, the Company excluded, shall bear all the costs and
expenses incurred by it in connection with this Deed and its execution
including, but not limited to, the fees and disbursements of any
counsel, independent accountant or any other person whose services may
have been used by the said Party in relation hereto. However, any fees
or costs associated with any routine accountancy performed on behalf of
the Company but not in connection with this Deed and its execution
shall remain with the Company.
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12. CONFIDENTIALITY
12.1 The Parties undertake to hold in confidence and not to disclose to
third parties (except to their professional advisors and, in the case
of Valtech U.K., to any of its Associated Companies without the prior
written consent of the other, the terms and conditions of the
transaction contemplated hereby.
12.2 All announcements by or on behalf of the Parties hereto relating to the
transaction contemplated hereby shall be in terms agreed by the
Parties.
Save that Valtech S.A., parent company of Valtech U.K., and ObjectShare
shall be entitled to make such announcement as it respectively thinks
fit to comply with (i) the regulations of the Paris Stock Exchange on
which Valtech S.A. is listed and (ii) the NASDAQ regulations in the
case of ObjectShare. However the Parties agree that in this case they
shall consult with each other prior to making any such release with
respect to the contents of this Deed or the transactions contemplated
thereby.
12.3 If for any reason the transaction contemplated hereby is not completed,
the obligations of the Parties pursuant to this Article 12 will remain
in force until [November19, 2000].
13. NOTICES
13.1 Any notice required to be given hereunder shall be validly given if
sent by registered letter (with return receipt requested) or by fax,
confirmed by such registered letter, or by hand delivery against
written acknowledgement of receipt to the following addresses or to
such other address as may have been communicated by either of the
Parties to the other in accordance herewith:
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for notices to ObjectShare:
---------------------------
ObjectShare, Inc.
16811 Hale Avenue, Ste. A
Irvine, California 92606 USA
To the attention of the Chief Executive
Officer, Fax: (949) 253-3724
Cc: Paul Hastings Janofsky & Walker LLP
695 Town Center Drive, 17th Floor
Costa Mesa, California 92626 USA
To the attention of William J. Simpson
Fax: (714) 979-1921
for notices to Valtech U.K.:
----------------------------
Valtech (U.K.) Limited
279 Tottenham Court Road
London W1P6AA
to the attention of the Directors/managing
Director
Fax: ______________
cc: Valtech S.A.
To the attention of Jean-Yves Hardy,
Chief Executive Officer
Fax: 33 1 41 88 23 01
cc: Archibald Andersen,
Attn.: Mr. Mark Richardson and
Ms. Celine Maironi-Persin
Fax: 33 1 55 61 14 14
Notices shall be effective as of the date of receipt.
14. PROPER LAW AND JURISDICTION
14.1 This Deed shall be governed by and construed in accordance with the
laws of England and Wales.
14.2 Valtech UK and ObjectShare irrevocably agree that the Courts of England
shall have jurisdiction in relation to any matters arising out, or in
connection with, this Deed and, for those purposes, hereby irrevocably
submit to the exclusive jurisdiction of those Courts.
15. WAIVERS
15.1 The failure by any Party hereto promptly to avail itself in whole or in
part of any right, power or privilege to which such Party is entitled
pursuant to the terms of this Deed shall not constitute a waiver of
such right, power or privilege which may be exercised at any time. To
be valid, waiver by any Party hereto of any such right, power or
privilege must be in writing and notified to the other Party as
provided herein.
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16. HEADINGS
16.1 The descriptive words or phrases at the head of the Articles are
inserted only as a convenience and for reference purposes and are not
intended to in any way define, limit or describe the scope or intent of
the Articles which they precede.
17. WHOLE DEED
17.1 This Deed together with the documents referred to in it or executed at
the Closing Date constitutes the entirety of the agreement between the
Parties with regard to the subject matter hereof and supersedes any
previous agreement or agreements whether verbal or written with regard
thereto; provided, however, that any, scheduled exception to a specific
article in this Deed shall apply only to that specific article and no
other article herein unless expressly provided for therein.
18. INVALIDITY
18.1 If any provision of this Deed is held to be illegal or unenforceable,
the illegality or unenforceability of that provision will not affect
the enforceability of any other provision of this Deed.
19. TIME OF THE ESSENCE
19.1 Time is of the essence of this Deed both as regards any time, date or
period specified in this Deed and as regards any time date or period
which may be substituted for them in accordance with this Deed or by
agreement in writing between ObjectShare and the Purchaser.
20. FURTHER ASSURANCE
20.1 At all times ObjectShare shall (at its own cost and expense) do or
procure to be done all acts and things and/or execute or procure the
execution of all documents required of it by the Purchaser to vest in
the Purchaser (or as it directs) the Shares, and to give the Purchaser
the full benefit of the provisions of this Deed.
20.2 At all times ObjectShare shall (at its own cost and expense) provide or
procure to be provided to the Purchaser all such information relating
to the business and affairs of the Company as it or any other member of
ObjectShare's Group may have in its possession or under its control as
the Purchaser shall from time to time reasonably require and, for this
purpose, shall give the Purchaser and its representatives, agents and
advisers full access to, and permit them to copy, all such information.
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21. COUNTERPARTS
21.1 This Deed may be entered into in any number of counterparts and by the
parties on separate counterparts, but shall not be effective until each
party has executed and delivered at least one counterpart. Each
counterpart, when executed and delivered, shall constitute an original,
but all counterparts shall together constitute one and the same
instrument.
22. APPLICABILITY
22.1 In case of discrepancy between this Deed and its Schedules, the Deed
shall prevail.
Executed as a deed by or on behalf of the Parties on the date which first
appears in this Deed.
Executed as a Deed
(but not delivered until dated) Valtech Limited
by Valtech Limited acting by:
/s/
---------------------------------------
Director
/s/
---------------------------------------
Director/Secretary
Executed as a Deed
(but not delivered until dated) ObjectShare, Inc.
by ObjectShare, Inc.
/s/
---------------------------------------
---------------------------------------
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