The Negotiation and Drafting of International Contracts Course of Mr. Robert Simpson
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- I 18 shares 2.40%
- I 18 shares 1.60%
- , an individual residing at _____________________________________________________
I 18 shares 2.40%Total: 750 shares 100.OO% Purchaser would buy 25% of the above, by purchasing 91 shares from A and 96 shares from B, leaving the shareholdings as follows: Purchaser 187 shares 24.94% A 225 shares 30.00% B 225 shares 30.00% C 34 shares 4.54% D 20 shares 2.66% E 20 shares 2.66% F 9 shares 1.20% G 6 shares .80% H 6 shares .80%
A 225 shares 20.00% B 225 shares 20.00% C 34 shares 3.02% D 20 shares 1.76% E 20 shares 1.76% F 9 shares 0.80% G 6 shares 0.53% H 6 shares 0.53% I 18 shares 1.60%Total: 750 shares 100.OO% 2. Consideration Purchaser would pay a total purchase price for the above shares as follows: (a) The consideration payable to Messrs. A and B for their 187 shares would be deferred and determined in function of the economic success of the Company. If the Company meets the revenue and cash balance targets as described in the annexed Business Plan at the end of the first 12 months of operations subsequent to the date of the Closing (i.e., revenue of US$ _____and a positive cash balance of US$______), Purchaser would forthwith pay each of Messrs. A and B US$_____ per share. (b) The consideration for the second 25% of the shares would be US$________ , payable at the date of the Closing, for which the Company would issue Purchaser 376 new shares (representing a par value of ______ Euros and an issuance premium of $___________. This consideration is envisioned to cover the Company’s cash needs for the first eighteen months following the date of the Closing. 3. Conditions of purchase The purchase of the shares would be subject to the conclusion of a mutually acceptable acquisition agreement which would contain the following conditions precedent to the Closing: (a) the transformation of the Purchaser from a société à responsabilite limitée, into a société anonyme; (b) the successful completion of an audit and standard due diligence by representatives of Purchaser including with respect to the valid registration and ownership of all intellectual property rights; (c) the confirmation of free and complete title to the Assets and, in particular, as concerns the bankruptcy proceedings in which certain of such Assets have been placed; (d) the transfer of all the Assets to the Company, at a symbolic price of US$1, free and clear of any liens and encumbrances of any nature whatsoever; (e) the conclusion of appropriate and mutually acceptable employment or consulting agreements with X and Mr. B as well as employment agreements with the key personnel described in the annex hereto; (f) the approval of the acquisition agreement and the transactions contemplated therein by the shareholders of the Company and the Board of Directors of Purchaser; and (g) the completeness and accuracy, at the date of the Closing of all the representations and warranties set forth in the acquisition agreement. 4. Other conditions (a) Prior to or simultaneously with the Closing, the Company and Purchaser would enter into a license agreement pursuant to which the Company would grant Purchaser the right to manufacture and sell products which agreement shall provide, inter alia,……. (b) Prior to or simultaneously with the Closing, the Company and Purchaser would enter into a non-exclusive distribution agreement pursuant to which the Company would grant the Purchaser a non-exclusive right to distribute the Company’s products in (define territory). (Note: A number of points need to be clarified. For example, would Purchaser act as exclusive distributor of all the Company’s present and future products or just inks and graphic arts products? It is also necessary to consider carefully the royalty provisions. The license agreement must be a bona fide arms’ length transaction between the parties. It is not possible under French law to structure the royalty as free (this would constitute an illegal use of the Company’s assets). Also it is not appropriate to tie consideration for a license from the Company to consideration payable to only certain of the shareholders for the purchase of their shares.) (c) Prior to or simultaneously with the Closing, the shareholders of the Company and Purchaser would enter into a shareholders’ agreement with respect to the management of the Company and the disposition of shares of the Company. In particular, the shareholders would agree to appoint a Purchaser representative as President (Président) of the Company and a representative of the non-Purchaser shareholders (X) as full time General Manager (Directeur Général) of the Company, responsible, under the direction of the President, for the Company’s day to day operations. The agreement would also provide that the Board of Directors be comprised of an equal number of representatives of Purchaser and the other shareholders and set forth voting requirements for strategic decisions. (d) The shareholders’ agreement would also provide that Purchaser have the right, for a period, commencing on January 1, 2006 and ending on December 31, 2007, to buy the remaining 50% of the Company’s shares for a total price equal to one half of four times the Company’s EBIT during the preceding twelve-month period. From January 1, 2008 and thereafter, Purchaser would have a right of first refusal to purchase the remaining 50% of the Company’s shares for a total price equal to the offer of any bona fide, third party purchaser. 5. Non-competition agreements (Set forth text) 6. Finders Neither Purchaser, the Company nor the shareholders of the Company have incurred or would incur any broker’s, finder’s or agent’s fees in connection with the proposed acquisition. 7. Expenses The Shareholders, personally, and not out of the assets of the Company, would pay any and all legal, accounting or other expenses incurred by the Shareholders or the Company in connection with the acquisition and the transactions contemplated in the acquisition agreement. Purchaser would be responsible for payment of the 4.80% registration tax on the sale of the shares purchased from Messrs. A and B (which it understands would in no event exceed the maximum of approximately 3,000 Euros due on the sale of shares of a société anonyme). 8. Investigation From the date of the acceptance of this letter, Purchaser, its representatives, agents, attorneys and accountants would be permitted to continue their full investigation of the Assets and the business and operations of the Company and would on reasonable request have full access to the Company’s premises, properties, files, books and records and the possibility to consult with the Company’s proposed management and key personnel. 9. Exclusivity In consideration of Purchaser’s continuing to undertake the substantial legal, accounting and other expenses incident to its further due diligence and the preparation of the acquisition agreement and related agreements, the Company and the current shareholders of the Company agree that, from the date of this letter through_________, 2002 or such other date as our discussions regarding this transaction may terminate, whichever is later, neither the Company nor the Shareholders shall engage, either directly or through representatives, in any discussions or negotiations with any other party relating to the acquisition of the Company’s shares or the Assets. Neither the Company nor the Shareholders have any other obligations (contractual or otherwise) that would be inconsistent with or in any way prevent it or them from carrying out the transactions envisioned herein. 10. Confidentiality The Company and the shareholders, on the one hand, and Purchaser, on the other hand, would keep totally confidential and would not disclose the transactions envisioned herein or any documents or information exchanged among the parties to any third party nor make any public announcement relating thereto without the consent of the other party, except where such disclosure is required by law and then only after notice to the other party. 11. Acquisition agreement Once this letter is accepted, we would forthwith work with you towards the negotiation and execution of a binding acquisition agreement and related agreements reflecting the foregoing provisions. The acquisition agreement would include such other terms and conditions customary in transactions of this character, including, but not limited to, the standard representations and warranties as to the Assets and the Company’s business and operations. 12. Purpose and effect The purpose of this letter is to present our proposal and outline the basic terms of the transaction. Except as provided otherwise herein, any pre-contractual liability or any express or implied business combination, partnership or venture of the parties under the principles outlined in this letter is expressly excluded. 13. Applicable law The applicable law shall be the express provisions of this letter and the intent of the parties as expressed herein, as may be supplemented, if necessary, by principles of French law. 14. Resolution of disputes Any and all disputes arising out of or in connection with this letter, the acquisition agreement or any other related agreement shall be submitted to the Commercial Court of ______________. If you find the above satisfactory, please sign a copy of this letter and return it to us as promptly as possible. Very truly yours, PURCHASER CORPORATION AGREED TO AND ACCEPTED: _____________________ By: ______________________ Authorized agent 4. Due Diligence Questionnaire (for Acquisition of Shares) Note: If any information is not documented, please supply a precise written statement, in particular, with respect to any oral undertakings. 1.1. Legal status of the Company Is the Company validly in existence and able to regularly conduct its business in compliance with its corporate purpose and all other legal and administrative requirements applicable to its type of activities? Updated copy of the Company’s Articles and By-laws (statuts). Extract Kbis dated within the past month. 1.2. Shares Have the Company’s shares been validly issued and fully subscribed and paid for? Do they represent all of the existing shares of capital stock of the Company? Do the shareholders own all of the shares free and clear of all liens and encumbrances whatsoever and are such shares the subject of any change in beneficial ownership or subject to any mortgage or the like or any other restrictions affecting the free transfer thereof in any manner whatsoever such as a promise of sale, preemptive or preferential rights or any other restrictions? Schedule of shareholders. 1.3. Increase in capital Has the principle of the increase in capital reserved to Sun been voted? Is it about to be? What are the terms and conditions? Supply, if applicable, the drafts of documents. 1.4. Transfer of shares of the Company Is the transfer of the shares or the subscription by ___ to an increase in capital in violation of any law, regulation, norm or administrative or judicial decision or any provision of the Company’s statuts which would result in a default under an agreement or loss of any rights whatsoever? To the extent that may be necessary, have all authorizations or consents been obtained? 1.5. Financial statements a) Provide, if they exist, the balance sheet, general operating statement and profit and loss statement of the Company, certified by the Company’s statutory auditors as well as their certification that such financial statements accurately reflect the Company’s accounting books and records and have been prepared in accordance with generally accepted accounting principles applied on a consistent basis. b) Are such financial statements true and accurate and do they substantially represent the Company’s activities and financial situation for the periods in question? c) Tax declarations and annexes 2002 and the shareholders’ approval of the accounts. 1.6. Assets a) Real estate Provide an exact and summary description of any real property of which the Company is the owner, concessionaire or lessee with an indication in each case of the corresponding legal status. b) Fixed assets Provide an exact and summary description of all fixed assets of which the Company is the owner, concessionaire or lessee with an indication in each case of the corresponding legal status. c) Material, equipment and furnishings Is the material, equipment and furnishings used by the Company the property of the Company or is it rented? Provide a schedule with an indication in each case of the corresponding legal status. d) Inventory Does the inventory have a useful value at least equal to the value for which it is listed in the accounts? e) State of assets Are all the Company’s assets in a normal state of repair and good working order? Are they apt to satisfy the needs of the Company’s activity? f) Intellectual property Are all the trademarks or names, the company’s name, patents and know how used by the Company in any manner whatsoever (hereafter “Intellectual Property”) owned by the Company and valid and subsisting? Provide a schedule and indicate whether each item is a patent, trademark or name, know how, etc. and whether it is owned or licensed. Is there any claim, demand or proceeding pertaining to any of the Intellectual Property? Does a shareholder, officer, director or employee have an interest in any of the Intellectual Property? Is there any contractual or legal restriction on the manner in which any of the Intellectual Property may be used? g) Title to properties Does the Company have, with respect to the properties used in its business, the right and title of the nature indicated case by case in the schedules to be provided (or, if not, some other property right)? Are such rights free and clear of any liens, encumbrances or any other restrictions or charges of any nature whatsoever? Are the leases and contracts subject to any particular restrictions and are they valid and subsisting and being properly carried out? Is any one of them in default and would the transfer of shares be in violation of any of the provisions thereof? h) Receivables, prepaid expenses, loans Do all receivables, except those which are reflected in provisions for bad debts, represent valid and binding obligations to the Company and are they collectable with reasonable diligence in the ordinary course of business? Are all accounts reflected in the financial statements as pre-paid expenses or deferred charges properly attributable to the Company’s future operations? Except as may be indicated in the annexes to the balance sheets, has the Company made a loan or extended credit which is unusual as to its amount or nature? 1.7. Liabilities a) Except as may be indicated in the financial statements or schedules to be provided, does the Company have any undertaking, liability or obligation, whether or not accrued, including without limitation, any guarantee or security or any tax or labor liability? b) Except as may otherwise be set forth in a schedule to be provided, is all the indebtedness reflected in the balance sheet and can it be reimbursed at any time without any penalty or indemnity whatsoever? d) Except as may otherwise be set forth in a schedule to be provided, have all reserves have been regularly accounted for, in particular, as concerns possible capital losses, amortization, litigation and any other contingent liability? 1.8. Taxes and charges Has the Company correctly and completely filed all declarations required to be filed on or prior to the date hereof and has it paid when due all taxes and social charges for the periods covered by such declarations? (it being understood that the term “taxes and charges” shall include all taxes, duties and levies of any kind, national or local, including all social security, retirement and other social charges, without any imitation. 1.9. Authorizations and compliance with laws Does the Company have all necessary authorizations and permits to conduct its business, in particular, as concerns the protection of classified establishments and the protection of the environment? Is the Company in compliance with all laws concerning the protection of the environment? Has the Company substantially complied with all laws, decrees and regulations actually in force or about to enter into force concerning its activities, its business or the envisioned sale of the shares, including without limitation, all laws and regulations governing labor relations and social security? 1.10. Litigation Except as may otherwise be set forth in a schedule to be provided, is there any action, suit or judicial proceeding pending or threatened against the Company and/or its shareholders, and is there any known basis for such action, suit or proceeding? 1.11. Insurance Is the Company normally insured with respect to its assets and responsibilities, has there been any default in the payment of premiums for any one of its policies or is there any ground for cancellation or avoidance of any one of its policies, reduction in the coverage afforded or unusual increase in the premiums? 1.12. Employees Except as may otherwise be set forth in a schedule to be provided, is there any pending or threatened labor dispute directly or indirectly involving the Company, and is the Company party to any agreement or contract other than collective agreements which are applicable to it because of the nature of its business? Provide a schedule of employees, their employment agreements, length of service, positions, salaries and advantages. Do the employment agreements contain any clause conferring to any employee any particular advantage? What commitments have been made by the Company to employees whose recruitment has been envisioned? 1.13. Shareholdings Except as may otherwise be set forth in a schedule to be provided, does the Company have any shareholding or interest in another company of any kind? 1.14. Contracts Provide a schedule of contracts in force and effect, specifying if the Company is bound by any contracts which are exorbitant in the context of its normal course of business, if all the contracts to which the Company is a party are being carried out in compliance with their provisions and if any party to such contracts is in default with respect to any obligation thereunder. 1.15. Suppliers, clients and partners Do any suppliers, clients or other important business partners benefit from any advantage which is not strictly in compliance with normal business practice. Provide a schedule of principal suppliers and principal clients. Provide a schedule of agency, intermediary, brokerage, purchase or sale commission contracts with a description of the conditions thereof. 1.16. Directors and officers, bank accounts and financial agreements The names of all the directors and officers of the Company should be set forth in a schedule to be provided along with the names of all employees of the Company who are authorized on the bank accounts or have the authority to act on behalf of the Company. An exhaustive schedule of bank accounts, credit facilities, guarantees, factoring and any financial agreement in general should also be provided. 1.17. Absence of changes Specify if the Company knows or has reason to know, since the end of its most recent fiscal year, of any material change in its situation (legal, financial or otherwise), assets, liabilities, commitments, business or property other than changes in its ordinary course of business, the aggregate of which does not substantially affect the Company’s value. Specify if there is any fact (other than general information relating to economic and commercial conditions, competition, the evolution of techniques concerned and any other similar elements) which may have material adverse consequences on the Company’s business. 5. Agreement for Sale of Stock AGREEMENT FOR SALE OF STOCK This AGREEMENT FOR SALE OF STOCK (the "Agreement"), is made and entered into this ___ day of ___________, 2002, by and among:, an individual residing at _____________________________________________________,_______________, a _________________ corporation with offices at _____________________________________________, ___________________, an individual residing at _________________________________________________________(___________, _________________and ________________being hereinafter referred as the “B Parties”); and Mr. A, an individual residing at _________________________________________________________(the B Parties and A being hereinafter referred to as the “Sellers” ); and ___________, a French société anonyme with a capital of _________ Euros and its registered office at ____________, France, and registered under RCS no. ________________(the “Buyer”). WITNESSETH: WHEREAS, the Buyer wishes to acquire a 50% interest in the patents, patent applications, know how and intellectual property and other inventions as well as the material, equipment and furnishings (as listed in the schedules to the Guaranty Agreement annexed hereto), which assets have recently been acquired by ________________, a French société par actions simplifiée with a capital of 37,000 Euros, comprised of 3,700 shares with a par value of 10 Euros per share, and its registered office at ______________, France (hereinafter the “Company”), by purchasing, at the closing on the date hereof (the “Closing”) 50% of the shares of capital stock of the Company; WHEREAS, the Buyer wishes to have a call on the remaining 50% of the shares of the Company from January 1, 2006 through December 31, 2007 and thereafter a right of first refusal to purchase such shares; WHEREAS, the Sellers are the owners of all the shares of capital stock of the Company and wish to sell or cause to be sold to the Buyer an initial 50% ownership of the Company, in part by the sale of shares from the Sellers, and in part, by the issuance of new shares to the Buyer, as described below, and further wish to grant the Buyer the above-mentioned call and right of first refusal with respect to the remaining 50% of the shares of the Company; WHEREAS, the Sellers acknowledge that the Buyer would not have entered into this Agreement without the Guaranty Agreement annexed hereto, it being understood that such constitutes an essential element of the Buyer’s acquisition of the Shares for the agreed price; WHEREAS, the audit conducted by the Buyer shall not in any way affect the scope of the Guaranty Agreement; WHEREAS, the purpose of this Contract is to set forth the terms and conditions of the purchase of the Shares by the Buyer (without limiting the application of the Guaranty Agreement) at the Closing; NOW, THEREFORE, in consideration of the above and the mutual covenants and agreements contained herein and in the annexes hereto, the parties hereto hereby agree as follows: Directory: FACULTY FACULTY -> Dsci 3870: Management Science FACULTY -> Handling Indivisibilities FACULTY -> Course overview FACULTY -> Curriculum vitae wei chen professor FACULTY -> Digital image warping FACULTY -> Samples of Elements Exam Question III contains All Prior Exam Qs III except FACULTY -> 【Education&Working Experience】 FACULTY -> References Abe, M., A. 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