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Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act:

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report (December 31, 2001):

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes þ No o

Indicate by check mark which financial statement item the registrant has elected to follow:


*	Listed, not for trading or quotation purposes, but only in connection with the registration of the American Depositary Shares pursuant to the requirements of the Securities and Exchange Commission.

You should read the following selected financial data together with Item 5 “Operating and Financial Review and Prospects” and our financial statements included under Item 18. Our financial statements have been prepared in accordance with U.S. GAAP. Our results of operations have been significantly impacted in recent years by business combinations, which make it difficult to compare our revenues, operating income and net income from one year to the next. See Item 5 “Operating and Financial Review and Prospects” for a discussion of business combinations that affect the comparability of the information provided below.

For your convenience, we have translated the 2001 euro amounts into U.S. dollars, using the rate of $1.00 = €1.123, which was the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York (the “Noon Buying Rate”) on December 31, 2001. This does not mean that we actually converted such amounts into U.S. dollars. For periods presented prior to January 1, 2000, the selected financial data presented below have been prepared in French francs and translated into euro using the official fixed exchange rate of €1 = FF6.55957, applicable since January 1, 1999.

The rate of exchange for the French franc against the euro was fixed on December 31, 1998 at €1.00 = FF 6.55957. Although the introduction of the euro has eliminated exchange rate risks between the French franc and the currencies of the member states of the European Monetary Union, or EMU, there can be no assurance as to the relative strength of the euro against non-EMU currencies. We discuss the extent to which our financial results are subject to currency fluctuations in Item 5 “Operating and Financial Review and Prospects.”

The following table sets forth, for the periods and dates indicated, certain information concerning the exchange rates for the French franc from 1997 through 1998, expressed in French francs per U.S. dollar, and for the euro from 1999 through April 30, 2002, expressed in U.S. dollar per euro. The information concerning the U.S. dollar exchange rate is based on the Noon Buying Rate. We provide the exchange rates below solely for your convenience. We do not represent that French francs or euro were, could have been, or could be, converted into U.S. dollars at these rates or at any other rate. The Federal Reserve Bank of New York has ceased publishing the Noon Buying Rates for French francs and other constituent currencies of the euro.


(1)	The average of the Noon Buying Rates on the last business day of each month (or portion thereof) during the relevant period.

We may not grow as quickly as we hope because the markets for data conferencing and Web conferencing, which we target for a substantial part of our future growth, are in very early stages of development and may not develop as expected.

A significant part of our growth strategy relies on expansion in the data conferencing and Web conferencing businesses. While we believe these markets are growing and have tremendous potential, they are currently very small, and we cannot assure you that they will continue to develop significantly or at all. If these markets do not continue to develop, or if they develop more slowly than we anticipate, then we will not grow as quickly or profitably as we hope.

Web conferencing services will compete with our traditional audio and video services, which may cause us to lose market share and to experience lower margins.

Web conferencing services will compete with our traditional audio and video conferencing services, and if they are perceived as an equal quality but lower-cost alternative to our traditional audio and video conferencing services, we may lose market share or experience lower margins. If high quality Internet-based services are offered by third parties for free or at significantly lower cost than our traditional audio and video conferencing services, any positive effect on our results of operations resulting from our newer Internet-based services may be outweighed by negative effects on our traditional business. If we are unable to successfully respond to changes in Web conferencing technology and pricing models, we may lose customers or experience declining margins.

If we are unable to keep up with rapid changes in technology, our products and services could become obsolete.

The market for our products and services is marked by rapid technological change, frequent new product introductions and technology enhancements, changes in client demands and evolving industry standards. New products and services based on new or improved technologies or new industry standards can render existing products and services obsolete and unmarketable. To succeed, we will need to enhance our current products and service offerings and develop new products and services on a timely basis to keep pace with developments related to interactive communication technology and to satisfy the increasingly sophisticated requirements of our clients. If we fail to do so, our products and services could become unmarketable, which would adversely affect our business, financial condition and results of operations.

The process of developing our products and services is extremely complex and requires significant continuing development efforts. Our investments in research and development are significant and are likely to increase. Any delays in developing and releasing enhanced or new products and services or in keeping pace with continuous technological change could harm our business, financial condition and results of operations.

We depend on the performance of our sophisticated information systems to deliver services to our customers. This dependence will increase as we offer more complex data and Web-based services. Heavy usage of the systems or technological failures could cause delays or could cause the system to break down for a period of time. In October 2000, for example, our Denver, Colorado automated audio conferencing bridge, which services all of our North American automated audio conferencing customers, experienced a technical failure that lasted approximately 45 minutes. The cause for this outage has been ascertained and remedied. Although we have backup systems and perform regular maintenance with a view to minimizing the occurrences of technical failures, we cannot eliminate all risk of technical problems, which are likely to occur from time to time.

In addition to our technology, we also depend on operators and other employees in connection with the provision of our non-automated services. Notwithstanding the existence of strict security procedures and operating procedures in our call centers, mistakes can arise. In May 2001, an operator in our Denver, Colorado

call center inadvertently connected analysts dialing in for an earnings call to a board meeting where a possible acquisition was discussed. This human error necessitated the disclosure of confidential information regarding the proposed acquisition to the public market. If technical problems or human errors occur with regularity or disrupt a significant number of customer communications, or if we experience technical problems or breach security with greater frequency than our competitors, then we might lose customers or incur liability.

We depend on the continued services of a few key executives, and only a limited number of those key executives have service contracts.

Our future success depends upon the continued service of our executive officers and other key personnel, including our Chairman and Chief Executive Officer, François Legros. If we lose the services of one or more of our executive officers or key employees, or if one or more of them decide to join a competitor or otherwise compete directly or indirectly with us, we may lose business to competitors or may have difficulty implementing our strategy.

Because we have made several significant acquisitions in recent years, our consolidated financial statements are not comparable from period to period, which may make it more difficult for you to evaluate our business.

Since the beginning of 1997, we have made a number of significant acquisitions. Companies acquired during 2001 accounted for 76.0% of our revenue growth in 2001 and companies acquired during 2000 accounted for 4.4% of our revenue growth in 2001, and for 5.7% of our revenue growth in 2000. Our acquisitions have changed the nature of our business by substantially increasing the proportion of our revenues earned in the United States and the share of our revenues derived from lower margin, operator assisted services. As a result of these acquisitions, our consolidated financial statements included in this annual report are not comparable from period to period, and do not show trends that could be useful in analyzing our historical or forecasting future trends.

We are highly leveraged. As of December 31, 2001, we had €149.9 million of financial debt, the bulk of which was incurred under a credit facility agreement that we entered into in April 2001 and thereafter amended. This credit facility requires us to comply with certain covenants, including the maintenance of financial ratios and limits on our capital expenditures. This credit facility is described in more detail under Item 5 “Operating and Financial Review and Prospects — Liquidity and Capital Resources” and is included as an exhibit under Item 19. If we fail to comply with our covenants, our lenders could require us to repay the entire amount outstanding under our credit facility immediately.

Our high degree of leverage can have important consequences for our business, such as:


	•	limiting our ability to make capital investments in order to expand our business;

	•	limiting our ability to borrow additional amounts for working capital, capital expenditures, debt service requirements or other purposes;

	•	limiting our ability to invest operating cash flow in our business, because we use a substantial portion of these funds to pay debt service and because our covenants restrict the amount of our investments;

	•	limiting our ability to withstand business and economic downturns, because of the high percentage of our operating cash flow that is dedicated to servicing our debt; and

	•	limiting our ability to pay dividends.

If we cannot pay our debt service or if we fail to meet our covenants, we could have substantial liquidity problems. In those circumstances, we might have to sell assets, delay planned investments, obtain additional equity capital or restructure our debt. Depending on the circumstances at the time, we may not be able to accomplish any of these actions on favorable terms or at all.

Merger and acquisition related accounting charges may delay and reduce our profitability.

We recorded significant goodwill and intangible assets in 2001 in connection with our acquisitions of Vialog and Astound. We will be required to amortize some identifiable intangible assets over time, and to test this goodwill and the value of the intangible assets that we acquired each time we prepare our financial statements. In 2001, we recorded goodwill amortization charges of €30.8 million and impairment charges of €61.3 million. While not all of these charges were related to Vialog and Astound, the total amount was significantly increased by the two acquisitions. Goodwill charges and any impairment charges could increase our net loss and extend the time needed for us to reach profitability.

We have historically incurred and may continue to incur net losses, which may adversely affect the trading price of our ordinary shares and the ADSs.

In the year ended December 31, 2001, we incurred a net loss of €98.5 million. As of December 31, 2001, we had an accumulated deficit of €111.9 million. To date, we have funded our operations and acquisitions primarily from the sale of equity securities, convertible bonds and bank borrowings. We expect to continue to incur significant acquisition-related amortization charges and development, sales and marketing and administrative expenses and, as a result, will need to generate significant revenues to achieve and maintain profitability. We cannot be certain that we will be able to achieve revenue growth sufficient to allow us to achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis in the future.

Fluctuations in currency exchange rates could adversely affect our revenues and results of operations.

Because we conduct our business in 18 different countries, our results of operations can be adversely affected by fluctuations in currency exchange rates. Our results of operations are particularly sensitive to movements in exchange rates between the euro and the U.S. dollar. Our revenues in the United States (including those of our Canadian subsidiary, which uses the U.S. dollar) represented approximately 63.4% of our total 2001 revenues, and approximately 45.6% of our 2000 revenues. Our results of operations are also sensitive to movements in exchange rates of the euro against the British pound.

Since the introduction of the euro in January 1999, its value has declined substantially against the U.S. dollar and the British pound. As a result of this decline, our revenues stated in euros have been greater than they would have otherwise been. If the euro strengthens against the dollar or the pound, our revenues stated in euros will be lower than they would otherwise be. Although the impact of exchange rate movements on our results of operations is somewhat mitigated by the fact that we incur costs and borrow in the currencies of a number of countries in which we operate, currency exchange rate movements can nonetheless have a considerable impact on our results of operations.

When deemed appropriate, we enter into transactions to hedge our exposure to foreign exchange risks incurred in connection with borrowings. These efforts, when undertaken, may fail to offset the effect of adverse currency exchange rate fluctuations on our results of operations. For more information concerning our exchange rate exposure, see Item 11 “Quantitative and Qualitative Disclosures About Market Risk” beginning on page 61 of this annual report.

Challenges to our intellectual property rights could cause us to incur costly litigation and, if we are not successful, could result in the loss of a valuable asset and market share.

Our success depends, in part, upon our technology and other intellectual property rights. To date, we have relied primarily on a combination of copyright, trade secret and nondisclosure and other contractual restrictions on copying and distribution to protect our proprietary technology. Litigation to enforce intellectual property rights or protect our trade secrets could result in substantial costs and may not be successful. If we are unable to protect our intellectual property rights, our business, financial condition and results of operations may suffer. The means available to protect our intellectual property rights in France, the United States or any other country in which we operate may not be adequate to fully protect our intellectual property rights. In addition, not all foreign countries protect intellectual property rights to the same extent as do the laws of France or the United States. Similarly, if

third parties claim that we infringe on their intellectual property rights, we might be required to incur significant costs and to devote substantial resources to the defense of such claims. If we are not able to defend such claims successfully, we might lose rights to technology that we need to develop our business, which may cause us to lose market share, or we might be required to pay significant license fees for the use of such technology.

If third parties using or claiming prior rights to the name “Genesys” were to successfully prevent us from using the name “Genesys” or “Genesys Conferencing” in some markets, we might be required to establish new or alternative brand names in those markets.

We do not hold a registered trademark for the name “Genesys” or “Genesys Conferencing” in all jurisdictions where we operate, and in several jurisdictions, including France, third parties have filed objections to our applications for trademarks on “Genesys Conferencing.” In particular, in June 2000, following our trademark application to register the trademark “Genesys Conferencing” in France, Alcatel filed an objection to the claim alleging a risk of confusion with a prior trademark registered in the name of a company acquired by Alcatel in 2000, for the name “Genesys.” Alcatel has also filed claims opposing our European Union and German trademark applications for “Genesys Conferencing.” Since that time, Vivendi Water has also marketed “Genesys” as a concept for pre-treatment of industrial water. If Alcatel, Vivendi Water or other third parties that use or own prior registered trademarks for the name “Genesys” were to successfully prevent us from using the name “Genesys” or “Genesys Conferencing” in some of our markets, this would impair our ability to build a worldwide brand and could require us to spend substantial resources to establish new or alternative brand names in markets where we are unable to use our name.

We use third-party technology in providing our products and services, and our business would be harmed if we were not able to continue using this third-party technology.

In providing our products and services, we use third-party technology that we license or otherwise obtain the right to use, including teleconferencing platforms, software packages and software development tools. There are inherent limitations in the use and capabilities of the technology that we license from third parties. Our business would be seriously harmed if the providers from whom we license software and technology ceased to deliver and to support reliable products, to enhance their current products in a timely fashion or to respond to emerging industry standards. In addition, third-party technology may not continue to be available to us on commercially reasonable terms or at all. The loss of, or inability to maintain or obtain, this technology could result in significant delays or reductions in services we provide. Furthermore, we might be forced to limit the features available in our current or future product and service offerings.

In addition, we rely on external service providers for a number of important services, including data conferencing, billing and Web streaming. Some of the companies we use for data conferencing and Web streaming services are small and have not yet reached profitability, and they may be unable to keep pace with the rapid technological changes that characterizes these sectors of the industry. If our third party service suppliers are unable to continue to provide quality services to us, we may be required to find alternative suppliers, which may lead to service interruptions or entail additional cost.

We may not be able to compete effectively with our competitors, which include some of the largest telecommunications companies in each country in which we operate.

The market for conferencing services is rapidly changing and intensely competitive. We expect competition to increase as the industry grows. We may not be able to compete successfully against current or future competitors.

Our principal competitors include major telecommunications companies, including France Telecom in France, British Telecom in the United Kingdom and operators such as AT&T, MCI Worldcom and Global Crossing in the United States. These companies are much larger than us, and have substantially greater financial and other resources than us. Many of the voice and data communications customers of the major telecommunications companies use the conferencing services of those companies without considering alternative service

providers. In order to compete with these larger companies, we must offer better service, lower prices or both. While we believe that we successfully do so today, we cannot assure you that we will continue to be able to do so, particularly if substantial financial investments are required to maintain the highest quality standards.

We also face significant competition from new and existing local and regional telecommunications companies. Such companies often view conferencing, data transmission and Web-based services as essential components of their future growth, and as a result they invest heavily in developing and promoting such services. Unlike us, these companies offer a broad range of telecommunications services in addition to conferencing. Customers might prefer to use companies that provide multiple services, rather than specialist providers. If so, then we might lose customers to multiple service providers, and our results of operations might be adversely affected.

There are also numerous other teleconferencing specialists, and the relatively low barriers to entry in the teleconferencing market means that there might be additional teleconferencing specialists in the future. The presence of other specialists in the market and low barriers to entry mean that we must provide superior service to differentiate ourselves from our competitors, expand internationally to win contracts with customers seeking international services, and ensure that our prices are competitive.

In addition, Internet-based services are being increasingly offered by large software companies, such as Microsoft and Oracle, that are larger than us and have greater financial resources than we do. These companies can offer conferencing services as parts of packages that include other business related software, including basic operating system software.

The telecommunications and Internet sectors are experiencing low valuations compared to recent years, and raising capital in these sectors has become difficult.

Our share price and our ability to raise capital depends in part on the state of the market for shares of telecommunications companies, which in recent months has been characterized by low valuations and difficult conditions for raising new capital. If these market conditions continue, then our share price could be adversely affected, and we could have difficulties if we were to require additional capital to fund our development.

The market prices of our ordinary shares and ADSs have been volatile, and may continue to be volatile in the future.

Since our initial public offering in October 1998 through April 30, 2002, the closing price of our ordinary shares ranged from a high of €79.50 per share ($70.79 per share using the December 31, 2001 Noon Buying Rate) to a low of €7.57 per share ($6.74 per share using the December 31, 2001 Noon Buying Rate), and since April 26, 2001 through April 30, 2002, the closing price of our ADSs ranged from a high of $15.59 per ADS to a low of $3.55 per ADS. Recently, the stock market in general and the shares of technology and telecommunications companies in particular have experienced significant price fluctuations. The market prices of our ordinary shares and ADSs may continue to fluctuate significantly in response to various factors, including:


	•	quarterly variations in operating results or growth rates;

	•	the announcement of technological innovations;

	•	the introduction of new products by us and our competitors;

	•	changes in estimates by securities analysts;

	•	market conditions in the industry;

	•	announcements and actions by competitors;

	•	regulatory and judicial actions; and

	•	general economic conditions.

Our stock option plan includes provisions that could have anti-takeover effects.

Under our stock option plan, if any shareholder or group of shareholders acquires ownership of more than 25% of our outstanding share capital, our board of directors will have the right to accelerate the vesting of employee stock options granted under our 1998, 1999 and 2000 stock option plans. As of April 30, 2002, options on up to 513,028 shares, representing approximately 3.4% of our share capital, are subject to potential accelerated vesting. The ability of the board of directors to accelerate the vesting of stock options could have the effect of deterring a potential bidder from making an offer to acquire our company without the approval of our board.

Exchange rate fluctuations may adversely affect the U.S. dollar value of our ADSs and our dividends (if any).

As a holder of ADSs, you may face some exchange rate risk. Although we have no current plans to pay dividends, if and when we do pay dividends, they would be denominated in euro. Fluctuations in the exchange rate between the euro and the U.S. dollar will affect the U.S. dollar amounts received by owners of our ADSs on conversion of dividends, if any. Moreover, these fluctuations may affect the dollar price of our ADSs on the Nasdaq Stock Market, whether or not we pay dividends.

We have not yet distributed any dividends to our shareholders, and do not anticipate doing so in the near future.

We currently intend to use all of our operating cash flow to finance our business and service our debt for the foreseeable future. We have never distributed dividends to our shareholders, and we do not anticipate distributing dividends in the near term. Although we may in the future distribute a portion of our earnings as dividends to shareholders, the determination of whether to declare dividends and, if so, the amount of such dividends will be based on facts and circumstances existing at the time of determination. In addition, our credit agreement prohibits us from paying dividends. Accordingly, we cannot assure you that any dividends will be paid for the foreseeable future.

This annual report contains forward-looking statements. We may also make written or oral forward-looking statements in our periodic reports to the Securities and Exchange Commission on Form 6-K, in our annual report to shareholders, in our proxy statements, in our offering circulars and prospectuses, in press releases and other written materials and in oral statements made by our officers, directors or employees to third parties. Examples of such forward-looking statements include:


	•	projections of operating revenues, net income, net earnings per share, capital expenditures, dividends, capital structure or other financial items or ratios;

	•	statements about the future performance of the conferencing industry;

	•	statements about our future economic performance or that of France, the United States or any other countries in which we operate; and

	•	statements of assumptions underlying such statements.

Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “should” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. Such factors, some of which are discussed under Item 3 “Key Information — Risk Factors” beginning on page 8 of this annual report, include but are not limited to:


	•	uncertainties regarding the market for data conferencing and Web conferencing, and the pricing for these services;

	•	the effects of technological change;

	•	fluctuations in the value of our ordinary shares and ADSs and in the value of the Internet and telecommunications sectors; and

	•	competition from telecommunications providers.

We caution you that the foregoing list of factors is not exclusive and that other risks and uncertainties may cause actual results to differ materially from those in forward-looking statements.

Forward-looking statements speak only as of the date they are made. We do not undertake any obligation to update them in light of new information or future developments.

The legal and commercial name of our company is Genesys S.A. We are a French société anonyme, a form of limited liability stock company, formed in 1986 pursuant to the French Commercial Code for a term of 99 years. Our registered office is located at “L’Acropole,” 954-980 Avenue Jean Mermoz, 34967 Montpellier Cedex 2, France. Our phone number is +33 4 99 13 27 67.

Our company was established in Montpellier, France in 1986. We launched our first major service, TeleMeeting, a fully automated conferencing service, in 1989. From 1990 to 1994, we concentrated our efforts on establishing our presence in the French market, and once achieved, we concentrated on expansion and penetration of the European market from 1994 to 1997. During this time, we launched our Multi-Conference Manager software, which was used to monitor teleconferences. By 1997, we had become the leading conference specialist in Europe in terms of revenue. We subsequently expanded the geographic scope of our business to include the Asia/Pacific Rim and North American regions.

In 1999, we added video conferencing and data conferencing to complete our product line. In 2000, we created our Web event unit, Genesys Open Media, which is now part of our principal French operating company, Genesys Conferencing France. In January 2001, we launched two new Web-based services: PowerShare, our automated data conferencing service, and Multi-Conference Manager browser, the browser version of our Multi-Conference Manager software.

In October 2001, we launched our innovative Genesys Meeting Center, the conferencing industry’s first fully integrated audio and Web conferencing platform. Genesys Meeting Center is a platform that incorporates our fully automated TeleMeeting audio conferencing, the Multi-Conference Manager browser, our PowerShare Web conferencing and Astound’s conference center, resulting in a Web-based platform that gives users access to a virtual conference room, available 24 hours per day, 7 days per week.

In recent years, our business has grown significantly through acquisitions. Our largest acquisition occurred in April 2001, when we acquired Vialog Corporation, a leading independent provider of conferencing services in North America, which was formed in January 1996. At the time of the acquisition, Vialog was the largest company in North America focused solely on conferencing services. It had four operating centers, state-of-the-art digital conferencing technology, an Internet portal site and an experienced U.S. sales force. Vialog had built a large, stable customer base ranging from Fortune 500 companies to small institutions, including several major long distance telecommunications providers who had outsourced their conferencing services to Vialog. The acquisition of Vialog doubled our customer base and made us the leading conferencing specialist in North America. Following the acquisition, Vialog was merged into our principal U.S. subsidiary, Genesys Conferencing Inc.

In March 2001, we also acquired the Canadian company Astound Incorporated, which develops and markets software for real-time multimedia data collaboration, application sharing and personalized information delivery. Our PowerShare service, now a part of our Genesys Meeting Center, was developed by Astound, and we began marketing it in June 2000 under a resale arrangement. We believe that the acquisition of Astound strengthened our research and development capabilities, particularly in the area of data collaboration.

Even before the Vialog and Astound acquisitions, we grew significantly as a result of acquisitions. In 1999, we acquired Aloha Conferencing from Cable & Wireless and the conferencing services unit of Williams Communications. In 2000, we acquired the European audio and video conferencing business of Cable & Wireless, as well as three web event and web streaming companies in France, an audio and video conferencing company in Germany and a video conferencing company in Australia.

Our acquisitions have had a significant impact on our consolidated results of operations and financial condition. The financial implications of our acquisitions are described under Item 5, “Operating and Financial Review and Prospects.”

In October 1998, we conducted our initial public offering in France, and our ordinary shares were listed on the Nouveau Marché of Euronext Paris. In April 2001, in connection with our acquisition of Vialog, our shares were listed on NASDAQ in the form of American Depositary Shares, each representing one half of one ordinary share.

We are the world’s leading independent specialist provider of interactive group communications services and applications, based on 2001 revenues. Since 1999, our revenues have more than tripled largely as a result of our acquisitions and, to a lesser extent, through organic growth, increasing from €47.8 million in 1999, to €92.4 million in 2000 to €178.9 million in 2001. Our acquisitions have also shifted our revenue base from a majority in Europe in 1999 (58.1%), to a majority in North America in 2001 (63.4%).

We believe we provide the most innovative and technologically advanced portfolio of group communications services as well as customized, value-added conferencing. From the simple conference call to the large-scale Internet broadcast, from audio to video, data and rich media, we provide group conferencing and managed event conferencing services, linking remote participants and audiences at any given time, enabling them to work, discuss and exchange ideas and information. We group our services into two categories of interactive group communications:



	•	*Virtual Group Conferencing.* Our Virtual Group Conferencing category encompasses our innovative Genesys Meeting Center, which is a combination of our automated TeleMeeting audio conferencing, our Web-based data collaboration application PowerShare, Astound’s conference center and our proprietary Web technology, Multi-Conference Manager. We also include our video conferencing services in this category.


	•	*Events and Managed Services.* Our Events And Managed Services category assists our customers in achieving the maximum results for any event, from a large scale telephone conference to a fully interactive Webcast. Our Events and Managed Services category encompasses our EventStream and PowerStream applications, which permit synchronized audio and video broadcasting, and our TeleEventservice, a fully operator-managed audio conferencing service.

The services provided in our two interactive group communications platforms are derived from one or more of the following three types of group communications:


	•	audio conferencing;

	•	video conferencing; and

	•	Web-based conferencing.

We believe that we have the broadest global presence among all full-service independent group communications specialists, providing service to approximately 17,000 businesses, with more than 1,500 employees in 18 countries in Europe, North America, and the Asia/Pacific Rim region as of December 31, 2001. Our global presence, comprehensive product offering and commitment to innovation have allowed us to attract the business of some of the world’s largest users of group communications services.

We believe our commitment to emerging interactive group communication tools, applications and technologies has been one of the cornerstones of our growth, and we are moving rapidly to capitalize on the new opportunities provided by the Internet.

We aim to be the world’s leading provider of interactive group communications services and applications in terms of both market share and technology. In pursuit of this goal, we intend to:


	•	*Aggressively market our global capabilities.* We will use our experienced, knowledgeable sales force to aggressively market our global capabilities to multinational customers that we currently serve through only one or a few markets, such as Vialog’s base of multinational companies, all of whom previously used Vialog’s services only in the United States. In addition, we will actively pursue major new international contracts offered in global requests for proposals for one or more interactive group communication services.

	•	*Enhance profitability and stimulate usage by migrating customers to automated services.* We will continue to migrate customers wherever appropriate from operator-assisted services to fully-automated conferencing services. Vialog’s customers, almost all of which used operator-assisted services, have been targeted for migration to automated services, which involve lower costs for the customer but generate higher margins and stimulate usage. In implementing this strategy, we will use our internal sales teams, which are dedicated to servicing existing customers, to promote the benefits of newer services.

	•	*Continue to provide a comprehensive suite of services designed to provide a full array of integrated real-time communications.* We will continue to offer one-stop shopping for a full line of group communications services, from traditional audio and video services to the latest in data collaboration over the Internet and Web streaming technology. We believe that offering both traditional audio and video conferencing as well as, and integrated with, new Internet-based services is essential to winning the business of our target multinational and multi-site national corporations, who are increasingly looking to rationalize and centralize their communication needs.

	•	*Establish leadership through customer focus and innovation.* We invest in and acquire new and innovative services designed to ensure that our services respond to the full range of customer demands. Examples of our commitment to innovation include our integrated Genesys Meeting Center, which has met with significant success since its launch in October 2001, and our Genesys Events and Managed Services, to be deployed to our call centers during 2002 in anticipation of commercial launch. Our Genesys Events and Managed Services is a feature-rich integration of audio, Web and video designed to provide an integrated multimedia platform for investor relations and event conferencing. As we move forward, we intend to focus on systems based on universal standards and open systems, in order to facilitate ease of use by our customers and the development of further innovative services.

	•	*Broaden distribution channels for our services.* We will market customized and individually branded packages to alternative telecommunications providers, business-to-business exchanges and business-oriented Internet portals that seek to outsource the provision of group communications services.

	•	*Reduce selling, general and administrative costs.* We are in the process of a program designed to reduce our selling, general and administrative costs as a percentage of revenues. One way in which we are implementing this strategy is by consolidating our call centers in North America. The consolidation process, launched in February 2002, will transform our six North American call centers into three multimedia “super centers,” to provide higher levels of customer service and improve operating efficiencies.

From the simple conference call to the large-scale Internet broadcast, from audio to video, data and rich media, we provide group conferencing and managed event conferencing services, linking remote participants and audiences at any given time. We group our services into two categories of interactive group communications: virtual group conferencing, and events and managed services. The services that we provide in each of these categories are based on one or more of three types group communications: audio conferencing, video conferencing, or Web-based conferencing.

We group our integrated audio and Web conferencing service, Genesys Meeting Center, and our video conferencing services under our Virtual Group Conferencing category.


	•	A unique audio status and control bar next to participants’ names identifies the active speaker and allows the moderator to manage the audio portion of the conference along with the Web portion.

	•	The capability of presenters to deliver dynamic multimedia presentations, collaborate and share any application running on their computers, conduct “follow-me” Web tours and jump between applications at any time during the meeting.

	•	A comprehensive invitation wizard with Microsoft Outlook® integration, and RSVP and reminder functions for easy invitation management for organizers.

	•	Pre-scheduling of polls and pre-selection of Web pages.

	•	Waiting room, sub conference rooms, mute and un-mute, surveys and ad hoc voting, and live text chat that can be conducted during the conference and then archived.

	•	Advanced streaming and archiving capabilities that permit participants to attend a conference call or working session through their PCs, in real time or at a later date, through archived sessions. Live conferences can be streamed to reach wider audiences throughout the Web.

We host Genesys Meeting Center on our global network with multiple bridge locations across the 18 countries in which we operate. We launched Genesys Meeting Center in October 2001 in North America and in the United Kingdom, and have progressively deployed it throughout the Asia/Pacific Rim region and Europe at the end of 2001 and beginning of 2002. Localized versions in French, German, Swedish, Spanish and Italian are available. We generate revenues from Genesys Meeting Center in two ways. We charge for the Web-based conferencing services in Genesys Meeting Center on a monthly subscription basis based upon the number of “seats” available in the virtual conference room. We also earn revenues from the fully automated audio conferencing services in Genesys Meeting Center on a per participant, per minute basis.


	•	*Video Conferencing.* We offer a multi-point video conference service enabling video connection between two sites or more, no matter what equipment, networks and standards are used. We handle the whole meeting, from inviting participants to the selection of the best networks in relation to the location of the sites involved. The moderator can choose the composition of the images shown on each screen: all sites, the site speaking or any combination of screens. These screen formats can be changed at any time during the meeting. We generate revenues by charging for the service on a per-line, per-minute basis, with enhanced services charged on an added fee basis.

From a large scale telephone conference to a fully interactive Webcast, our managed event services provide our customers with multiple possibilities to achieve their desired impact. We group our Web-based audio and


	Participants can easily join an audio call via telephone and/or click onto a Web presentation with audio or video, over any standard Internet connection. The client chooses how to broadcast the event but can allow participants to choose how they would like to view it. For example, participants may chose to listen in via telephone or through an audio stream over the Internet.


	•	*TeleEvent.* TeleEvent is a fully operator-managed audio conference service designed specifically for large event style conference calls, which can include several thousand participants. Participants may dial-in from any location, or the operator will dial-out to them. An operator takes full control of the conference, ensuring that the delivery of the call is flawless. TeleEvent is frequently used for investor relations calls, new product launches or other announcements by top management of our customers.


	Due to the complex and highly specific nature of TeleEvents, we assign a dedicated cross-functional team to each TeleEvent client. Our service begins with guidance in the initial planning of the event to maximize the event’s impact. During the event, specialist operators manage all aspects of the conference including branded greetings, detailed recording of participant information and the management of controlled question and answer sessions, which help to control speaking time and maintain focus. This allows the presenter to focus on conveying the desired message to the audience.

	We also offer our customers a wide range of enhanced services for an additional fee. These services include transcripts of calls, real-time translation services, broadcast fax transmission of documents to conference participants, recording and rebroadcast of conferences and participant polling. Our operators can also assist customers in integrating our other services including data collaboration and Webcasting into their events.

The services that we offer in our two categories are derived from three group communications technologies: audio conferencing, video conferencing, Web-based conferencing.


	•	*Audio conferencing.* Audio conferencing connects multiple parties on a single telephone call through specialized telephone equipment known as a “bridge.” Each bridge has multiple ports, which allow conference participants to connect to a conference call. We offer two types of audio conferencing: fully automated, which is part of our Genesys Meeting Center, and our operator-assisted TeleEvent. Audio conferencing represented approximately 88.1% of our revenues in 2001.

	•	*Video conferencing.* Video conferencing is similar to audio conferencing except that one or more callers may be viewed on a video monitor by the other participants. We offer our video conferencing services primarily in our Virtual Group Conferencing category.

	•	*Web-based conferencing.* Web-based conferencing is conferencing using the Internet as the media for communication. We offer two types of Web-based conferencing services: data collaboration applications and Web streaming. Data collaboration applications help customers to enhance their audio conferences by allowing graphics, animation and audience participation through a simple Internet connection. Our PowerShare application, now a part of our Genesys Meeting Center, allows conference participants to share and jointly edit or view documents in real time, or to access conference archives or learning sessions at their own pace. Web-based applications enable multiple users to conference and collaborate using both visuals and voice over the Internet. Our Multi-Conference Manager browser based end-user software, which forms part of our Genesys Meeting Center, enables customers to monitor and manage their virtual


		conference room over the Internet. Our EventStream and PowerStream Web streaming applications described above are two of our other Web-based conferencing services.

Telecommunications Services. A significant portion of our direct costs are attributable to the purchase of local and long distance telephone services. We purchase telecommunications services from multiple suppliers in most of our markets and believe that multiple suppliers will continue to compete for our business. Our main suppliers are Sprint, AT&T and Cable & Wireless in the United States; France Telecom and WorldCom in France; Telewest, Colt and Energis in the United Kingdom; Telstra in Australia and Tele2 in Sweden. We increasingly deal with alternative operators such as Colt in Germany, and are currently investigating the possibility of developing region-wide service contracts in Europe and Asia/Pacific in order to reduce transmission costs.

Since April 1,1999, our U.S. subsidiary has been obligated to purchase a portion of its long-distance telecommunications services from Cable &Wireless. This portion is related to the business originally conducted by Aloha Conferencing (which was acquired from Cable &Wireless in April 1999). Prices under the agreement are subject to adjustment every six months to match any more favorable rates offered by Cable &Wireless to a comparable customer. We may terminate the agreement with Cable &Wireless at any time after on April 1, 2003 with six months prior notice. We may also terminate the agreement from time to time as to either U.S. or international service if the prices being charged under the agreement cease to be competitive with those offered by other specified major long-distance carriers as determined under a formula provided in the agreement.

Teleconferencing Bridges and Video Platforms. Our primary suppliers of teleconferencing bridges include Prescom and Spectel. Our principal video platforms include equipment manufactured by VideoServer, PictureTel and Accord.

Audio and Video Conferencing Equipment. Our primary provider of audio and video conferencing equipment is Polycom, a major supplier of conferencing terminal equipment. Since July 31,1999, we have been obligated to exclusively use Williams Communications for our external video events management services.

Data Collaboration and Web Streaming Software. We acquired our primary supplier of data collaboration software, Astound, in March 2001. Astound developed our PowerShare application, which is now integrated into Genesys Meeting Center. We have an agreement with Activate for the provision of audio streaming services, although we provide a portion of our needs internally.

We seek to attract customers through multiple distribution channels and acquisitions. Once the relationship has been established, we attempt to cross sell multiple services throughout the customer’s organization worldwide.

We maintain sales, marketing and customer service teams in each of the 18 countries in which we operate, and tailor our sales organization, marketing and advertising efforts to each individual market. We have a direct sales force in each market. At the end of December 2001, we had a total of 277 sales personnel, including 73 based in Europe, 181 based in the United States and 23 based in Asia. Our acquisition of Vialog nearly tripled our sales force in the United States. We compensate our sales force with a base salary plus commission.


	•	Large Accounts. In each market, we focus our sales and marketing efforts primarily on large multinational companies and domestic companies with multiple sites, because these are the heaviest users of group communications services. To target these accounts, our direct sales staff focuses on the home country, city or headquarters of these multinationals as a base for developing global business relation-


		ships. In approaching large accounts, we seek to establish strong relationships and to position our company as a long-term partner and solution provider. We have made a concerted effort to win global contracts by emphasizing our global presence, and in 2001, won global contracts with companies such as JP Morgan, Regus, Sony and Federal Express. Each account manager deals with the customer’s home country office or headquarters when establishing global service.

	•	Small Accounts. We also actively target small and medium size businesses using our inside sales force. Our inside sales team targets small and mid-size businesses through advertising in specialized magazines, telemarketing calls and direct mail.

To broaden demand for our services, we actively pursue opportunities to respond to the needs of alternative telecommunications providers, business-oriented Web sites and business-to-business exchanges, marketplaces and other distribution partners that seek a provider who can offer group communications services to their users. These relationships, under which we typically provide our services under the brand name of the distributor, broaden our presence in the market and are particularly helpful in targeting small and mid-size companies. We currently serve as the exclusive out-sourced provider for Cable & Wireless in the United States and Western Europe, have distribution relationships with Optus and Tele1, PC bundling relationships with Hewlett Packard and Dell Computer and are negotiating additional relationships.

We target our marketing efforts on an industry by industry basis (vertical marketing) as well as on a geographic basis. We promote our services through both online and offline media. Online, we advertise on numerous sites, including Yahoo, Lycos, Goto.com and the GTE Superpages, where we run banner ads, including ads that are displayed when users enter searches using the “conferencing” keyword. Our conferencing Web site, www.genesys.com, provides access to Genesys Meeting Center and allows non-customers to sign up to open an account. Offline, we primarily advertise in specialized industry publications as well as attend key industry trade shows.

Customer communication programs are a critical component of our customer retention strategy. Our programs include an HTML client newsletter and Web-mail campaigns informing clients about new services, upgrades and promotions. We also run a series of online seminars, inviting high profile speakers from key vertical sectors to participate. Customers are invited to attend the events, which are delivered using our own services.

We train employees in the principles of customer care management, which include service quality monitoring and the development of positive relationships with clients. We pursue a philosophy of continuous performance improvement, meaning we consistently measure our performance and endeavor to improve it. We tie the bonus of our non-sales personnel to these measurements of service quality. We actively manage and analyze all facets of a conference call, including reservation, call execution, billing and follow up with customer satisfaction surveys. We pride ourselves on our commitment to quality and customer satisfaction. We also review our performance with our customers on a regular basis, continually set specific performance improvement goals, and modify our operations accordingly. Feedback from our customers indicates that these factors contribute to our high customer retention rate.

Our operating centers presently perform the billing and collection process for their respective customer bases. The data needed to develop an invoice is captured by and stored on each telecommunications bridge and entered into the billing system automatically. An automated mediation platform coordinates and manages the information that circulates between the reservation software, the bridging hardware and the billing software. This

platform facilitates the automated “pull and push” of information from one part of the system to another. This means that information collected during the reservation process, by a reservationist or via the Web-based reservation system, is automatically transferred to the bridge to ensure that the correct number of ports are available as well as the relevant value added features. This extends to the billing process, where the platform automatically pushes the call detail record collected by the telecommunications bridge software from the bridge to the billing software. The call detail record includes the account number, which identifies the entity paying for the call, the moderator number, which identifies the person who organized the call and statistics about the length of the call, number of participants and value added features used. The automation of this process reduces the errors and increased costs associated with human intervention. Billing is primarily on a second increment basis for the duration of each connected line. The frequency with which invoices are delivered to the customer for payment varies by operating center and by customer.

Each of our operating centers validates its invoices against its telephone bills to verify billing accuracy. In addition, each operating center generates reports and files that provide detailed customer activity including usage and rate profiles, payments, adjustments, accounts receivable aging, credit status and commission summaries. Our billing system is built to take into account local customer demands as well as the legal specifications of each market. All of these files are input into centralized databases we are implementing regionally to provide management with the ability to monitor customer value and make informed marketing, sales, financial and operational decisions. The flexibility and capabilities of our billing systems enhance its ability to serve our customers’ needs by allowing us to customize invoices according to a number of variables such as detail level, frequency of billing, class of service and local legal requirements. We have developed proprietary software used in the billing services provided to long distance service carriers and other telecom resellers that outsource their teleconferencing function to us. We are currently in the process of implementing a common “back office” system across all regions. This system, which is an upgrade to one of our existing systems, supports customer registration, reservations, call record processing and pricing, billing and reporting for all of our services. We believe that this common back office system, with its functionality and flexibility, will enhance our ability to respond to requests from customers for customized billing and reporting. For example, a multinational client can be provided with usage reporting by service, geography and user. We currently expect the implementation of this system to be completed over the next six to nine months.

As of December 31, 2001 we had over 17,000 customers world-wide ranging in size from major multinational corporations and Fortune 500 companies, to small business, professional organizations and public institutions. We focus our sales and marketing efforts primarily on the major multinational companies that are the world’s largest users of group conferencing services. We have experienced strong growth in the number of customers in recent years as a result of both internal growth and acquisitions. Our April 2001 acquisition of Vialog doubled our customer base. No one customer accounted for more than 5% of our revenues during the year ended December 31, 2001. Our top 20 customers accounted for 25.8% of our revenues during the year ended December 31, 2001. Some of our top customers in 2001 were Cable & Wireless, CIGNA Corp., Citibank, Deutsche Bank, the Gartner Group and JP Morgan.

On April 1,1999, as a condition to our acquisition of Aloha, we agreed with Cable & Wireless USA, Inc. that Cable & Wireless USA, Inc. would purchase from our company, in each twelve month period ending March 31 during an initial four year term, at least 95% of all of its purchases of conferencing (audio, data and video) services (for its own use or resale to its customers), with the exception of limited affiliate provided services. The prices charged to Cable & Wireless are subject to adjustment every six months to match any more favorable rates we offer to a comparable customer in the United States.

On July 31, 1999, as a condition to our acquisition of the conferencing unit of Williams Communications, we and Williams Communications agreed that we would be the preferred third-party provider of audio and data conferencing services and, after September 25, 2000, video conferencing services (that use ISDN as a transport protocol), to Williams Communications and its affiliates in the United States for a term of three years, with limited exceptions where Williams Communications had internal capabilities. The prices charged are on a retail most favored customer basis, which is reevaluated as of November 1 of each year during the term.

We offer our services in 18 countries in Europe, North America, and the Asia/Pacific Rim region. The countries in which we have facilities include:

Our global presence is a key competitive strength that enhances our ability to serve the needs of our multinational clients and to win global contracts. With the exception of our video division, we are organized and managed on a country by country basis, with each country reporting to a regional Executive Vice President who in turn reports to the Chief Operating Officer. Local advertising and marketing decisions are made on a country by country basis and are coordinated by regional Executive Vice Presidents. A global sales team also reporting to the Chief Operating Officer focuses on major multinational and global accounts. During 2001, we created a global video division, with its own division Chief Executive Officer.

Over the past three years, we have expanded our operations significantly, particularly in the United States, the world’s largest market for group communications services, most notably with our 2001 acquisition of Vialog. In 1999, we earned nearly 38% of our revenues in the United States, in 2000, we earned nearly 46% in the United States, and in 2001, we earned over 60% in the United States.

Our conferencing services are provided using equipment known as telecommunications bridges. Conferencing capacity is measured in ports, with one port needed for each conference participant. At the end of 2001, we had a total audio conferencing capacity of 38,998 ports, of which 9,600 were located in Europe, 28,386 were located in the United States and 1,012 were located in the Asia/Pacific Rim region. These ports can be networked in whole or in part to accommodate large calls. We have procedures designed to manage server and bridge capacity in order to manage traffic during periods of heavy demand, including peak periods such as Monday mornings. Additional audio conferencing capacity can be added through the purchase and installation of additional bridges. Our video conferencing capacity was approximately 444 ports worldwide at the end of 2001, of which 184 were located in Europe, 224 were located in the United States and 36 were located in the Asia/Pacific Rim region.

We provide our data collaboration and streaming services through relationships with our suppliers M-Show, Activate and LiveWare5 as well as through internally developed services. To date, operational capacity for these services has exceeded market demand as these services are still in their infancy, but we estimate that the theoretical capacity is in excess of 100,000 simultaneous users. Our policy is to purchase additional bridging and streaming capacity when average daily usage reaches 70% of available capacity.

Our automated audio services are managed by proprietary software developed by us that organizes telephone connections and automatically interacts with the telecommunications bridge to control the various teleconference functions. Each subscriber to the Genesys Meeting Center service is assigned a permanent call number that is assigned to a particular bridge. In an operator-managed conference, call numbers are assigned by an operator.

All of our network operation centers are designed with resilience and redundancy to help limit interruptions to service. Each location is serviced by more than one primary telecommunications carrier, and many feature bi-directional fiber access and SONET rings, which increase reliability. All network operations centers have backup electrical power and significant fire and security protection. Each network operations center provides backup for other group network operations centers, so in the event of a national or regional catastrophic failure, traffic can be diverted to a geographically distant, and therefore non-affected, location.

Our industry is currently experiencing a period of rapid technological change, driven in particular by the increase in Internet-based applications. We consider effective research and development essential to our success. In 2001, we spent €5.4 million, or 3% of our total revenues, on research and development. We consider that our ability to develop innovative applications such as Genesys Meeting Center, Genesys Event and Managed Services and our Multi-Conference Manager software have been instrumental to our growth and our ability to retain customers. Our research and development team, including management information systems development, included around 100 researchers at the end of December 2001. Our research and development team is managed by our Chief Strategy Officer, who oversees management information systems, including customer reporting and billing systems. We are currently focusing our research and development efforts on:


	•	Genesys Events and Managed Services;

	•	enhancements to Genesys Meeting Center;

	•	enhanced Web streaming applications;

	•	enhanced data collaboration services;

	•	voice over Internet applications;

	•	video over Internet applications; and

	•	management information systems, including customer reporting and billing.

We have also made and intend to continue to make selective acquisitions and have entered and will continue to enter into licensing arrangements to accelerate our research and development efforts.

We have developed proprietary copyrighted software for our service and quality control functions, and have also developed in-depth technical know-how with respect to the operation of telecommunications equipment and the coordination of large volume conference calls. We seek to protect our proprietary information and business practices as trade secrets. We hold one U.S. patent, through the acquisition of Astound, pertaining to the synchronization of audio and music to graphics and have filed for others. We require our key employees to execute a non-disclosure agreement for the protection of our confidential information.

We have registered the trademark “Genesys” in several countries including France, where we first filed an application to register the trademark “Genesys” in June 1988, and have filed applications to register this and other trademarks in other jurisdictions. In June 2000, following a trademark application by Genesys to register the trademark “Genesys Conferencing” in France, Alcatel filed an objection to the claim alleging a risk of confusion with a prior trademark registered in the name of a subsidiary of Alcatel, for the name “Genesys.” Alcatel has also filed claims opposing our European Union and German applications for “Genesys Conferencing.” We are currently involved in negotiations with Alcatel regarding the use of the mark “Genesys.” Additionally, at the end of 2001, Vivendi Water began marketing “Genesys” as a concept for pre-treatment of industrial water.

The market for group communications services is rapidly evolving and competitive. In almost all of the countries in which we operate, the group communications market is dominated by major telecommunications operators. Additionally, Internet-based services are increasingly being offered by large software companies. Each of these companies has greater financial and operating resources than we do and many of them are owned by the governments of the countries in which they operate or if privatized, have significant political and economic importance in their home countries. Despite their large share of the group communications services market, group communications services account for a small percentage of the revenues of most major telecommunications operators, and based on our experience marketing group communications services, we believe they frequently

We believe that the principal competitive factors affecting the market for its services are:


	•	innovation;

	•	brand awareness;

	•	quality of customer service;

	•	ease of use of services;

	•	geographic scope;

	•	breadth, reliability and security of service offerings;

	•	compatibility with new and existing communication formats;

	•	capacity; and

	•	price.

Our failure to adequately address any of the above factors could harm our business.



	•	Companies with conferencing revenues of approximately U.S. $200 million or more per annum: AT&T and WorldCom;



	•	Companies with conferencing revenues of over U.S. $100 million to U.S. $199 million per annum: Intercall and Global Crossing; and



	•	Companies with conferencing revenues of below U.S. $100 million per annum: ACT, Premiere, Raindance, British Telecom, WebEx, France Telecom, Deutsche Telekom and Sprint.

Although we compete with each of these groups of competitors, we believe that those companies with large conferencing capacity, a diverse geographic scope and a broad range of services, such as our company, are best positioned to successfully bid for large conferencing contracts.

In general, the telecommunications industry is subject to extensive regulation by national, state and local governments. Although there is little or no direct regulation of the core group communications offered by us in any of the countries in which we operate, various government agencies, including the U.S. Federal Communications Commission, or FCC, and the French Autorité de Regulation des Telecommunications, have jurisdiction over some of our current and potential suppliers of telecommunications services. Government regulation of those services has a direct effect on the cost of our communications services. There can be no assurances that the FCC, Autorité de Regulation des Telecommunications or any other governmental agencies will not seek to regulate us as a common carrier, or seek to regulate the prices, conditions or other aspects of the group communications services that we offer. Additionally, government regulations in countries other than the United States and France vary widely and may restrict our ability to offer our services in those countries. We believe that we are currently in material compliance with all applicable communications laws and regulations.

The table below sets forth our significant subsidiaries and affiliates as of December 31, 2001.

Since the beginning of 2002, we have undertaken some internal restructuring of our business operations. In January 2002, we merged our former U.S. operating subsidiary, Genesys Conferencing Inc., into Genesys Conferencing of Massachusetts, Inc. (formerly Vialog). We then merged the combined company into a newly formed Delaware corporation, Genesys Conferencing Inc., in order to reincorporate our consolidated U.S. operations in Delaware.

We have also planned to contribute all of the conferencing activities we conducted in France to our subsidiary, Genesys Conferencing France S.A., in order to become a holding company. If approved at our June 2002 shareholders’ meeting, this restructuring will be retroactive to January 2002.

Our development of local facilities serves the dual purposes of providing local language, local currency, and local time zone services to the areas served by each operations center, as well as backup and overflow capacity among other centers in the event all or part of a conference needs to be rerouted from an operations center that is at full capacity. Our administrative headquarters are located in Montpellier, France. At December 31, 2001, our principal operational facilities were the locations listed in the table below.

All operations are in office locations close to the city center or in nearby suburbs. These leases expire or are renegotiable within the next ten years and are adequate for our expansion plans. Forward lease commitments are not significant in relation to total ongoing operating expenses and all lease costs are consistent with generally available market rentals. We believe we could obtain comparable facilities at similar market rates if necessary. Our operations centers provide us with a high degree of redundancy. We can reroute most of our conferences from one operations center to another if necessary. By networking our operations centers in different time zones, we can use idle evening and nighttime capacity in one center to fulfill daytime demand at another center.

In February 2002, we announced plans to consolidate our six North American call centers into three multimedia “super centers,” to provide higher levels of customer service and improve operating efficiencies. In March 2002, in connection with this plan, we announced the execution of the first phase, with the closure of our Bedford, Massachusetts call center on March 20, 2002. All traffic generated through that site has been re-routed to our Reston, Virginia facility. The other call centers affected by our consolidation plan include Montgomery, Alabama and Denver, Colorado.

We were founded in Montpellier, France in 1986 to develop automated audio conferencing services. Since then, we have expanded through internal growth and acquisitions to become the world’s leading specialist provider of interactive group communications services and applications, based on annual revenues. We have significantly expanded our global presence and the scope of our service offering since the beginning of 1998. During that period, we have evolved from a regional audio conferencing provider generating 94.9% of our revenues within Europe in 1998 to become a global company earning 67.0% of our revenues outside Europe in 2001. We have also diversified the scope of our products and services. At the beginning of 1998, we provided only audio conferencing services. Since then, we have expanded our services to include video conferencing (beginning in 1998), and Web-based conferencing comprised of data collaboration and Web streaming services (both beginning in the third quarter of 2000).

Since the beginning of 2001, we have completed two major acquisitions. In March 2001, we acquired Astound Incorporated, a leading provider of Web conferencing and data collaboration software. In April 2001, we acquired Vialog Corporation, a leading independent provider of conferencing services in the United States. Our financial statements for 2001 include the results of Astound for nine months and the results of Vialog for eight months.

In February 2002, we announced plans to consolidate our six North American call centers into three multimedia “super centers” during 2002. We estimate that the costs associated with the consolidation will total approximately €8 million. Of this amount, we expect to record a pre-tax restructuring charge of approximately €3.6 million in the first quarter of 2002. The remaining amount will be added to the goodwill relating to the acquisition of Vialog. The costs include primarily the lease commitments on expected unused facilities, the write-off of certain leasehold improvements and equipment and employee severance. We estimate that future annual cost savings from the consolidation will range from €3.5 to €4.0 million beginning the third quarter of 2002. This annual cost saving is expected to have a positive impact on our gross margin, and to reduce selling and marketing and general and administrative expenses. In March 2002, we announced the completion of the first phase of our call center consolidation.

One of the primary drivers of our recent growth has been our effort to expand our global presence and service offering by making strategic acquisitions. Among the most significant effects of our acquisitions have been:


	•	*Increased revenues.* During the three year period ended December 31, 2001, our revenues grew from €48.0 million in 1999 to €179.0 million in 2001. Companies we acquired during 2000 accounted for €2.5 million in revenues, or approximately 5.7% of our total annual revenue growth, in 2000. An additional €18.5 million, or 42% of the total annual revenue growth in 2000, was due to the impact of including a full year of revenues in 2000 from companies that were consolidated for less than the full year in 1999. Companies we acquired during 2001 accounted for €65.7 million in revenues, or approximately 76% of our total annual revenue growth, in 2001. An additional €3.8 million, or 4.4% of total annual revenue growth in 2001, was due to the impact of including a full year of revenues in 2001 from companies that were consolidated for less than the full year in 2000.

	•	*Change in composition of revenues and margins.* Most of the companies that we have acquired, such as Vialog, historically generated a significant proportion of their revenues from operator-assisted services. These services entail higher labor costs, and thus have lower margins than automated unattended conferencing services. As a result, we position operator-assisted service as a complement to our core


		automated service, and are migrating existing customers of our acquired companies from operator-assisted services to higher margin automated services. We also expect to generate a greater proportion of our revenues in the future from data collaboration and Web streaming services.

	•	*Global presence.* Our acquisitions have enabled us to expand our geographic coverage from 5 European countries at the beginning of 1998 to 18 countries in Europe, North America, and the Asia/Pacific region at the end of 2001. Our April 2001 acquisition of Vialog alone nearly tripled our North American operations. Based on our experience in marketing global conferencing services, we believe our global coverage enhances our ability to win contracts from the multinational customers that are the world’s largest users of conferencing services. One of the effects of our expansion into new markets has been to increase our exposure to exchange rate fluctuations. The impact of exchange rate fluctuations is discussed in more detail below.

	•	*Increased amortization and financial expenses.* We have accounted for all of our acquisitions under the purchase method of accounting. Under this method of accounting, we record the excess of the purchase price over the net assets of acquired companies as goodwill and identifiable intangible assets, which we amortize on a straight line basis over a period ranging from 3 to 20 years. The resulting increase in amortization expense has had and will continue to have a significant impact on our results of operations. In 2001, we recorded €30.8 million and €61.2 million in goodwill and other intangibles amortization charges and impairment charges, respectively. In 2002, we will adopt Statement of Financial Accounting Standards No 142, Goodwill and Other Intangible Assets, which we expect will result in a decrease in amortization charge of €12.5 million in 2002. In connection with our acquisitions, we have also incurred additional indebtedness, which has increased our net financial expense.

We intend to continue to make strategic acquisitions to further expand our global presence and to broaden the scope of our services. As we do so, the factors mentioned above may have an increasing impact on our results of operations.

Our principal acquisitions in 2000 and 2001 are summarized in the following table:

We include the results of acquired companies in our results of operations from their respective dates of acquisition. As a result, our historical financial statements are not directly comparable from one period to the next. For additional information regarding these acquisitions see Item 4 “Information on the Company — History and Development of the Company,” “— Business Overview” and Note 4 to our financial statements filed under Item 18.

Until 2002, we organized our services and reported our revenues along the type of service provided: audio conferencing, video conferencing and data collaboration and Web streaming. Beginning in 2002, we will further group these services into two interactive group communications categories: Virtual Group Conferencing and Events and Managed Services.

We generate our revenues primarily from fees charged to our customers for conferencing and related services. We earn revenues from three principal types of interactive group communications services:



	•	Audio conferencing. Historically, we have generated the large majority of our revenues from fees charged to customers for audio conferencing services, which accounted for 88.1% of our total revenues in 2001. We bill our audio conferencing services on a per-line, per-minute basis.



	•	Video conferencing. We began offering video conferencing services in 1998, in partnership with VideoWeb, and significantly expanded those services with our acquisitions of VideoWeb in April 1999, Conferencing Acquisition Corporation (a subsidiary of Williams, Inc.) in July 1999, the customer list of Cable & Wireless UK in April 2000 and Vialog Corporation in April 2001. In 2001, video conferencing services accounted for approximately 6.1% of total revenues. We bill our video conferencing services on a per-line, per-minute basis.


	•	Web-based conferencing. We offer two types of Web-based conferencing services: data collaboration and Web streaming.


	•	Data collaboration. We began offering data collaboration services in the fourth quarter of 2000, following the launch of our PowerShare application. We have further strengthened our position since then through the acquisition of Astound. In October 2001, we launched Genesys Meeting Center, a fully integrated audio and Web conferencing platform, which now incorporates PowerShare. In 2001, data collaboration services accounted for approximately 2.4% of total revenues. We bill data collaboration services either on a per-user, per-minute basis or, in the case of the Web conferencing service included in Genesys Meeting Center, on a monthly subscription basis. Subscribing customers pay a monthly fee for a certain number of seats in a virtual conference room.

	•	Web streaming. We began offering Web streaming services in June 2000, following our acquisition of Mediactiv, and further strengthened our position since then through our July 2000 acquisitions of Langages Virtuels and Cote&Com. In 2001, Web streaming services accounted for approximately 2.3% of total revenues. We charge for Web streaming services on a per event basis that takes into account the size and complexity of the services requested.

For each of our audio, video and data services, the key factors that determine revenues are the volume of minutes sold and the average per-line, per-minute price for the service. We have experienced strong volume growth in each of these types of services since 1999, driven primarily by acquisitions, together with, in the case of audio conferencing, strong organic growth. Average per-minute prices for audio conferencing have declined since 1999, primarily as a result of the effect of volume discounts, competitive pressure and an emphasis on automated unattended conferencing services, which we bill at lower rates. The key drivers for the Web collaboration included in the Genesys Meeting Center are the number of subscriptions sold. The key drivers of Web streaming revenues are the number of events managed and the average per event price for the service.

In addition to our services, we also earn other revenues from the sale of audio and video conferencing equipment, which we record under “Products.” These sales accounted for 1.0% of our total revenues in 2001. We offer conferencing equipment for sale to promote the use of our services and as an added benefit to those customers that seek to purchase both their conferencing equipment and their conferencing services from a single supplier.

We generally recognize revenue upon completion of conferencing services or at the time of shipment of equipment, unless we have future obligations for installation or have to obtain customer acceptance, in which case we defer revenue until these obligations are met. We include amounts billed in excess of revenue recognized as deferred revenue in our consolidated balance sheets.

Our cost of revenue consists of long distance telephone and network charges, operator and technical support salaries and office expenses for operations staff, depreciation on our teleconferencing bridges and telecommunications equipment and equipment product costs. Of these costs, the largest components are operator and technical support salaries and long distance telephone and network charges. Our overall gross margin increased from 55.9% of total sales in 2000 to 57.4% in 2001 primarily as a result of the migration of our customers, particularly in North America, from attended services to automated services, which carry higher margins. We expect our gross margin to continue to improve if we continue to be successful in this strategy. However, the improvement may be partly offset by expected price decreases due to stronger pressure from competitors and favorable rates offered for large, multinational contracts. We expect that the costs savings from our announced consolidation of our North American call centers described above under “— Recent Developments” will have a positive impact on our gross margin.

We historically have experienced, and expect to continue to experience, seasonal fluctuations in revenues, including lower revenues in the third quarter. This seasonality results mainly from decreases in general consumption during the summer vacation periods, particularly in the months of July and August. Because of this seasonality, our rate of revenue growth is typically lower in the third quarter than in other quarters.

Our operating income depends on our revenue, our cost of revenue, and the level of our other operating expenses. Our principal operating expenses are:


	•	Research and development costs, which consist primarily of salaries and benefits for research and development personnel, depreciation of research and development equipment and related expenses.

	•	Selling and marketing expenses, which consist primarily of the costs of advertising and marketing materials and salaries and benefits paid to sales personnel.

	•	General and administrative expenses, which consist primarily of personnel costs and costs for general corporate functions, including finance, accounting, facilities and administration and human resources, and fees for professional services such as consulting, legal and accounting services. Expenses relating to software and information system network maintenance and development are classified as general and administrative expenses rather than research and development expenses.

	•	Impairment of goodwill and other intangibles, which consists principally of charges related to the review of the carrying value of its goodwill and identifiable intangible assets that were recorded in connection with our various acquisitions.


	•	Amortization of goodwill and other intangibles, which consists principally of expenses related to the amortization of goodwill from acquisitions, and to a lesser extent, of the amortization of other intangibles. We will apply Statement of Financial Accounting Standards No 142, Goodwill and Other Intangible Assets, beginning in 2002, which we expect will result in a decrease in amortization charge of €12.5 million beginning in 2002.

Additionally, we expect to record a pre-tax restructuring charge of approximately €3.6 million in the first quarter ending March 31, 2002 related to the consolidation of our North American call centers described above under “— Recent Developments.”

We believe that EBITDA is a meaningful measure of performance and use it for purposes of managing our business and evaluating our financial health. We define EBITDA as earnings (loss) before income taxes, interest, depreciation, amortization charges and impairment of goodwill and other intangibles. Our depreciation charges are divided among the line items cost of revenue, research and development, selling and marketing and general and administrative expenses, based on the use of the assets being amortized. EBITDA is not a measurement of operating performance calculated in accordance with accounting principles generally accepted in the United States, and should not be considered a substitute for operating income (loss), net income (loss), cash flows from operating activities or other statement of operations or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States, or as a measure of profitability or liquidity. EBITDA may not be indicative of our historical operating results; nor is it meant to be predictive of potential results. Because all companies do not calculate EBITDA identically, the presentation of EBITDA contained in this annual report may not be comparable to similarly named measures of other companies.

Our EBITDA declined as a percentage of revenues from 14.1% in 1999 to 9.4% in 2001. One of the most important drivers behind our EBITDA margin is the level of our personnel costs, which are divided among the line items cost of revenue, research and development, selling and marketing and general and administrative expenses based on the function of the relevant employees.

The following table sets forth our revenues for 2000 and 2001 by category and expressed as a percentage of total revenues.

Total revenues increased from €92.4 million in 2000 to €179.0 million in 2001, an increase of 93.6%. Of the €86.5 million increase, €65.7 million, or 76.0% of the increase, was principally attributable to our April 2001 acquisition of Vialog and, to a lesser extent, our March 2001 acquisition of Astound. Approximately €1.3 million, or 1.5% of the increase in revenues from 2000 to 2001 was due to the impact of currency exchange rate movements, as the euro depreciated against the dollar and other non-euro currencies in which we do business. Approximately €3.8 million, or 4.4% of the increase in revenues from 2000 to 2001 was due to the impact of including a full year of revenues from Genesys Open Media, Telechoice and Eureka in 2001, as opposed to including only six, three and three months, respectively, in 2000. The remaining €15.7 million increase was

driven by organic revenue growth in the United States and Europe, particularly in the United Kingdom, France and Sweden. This organic growth is mainly attributable to our automated audio-conferencing services. Call volume minutes also significantly increased, more than doubling from 305 million in 2000 to 727 million in 2001, or 868 million in 2001 when combined with Vialog’s minutes for the first four months of 2001.

Audio conferencing. Audio conferencing revenues increased by 108.6%, from €75.5 million during 2000 to €157.7 million during 2001. Of the €82.2 million increase in audio conferencing revenues, €62.8, or 76.5% of the increase, was attributable to the acquisition of Vialog at the end of April 2001 with the resulting increase in call volume minutes. The remaining €19.4 increase was mainly driven by organic revenue growth in the United States and Europe as described above.

Video conferencing. Video conferencing revenues decreased by 10.6%, from €12.2 million during 2000 to €10.9 million during 2001. This decrease is mainly due to the loss of maintenance contracts for video equipment that were included as part of the acquisition of Cable & Wireless’ European video conferencing activities in 2000, as well as the migration of customers from video services to our new innovative data and Web streaming services.

Data conferencing and Web streaming. Data conferencing and Web streaming revenues significantly increased from €1.6 million in 2000 to €8.5 million in 2001. The €6.9 million increase in revenues was primarily attributable to the full year consolidation of Genesys Open Media, a web streaming and managed events services company, in 2001, compared to only six months in 2000, as well as the inclusion of nine months of results of Astound, following its acquisition in March 2001.

Geographic composition of revenues. The following table breaks down our revenues by region for each of 2000 and 2001 in euros and expressed as a percentage of total revenues:

The shift in the geographic composition of revenues to North America is primarily a result of the impact of our April 2001 acquisition of Vialog, and to a lesser extent, our March 2001 acquisition of Astound.

Our gross profit increased from €51.7 million in 2000 to €102.8 million in 2001. As a percentage of revenues, gross profit increased from 55.9% in 2000 to 57.4% in 2001. The improvement in our gross margin resulted from the continued shift toward automated services, particularly in North America. Automated services carry higher margins than attended services. We expect that the announced consolidation of our North American call centers, planned for 2002, will have a positive impact on our gross margin due to the expected reduction in our cost of revenues.

Our operating loss increased from €3.0 million in 2000 to €91.3 million in 2001. Excluding impairment of goodwill and other intangibles, our operating loss was €30.0 million in 2001. This increase was primarily a result of the increased amortization costs associated with our 2001 acquisitions and the growth in our sales and

Our research and development expenses more than doubled from €2.6 million in 2000 to €5.4 million in 2001, although they remained essentially steady as a percentage of our sales. The increase in research and development expenses resulted primarily from the expansion of our workforce in connection with our development efforts in Web streaming (Genesys Open Media, acquired in July 2000) and data collaboration (Astound acquired in 2001), as well as the development of the Genesys Meeting Center, which we launched in the second half of 2001.

Our selling and marketing expenses more than doubled from €17.9 million in 2000 to €42.7 million in 2001, and increased by over 4% as a percentage of our total revenues from 19.3% in 2000 to 23.9% in 2001. Of the €25.0 million increase, €12.1 million, or 48.4%, was primarily attributable to our acquisition of Vialog, which more than doubled our sales force in North America. The remaining amount of increase mainly related to the organic growth of our sales force, particularly in the United States, the expansion of our global marketing team, and, to a lesser extent, expenses in connection with the launch of our Genesys Meeting Center platform.

Our general and administrative expenses more than doubled, from €27.2 million in 2000 to €53.9 million in 2001, but only slightly increased as a percentage of total revenues from 29.4% in 2000 to 30.1% in 2001. Of the €26.7 million increase, €16.0 million, or 60.0% of the increase, was principally attributable to the inclusion of eight months of expenses of Vialog, and to a lesser degree the inclusion of nine months of expenses of Astound. Approximately €2.2 million, or 4.4% of the increase from 2000 to 2001 was due to inclusion of a full year of expenses of each of Genesys Open Media, Telechoice and Eureka in 2001, compared to only six, three and three months, respectively, in 2000. The remaining increase is mainly attributable to integration expenses in connection with the Vialog and Astound acquisitions, as well as increased expenses due to the growth of our company (such as increased professional fees and investor relationship expenses following our listing in April 2001 on the Nasdaq Stock Market).

Amortization of goodwill and other intangibles more than quadrupled from €7.0 million in 2000 to €30.8 million in 2001. Virtually all of the €23.8 million increase is attributable increased amortization expense in connection with our acquisitions of Astound (€10.3 million) and Vialog €10.9 million) in 2001. The remaining increase primarily reflects the inclusion of a full year of amortization expenses for Genesys Open Media, Telechoice and Eureka in 2001, compared to only six, three and three months, respectively, during 2000.

During the period from 1999 to 2001, we acquired numerous businesses using our ordinary shares as a major component of the purchase price when our valuation was at a significantly higher level. Due to the dramatic downturn in the valuation of companies in the telecommunications industry during 2001, and the estimated future financial performance of the industry, we evaluated the carrying value of our long-lived assets in accordance with Statement of Financial Accounting Standards No. 121, Accounting for the impairment of long-lived assets and for long-lived assets to be disposed of. As a result of this assessment, we recorded an impairment charge amounting to €61.3 million in 2001, which is mainly associated with the 2001 acquisition of Astound (€32.8 million) and our 1999 and 2000 acquisitions relating to video-conferencing (€20.6 million). For additional information regarding this impairment loss, see Note 3 to our consolidated financial statements included under Item 18.

Our EBITDA, excluding the impairment loss on goodwill and identifiable intangible assets, increased from €12.0 million in 2000 to €16.9 million in 2001. Our EBITDA margin decreased from 12.9% in 2000 to 9.4% in 2001. The decrease in EBITDA margin primarily reflects the increased level of selling and marketing expenses, general and administrative expenses and research and development expenses described above. These negative effects were partially offset by the improvement in our gross margins. We expect that the announced consolidation of our North American call centers during 2002 will improve operating efficiency and that this will help improve our EBITDA margin after the consolidation is completed.

We incurred net financial expenses of €6.7 million in 2001, after generating net financial income of €0.7 million in 2000. The change primarily reflects a significant increase in interest expenses due to a significant increase in our long term debt following the Vialog acquisition. As part of the acquisition of Vialog, in April 2001, we entered into a U.S. $ 125 million credit facility that replaced our previous U.S. $35 million multi-currency term loan and Vialog’s existing long term debt (U.S. $75 million senior notes payable).

We recorded income tax expense of €0.5 million in 2001, compared to €3.6 million in 2000. The net decrease of €3.1 million mainly consists of €7.6 million in deferred tax income relating to amortization of identifiable intangible assets in connection with the acquisition of identifiable intangible assets from Astound and Vialog in 2001. This decrease was partially offset by a €1.5 million increase for current tax reflecting higher earnings in the countries where we pay income tax, particularly in the United Kingdom and, to a lesser extent, Sweden and a €3.6 million increase for tax on acquisition costs of companies classified in goodwill and identifiable intangible assets.

For the foregoing reasons, we recorded a net loss of €98.5 million in 2001 compared to a net loss of €6.0 million in 2000. Excluding the charge for impairment of goodwill and other intangible assets, our net loss amounted to €37.3 million in 2001.

The following table sets forth our revenues for 1999 and 2000 by category and expressed as a percentage of total revenues.

Total revenues increased from €48.0 million in 1999 to €92.4 million in 2000, an increase of 92.6%. Of the €44.4 million increase, €2.5 million, or 5.7% of the increase, was attributable to acquisitions made during 2000. Approximately €8.1 million, or 18.2% of the increase in revenues from 1999 to 2000 was due to the impact of currency exchange rate movements, as the euro depreciated against the dollar and other non-euro currencies in which we do business. Approximately €18.5 million, or 42% of the increase in revenues from 1999 to 2000 was due to the impact of including a full year of revenues from Williams, Aloha and VideoWeb in 2000, as opposed to including only five, nine and eight months, respectively, in 1999. The remaining €15.3 million increase was driven by strong revenue growth in Europe, particularly in the United Kingdom and Germany, due to growth in automated services. During the period, our total call minutes nearly doubled from 158 million in 1999 to 305 million in 2000.

Audio conferencing. Audio conferencing revenues increased 76.5%, from €42.8 million during 1999 to €75.5 million during 2000. Of the €32.7 million increase in audio conferencing revenues, the main part was attributable to impact of including a full year of revenues from Williams and Aloha in 2000, as opposed to including only five and nine months, respectively, in 1999. The remaining increase was driven by strong revenue growth in Europe, particularly in the United Kingdom and France, due to strong growth in automated services.

Video and data conferencing. Video and data conferencing revenues more than tripled from €4.4 million in 1999 to €13.8 million in 2000. The €9.4 million increase in revenues was attributable to the consolidation of Williams and VideoWeb revenues for the full year in 2000, compared to five and eight months, respectively, in 1999 and the acquisition of Cable & Wireless’ European video conferencing activities in April 2000. The figure for 2000 also includes €1.5 million in web streaming revenues. These services were offered for the first time in 2000.

Geographic composition of revenues. The following table breaks down our revenues by region for each of 1999 and 2000 in euros and expressed as a percentage of total revenues:

The change in the geographic composition of revenues primarily reflects the impact of including the revenues of Williams and Aloha for the full year in 2000, as opposed to only five and nine months, respectively, in 1999.

Gross profit increased from €27.4 million in 1999 to €51.7 million in 2000. Gross profit declined as a percentage of sales from 57.2% in 1999 to 55.9% in 2000. This reduction in margins resulted from an increase in labor costs as a result of the acquisition of Aloha, Video Web and Williams, which were acquired in the course of 1999 and generate most of their revenues from operator-assisted conferencing. The decline in margins also reflects our acquisitions during the second half of 2000 in the field of Web streaming, which generates lower margins than audio conferencing. Excluding the impact of acquisitions made during 1999 and 2000, our gross margin increased from 1999 to 2000.

Our operating loss increased from €0.5 million in 1999 to €3.0 million in 2000. The following table breaks down our operating costs and expenses that are not included in cost of revenue for 1999 and 2000 by major components.

Research and development expenses increased by 60.4% from €1.6 million in 1999 to €2.6 million in 2000. The increase in research and development costs resulted primarily from additional employees hired in connection with our research and development efforts in connection with data collaboration and enhancements to our TeleMeeting service and our Multi-Conference Manager browser. As a percentage of total revenues, research and development expenses declined from 3.4% in 1999 to 2.8% in 2000. This decrease primarily reflects a broader revenue base (especially after our acquisitions in 1999) over which to spread our research and development expenses.

Selling and marketing expenses increased by 76.4% from €10.1 million in 1999 to €17.9 million in 2000. The increase primarily reflects the addition of sales personnel from Williams, which was acquired in July 1999, and Mediactiv, Cote & Com, Langages Virtuels, Telcen, Telechoice and Eureka, each of which were acquired in 2000. It also reflects, to a lesser extent, growth in the size of our global marketing team. As a percentage of total revenues, selling and marketing expenses decreased from 21.1% in 1999 to 19.3% in 2000, reflecting increased usage by our existing customers and greater revenues per sales person.

General and administrative costs more than doubled, from €13.0 million in 1999 to € 27.2 million in 2000. As a percentage of total revenues, general and administrative costs increased from 27.0% in 1999 to 29.4% in 2000. The increase in general and administrative costs was primarily due to the recruitment of personnel to handle upgrades to our management information systems and additional accounting and support staff, and

consulting and legal fees paid in connection with acquisitions investigated but not completed. The increase also reflects the acquisition of general and administrative personnel from Williams and the companies we acquired during 2000.

Amortization of goodwill and other intangibles more than doubled from €3.2 million in 1999 to €7.0 million in 2000. This increase primarily reflects the recording of a full year of amortization expenses for Williams, Aloha and VideoWeb in 2000, as opposed to only five, nine and eight months, respectively, during 1999. The increase also reflects goodwill recorded in connection with the acquisitions of Mediactiv, Cote & Com, Langages Virtuels, Telcen, Telechoice and Eureka in 2000.

Our EBITDA increased from €6.8 million in 1999 to €12.0 million in 2000. Our EBITDA margin decreased from 14.1% in 1999 to 12.9% in 2000. The decrease in EBITDA margins primarily reflects the impact of increased corporate expenses incurred in preparation for the integration of Vialog. It also reflects the impact of charges associated with the acquisition of Mediactiv, Langages Virtuels, Cote & Com, Eureka and Telcen, each of whom was generating losses at the time it was acquired, as well as charges linked to the creation of new subsidiaries in Norway and Denmark. To a lesser extent, the decrease in EBITDA margin reflects the impact of consolidating Williams, which had lower margins, for a full year in 2000, as opposed to only six months in 1999.

We generated net financial income of €0.7 million in 2000, after incurring net financial expense of €2.1 million in 1999. The change primarily reflects a significant increase in interest income and other net financial income, primarily reflecting the investment of cash received as a result of a capital increase in June 2000.

We recorded income tax expense of €3.6 million in 2000, as compared with €1.3 million in 1999. The increase reflects higher earnings in the countries where we pay income tax, particularly in the United Kingdom and, to a lesser extent, Sweden.

For the foregoing reasons, we recorded a net loss of €6.0 million in 2000, as compared with a net loss of €3.8 million in 1999.

Our liquidity requirements are driven primarily by the implementation of our acquisition strategy and capital expenditures on servers, computers, software, telecommunications and bridging equipment. To date, we have funded our capital requirements through a combination of equity offerings, borrowings (including bank financings and convertible debt issuances), and operating cash flow.

At December 31, 2001, our principal sources of liquidity included €17.5 million in cash and cash equivalents and a total of €5.4 million of unutilized short-term credit facilities. Under the terms of our U.S. $125 million credit facility, we may only have U.S. $4.0 million of additional indebtedness, which may limit our ability to borrow under our short-term credit facilities.

In connection with the acquisition of Vialog, in April 2001, we and Vialog entered into a U.S. $125 million credit facility, which was used to refinance the existing debt of our company and Vialog and for working capital

Cash and cash equivalents decreased from €49.7 million at the end of December 2000 to €17.5 million at the end of December 2001.

We used cash of €18.3 million in operating activities. This amount reflected an increase in our working capital requirements arising from an €18.5 million note receivable that we acquired in connection with the acquisition of Vialog. Additionally, our accounts receivable and prepaid expenses increased by €7.5 million and €5.9 million, respectively.

We used cash of €36.0 million in investing activities, primarily in connection with the acquisition of Astound (€13.6 million) and Vialog (€6.3 million). Cash used in investing activities also reflected capital expenditures of €16.0 million for servers, computers, software (including €2.8 million relating to the capitalized development of an integrated reservation and billing system), telecommunications and bridging equipment. Our practice is generally to purchase additional bridging and streaming capacity when average daily usage reaches approximately 70% of available capacity. Our capital expenditures as a percentage of revenues decreased, amounting to 15.6%, 11.4% and 8.9% of revenues in 1999, 2000 and 2001, respectively. The following table sets forth our capital expenditures for the periods indicated.

Financing activities provided €20.7 million of cash, primarily reflecting the closing of an equity offering in October 2001 that provided net proceeds of €20.9 million. We also issued €6.6 million of long-term debt and repaid €3.0 million of long-term debt.

As of December 31, 2001, the repayment schedule for all of our contractual obligations and commercial commitments is as follows:

On April 20, 2001, we and Vialog entered into a U.S. $125 million credit facility agreement with BNP Paribas, CIBC World Markets and Fortis Bank. This credit facility, which was amended thereafter, replaced our then outstanding U.S. $35 million multi-currency term loan and the long term debt of Vialog (U.S. $75 million


	—	a U.S. $50 million senior term loan facility granted to Vialog, which was used by Vialog to refinance its existing debt. This facility matures on April 28, 2006 and bears interest at the rate of Libor USD plus a margin of 2.65% per annum.

	—	a U.S. $30 million senior term loan facility granted to Vialog, which was used by Vialog to refinance its existing debt. This facility matures on October 31, 2006 and bears interest at the rate of Libor USD plus a margin of 3.15% per annum.

	—	a U.S. $35 million senior term loan facility granted to our company, which we used to partially refinance our existing debt. This facility matures on April 28, 2006 and bears interest at the rate of Libor USD plus a margin of 2.65% per annum.

	—	a U.S. $5 million revolving loan facility granted to Vialog, to be used by Vialog for working capital purposes. This facility bears interest at the rate of Libor USD plus a margin of 2.65% per annum.

	—	a U.S. $5 million revolving loan facility granted to our company, which we use for working capital purposes. This facility bears interest at the rate of Libor USD plus a margin of 2.65% per annum.

The U.S. $50 million and U.S. $35 million term loans granted to Vialog and our company, respectively, are to be repaid in semi-annual installments in accordance with the schedule set forth in the credit facility agreement. The U.S. $30 million facility is to be repaid in one payment at maturity. All amounts borrowed are repayable at any time in whole or in part at the option of the borrower.

The U.S. $125 million credit facility requires us to comply with certain financial covenants, consisting of leverage, interest cover, and cash cover ratios. We are currently in compliance with all of the covenants, as amended. Confirmation of the approval of the latest amendment was received on May 31, 2002. In addition, the credit facility places limits on our ability to make capital expenditures and prohibits our payment of dividends. We have pledged as security for our credit facility the shares of our principal subsidiaries, as well as the accounts receivable of our principal U.S. subsidiary. If our financial results do not reach the levels required by our debt covenants and we are unable to obtain a waiver from our lenders, our debt would be in default and callable by our lenders.

We lease our facilities and some of our equipment under long-term operating leases. Our minimum payments due under operating leases are €10.4 million in 2002, €7.1 million in 2003, €5.5 million in 2004, €3.4 million in 2005, €2.2 million in 2006 and €6.7 million thereafter, for a total of €35.2 million. We also have obligations under capital leases that total approximately €478,000, including the interest portion.

We have entered into several interest rate swap agreements to hedge our exposure on a portion of our debt. We also enter into foreign currency hedging agreements, principally forward purchase or sale agreements. Our hedging arrangements are described under Item 11 “Quantitative and Qualitative Disclosure About Market Risk.”

We do not have any material guarantees outstanding, nor do we have any securitization or other off balance sheet financing arrangements.

See Item 4 “Information on the Company — Business Overview — Research and Development” and “Information on the Company — Business Overview — Intellectual Property.”

On March 6, 2002, we announced that we believed the business environment was going to remain favorable for the conferencing and collaboration industry in 2002. As a result, we stated our expectation that our gross

For internal planning purposes, we have targeted growth in revenues to between €230 million and €250 million. These revenue targets are subject to significant uncertainty, and might not be reached for any number of reasons, including those described under Item 3, “Key Information — Risk Factors.”

We prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities.

We believe the following critical accounting policies, among others, represent the more significant judgments and estimates used in the preparation of our consolidated financial statements.

We evaluate the collectibility of our accounts receivable based on a combination of factors. In circumstances where we are aware of a specific customer’s inability to meet its financial obligations to us (e.g., bankruptcy filings, failure to pay amounts due to us or others), we record a specific reserve for bad debts against amounts due to reduce the net recognized receivable to the amount we reasonably believe will be collected. For all other customers, we recognize reserves for bad debts based on past write-off history (average percentage of receivables written off historically), and the length of time the receivables are past due. If circumstances change (i.e. higher than expected defaults or an unexpected material adverse change in a major customer’s ability to meet its financial obligations to us), our estimates of the recoverability of amounts due us could be reduced by a material amount.

In reviewing the recoverability of our goodwill and identifiable intangible assets, we must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the respective assets. These assumptions require us to exercise significant judgment, often on a subjective basis. If these estimates or their related assumptions change in the future, we may be required to record impairment charges for these assets. During 2001, we recorded an impairment charge on these assets of €61.3 million.

Effective January 1, 2002, we will adopt Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets. Under SFAS 142, we will discontinue amortizing our goodwill, but we will be required to review our goodwill for impairment during the three months ending March 31, 2002, and then on an annual basis thereafter. Based on the circumstances and underlying assumptions made when the impairment reviews are performed in the future, further impairment charges could be required.

We will continue to amortize our identifiable intangible assets that have determinable lives, but we will still be required to review the recoverability of these assets whenever events or changes in business circumstances indicate that the assets may be impaired. Based on the circumstances and underlying assumptions made at the time of these reviews, further impairment charges could be required.

We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities. We regularly review our deferred tax assets for recoverability and establish a valuation allowance based upon historical losses, projected future taxable income for each subsidiary and the expected timing of the reversals of existing temporary differences. As a result of this review, we have recorded a deferred tax asset of €0.2 million as of December 31, 2001, and we have established a full valuation allowance on the remaining amount of our deferred tax assets.

In accordance with our bylaws (statuts), we are managed by our Board of Directors (conseil d’administration), which must be composed of a minimum of 3 and a maximum of 18 members. Our Board of Directors is currently composed of six members. Each member of the Board of Directors is appointed for term of up to six years and we cannot have more than 1/3 of our Directors be older than 70 years of age. If the proposed resolution is passed at our annual shareholders meeting to be held on June 17, 2002, the term may not exceed three years. Under French law, the Board of Directors has broad authority to take actions in the name of our company within the scope of our corporate purpose (subject to the authority expressly reserved by law to the shareholders).

The names and positions of the current members of our Board of Directors, their ages, business experience, dates of initial appointment, the year in which their current term expires and information on their principal business activities outside our company are as follows:


*	Mr. Bertrand sat on our Board as the representative of Finovectron SA from 1990 to 1998 (except from September 1996 to April 1998, when Finovectron had another representative); Mr. Bouillet sat on our Board as the representative of STM-Goupil from 1988 to 1995; and Mr. Piriou sat on our Board as the representative of both In’Com and Part’Com from 1988-2000.

At our annual shareholders’ meeting scheduled for June 17, 2002, our shareholders will be asked to approve the re-appointment of Mr. Legros as Chairman and Mr. Bertrand as Director, for an additional term.

Following the acquisition of Vialog, Mr. David Lougee, a former Vialog director, was elected to our Board of Directors of in June 2001. He served on our Board of Directors through the remainder of 2001 and resigned his position in March 2002.

None of our directors has any family relationship with any other of our directors or member of our senior management.

The names, positions and business experience of our senior officers are as follows:

François Legros, Chairman and Chief Executive Officer. Mr. Legros has been our Chairman and Chief Executive Officer since June 1997, and was the first employee to be hired by our company. Mr. Legros started his career at our company as Finance Manager and later became our Financial and Administrative Director. In 1994, he was appointed Managing Director of Genesys Sweden and Genesys Development Director and became Group Managing Director in 1996.

David Detert, Executive Vice President, Networks & Infrastructure. Mr. Detert joined our company in October 1997 as Executive Vice President, Business Development. In 1998 he was appointed to Executive Vice President, Research & Development, which he served until appointment to his present position. Prior to joining

Andrew Pearce, Executive Vice President, Europe. Mr. Pearce has been our Executive Vice-President, Europe since January 2000. He joined our company in April 1999 as Managing Director of Darome Teleconferencing Ltd. (one of our subsidiaries). Prior to joining our company, Mr. Pearce spent 10 years with British Telecom Conferencing, where he held several positions including Head of Operations, BT Conferencing and Business Manager, Conferencing Services.

Margie Medalle, Executive Vice President and Chief Operating Officer, North America. Ms. Medalle has been our Executive Vice President and Chief Operating Officer, North America since April 2001. Prior to this time, she served as the President and Chief Executive Officer of our North American operating company after joining our company in April 1999 following our acquisition of Aloha Conferencing. Ms. Medalle was formerly President and Managing Director of Aloha Conferencing and prior to joining Aloha, Ms. Medalle owned her own consulting company specializing in mergers and acquisitions, strategic planning, financial analysis and efficiency studies.

Olivier Fourcade, Executive Vice President, Asia Pacific. Mr. Fourcade, our Executive Vice President, Asia Pacific, joined our company in 1991, and since then has held several positions including Executive Vice Present, Marketing Manager Europe and Executive Vice President, Video Business Unit. Today, Mr. Fourcade serves as our Executive Vice President, Asia Pacific, a position he has held since October 2001.

Jim Huzell, Chief Operating Officer. Mr. Huzell joined our company as Chief Operating Officer in 2000. Prior to this time, Mr. Huzell spent five years as Managing Director of ScanMarket AB, a consulting business, working on business development projects for mobile telephone companies such as Ericsson and Nokia as well as with several other technology ventures. Prior to joining ScanMarket, Mr. Huzell served for four years as Chief Executive Officer of Comviq European, an independent mobile telephone operator.

Michael E. Savage, Executive Vice President and Chief Financial Officer. Mr. Savage joined our company as Executive Vice President and Chief Financial Officer in September 2001. Prior to this time, he served as Senior Vice President and Chief Financial Officer of Vialog Corporation, a position he held from September 1999. Before joining Vialog, Mr. Savage also served as Chief Financial Officer of America Online/ Digital City, and prior to that position, as Chief Financial Officer and Vice President of World Corp., the holding company of World Airways, Inc. and InteliData Technologies Corp.

Marie Capela-Laborde, Executive Vice President, Group General Counsel & Secretary. Ms. Capela-Laborde has served as our Executive Vice President General Counsel & Secretary since July 2001. She joined our company in March 1998 as Head of the Legal Division. Prior to that time she worked as an attorney in her own law firm.

Rolf Dahlin, Chief Executive Officer, Video Division. Mr. Dahlin has been the Chief Executive Officer of our Video Division since October 2001. He joined our company in 1995, and has served in a variety of positions since that time including Managing Director, Sweden and Vice President of Business Development. Before joining our company, Mr. Dahlin spent nine years at Esselte both as a sales manager and a marketing manager.

Kailash Ambwani, Chief Strategy Officer. Mr. Ambwani has been our Chief Strategy Officer since January 2002. Prior to appointment to his present position, he served as Executive Vice President from April 2001. Before joining our company, Mr. Ambwani co-founded Astound Incorporated in June 1996 and served as its Chairman and Chief Executive Officer until we acquired Astound in March 2001. Prior to Astound, Mr. Ambwani served as Chairman and Chief Executive Officer of Gold Disk Incorporated, a software publisher.

None of these individuals has any principal business activities outside of our company.

None of these individuals has any family relationship with any director or nominee for director or other member of our senior management.

In 2001, Mr. Kim Mayyasi served as our Chief Executive Officer for our North American operations. Prior to his position at our company, he served as President and Chief Executive Officer of Vialog Corporation. He resigned from our company effective January 1, 2002.

In 2001, the aggregate amount of compensation paid to our directors and senior management (19 persons in total) for services in all capacities, including former directors and senior management who left our company during the year, was €3.1 million. Of this amount €47,000 consisted of attendance fees (jetons de présence) paid to members of our Board of Directors, allocated as set forth below.

Our Chairman and Chief Executive Officer received €458,532 in compensation in 2001 before taxes and other charges, consisting of a base salary of €258,532 and a €200,000 bonus.

Under French law, directors may not receive options solely as compensation for service on the board, thus only those directors who are also our employees may receive stock options. During 2001, a total of 327,500 options were granted to senior management, including senior management who left our company during the year, as set forth below. Each option gives the right to purchase one of our ordinary shares at the exercise price and that expire on the date set forth in the following table.

The other members of our senior management, including those who left our company in 2001, did not receive any stock options during 2001.

For additional information regarding our stock options, see “— Share Ownership” below and Note 12 to our financial statements included under Item 18.

The aggregate amount that we set aside or accrued to provide pension, retirement or similar benefits for directors and members of senior management during 2001 was €0.2 million.

None of the above directors has entered into a service contract with our company or any of our subsidiaries providing for benefits upon termination of his service as a director.

Our board of directors has established an audit committee, a compensation committee and a strategic committee. The functions of these committees are described below.

Our audit committee is responsible for reviewing the propriety and accuracy of our consolidated financial statements. In accordance with the rules of the Nasdaq Stock Market, all of the members of our audit committee are independent directors and are each able to read and understand fundamental financial statements. Our audit committee has adopted a charter that sets forth its responsibilities, which include:


	•	making regular reports to our board of directors;

	•	reviewing and reassessing the adequacy of the audit committee charter annually and recommending any proposed changes to the board of directors for approval;

	•	reviewing the annual audited financial statements with management;

	•	reviewing with management and our independent auditor our annual and interim financial statements prior to the filing of such financial statements with the U.S. Securities and Exchange Commission or the French Commission des Opérations de Bourse;

	•	meeting periodically with management to review our major financial risk exposures and the steps management has taken to monitor and control such exposures;

	•	reviewing major changes to our auditing and accounting principles and practices;

	•	receiving periodic reports from our independent auditor regarding our auditor’s independence, discussing such reports with our auditor, and if so determined by the audit committee, taking or recommending that the full board of directors take appropriate action to oversee the independence of the auditor;

	•	reviewing the appointment and replacement of any senior internal auditing executive;

	•	reviewing the significant reports to management prepared by the internal auditing department and management’s responses;

	•	obtaining reports from management, our senior internal auditing executive and the independent auditor that our subsidiaries and/or foreign affiliated entities are in conformity with applicable legal requirements;

	•	reviewing with our independent auditor any problems or difficulties our auditor may have encountered and any management letter provided by our auditor and our response to that letter;

	•	advising our board of directors with respect to our policies and procedures regarding compliance with applicable laws and regulations; and

	•	reviewing with our legal counsel legal matters that may have a material impact on our financial statements, our compliance policies and any material reports or inquiries received from regulators or governmental agencies.

In 2001, the members of our audit committee were Mr. Bouillet, Mr. Jones and Mr. Piriou.

Our Board of Directors has established a compensation committee. The compensation committee is responsible for:


	•	approving the compensation of all elected officers;

	•	reviewing and making recommendations with respect to compensation and benefits for executive officers and taking all related actions that are not reserved for our board; and

	•	administering our stock option plan and other salary, compensation or benefit plans that it is designed to administer.

In 2001, the members of our compensation committee were Mr. Lougee, Mr. Piriou and Mr. Senter.

Our Board of Directors has also established a strategy committee. Our strategy committee is in charge of defining our overall strategy. In 2001, the members of the strategic committee were Mr. Lougee, Mr. Senter, Mr. Bertrand and Mr. Bouillet.

We had 1,530 employees world-wide as of December 31, 2001. The table below sets forth the breakdown of employees by geographic area and by main category of activity as of December 31, 1999, 2000 and 2001.

Since 1997, we have experienced significant growth in our total number of employees as our business has expanded both through internal growth and acquisitions. However, our high percentage of automated audio conferencing calls enables us to deliver conferencing services with a smaller ratio of operators and reservation personnel than competitors that rely more heavily on operator-assisted conferencing.

Under French law, all employers of more than 20 employees in France are required to implement a 35-hour work week. Pursuant to this law, we entered into a collective bargaining agreement with our French employees in March 2000. Although the work week is shorter on average and we have not reduced salaries, the agreement allows us greater flexibility than before to organize the use of employee time. For example, employees can work more than 35 hours in some weeks, but in exchange we are required to reduce the number of hours worked in other weeks to ensure that they do not work more than 35 hours per week on an annual basis. We believe this added flexibility partly compensates for the reduction in hours and that the 35-hour week does not have a material adverse effect on our financial condition. We are not a party to any other collective bargaining agreements.

To date we have not experienced any labor movements or work stoppages. We believe our relations with our employees are good.

The following table sets forth information known to us with respect to the ownership of our ordinary shares as of March 31, 2002 based on 15,281,090 shares outstanding as of such date by:



	•	Each of our directors and named senior management; and



	•	All directors and named senior management as a group.



(1)	Mr. Bertrand may be considered the beneficial owner of 347,000 shares held of record by Europe Telecom Media Fund II LP, for which shares he disclaims beneficial ownership except to the extent of his pecuniary interest therein.



(2)	Shares held as ADSs (which represent one-half of one ordinary share).

The following table sets forth information with respect to the ownership of options to purchase our ordinary shares as of March 31, 2002 by:



	•	Each of our named senior management; and



	•	All senior management as a group.



(1)	Granted pursuant to the 1998 plan.


(2)	Granted pursuant to the 1999 plan.


(3)	Granted pursuant to the 2000 plan.


(4)	Granted pursuant to the 2001 plan.


(5)	Granted pursuant to the Vialog stock plans

For additional information regarding our stock options and stock option plans see Item 10 “Additional Information — Memorandum and Articles of Association” and Note 12 to our financial statements included under Item 18.

The table below shows the beneficial owners of more than 5% or more of our ordinary shares and ADSs, based on 15,281,057 ordinary shares outstanding as at February 21, 2002.

In March 2002, we learned that a group of shareholders led by John Hassett filed a Schedule 13D with the U.S. Securities and Exchange Commission indicating that the group had acquired 5.9% of our outstanding shares. No filings have been made in France.

Our statuts (bylaws) currently do not provide for double voting rights. We have proposed a resolution authorizing double voting rights for approval at our June 17, 2002 annual shareholders meeting. For more information relating to our ordinary shares, see Item 10 “Additional Information — Memorandum and Articles of Association.”

As of March 31, 2002, there were 8,746,146 of our ADSs outstanding representing 4,373,073 of our ordinary shares, or 28.6% of our total shares outstanding as of such date. As of March 31, 2002, there were 57 record holders of our ADSs, of which 18 have registered addresses in the United States. In addition, as of March 31, 2002, 420 of our ordinary shares were held by 18 record holders with registered addresses in the United States.

Other than as described above, we are not aware of any arrangements that may at a subsequent date result in a change in control of our company.

We are involved in legal proceedings from time to time in the ordinary course of our business. We do not believe that liabilities related to any of these claims and proceedings against us are likely to have, individually or in the aggregate, a material adverse effect on our consolidated financial condition or results of operations.

We have never declared or paid any dividends on our capital stock. We expect to retain our future earnings, if any, for use in the operation and expansion of our business and do not anticipate paying any dividends in the foreseeable future.

Our ability to pay dividends is also affected by restrictions in existing credit agreements. Our credit facility prohibits us from paying dividends.

There have not been any significant changes since the date of our financial statements included under Item 18.

Our ordinary shares are listed on the Nouveau Marché of Euronext Paris, and since April 26, 2001, our ADSs have traded under the symbol “GNSY” on the Nasdaq Stock Market.

Our ordinary shares were included in the SBF 250 Index as of March 23, 2001. The SBF 250 features similar criteria for the top 250 publicly traded French equities.

The table below sets forth, for the periods indicated, the reported high and low quoted prices of our ordinary shares on the Nouveau Marché of Euronext Paris S.A. and of our ADSs on the Nasdaq Stock Market.


*	Source: Euronext Paris and The Bank of New York. Two ADSs represent one ordinary share. Trading of our ADSs on the Nasdaq began on April 26, 2001.

On September 22, 2000, ParisBourse^SBF S.A., Amsterdam Exchange N.V. and the Societé de la Bourse de Valeurs Mobilières de Bruxelles S.A. merged to create Euronext N.V., a Dutch holding company and the first pan-European stock exchange. Subsequently, ParisBourse^SBF S.A. changed its name to Euronext Paris. Securities quoted on any of the stock exchanges participating in Euronext will be traded through a common Euronext platform, with central clearinghouse, settlement and custody structures. However, these securities will remain listed on their respective local exchanges. Euronext Paris retains responsibility for the admission of securities to its trading markets, as well as the regulation of these markets.

Securities approved for listing by Euronext Paris are traded in one of two regulated markets, the Bourse de Paris, which in turn comprises the Premier Marché and the Second Marché, and the Nouveau Marché. These markets are all operated and managed by Euronext Paris, a market operator (entreprise de marché) responsible for the admission of securities and the supervision of trading in listed securities. Euronext Paris publishes a daily official price list that includes price information on listed securities. The securities of most large public companies are listed on the Premier Marché, with the Second Marché available for small and medium-sized companies. Trading on the Nouveau Marché was introduced in March 1996 to allow small capitalization and start-up companies to access the stock market. In addition, the securities of certain other companies are traded on a non-regulated, over-the-counter market, the Marché Libre OTC.

The Nouveau Marché is a regulated market managed and operated by Euronext Paris. The Nouveau Marché, however, is neither a new section of an existing market nor a stepping stone to the Second Marché. The Nouveau Marché is an electronic market that combines a central order book with market making to ensure greater liquidity. Member firms of the Nouveau Marché may act in one or more capacities: Listing Advisers/ Market-Makers (Introducteurs/ Teneurs de Marché); brokers (Négotiateurs pour compte propre); dealers (Négotiateurs pour compte de tiers); broker-dealers; and/or clearing agents (Adhérent Compensateurs). BNP Paribas Equities and Oddo Pinatton act as Teneurs de Marché with respect to our ordinary shares traded on the Nouveau Marché. Admission to the Nouveau Marché is subject to capital adequacy and liquidity requirements determined by Euronext Paris regulations. In addition, companies listed on the Nouveau Marché are required to publish comprehensive information regularly and to keep the public informed of events likely to affect the market price of their securities. Euronext Paris allows continuous trading for the most actively traded shares on the Nouveau Marché. Such trading takes place on each business day from 9:00 a.m. to 5:35 p.m., with a pre-opening session from 7:15 a.m. to 9:00 a.m. and a post-closing session from 5:25 p.m. to 5:30 p.m. during which transactions are recorded but not executed.

For shares that are not traded continuously, retail orders on the Nouveau Marché are matched by the central system at two daily fixings, at 10:30 a.m. and 4:00 p.m. Between such fixings, Listing Advisors/ Market Makers display bid/asked spreads for a minimum number of each of the securities for which they act as market-makers, and trades with the Listing Agents/ Market Makers are executed from time to time throughout the day. Our shares are traded continuously. Euronext Paris may restrict trading in a security listed on the Nouveau Marché if the quoted price of the security increase or decreased beyond the specific price limits defined by its regulators (réservation à la hausse ou à la baisse). In particular, trading is automatically restricted in a security whose quoted price varies by more than 10% from the last price determined in an auction or by more than 5% from the last traded price. If the order that has caused the restriction is cancelled within the following minutes, the trading of this security resumes. If the order is not cancelled within the following minutes, an auction is organized after a call phase of four minutes, during which orders are entered in the central order book but not executed. Euronext

Trades of securities listed on the Nouveau Marché are settled on a cash basis on the third trading day following the trade. Market intermediaries are also permitted to offer investors a deferred settlement service (service à règlement différé) for a fee. The deferred settlement service is only available for trades in securities that either:


	•	are a component of the SBF 120 Index; or

	•	Have both a total market capitalization of at least €1 billion and a daily average volume of trades of at least €1 million.

Investors can elect on the determination date (date de liquidation), which is the fifth trading day before the end of the month, either to settle the trade by the last trading day of the month or to pay an additional fee and postpone the settlement decision to the determination date of the following month. At the date of this annual report, our ordinary shares are eligible for deferred settlement.

Equity securities traded on a deferred settlement basis are considered to have been transferred only after they have been registered in the purchaser’s account. Under French securities regulations, any sale of a security traded on a deferred settlement basis during the month of a dividend payment date is deemed to occur after the dividend has been paid. If the sale takes place before, but during the month of, a dividend payment date, the purchaser’s account will be credited with an amount equal to the dividend paid and the seller’s account will be debited by the same amount.

Prior to any transfer of securities held in registered form on the Nouveau Marché, such securities must be converted into bearer form and inscribed in an account maintained by an accredited intermediary with Euroclear, France, a registered clearing agency. Transactions in securities are initiated by the owner giving instructions (through an agent, if appropriate) to the relevant accredited intermediary. Trades of securities listed on the Nouveau Marché are cleared and settled through Euroclear, France, using a continuous net settlement system. A fee or commission is payable to the Listing Advisor/ Market Maker or broker-dealer or other agent involved in the transaction.

Under French law, a company may not issue shares to itself, but it may purchase its own shares in the limited cases described in Item 10 under “Additional Information — Memorandum and Articles of Association.”

We have previously filed a description of our bylaws, or statuts, in a registration statement on Form F-4 filed on February 12, 2001 (File No. 333-55392) under the caption “Description of Genesys Share Capital.” That description is incorporated by reference into this annual report.

We have proposed certain resolutions for adoption at our June 17, 2002 annual shareholders’ meeting. Certain of the changes are to modify our bylaws in accordance with changes in French law as well as certain additional proposals. If approved, the significant changes to our bylaws will be the following:



	•	all fully-paid up shares held in registered form in the name of the same shareholder for at least two years will have double voting rights;



	•	any shareholder will be required to notify us within five trading days from the day it acquires more than 1% of our share capital; and



	•	if we have reason to believe that a shareholder, who is named on the list of holders of our bearer shares provided by Euroclear, is holding on behalf of a third party, we will be able to ask that shareholder for certain information regarding the third parties on whose behalf it holds the shares (name, nationality, address, and number of shares) and if such information is not provided or is incomplete, we may deny such shareholder the right to vote.

Our shareholders will also be asked to authorize a share repurchase program at our June 17, 2002 shareholders meeting. If adopted, the resolution will permit us to purchase and sell our ordinary shares, within the limits provided by law, during an 18-month period from the date of such meeting, at the maximum purchase price of €60 (or the corresponding amount in any other currency) and at the minimum sale price of €5 (or the corresponding amount in any other currency). We will be subject to the same limitations as under the existing authorization and the purpose of the share repurchase program will not be changed.

On April 20, 2001, as amended thereafter, we entered into U.S. $125 million credit facility. This credit facility is described in more detail under Item 5 “Operating and Financial Review and Prospects — Liquidity and Capital Resources” and is included as an exhibit under Item 19.

French exchange control regulations currently do not limit the amount of payments that we may remit to non-residents of France. Laws and regulations concerning foreign exchange controls do require, however, that all payments or transfers of funds made by a French resident to a non-resident be handled by an accredited intermediary. In France, all registered banks and most credit establishments are accredited intermediaries.

The following generally summarizes the material French tax consequences of purchasing, owning and disposing of our shares or ADSs. The statements relating to French tax laws set forth below are based on the laws in force as of the date hereof, and are subject to any changes in applicable laws and tax treaties after such date.

This discussion is intended only as a descriptive summary and does not purport to be a complete analysis or listing of all potential tax effects of the purchase, ownership or disposition of our shares.

The following summary does not address the treatment of shares that are held by a resident of France (except for purposes of describing related tax consequences for other holders) or in connection with a permanent establishment or fixed base through which a holder carries on business or performs personal services in France, or by a person that owns, directly or indirectly, 5% or more of the stock of our company.

There are currently no procedures available for holders that are not U.S. residents to claim tax treaty benefits in respect of dividends received on ADSs or shares registered in the name of a nominee. Such holders should consult their own tax advisor about the consequences of owning and disposing of ADSs.

In France, dividends are paid out of after-tax income. However, French residents are entitled to a tax credit, known as the avoir fiscal, in respect of dividends they receive from French companies. Individuals are entitled to an avoir fiscal equal to 50% of the dividend. The avoir fiscal applicable to corporate investors generally is equal to 15% of the dividend. Dividends paid to non-residents normally are subject to a 25% French withholding tax and are not eligible for the benefit of the avoir fiscal. However, non-resident holders that are entitled to and comply with the procedures for claiming benefits under an applicable tax treaty may be subject to a reduced rate of withholding tax, and may be entitled to benefit from a refund of the avoir fiscal, as described below.

France has entered into tax treaties with certain countries under which qualifying residents are entitled to obtain from the French tax authorities a reduction (generally to 15%) of the French dividend withholding tax and a refund of the avoir fiscal (net of applicable withholding tax).

If a non-resident holder establishes its entitlement to treaty benefits prior to the payment of a dividend, then French tax generally will be withheld at the reduced rate provided under the treaty.

Dividends paid out of profits that have not been taxed at the ordinary corporate rate, or were earned and taxed more than five years before the distribution, are subject to an equalization tax called the précompte, which is payable by the distributing corporation. The précompte generally is equal to one-half of the amount of the dividend paid to the shareholder prior to deduction of withholding tax. Corporate investors entitled under a tax treaty to a refund of the avoir fiscal at a rate of 15% generally may claim an additional payment equal to 70% of the précompte actually paid in cash by the distributing corporation, net of applicable withholding tax. This additional payment is considered an increase to the avoir fiscal.

When a tax treaty does not provide for a refund of the avoir fiscal, or when a non-resident investor is not entitled to such a refund but is otherwise entitled to the benefits of the tax treaty, then a qualifying investor may obtain from the French tax authorities a payment equal to 100% of the précompte actually paid in cash by the distributing corporation, net of applicable withholding tax.

Holders that are not residents of France for tax purposes, do not hold shares or ADSs in connection with the conduct of a business or profession in France, and have held not more than 25% of our dividend rights (droits aux bénéfices sociaux), directly or indirectly, at any time during the preceding five years, are not subject to any French income tax or capital gains tax on the sale or disposition of shares or ADSs.

A 1% registration duty (subject to a maximum of €3,049 per transfer) applies to certain transfers of shares or ADSs in French companies. The duty does not apply to transfers of shares or ADSs in listed companies that are not evidenced by a written agreement, or if any such agreement is executed outside France.

France imposes estate and gift tax on shares or ADSs of a French company that are acquired by inheritance or gift. The tax applies without regard to the residence of the transferor. However, France has entered into estate and gift tax treaties with a number of countries pursuant to which, assuming certain conditions are met, residents of the treaty country may be exempted from such tax or obtain a tax credit.

The following is a summary of the material French and U.S. federal income tax consequences of the purchase, ownership and disposition of our shares or ADSs if you are a holder that is a resident of the United States for purposes of the income tax convention between the United States and France (the “Treaty”) and are fully eligible for benefits under the Treaty (a “U.S. holder”). You generally will be entitled to Treaty benefits in respect of our shares or ADSs if you are:


	•	the beneficial owner of the shares or ADSs (and the dividends paid with respect thereto);

	•	an individual resident of the United States, a U.S. corporation, or a partnership, estate or trust to the extent its income is subject to taxation in the United States in its hands or in the hands of its partners or beneficiaries;

	•	not also a resident of France for French tax purposes; and

	•	not subject to an anti-treaty shopping article that applies in limited circumstances.

For U.S. federal income tax purposes, a U.S. holder’s ownership of the company’s ADSs will be treated as ownership of the company’s underlying shares.

This summary does not purport to be a comprehensive description of all of the tax considerations that may be relevant to any particular investor, and does not discuss tax considerations that arise from rules of general application or that are generally assumed to be known by investors. In particular, the summary does not deal with shares that are not held as capital assets, and does not address the tax treatment of holders that are subject to special rules, such as banks, insurance companies, dealers in securities or currencies, regulated investment companies, persons that elect mark-to-market treatment, persons holding shares as a position in a synthetic security, straddle or conversion transaction, persons that own, directly or indirectly, 5% or more of our voting stock or 10% or more of our outstanding capital and persons whose functional currency is not the U.S. dollar. The summary is based on laws, treaties, regulatory interpretations and judicial decisions in effect on the date hereof, all of which are subject to change.

This summary does not discuss the treatment of shares or ADSs that are held in connection with a permanent establishment or fixed base through which a holder carries on business or performs personal services in France.

You should consult your own tax advisers regarding the tax consequences of the purchase, ownership and disposition of shares or ADSs in the light of your particular circumstances, including the effect of any state, local or other national laws.

As discussed in more detail under “— French Taxation,” dividends paid by French companies to non-residents of France generally are subject to French withholding tax at a 25% rate, and are not eligible for the benefit of the avoir fiscal.

However, under the Treaty, you can claim the benefit of a reduced dividend withholding tax rate of 15%. You will also be entitled to a payment from the French tax authorities equal to the avoir fiscal, less a 15% withholding tax. French tax will be withheld at the 15% Treaty rate if you have established before the date of payment that you are a resident of the United States under the Treaty and, if you are not an individual, that you are the owner of all the rights relating to the full ownership of the shares or ADSs (including, but not limited to, dividend rights). A U.S. holder generally will be entitled to receive a refund of the avoir fiscal only if the holder (or its partners, beneficiaries or grantors, if the holder is a partnership, estate or trust) is subject to U.S. federal income tax on the avoir fiscal payment and the dividend to which it relates.

A U.S. holder that is a corporation generally will be entitled to an avoir fiscal refund of 15% of the amount of a dividend, while a U.S. holder who is an individual generally will be entitled to an avoir fiscal refund at a

Pension funds and certain other tax-exempt U.S. holders are generally entitled under the Treaty to a reduced withholding tax rate of 15%, and to a payment at least equal to 30/85 of the avoir fiscal generally payable to a corporation, less a 15% withholding tax.

U.S. holders that are not entitled to receive payments in respect of the avoir fiscal at the 50% rate (e.g., corporations and certain tax-exempt investors) will be entitled to receive an additional payment from the French tax authorities if we are liable for the précompte equalization tax (discussed under “— French Taxation,” above) in respect of a dividend distribution. Corporate holders generally will be entitled to receive, in addition to the payment made in respect of the avoir fiscal at 15%, a payment equal to 70% of the précompte that we actually pay in cash in respect of a dividend paid, less a 15% withholding tax. The additional payment is considered an increase to the avoir fiscal, and will also not be made available until after the close of the calendar year in which the dividend is paid.

Thus, for example, if we pay a dividend of 100 to an individual U.S. holder, the holder initially will receive 85, but will be entitled to an additional payment of 42.50, consisting of the avoir fiscal of 50 less a 15% withholding tax. If we pay a dividend of 100 to a U.S. holder that is a corporation, such U.S. holder initially will receive 85, but will generally be entitled to an additional payment of 12.75, consisting of the avoir fiscal of 15 less a 15% withholding tax; in the event that the dividend distribution triggers payment by us of the précompte, such U.S. holder generally may also obtain from the French tax authorities an additional payment equal to 70% of the précompte that we actually pay in cash, less a 15% withholding tax.

If you are not entitled to a refund of the avoir fiscal, you generally may obtain from the French tax authorities a refund of the entire précompte we actually pay in cash in respect of a dividend, less a 15% French withholding tax. Pension funds and certain other tax-exempt U.S. holders are also entitled to certain refunds in respect of the précompte we actually pay in cash. Such holders should consult their own tax advisers in respect of précompte refunds.

The gross amount of dividend, avoir fiscal and précompte payments that you receive (prior to deduction of French withholding tax) generally will be subject to U.S. federal income taxation as foreign source dividend income. Such dividends will not be eligible for the dividends received deduction generally allowed to U.S. corporations. French withholding tax at the 15% Treaty rate will be treated as a foreign income tax that, subject to generally applicable limitations under U.S. law, is eligible for credit against your U.S. federal income tax liability or, at your election, may be deducted in computing taxable income. Foreign tax credits will not be allowed for withholding taxes imposed in respect of certain short-term or hedged positions in securities or in respect of arrangements in which a U.S. holder’s expected economic profit is insubstantial. You should consult your own tax advisers concerning the implications of these rules in the light of your particular circumstances.

Dividends paid in euro will be included in your income in a U.S. dollar amount calculated by reference to the exchange rate in effect on the date you receive the dividend (or the date the depositary receives the dividend, in the case of the ADSs), regardless of whether the payment is in fact converted into U.S. dollars. If such a dividend is converted into U.S. dollars on the date of receipt, you generally should not be required to recognize foreign currency gain or loss in respect of the dividend income.

In order to claim Treaty benefits, you must complete and deliver to the French tax authorities either:


	•	the simplified certificate described below; or

	•	an application for refund on French Treasury Form RF 1A EU-No. 5052.


	•	you do not maintain a permanent establishment or fixed base in France with which the holding giving rise to the dividend is effectively connected;

	•	you own all the rights attached to the full ownership of the shares (including dividend rights); and

	•	you meet all the requirements of the Treaty for obtaining the benefit of the reduced rate of withholding tax and the refund of the avoir fiscal.

If a holder that is not an individual submits an application for refund on Form RF 1A EU-No. 5052, the application must be accompanied by an affidavit attesting that the holder is the owner of all the rights attached to the full ownership of the shares (including dividend rights) or, if the holder is not the owner of all such rights, providing certain information concerning other owners.

Copies of the simplified certificate and the application for refund are available from the U.S. Internal Revenue Service.

If the certificate or application is not filed prior to a dividend payment, then holders may claim withholding tax and avoir fiscal refunds by filing an application for refund at the latest by December 31 of the second year following the year in which the withholding tax is paid.

If you are not entitled to a refund of the avoir fiscal but are entitled to a full refund of the précompte, or if you are a U.S. pension fund or other tax-exempt U.S. holder that is entitled to a partial refund of the précompte, you must apply for such a refund by filing French Treasury Form RF 1B EU-No. 5053 before the end of the year following the year in which the dividend was paid. This form, together with instructions, is available from the U.S. Internal Revenue Service or at the Centre des Impôts des Non-Résidents (9, rue d’Uzès, 75094 Paris Cedex 2).

The avoir fiscal or partial avoir fiscal and any French withholding tax refund will not be paid before January 15 following the end of the calendar year in which the dividend is paid.

Under the Treaty, you will not be subject to French tax on any gain derived from the sale or exchange of shares or ADSs, unless the gain is effectively connected with a permanent establishment or fixed base maintained by you in France.

For U.S. federal income tax purposes, gain or loss you realize on the sale or other disposition of the shares or ADSs will be capital gain or loss, and will be long-term capital gain or loss if the shares were held for more than one year. The net amount of long-term capital gain recognized by an individual holder generally is subject to taxation at a maximum rate of 20%. Your ability to offset capital losses against ordinary income is limited.

Under the estate and gift tax convention between the United States and France, a transfer of shares or ADSs by gift or by reason of the death of a U.S. holder entitled to benefits under that convention will not be subject to French gift or inheritance tax, so long as the donor or decedent was not domiciled in France at the time of the transfer, and the shares or ADSs were not used or held for use in the conduct of a business or profession through a permanent establishment or fixed base in France.

Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries are subject to information reporting and may be subject to backup withholding unless the holder (i) is a corporation or other exempt recipient or (ii) provides a taxpayer identification number and certifies that no loss of exemption from backup withholding has occurred. Holders that are not U.S. persons generally are not subject to information reporting or backup withholding. However, such a holder may be required to provide a certification of its non-U.S. status in connection with payments received within the United States or through a U.S.-related financial intermediary.

We are subject to the information requirements of the U.S. Securities Exchange Act of 1934, as amended, and, in accordance therewith, we are required to file reports, including annual reports on Form 20-F, and other information with the U.S. Securities and Exchange Commission. These materials, including this annual report and the exhibits thereto, may be inspected and copied at the Commission’s public reference rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please call the Commission at 1-800-SEC-0330 for further information on the public reference rooms. As a foreign private issuer, we are not required to make filings with the Commission by electronic means, although we may do so. Any filings we make electronically will be available to the public over the Internet at the Commission’s Web site at http://www.sec.gov.

We prepare our financial statements in euros. In 2001, 63% of our total revenues were recorded in U.S. dollars, 17% in British pounds, 4% in Swedish crowns and 2% in Australian dollars. Virtually all of the remaining revenues were in euros. Purchases and expenses in U.S. dollars, British pounds, Swedish crowns and Australian dollars represented approximately 56%, 19%, 3% and 2%, respectively, of our cost of revenues and operating expenses in 2001. A strengthening of the euro against the U.S. dollar, the British pound, the Swedish crown and the Australian dollar and other currencies in which we receive revenues could reduce our reported revenues and increase our reported operating and net loss. Since its introduction on January 1, 1999, the euro has declined from U.S. $1.17 per euro to $ 0.8813 per euro as of December 31, 2001. This decline has increased the euro value of the U.S. dollar revenues that we have earned in our U.S. activities. The impact on our revenues of the decline of the euro against various currencies, primarily the dollar and the British pound, is described above under Item 5 “Operating and Financial Review and Prospects — Results of Operations.”

We incurred a net foreign exchange loss of €36 thousand in 1999, a net foreign exchange gain of €767 thousand in 2000 and a net foreign exchange gain of €1,520 thousand in 2001. The impact of currency exchange movements on our results of operations is typically mitigated by the fact that we incur expenses in local currency, and that we borrow in local currency, mainly in the United States, although this does not eliminate the entire impact. The extent to which changes in our revenues have historically been affected by currency exchange rate movements are described above. When deemed appropriate, we have entered into transactions to hedge our exposure to foreign exchange risks incurred in connection with borrowings, including by entering into forward contracts to purchase U.S. dollars and British pounds.

We are exposed to interest rate risk in our financing instruments. At December 31, 2001, we had variable rate debt totaling €140.9 million and had €1.6 million invested in short-term money market accounts bearing variable rates of interest. In order to reduce our exposure to fluctuations in interest rates, we have entered, when deemed appropriate, into transactions to hedge our exposure to interest rates. On June 29, 2001, we entered into a U.S. $57.5 million interest rate swap agreement to hedge our exposure on 50% of our outstanding term loans under the U.S. $125 million, credit facility, excluding the U.S. $10 million revolving line of credit, granted in April 2001, denominated in U.S. dollars. This new agreement replaced a previous agreement signed in August 1999. The effect of this new agreement was to convert underlying variable rate debt based on Libor USD to fixed rate debt with an interest rate of 5.52 %. Each interest-rate swap agreement is designated with all or a portion of the principal balance and has a term equal to specific debt obligation. This agreement involves the exchange of amounts based on a fixed interest rate for amounts based on variable interest rates over the life of the agreement without an exchange of the notional amount upon which the payments are based. The differential to be paid or received as interest rates change is accrued and recognized as an adjustment of interest expense related to the debt. The related amount payable to or receivable from third parties is included in other liabilities or assets. The fair value of the swap agreement and changes in the fair value as a result of changes in market interest rates are recognized as comprehensive income or loss. As a result, the comprehensive loss for this interest rate swap agreement amounted to €2.2 million at December 31, 2001.

We do not use derivative financial instruments for trading or other speculative purposes.



	1.1	Bylaws (statuts) of Genesys (English translation) (incorporated herein by reference to Exhibit 3.1 to our Registration Statement on Form F-4, File No. 333-55392)



	2.1	Form of Deposit Agreement (incorporated herein by reference to Exhibit A to the Registration Statement on Form F-6 relating to our American Depositary Shares)



	4.1	U.S. $125 million Credit Facility among Vialog Corporation, Genesys S.A., BNP Paribas and Others dated April 20, 2001, as amended November 27 2001, as amended June 11, 2002



	4.2	Excerpt from the Information Document (Note d’Information) of our company relating to the terms and conditions of our 3% convertible bonds due September 2004 (incorporated herein by reference to Exhibit 10.2 to our Registration Statement on Form F-4, File No. 333-55392)



	8.1	For a list of our significant subsidiaries, see Item 4 “Information on the Company — Organizational Structure”

We have audited the accompanying consolidated balance sheets of Genesys S.A as of December 31, 1999, 2000 and 2001, and the related consolidated statements of income, shareholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of Genesys’ management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Genesys S.A at December 31, 1999, 2000 and 2001, and the consolidated results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

Genesys S.A., together with its subsidiaries (“the Company”), is a limited liability company organized under the laws of France.

The Company is a global communications specialist, providing practical and innovative real-time collaborative and managed event services worldwide.

The accompanying consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States.

As a publicly traded company on the Nouveau Marché of Euronext Paris since October 1998, the Company publishes consolidated financial statements that have been prepared in accordance with generally accepted accounting principles in France which differ in certain respects from generally accepted accounting principles in the United States.

In addition, the Company has been listed on the Nasdaq Stock Market since April 26, 2001. As a result, the Company filed a Form 20-F on June 29, 2001 including consolidated financial statements for the fiscal year ended December 31, 2000 that have been prepared in accordance with generally accepted accounting principles in the United States.


	•	Companies which are wholly owned or which the Company controls are consolidated;

	•	Companies over which the Company exercises significant influence but does not control are accounted for under the equity method of accounting;

	•	All significant inter-company transactions and balances are eliminated.

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ from these estimates.

Prior to January 1, 2000, the reporting and the functional currency was the French franc. The consolidated financial statements for all years have been translated from French francs into euro equivalents using the fixed rate of FF6.55957 per euro. Comparative financial statements reported in euros depict the same trends as would have been presented if the Company had continued to present financial statements in French francs. Financial statements for periods prior to January 1, 2000 will not be comparable to the financial statements of other companies that report in euro which previously reported in currencies other than French franc. The functional currency of each subsidiary is the local currency, except Astound, a Canadian company using U.S. dollars. In accordance with Statement of Financial Accounting Standard No. 52, assets and liabilities of the Company and its subsidiaries with functional currencies other than the Euro are translated into Euro equivalents at the rate of

exchange in effect on the balance sheet date. Revenues and expenses are translated at the average exchange rates for the year. Foreign Currency translation gains or losses are recorded as a separate component of shareholders’ equity.

Due to the number of currencies involved, the constant change in currency exposures, and the substantial volatility of currency exchange rates, the effect of exchange rate fluctuations upon future operating results could be significant.

At year end, foreign currency denominated balances are translated using closing rates of exchange. In accordance with Statement of Financial Accounting Standard No. 52, unrealized gains and losses are recognized in income for the period unless the supporting transactions hedge a foreign currency commitment or a net investment in a foreign entity.

The Company generally recognizes revenue upon completion of conferencing services or at the time of shipment of equipment, assuming that persuasive evidence of an arrangement exists, the sales price is fixed or determinable and collectibility is probable, unless the Company has future obligations for installation or has to obtain customer acceptance, in which case revenue is deferred until these obligations are met. Amounts billed in excess of revenue recognized are included as deferred revenue in the accompanying consolidated balance sheets.

Cost of services consists principally of telephony costs, equipment product costs, operator and operations management salaries and office expenses for operations staff and depreciation on teleconferencing bridges and telecommunications equipment.

Cost of products consists of audio and video equipment that the Company purchases and sells.

Certain reclassifications have been made in prior years’ financial statements to conform to classification used in the current year. Beginning fiscal year 2000, certain company expenses have been presented using more accurate allocation methods. Such reclassification had no impact on reported net earnings, earnings per share or shareholders’ equity.

The Company considers all highly liquid investments with insignificant interest rate risk and purchased with an original maturity of three months or less from the date of purchase to be cash equivalents. Management determines the appropriate classification of its cash equivalents and investment securities at the time of purchase and reevaluates its determination as of each balance sheet date. Management has classified the Company’s marketable securities as available-for-sale securities within cash and cash equivalents in the accompanying consolidated financial statements. Unrealized gains and losses on such securities are recorded as a component of comprehensive income.

Video and audio equipment inventories are stated at the lower of cost or market, on a first-in, first-out (“FIFO”) basis.

Allowance for doubtful accounts is established for the amount that is considered as uncollectable at year-end.

Goodwill and identifiable intangible assets, which consist of assembled workforce, technology and customer lists, result from the excess of the purchase price over the fair value of net tangible assets of businesses acquired. Goodwill and other intangible assets are being amortized on a straight-line basis over the following periods: 3 to 5 years for assembled workforce, 4 years for technology, 5 to 10 years for customer lists and 20 years (audio and video teleconferencing) or 5 years (data and web conferencing) for goodwill, which represent their estimated useful lives. The Company measures impairment of goodwill and other intangible assets when events or circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of goodwill and other intangible assets is measured by a comparison of the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the acquired company. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Property and equipment are stated at cost, net of accumulated depreciation. Property and equipment are depreciated using the straight-line method over estimated useful lives of the assets. The following table shows estimated useful lives of property and equipment:

In accordance with the provisions of Statement of Financial Accounting Standards No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of”, the Company reviews long-lived assets, including property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Under Statement of Financial Accounting Standards No. 121, an impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. Impairment, if any, is assessed using discounted cash flows. At December 31, 2001, an impairment loss was recorded as described in note 3.

The Company maintains engineering departments that, in part, develop features and products for group communications. The Company charges to expense when incurred that portion of the costs of these departments which relates to research and development activities.

In 2000 and 2001, research and development expenses amounted to €2,613 and €5,366, which represents 2.8% and 3.0% of total revenue, respectively. Expenses relating to software and information system network maintenance and development classified as general and administrative expenses amounted in 2000 and 2001 to €2,555 and €6,318, respectively, which represents 2.7% and 3.5% of total revenue, respectively.

In accordance with Statement of Position 98-1 “Accounting for the Costs of Computer Software Developed or Obtained for Internal use”, the company capitalizes certain costs related to internal use software once specific criteria have been met.

Costs to obtain debt financing are capitalized and amortized over the life of the related debt using the effective interest method. Due to a higher conversion rate than expected for the convertible notes issued in August 1999, an additional amortization amounting to €144 and €27 was recorded in additional paid-in-capital in 2000 and 2001, respectively.

In accordance with Statement of Financial Accounting Standards No. 109, the Company provides for deferred taxes using the liability method of accounting. Under this method, deferred tax assets and liabilities are determined based on the temporary differences arising between the tax bases of assets and liabilities and their financial reporting amounts, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to reverse. A valuation allowance is recognized if, on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Deferred tax liability is recorded for identifiable intangible assets (technology, assembled workforce and customer lists), if necessary. Such liability is amortized over the life of the related intangible assets.

The Company accounts for stock options granted to employees in accordance with the provisions of Accounting Principles Board Statement No. 25 “Accounting for Stock issued to Employees”. Under APB 25, no compensation expense is recognized for stock options issued to employees with an exercise price equal to the market price of the underlying shares on the date of grant. Stock options issued with an exercise price less than the market price of the underlying shares on the date of grant result in deferred compensation which is amortized to expense over the vesting period.

Statement of Financial Accounting Standards No. 123, “Accounting for Stock Based Compensation”, provides an alternative to APB 25 in accounting for stock-based compensation issued to employees using the fair value based method. Companies can elect to continue to apply the provisions of APB 25 but are required by SFAS 123 to disclose the pro forma effect on net income and net income per share as if the fair value basis method had been applied.

The Company has elected to continue to apply APB 25 and presents the pro forma disclosure required by SFAS 123 in Note 12.

As of January 1, 1998, the Company adopted Statement of Financial Accounting Standards No. 130, “Reporting Comprehensive Income”. SFAS 130 establishes new rules for the reporting and display of comprehensive income (loss) and its components. The Company’s other comprehensive income (loss), as set forth in the accompanying consolidated statements of shareholders’ equity, includes net loss, unrealized gains and losses on investments and derivative instruments (interest rate swap agreement) and cumulative foreign currency translation adjustments.

In accordance with Statement of Financial Accounting Standards No. 128, “Earnings per Share” basic and diluted earnings per share have been presented. Basic earnings per share exclude the dilutive effects of options and reflect only the actual ordinary shares outstanding. Diluted earnings per share include the dilutive effects of options as if they had been exercised. Because the potentially issuable shares from the exercise of stock options would be antidilutive, there are no differences between basic and diluted net loss per share for the Company through December 31, 2001.

The Company executed a twenty-seven-for-one stock split in December 1997 and a two-for-one stock split in August 1998. All share data in the consolidated financial statements and accompanying notes have been adjusted to reflect these stock splits.

Management has reviewed Statement of Financial Accounting Standards No. 131 “Disclosures About Segments of an Enterprise and Related Information” and considered the way its operations are currently organized. Management has concluded that the Company operates currently in three regional segments (Europe, North America and Asia-Pacific) as management internally evaluates and reports the performance of the Company on the basis of these separate 3 business units.

The cost of advertising is expensed as incurred. The Company’s advertising costs for the years ended December 31, 1999, 2000 and 2001 were €925, €2,810 and €2,987, respectively.

Statement of Financial Accounting Standards No. 133 “Accounting for Derivative Instruments and Hedging Activities” (SFAS 133), requires the Company to recognize all of its derivative instruments as either assets or liabilities in the statement of financial position at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instruments depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, the Company must designate the hedging instrument, based upon the exposure being hedged, as fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation.

For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transaction in the same period during which the hedged transaction affects earnings. At December 31, 2001, the Company does not hold derivative instruments that are designated and qualify as a fair value hedge or hedge of a net investment in a foreign currency. For

derivative instruments not designated as hedging instruments, the gain or loss is recognized in current earnings during the period of change.

During the year ended December 31, 2001, the Company did not recognize gains or losses for cash flow hedges that has been discontinued.

Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash equivalents and trade receivables.

The Company has cash investment policies that limit investments to short-term low-risk instruments. The Company’s cash is held primarily in Euros, British Sterling Pounds (GBP) and U.S. dollars and concentrated mainly in 5 banks in France, the United Kingdom and the United States.

The Company sells its services and products to customers in a variety of countries in Europe, North America and Asia-Pacific. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses.

To date, such losses have been within management’s expectations. A summary of the activity in the allowance for doubtful accounts is as follows:

For all periods presented, no customer represented revenues in excess of 10% of the Company’s total consolidated revenues.

In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets. Statement of Financial Accounting Standards No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001. Use of the pooling-of-interests method is no longer permitted. SFAS 141 also includes guidance on the initial recognition and measurement of goodwill and other intangible assets acquired in a business combination completed after June 30, 2001. Statement of Financial Accounting Standards No. 142 prohibits the amortization of goodwill and indefinite-lived intangible assets. Statement 142 requires that these assets be reviewed for impairment at least annually. Intangible assets that have definite lives will continue to be amortized over their useful lives. Additionally, Statement 142 requires that goodwill included in the carrying value of equity investments no longer be amortized.

The Company will apply Statement 142 beginning in the first quarter of 2002. Application of the non-amortization provisions of Statement 142 is expected to result in a decrease in amortization expenses of €12.5 million in 2002. The Company will also reclassify an assembled workforce intangible asset with an unamortized balance of €6.5 million (along with a deferred tax liability of €1.8 million) to goodwill at the date of

adoption. The Company will test goodwill for impairment using the two-step process prescribed in Statement 142. The first step is a screen for potential impairment, while the second step measures the amount of the impairment, if any. The Company expects to perform the first of the required impairment tests of goodwill and indefinite lived intangible assets as of January 1, 2002 in the first quarter of 2002. Any impairment charge resulting from these transitional impairment tests will be reflected as the cumulative effect of a change in accounting principle in the first quarter of 2002. The Company does not believe that the effect of these tests will be material to the earnings and financial position of the Company.

In October 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. This Statement addresses the financial accounting and reporting for the impairment or disposal of long-lived assets and supersedes SFAS 121, and the accounting and reporting provisions of APB Opinion No. 30, Reporting the Results of Operations-Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions, for the disposal of a segment of a business (as previously defined in that Opinion). SFAS 144 also amends ARB No. 51, Consolidated Financial Statements, to eliminate the exception to consolidation for a subsidiary for which control is likely to be temporary. The provisions of this Statement are effective for financial statements issued for fiscal years beginning after December 15, 2001. The Company has currently reviewed the provisions of this statement and does not believe its adoption will have a material impact on its results of operations or its financial position.

As of December 31, 2001, the Company performed a review of the carrying value of its goodwill and identifiable intangible assets that were recorded in connection with its various acquisitions. This review was triggered by the significant decline in stock value in the telecommunications industry, which includes the Company’s conferencing services. During 2001, management of telecommunication companies and financial analysts revised down their estimates of future financial performance of this industry. Additionally, during the three last years, the Company acquired numerous businesses using common stock as a major component of the purchase price when the Company’s valuation was at a significantly higher level.

Based on the results of this review, including an independent report, the Company recorded a total impairment charge of €61,269. Of this amount, €50,611 was a reduction to the carrying value of goodwill and the remaining €10,658 was a reduction to the carrying value of identifiable intangible assets. The impairment charge of €61,269 is mainly associated with the acquisition of Astound (€32,777) and video-conferencing (€20,598) which were included in services offering of several acquisitions made by the Company.

The review was performed in accordance with the Statement of Financial Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of (SFAS 121). Under the guidance of SFAS 121, the Company divided its assets into six groups of assets with identifiable cash flows. For those groups of assets where the carrying value exceeded the undiscounted future cash flows, the amount of impairment was determined using discounted future cash flows, based on management’s best estimates.

All acquisitions made by the Company have been accounted for under the purchase method of accounting. The results of operations of the acquired businesses are included in the consolidated financial statements from the dates of acquisition.

On April 1, 1999, Genesys Conferencing, Inc. (“GCI”), a wholly-owned subsidiary of the Company, acquired substantially all of the assets of Aloha Conferencing Inc., an American teleconferencing company. The total purchase price was €14,104 and consisted of €13,684 (U.S.$ 14,925) in cash and €421 of acquisition costs. The total purchase price was allocated as follows:

The purchase price exceeded the fair value of the net tangible assets acquired by €12,710. The excess was allocated to goodwill for €10,822, amortized over 20 years, assembled workforce for €629, amortized over 5 years, and customer lists for €1,259, amortized over 10 years.

On April 13, 1999, the Company acquired all of the issued and outstanding stock of VideoWeb Ltd., a British videoconferencing company. The total purchase price was €10,082 and consisted of €3,425 (GBP 2,300) in cash, 584,605 shares of Genesys S.A. with a fair market value of €6,444 at the time of issuance and €213 of acquisition costs. The total purchase price was allocated as follows:

The purchase price exceeded the fair value of the net tangible assets acquired by €10,072. The excess was allocated to goodwill for €8,622, amortized over 20 years, assembled workforce for €233, amortized over 5 years, and customer lists for €1,217, amortized over 10 years.

On July 31, 1999, the Company acquired Conferencing Acquisition Corporation (“CAC”), a subsidiary of Williams Inc., an American teleconferencing company. CAC was an entity established by Williams, Inc. for purposes of effecting the acquisition of certain assets and liabilities of Williams Conferencing by Genesys. The total purchase price was €37,428 and consisted of €35,964 (U.S.$ 38,452) in cash and €1,464 of acquisition costs.

The purchase price exceeded the fair value of net tangible assets acquired by €27,374. The excess was allocated to goodwill for €23,717, amortized over 20 years, assembled workforce for €1,219, amortized over 5 years, and customer lists for €2,438, amortized over 10 years.

On January 1, 2000, VideoWeb Ltd merged into Genesys Conferencing Ltd (formerly “Darome Ltd”).

In April 2000, the Company acquired the audio and video conferencing activities of Cable & Wireless Communications. The transaction amounted to GBP 3,436 (€5.7 million). This investment has been recorded in intangible assets as customer lists and is being amortized over 10 years.

On June 6, 2000, the Company acquired 3,999 of the 4,000 issued and outstanding shares of Mediactiv, a French company specializing in the organization of medical conferences on the Internet. The total purchase price was €1,856 and consisted of 30,289 shares of Genesys S.A. with a fair market value of €1,829 at the time of issuance and €27 of acquisition costs. The purchase price exceeded the fair value of the net tangible assets acquired by €1,762. The excess was allocated to goodwill and is being amortized over 5 years.

On June 6, 2000, as part of the same business acquisition described above, the Company acquired 499 of all 500 shares of the issued and outstanding shares of MedLive, a French holding company. The total purchase price was €905 and consisted of €586 in cash and 5,288 shares of Genesys S.A. with a fair market value of €319 at the time of issuance. The purchase price exceeded the fair value of the net tangible assets acquired by €901. The excess was allocated to goodwill and is being amortized over 5 years.

On July 31, 2000, the Company acquired all of the issued and outstanding stock of Cote & Com, a French company specializing in live web streaming of financial presentation, for 31,044 shares of Genesys S.A. with a fair market value of €1,426 at the time of issuance. The purchase price exceeded the fair value of the net tangible assets acquired by €1,510. The excess was allocated to goodwill and is being amortized over 5 years.

On July 31, 2000, the Company acquired all of the issued and outstanding stock of EBCS (“Languages Virtuels”), a French company specializing in multimedia web-streaming and rich media on the Internet, for 155,500 ordinary shares of Genesys S.A. with a fair market value of €6,709 at the time of issuance. The purchase price exceeded the fair value of the net tangible assets acquired by €6,587. The excess was allocated to goodwill and is being amortized over 5 years.

On July 31, 2000, as part of the same business acquisition, the Company also acquired all of the issued and outstanding stock of Axone, a company specializing in web events, for 150,000 ordinary shares of Genesys S.A. with a fair market value of €6,471 at the time of issuance. The purchase price exceeded the fair value of the net tangible assets acquired by €6,570. The excess was allocated to goodwill and is being amortized over 5 years.

On July 31, 2000, the Company also acquired the audio and video conferencing activities of Telcen, an Australian video conferencing company, for AUD 1,400 (€894) in cash. The purchase price exceeded the fair value of the net tangible assets acquired by €793. The excess was allocated to goodwill and is being amortized over 20 years. Telcen activities were subsequently contributed to Genesys Conferencing Pty Ltd.

On September 20, 2000, the Company acquired all of the issued and outstanding stock of Telechoice Deutschland GmbH, a German company engaged in offering services and trading products in the area of telecommunications, and Eureka Global Teleconferencing Service GmbH, a German Company specializing in audio-, video- and data conferencing, for 124,597 ordinary shares of Genesys S.A. with a fair market value of €5,675 at the time of the purchase agreement, and €1,074 in cash. The purchase price exceeded the fair value of the net tangible assets acquired by €7,268. The excess was allocated to goodwill and is being amortized over 20 years. A contractual additional amount (€920) was recorded as goodwill in December 2000.

On January 1, 2001, Axone, Cote & Com, EBCS and Medlive merged into Mediactiv and was renamed to Genesys Open Media (GOM). GOM’s activity consist of event and managed services. At the end of 2001, Genesys Open Media was renamed to Genesys Conferencing France, S.A.

On January 1, 2001, Telechoice Deutschland GmbH and Eureka Global Teleconferencing Service GmbH merged into Darome Teleconferencing GmbH.

On March 27, 2001, the Company completed the acquisition of Astound Inc., a web conferencing and web streaming company headquartered in Canada.


	—	€14,399 in cash paid immediately;

	—	€4,000 in cash (named “top up”) paid on January 4, 2002, together with interests Libor USD 9 months + spread 2,75% thereon (€171);

	—	916,391 convertible notes, each with a principal amount of €28,79. Each note is convertible into one share of common stock, not later than March 27, 2011. The fair market value of these notes amounted to €26,383 at acquisition date;

	—	€1,659 of acquisition costs;

	—	€1,561 for deferred compensation relating to 188,116 stock options;

	—	€10,766 for deferred tax relating to identifiable intangible assets.

The purchase price exceeded the fair value of the net tangible assets acquired by €60,463. Based on an independent report, this excess was allocated to:


	—	technology for €30,351, classified in other intangibles and amortized over 4 years;

	—	assembled workforce for €1,349, classified in other intangibles and amortized over 3 years;

	—	goodwill for €28,763 and amortized over 5 years.

On April 25, 2001, the Company completed the acquisition of Vialog Corporation, an audio, video and data conferencing company listed on the American Stock Exchange (AMEX).


	—	3,446,969 shares of Genesys S.A. with a fair market value of €75,557 at the time of issuance. Vialog shareholders received ADS’s for each Vialog share at an exchange ratio of 0.33515 Genesys share per Vialog share, resulting in approximately 24.65% ownership of Genesys S.A. One Genesys ADS is equivalent to one-half Genesys common shares;

	—	€8,717 of acquisition costs;

	—	€8,648 for deferred compensation relating to 2,466,889 stock options;

	—	€30,589 for deferred tax relating to allocated purchase price.

The purchase price exceeded the fair value of the net tangible assets acquired by €204,091. Based on an independent report, this excess was allocated to:


	—	customer list for retail conferencing for €81,551, classified in other intangibles and amortized over 10 years;

	—	customer list for wholesale conferencing for €4,245, classified in other intangibles and amortized over 5 years;

	—	workforce for €5,250, classified in other intangibles and amortized over 4 years;

	—	goodwill for €113,045 and amortized over 20 years.

In May 2001, the Company registered a subsidiary in Italy, named Genesys Conferencing srl and held by Genesys S.A. for 95% and Genesys Conferencing Ltd (UK) for 5%.

On June 6, 2001, an €387 additional purchase price (including €38 for acquisition costs) was paid to former shareholders of Telechoice and Eureka. This amount is classified in goodwill and is amortized over 20 years.

Unrealized holding gains on available-for-sale securities at December 31, 1999 were €30. At December 31, 2000 and 2001, there is no material unrealized holding gains on available-for-sale securities. Net realized gains from sales of available-for-sale securities were €241, €1,960 and €387 in 1999, 2000 and 2001, respectively.

The Company leases certain of its equipment under capital leases. The cost of such equipment included in property and equipment was €962, €1,649 and €1,609 at December 31, 1999, 2000 and 2001, respectively. Accumulated amortization of this equipment was €610, €1,115 and €1,033 at December 31, 1999, 2000 and 2001, respectively.

Software development in progress at December 31, 2001 mainly consists of an integrated reservation and billing system (€2,776) that will be implemented in 2002.

The costs incurred during the year 2000 that relate to probable acquisitions pertained to the acquisition of Vialog and Astound, and were recorded as other intangible assets for €1,682 at December 31, 2000. At the acquisition dates, the respective costs were reclassified to goodwill.

Borrowings under short-term facilities represent overdraft positions on the Company’s bank accounts. Such borrowings bear interest at 6.7% at December 31, 2001. The weighted average interest rate for the Company under such facilities was 7.3% for 1999, 6.1% for 2000 and 7.1% for 2001. The short-term facilities provide for a maximum amount of borrowings of €5.4 million as of December 31, 2001.

On July 16, 1999, the Company entered into a new credit agreement (“Bridge Loan”) in order to partially finance the acquisition of CAC. This agreement provided for a U.S. $35 million term loan (€34.3 million), which bore interest at Libor 1 month plus 1.5% and was to be repaid in 6 semi-annual installments starting in September 2001. The loan contained certain affirmative and negative covenants. The shares of GCI and Genesys Conferencing Ltd. were pledged to secure this loan. The assets of Genesys S.A. were secured by its banks in the amount of €720 as collateral for the loan issued. The average interest rate for the loan was 7.8% in 2000 and 7.2% in 1999.

On August 11, 2000, the Company refinanced the Bridge Loan with a $35.0 million multi-currency term loan, which bore interest at Libor 1 month plus 2.0%. The other terms and conditions of the loan (repayment schedule, covenants, pledge and security) had not been modified compared to the Bridge Loan. The average interest rate for the loan was 8.6% in 2000.

On April 20, 2001 and amended thereafter, Genesys S.A. (“Genesys”) and Vialog Corporation (“Vialog”) entered into a U.S. $125 million credit facility agreement with BNP Paribas, CIBC World Markets and Fortis Bank. This credit facility replaced the $35 million multi-currency term loan of Genesys described above and long term debt of Vialog (U.S. $75 million senior notes payable), which existed prior to the acquisition by Genesys. The U.S. $125 million credit facility includes the following items:


	—	a U.S. $50 million senior term loan facility granted to Vialog, to be used by Vialog to refinance its existing debt. This facility matures on April 28, 2006 and bears interest at the rate of Libor USD plus a margin of 2.65% per annum.

	—	a U.S. $30 million senior term loan facility granted to Vialog, to be used by Vialog to refinance its existing debt. This facility matures on October 31, 2006 and bears interest at the rate of Libor USD plus a margin of 3.15% per annum

	—	a U.S. $35 million senior term loan facility granted to Genesys, to be used by Genesys to partially refinance its existing debt. This facility matures on April 28, 2006 and bears interest at the rate of Libor USD plus a margin of 2.65% per annum

	—	a U.S. $5 million revolving loan facility granted to Vialog, to be used by Vialog for working capital purposes. This facility bears interest at the rate of Libor USD plus a margin of 2.65% per annum

	—	a U.S. $5 million revolving loan facility granted to Genesys, to be used by Genesys for working capital purposes. This facility bears interest at the rate of Libor USD plus a margin of 2.65% per annum.

The U.S. $50 million and U.S. $35 million term loans granted to Vialog and Genesys, respectively, are to be repaid in semi-annual installments in accordance with the schedule set forth in the credit facility agreement. The U.S. $30 million facility is to be repaid in one payment at maturity. All amounts borrowed are repayable at any time in whole or in part at the option of the borrower.

The U.S.$125 million credit facility requires us to comply with certain financial covenants, consisting of leverage, interest cover, and cash cover ratios. The Company is currently in compliance with all of the covenants as amended. Confirmation of the latest amendment was received on May 31, 2002.

On August 6, 1999, the Company issued 1,524,390 3% convertible notes, each with a principal amount of €18.37, for €16.40 each. Each note is convertible into one share of common stock, and unless converted, is due September 1, 2004. The notes are callable at the Company’s option. The original issuance discount of €3,003 is being amortized as additional interest expense over the life of the notes. 851,056 and 197,011 notes were

converted into shares of common stock during the year 2000 and 2001, respectively. As a result, 476,323 were not converted at December 31, 2001.

A GBP 4.0 million (€5.8 million) denominated loan was entered into in 1997 in order to partially finance the acquisition of Darome Ltd. The loan bears interest at Libor plus 0.75%. The amount outstanding was repayable in equal quarterly installments through June 30, 2001. The loan contained certain affirmative and negative covenants. The average interest rates for the GBP denominated loan were 6.3% and 6.7% in 1999 and 2000, respectively.

On April 12, 2000, the Company entered into a credit agreement in order to partially finance the acquisition of the audio and video conferencing activities of Cable & Wireless Communications. This agreement provides for a GBP 3.3 million (€5.5 million) term loan, which bears interest at 8.3% (fixed rate). This loan was repaid on August 18, 2000.

On July 18, 2001, Genesys S.A. entered into a €762 revolving loan agreement which bears interest at Euribor 3 months plus a margin of 0.50% (fixed rate).

The Company also entered into several other term loan agreements with various financial institutions. The average interest rate was 4.2% for 1999, 5.8% for 2000 and 5.5% for 2001. At December 31, 2001, these loans bear interest at an average interest rate of 4.4%. The loans contain certain affirmative and negative covenants.

The Company was granted an interest free loan for €406 by ANVAR (an agency of the French government) for a research program for the development of videoconferencing services. The loan became due as the Company stopped the program after the acquisition of VideoWeb Ltd. in Europe and CAC in the United States in 1999. The outstanding amount due for this loan at December 31, 2001 (€132) will be repaid in 2002. During 2001, the Company was granted an additional interest free loan for €120 by ANVAR that relates to web conferencing.

Future repayments of long-term debt, excluding capital lease obligations, are as follows:

At December 31, 1999, 2000 and 2001, the carrying values of current financial instruments such as cash, accounts receivable and payable, other receivables, accrued liabilities and the current portion of long-term debt approximated their market values, based on the short-term maturities of these instruments. At December 31, 1999, 2000 and 2001, the fair values and carrying values of long term portion of long-term debt obligations were:

The fair value of long-term debt is estimated based on the quoted market prices for the same or similar issues, or where quoted prices are not available, on the present value of future cash flows discounted at borrowing rates currently offered for debt with similar remaining maturities.

On July 6, 1999, the Company issued 584,605 shares at a price of €11.02 per share in exchange for all of the outstanding shares of VideoWeb Ltd.

On June 6, 2000, in connection with the acquisition of Mediactiv and Medlive, the Company issued 30,289 and 5,288 shares, respectively, at a price of €60.37 per share in exchange for shares of the acquired companies.

On June 26, 2000, the Company closed an offering of 1,367,000 shares on the Nouveau Marché of Euronext Paris at a price of €39.82 per share. Each share carries an equity warrant issued at a price of €2.18; 2 warrants will allow the holder to purchase one of the Company’s ordinary shares at an exercise price of €54.00 up to the expiration date of June 27, 2003. The net proceeds of the offering were approximately €55.5 million.

On July 31, 2000, in connection with the acquisition of Cote&Com, EBCS (“Languages Virtuels”) and Axone, the Company issued 31,044, 155,500 and 150,000 shares, respectively, at prices of €45.93, €43.14 and €43.14 per share, respectively, in exchange for shares of the acquired companies.

On September 20, 2000, in connection with the acquisition of Telechoice Deutschland GmbH and Eureka Global Teleconferencing Service GmbH, the Company issued 124,597 shares at a price of €45.54 per share in exchange for shares of the acquired companies.

On September 29, 2000, the share capital was converted from French Francs (FF) into euros. Consequently, the share capital was increased by €3,717 by withdrawal from additional paid-in capital and the par value of the shares was increased from €4.57 (FF30.00) to €5.00.

To finance the acquisition of Astound and after the approval at the Shareholders’ special meeting of the Company on March 23, 2001, 1,103,200 convertible notes were issued by the Company exclusively for Geene, S.A.S. on March 27, 2001. 156,109 and 30,700 of the 1,103,200 notes were issued in exchange of future exercise of replacement options and special options, respectively. The 1,103,200 notes are convertible into ordinary shares. As a result, Astound shareholders will receive ordinary shares of the Company, immediately or later. The unit share price amounted to €28.79 split in nominal value for €5.00 and unit additional paid-in-capital for €23.79. In 2001, 676,708 notes have been converted into shares including 3,144 notes for exercised replacement options and 7,860 notes for future exercise of replacement options. As a result, ordinary shares and additional paid-in-capital increased by €3,384 and €16,099, respectively. Ordinary shares to be issued represents the 250,687 convertible notes into shares at a unit price of €28.79 which have not been converted. In addition, 145,105 replacement options and 30,700 special options have not been converted in 2001.

The schedule below summarize the movements of options and shares pertaining the acquisition of Astound:

To acquire Vialog Corporation and after the approval of the Shareholders’ special meeting of the Company and Vialog on March 23, 2001, the Company issued 3,446,969 shares to Vialog’s shareholders on April 25, 2001, in exchange for the 10,284,854 shares of Vialog common stock outstanding at the date of the merger. The issuance price amounted to €21,92 split in nominal value for €5.00 and unit additional paid-in-capital for €16,92. As a result, the shareholders’ equity increased by €75,557. Vialog shareholders received Genesys American Depositary Shares (ADS’s), which represents one-half of an ordinary shares of the Company. The ADS’s of the Company began trading on the Nasdaq Stock Market on April 26, 2001 (symbol: GNSY). The offering expenses amounting to €3,598 are classified in additional paid-in-capital, as part of the purchase accounting for the transaction.

In 2001, 261,110 stocks options of Genesys Conferencing of Massachusetts Inc. (formerly Vialog) were exercised. In accordance with the merger agreement, 87,510 ordinary shares of Genesys S.A. were issued in exchange of ordinary shares issued by Genesys Conferencing of Massachusetts, using the final exchange ratio of 0.33515. As a result, ordinary shares and additional paid-in-capital increased by €438 and €1,183 respectively.

On April 25, 2001, 10 of the 1,367,000 equity warrants issued on June 26, 2000 were exercised for 270 euros. As a result, ordinary shares and additional paid-in-capital increased by 25 euros and 245 euros, respectively.

On May 4, 2001, 100 stocks options of Genesys S.A. were exercised. As a result, ordinary shares and additional paid-in-capital increased by 500 euros and 1,032 euros, respectively.

After the approval of the Shareholders’ special meeting of the Company on March 23, 2001, the Company sold 1,520,380 ordinary shares on the Nouveau Marché of Euronext Paris at a price of €14.7 (nominal value of €5.0 and unit additional paid-in-capital of €9.7) in October 2001. As a result, ordinary shares and additional paid-in-capital increased by €7,602 and €14,748 respectively. The expenses relating to this public offering (€1,402) were classified in additional paid-in-capital.

851,056 and 197,011 notes issued on August 6, 1999 on Nouveau Marché of Euronext Paris were converted into shares in 2000 and 2001, respectively. As a result, ordinary shares increased by €4,161 in 2000 and €985 in 2001. Additional paid-in-capital increased by €9,797 in 2000 and €2,245 in 2001.

In September 2000, the Board of Directors approved the implementation of a share repurchase program whereby the Company may repurchase up to 683,088 of its ordinary shares. This plan which is valid for 18 months includes a limit value for purchase (not higher than 200 euros) and sale (not lower than 30 euros) At December 31, 2000 and 2001, the Company held 2,905 shares and 22,131 shares, respectively for a total cost of €149 and €678, respectively. The net loss on disposed treasury shares (€74 in 2001) was classified in accumulated deficit.

Shareholders have preemptive rights to subscribe on a pro rata basis for additional shares issued by the Company for cash. Shareholders may waive their preemptive subscription rights at an extraordinary general meeting of shareholders under certain circumstances. Preemptive subscription rights, if not previously waived, are transferable during the subscription period relating to a particular offer of shares.

The Company may distribute dividends out of its “distributable profits,” plus any amounts held in its reserve which the shareholders decide to make available for distribution, other than those reserves which are specifically required by law or its by-laws. “Distributable profits” consist of its statutory net profits in each fiscal year, as increased or reduced by any profit or loss carried forward from prior years, less any contributions to the reserve accounts pursuant to law or its by-laws.

The Company must allocate five percent of its statutory net profit for each year to its legal reserve account before dividends may be paid with respect to that year. Such allocation must be made until the amount in the legal reserve is equal to 10 percent of the aggregate nominal value of the issued and outstanding share capital. This restriction on the payment of dividends also applies to each of the Company’s French subsidiaries on a statutory basis. At December 31, 1999, 2000 and 2001, the Company’s legal reserve was €31, €125 and €146, respectively. The legal reserve may be distributed to shareholders only upon liquidation of the Company.

On September 23, 1998, the Board of Directors approved the 1998 Stock Plan (“the 1998 plan”) for grants of options for ordinary shares to directors, officers and key employees. A total of 412,890 shares are authorized for issuance under the 1998 plan. Stock options under the 1998 plan are granted at prices equivalent to the price of the initial public offering on October 1, 1998. Under the terms of the 1998 plan, the options give the right to purchase one share per option. The options generally vest at a rate of 20% by the first year anniversary (“bracket A”), 50% by the third year anniversary (“bracket B”) and the final 30% by the fourth year anniversary (“bracket C”). Shares acquired upon the exercise of stock options must be held for 3 years for bracket A options and 2 years for bracket B and bracket C options. The options expire eight years after the date of grant. Ordinary shares attributable to awards which have expired, terminated or been canceled or forfeited are available for issuance or use in connection with future awards.

On September 15, 1999, the Board of Directors approved the 1999 Stock Plan (“the 1999 plan”) for grants of options for ordinary shares to directors, officers and key employees. A total of 301,483 shares are authorized for issuance under the 1999 plan. Stock options under the 1999 plan are granted at prices equivalent to the average market value of the Company’s ordinary shares calculated over the 20 trading sessions prior to the date of grant. The other terms of the 1999 plan are identical to the 1998 plan.

On September 8, 2000, the Board of Directors of the Company approved the 2000 Stock Plan (“the 2000 plan”) pursuant to the authorization given by the shareholders’ meeting held on June 6, 2000. A total of 550,000 shares are authorized for issuance under the 2000 plan. Stock options under the 2000 plan are granted at prices equivalent to the average market value of the Company’s ordinary shares calculated over the 20 trading sessions prior to the date of grant. Under the terms of the 2000 plan, the options give the right to purchase one share per option. The options generally vest at a rate of 20% by the first year anniversary (“bracket A”), 50% by the third year anniversary (“bracket B”) and the final 30% by the fourth year anniversary (“bracket C”). Shares acquired upon the exercise of stock options must be held for 3 years for bracket A options and 2 years for bracket B and bracket C options. Options expire eight years after the date of grant. Ordinary shares attributable to awards which have expired, terminated or been canceled or forfeited are available for issuance or use in connection with future awards.

On September 8, 2000, the Board of Directors amended these three stock option plans with respect to the change of control clause that stipulates that if an individual shareholder or a group of shareholders (acting together) acquires more than 25% of the Company’s shares, the vesting of options can be accelerated, at the discretion of the Board for certain identified employees of the Company.

On September 26, 2001, for these three plans, the minimal period before selling shares acquired upon the exercise of stock options for non-French residents or non-signers of a work contract according to the French Law was changed. These option holders can now sell their shares upon exercise.

On September 26, 2001, the Board of Directors of the Company approved the 2001 Stock Plan (“the 2001 plan”) pursuant to the authorization given by the shareholders’ meeting held on June 26, 2001. A total of 550,000 shares are authorized for issuance under the 2001 plan. This plan is divided into two parts.

The first part of the 2001 plan relates to French residents or signers of a work contract according to French Law. Stock options under this part are granted at prices equivalent to the average market value of the Company’s ordinary shares calculated over the 20 trading sessions prior to the date of grant. Under the terms of this part of the 2001 plan, the options give the right to purchase one share per option. The options generally vest at a rate of 20% by the first year anniversary (“bracket A”), 50% by the third year anniversary (“bracket B”) and the final 30% by the fourth year anniversary (“bracket C”). Shares acquired upon the exercise of stock options must be held for 3 years for bracket A options and 2 years for bracket B and bracket C options. Options expire eight years after the date of grant. Ordinary shares attributable to awards which have expired, terminated or been canceled or forfeited are available for issuance or use in connection with future awards.

The second part of the 2001 plan relates to non-French residents or non-signers of a work contract according to the French Law. Stock options under this part are granted at prices equivalent to the average market value of the Company’s ordinary shares calculated over the 20 trading sessions prior to the date of grant. The options are exercised on the Nasdaq Stock Market only. Under the terms of this part of the 2001 plan, the options give the right to purchase 2 ADS’s per option. If on the effective date of the exercise of a vested option, the grantee is a restricted participant, such grantee shall receive one ordinary share instead of 2 ADS’s. The options vest at rate of 10% upon the first year anniversary and an additional 7,5% for each quarter thereafter, until fully vested. Options can be exercised immediately upon vesting and there are no holding restrictions on the underlying ADS’s (or ordinary shares for restricted participant). Options expire eight years after the date of grant. ADS’s (or ordinary shares for restricted participant) attributable to awards which have expired, terminated or been canceled or forfeited are available for issuance or use in connection with future awards.

The following table summarizes the status of stock options outstanding and exercisable at December 31, 2001:

In accordance to the merger agreement, Vialog stock options remain outstanding after the acquisition by Genesys S.A., on the same terms and conditions, except that, upon exercise the holder receives a right to receive Genesys ADSs for Vialog common stock based on the same exchange ratio used in connection with the merger.

On February 14, 1996 and April 29, 1999, Vialog’s Board of Directors approved the 1996 and 1999 Vialog Stock Plan, respectively. The maximum number of shares of Vialog’s common stock that may subject to outstanding awards may have not exceeded 3,250,000 shares and 1,500,000 shares as of December 31, 2001 for the 1996 and 1999 Vialog’s Stock Plans, respectively. Shares of common stock attributable to awards which have

expired, terminated or been canceled or forfeited are available for issuance or use in connection with future awards. The 1996 and 1999 Vialog Stock Plans will remain in effect until February 14, 2006 and April 29, 2009, respectively, unless terminated earlier by the Vialog’s Board of Directors.

Stock option activity under the 1996 and 1999 Vialog Stock Plans was as follows:

The following table summarizes the status of stock options outstanding and exercisable at December 31, 2001:

Pro forma information regarding net income and earnings per share is required by SFAS 123, and has been determined as if the Company had accounted for its employee stock options under the fair value method of SFAS 123. The fair value of these options was estimated at the date of grant using a Black-Scholes option pricing model with the following assumptions:

For purposes of pro forma disclosure, the estimated fair value of the options is amortized to expense over the options’ vesting period. The Company’s pro forma information is as follows (in thousands of euros except for earnings per share information):

The weighted average fair value of options granted during 1999, 2000 and 2001 was as follows:

The provision for income taxes differs from the computed “expected” income tax benefit using the French statutory tax rate of 37%, 38% and 36% in 1999, 2000 and 2001, respectively, for the following reasons:

The deferred tax liability at December 31, 2001 mainly relates to the acquisition of identifiable intangible assets from Astound (technology and assembled workforce) and Vialog (customer lists and assembled

workforce). Such liability will be written off at the same rate as the amortization of the related identifiable intangible assets.

The Company has recorded a valuation allowance against deferred tax assets generated in France, Germany, Canada, United States, Australia, Singapore and Hong Kong for all periods presented herein, due to the uncertainty of realization through future operations. The valuation allowance will be reduced at such time as management believes it is more likely than not that the deferred tax assets will be realized. Any reductions in the valuation allowance will reduce future provisions for income tax expense.

The breakdown per expiration date of net operating losses carried forward is as follows:

The Company leases its facilities under long-term operating lease agreements expiring on various dates through November 2010. The Company also leases equipment (mainly teleconferencing bridges) under long-term operating leases expiring on various dates through October 2004. The rent expenses for long-term operating leases amounted to €1,420, €2,783 and €7,464 in 1999, 2000 and 2001, respectively.

As of December 31, 2001, aggregate minimum lease payments under non cancelable operating leases and commitments were as follows:

The Company also leases equipment and cars through capital leases contracts, which expire at various dates through 2005.

The amounts of future minimum lease payments under those contracts are as follows:

On August 31, 1999, the Company entered into a U.S. $20 million interest rate swap agreement to hedge its exposure on a portion of its outstanding debt denominated in U.S.$. The effect of this agreement was to convert underlying variable rate debt based on Libor USD to fixed rate debt with an interest rate of 6.78%. On June 29, 2001, the Company entered into a U.S. $57.5 million interest rate swap agreement to hedge its exposure on 50% of its outstanding term loans under the U.S. $125 million credit facility, excluding the U.S. $10 million revolving line of credit, granted in April 2001, denominated in U.S. dollars. This new agreement replaces the agreement signed in August 1999. The effect of the latter agreement was to convert underlying variable rate debt based on Libor USD to fixed rate debt with an interest rate of 5.52%.

Each interest-rate swap agreement is designated with all or a portion of the principal balance and has a term equal to specific debt obligation. This agreement involves the exchange of amounts based on a fixed interest rate for amounts based on variable interest rates over the life of the agreement without an exchange of the notional amount upon which the payments are based. The differential to be paid or received as interest rates change is accrued and recognized as an adjustment of interest expense related to the debt. The related amount payable to or receivable from third parties is included in other liabilities or assets. The fair value of the swap agreement and changes in the fair value as a result of changes in market interest rates are recognized as comprehensive income or loss. As a result, the comprehensive loss for this interest rate swap agreement amounted to €2,249 at December 31, 2001.

As of December 31, 2001, the Company expects to reclassify €704 of net loss on derivative instruments from accumulated comprehensive income to earnings during the next twelve months due to the payment of variable interest associated with the senior term loan facility.

To hedge the exposure risk on foreign currency translation rates, on December 5, 2000, the Company entered into term purchase agreements (forward contracts) for nominal amounts of U.S. $30,125 and GBP 1,355 with a purchase date on January 5, 2001. Gains and losses on these transactions are reported in comprehensive income. There are no purchase agreements at December 31, 2001.

On June 27, 2000, the Company received a preliminary conclusion of a tax audit for Genesys S.A. for the years ended December 31, 1996, 1997, 1998 and 1999. The amounts reported in the reassessment notice received from the tax authorities amounted to approximately €1.3 million in relation to the deductibility of certain

expenses incurred by the parent company such as acquisition costs for companies outside of France, and offering and debt issuance costs. The Company believes that, based on its outside legal counsel and the latest correspondence from the tax authorities, the risk of liability is remote. During the second half year 2000, the tax authorities revised their initial notice from €1.3 million to approximately €850. On June 27, 2001, the tax authorities revised again their notice by €460. The remaining portion amounted to €390 at December 31, 2001. Except for €63 accrued since December 31, 2000, the remaining portion is still disputed by the Company. It will be subject to a further favorable decision to be taken by the European Court.

The Company’s U.S. subsidiary GCI assesses, collects and pays federal, state and local taxes where it can determine the taxable transport or transmission service, the jurisdiction in which a tax would apply and where it has the ability to assess the tax. When GCI is unable to determine or is unable to assess federal, state and local taxes, it does not. As of December 31, 1999, 2000 and 2001, GCI had established a reserve of approximately U.S. $195 (equivalent to €208), U.S. $569 (equivalent to €611) and U.S. $1,100 (equivalent to €1,248), respectively, for federal, state and local taxes, which it believed is sufficient to cover taxes, if any, that GCI should have assessed through December 31, 2001, but did not, in the event they become due.

The U.S. $125 million credit facility agreement signed on April 20, 2001 with BNP Paribas, CIBC World Markets and Fortis Bank is secured by the following:


	—	stock pledge of shares of Genesys Conferencing Ltd (England), Genesys Conferencing AB (Sweden), Genesys Conferencing Inc, Genesys Conferencing of Massachusetts;

	—	security over assets such as accounts receivable, inventories and property, plant and equipment of Genesys Conferencing of Massachusetts;

	—	security over some assets such as accounts receivable of Genesys Conferencing Inc.

The Company also entered into other collateral security agreement in favor of banks amounting to €1,140 and other security agreements with the French tax administration (€342) and leasing companies (€100).

In the normal course of business, the Company is at times subject to pending and threatened legal actions and proceedings. Management believes that the outcome of such actions or proceedings is not expected to have a material adverse effect on the financial position of the Company.

The Company contributes to pensions for personnel in France in accordance with local law, by contributing based on salaries to the relevant government agencies. There exists no actuarial liability in connection with these plans.

In the United States, the Company sponsors a defined contribution plan which qualifies under section 401(k) of the Internal Revenue Code. During 1999, 2000 and 2001, the Company made contributions of approximately U.S. $43 (equivalent to €46), U.S. $122 (equivalent to €132) and U.S. $420 (equivalent to €469) to the plan, respectively. At Genesys Conferencing Inc, all employees are eligible to enroll in the plan and can contribute up to 20% of their eligible wages into the Plan, so long as the total contributions do not exceed dollar limits established under IRS regulations. The Company matches 20% of the employee contributions. At Genesys Conferencing of Massachusetts Inc., all employees are eligible to enroll in the plan and may contribute up to 15 percent of pre-tax annual compensation, as defined in the Plan. The Company matches 50% of the participant’s contribution up to a maximum of 6% of the participant’s compensation.

In England, the Company has defined contribution plans whose assets are held separately from those of the Company. Costs recognized for these plans were €106, €184 and €233 in 1999, 2000 and 2001, respectively.

French law also requires payment of a lump sum retirement indemnity to all employees based upon years of service and compensation at retirement. Benefits do not vest prior to retirement. There is no formal plan and no funding of the obligation is required. The Company’s obligation is not material to its financial condition, liquidity or results of operations as of December 31, 1999, 2000 and 2001 or for the years ended December 31, 1999, 2000 and 2001.

The Company and its subsidiaries operate in three geographic reportable segments: Europe, North America and Asia-Pacific. The Company makes key decisions and evaluates performance of the Company based on these segments. Transfers between segments are accounted for at amounts that are generally above cost and consistent with the rules and regulations of governing tax authorities. Such transfers are eliminated in the consolidated financial statements. Corporate items include non-operating overhead and research and development expenditures. Corporate assets mainly include research and development telecommunications equipment.

The following is a summary of operations by segment for the years ended December 31, 1999, 2000 and 2001:

On January 1, 2002, Genesys Conferencing Inc merged into Genesys Conferencing of Massachusetts, Inc. Thereafter, Genesys Conferencing of Massachusetts, Inc. was renamed to Genesys Conferencing Inc.

On February 6, 2002, the Company announced plans to consolidate its call center operations in North America from six call centers to three call centers to provide higher levels of customer service and improve operating efficiencies. The Company expects to complete its consolidation of call centers by the end of the third quarter of 2002. The three remaining call centers have the capacity to absorb the current volume and to provide for future growth. Based on preliminary estimation, the restructuring costs should amount to roughly €8 million. Of this amount, the Company expects to record a pre-tax restructuring charge of approximately €3.6 million in the first quarter ending March 31, 2002. The remaining amount will be added to the goodwill relating to the

acquisition of Vialog. Costs include primarily employee severance, unusable future facility lease commitments and the write-off of certain leasehold improvements and equipment as well as other miscellaneous costs associated with the call center consolidation. The Company estimates that future annual cost savings from the consolidation will range from €3.5 to €4.0 million beginning the third quarter of 2002.

The following schedules set forth unaudited pro forma condensed consolidated financial information for the Company which has been prepared to reflect the acquisitions made by the Company since January 1, 2000. These acquisitions included:


	—	Genesys Open Media, acquired in July 2000,

	—	Eureka and Telechoice, acquired in September 2000,

	—	Astound Inc., acquired in March 2001,

	—	Vialog Corp., acquired in April 2001.

The consolidated pro forma information has been prepared in accordance with generally accepted accounting principles in the United States.

The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2000 gives effect to the acquisitions of Vialog, Astound, Telechoice, Eureka and Genesys Open Media as if they had occurred on January 1, 2000.

The unaudited pro forma condensed consolidated balance sheet as of December 31, 2000 has been prepared as if the acquisitions of Vialog and Astound had occurred on December 31, 2000.

The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2001 gives effect to the acquisitions of Vialog and Astound as if they had occurred on January 1, 2001.


	—	goodwill and other intangible assets relating to the acquisitions;


	—	long term debt and common stock issued to finance the acquisitions;



	—	opening adjustments relating to the acquisition of Vialog.

The pro forma information is not necessarily indicative of the financial statements that would have been obtained had these acquisitions actually occurred at January 1, 2000, December 31, 2000 or January 1, 2001, nor are they necessarily indicative of future consolidated information.

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

EX-4.1 3 y00394exv4w1.htm U.S. $125 MILLION CREDIT FACILITY - VIALOG CORP. exv4w1

C L I F F O R D SOCIETE D’EXERCICE LIBERAL D’AVOCATE A FORME ANONYME
C H A N C E

USD 50,000,000 TERM A1 FACILITY AGREEMENT
USD 30,000,000 TERM B FACILITY AGREEMENT
USD 5,000,000 REVOLVING 1 FACILITY AGREEMENT
USD 35,000,000 TERM A2 FACILITY AGREEMENT
USD 5,000,000 REVOLVING 2 FACILITY AGREEMENT

(1)		VIALOG CORPORATION in its capacity as borrower under the Term A1 Facility, Term B Facility and the Revolving 1 Facility (“Vialog Corporation” and together with Genesys S.A. the “Borrowers”);

(2)		GENESYS S.A. in its capacity as borrower under the Term A2 Facility and the Revolving 2 Facility (“Genesys S.A.”);

(3)		BNP PARIBAS, CIBC WORLD MARKETS PLC, FORTIS BANK N.V./S.A. as arrangers (the “Arrangers”);

(4)		BNP PARIBAS as agent for and on behalf of the Lenders (the “Agent”);

(5)		BNP PARIBAS as security agent for and on behalf of the Lenders (the “Security Agent”); and

(6)		THE LENDERS (as defined below).


	In this Agreement:

	“A1 Margin” means, in relation to the Term A1 Outstandings and subject to Clause 5.3 (Term Margin Ratchet), 2.25% per annum.

	“A2 Margin” means, in relation to the Term A2 Outstandings and subject to Clause 5.3 (Term Margin Ratchet), 2.25% per annum.

	“Acquisition” means the purchase by Genesys S.A. of the shares of Vialog Corporation on the terms of the Acquisition Documents.

	“Acquisition Agreement” means the agreement dated 1 October 2000 between Genesys S.A. and Vialog Corporation together with all schedules, exhibits and attachments to such agreement.

	“Acquisition Costs” means all fees, costs and expenses, stamp, registration and other taxes paid by Genesys S.A. or any other member of the Group on or prior to the Closing Date in connection with the Acquisition, the Facilities and the Finance Documents.

	“Acquisition Documents” means the Acquisition Agreement and all documents to be executed pursuant thereto on or before the Closing Date in the form attached to or agreed for the purposes of the Acquisition Agreement and such other documents (if any) relating to the transactions contemplated in such agreements and identified by the Agent and Genesys S.A. in writing as an Acquisition Document.


	“Additional Guarantor” means any company which has become an Additional Guarantor in accordance with Clause 35 (Changes to the Obligors).

	“Advance” means a Revolving Advance or a Term Advance.

	“Astound’s Acquisition” means the acquisition of Astound, Inc., a corporation incorporated under the laws of the Province of Ontario, Canada, by Genesys S.A.

	“Astound’s Acquisition Agreement” means the agreement dated 18 December 2000 between Genesys S.A. and Astound, Inc.

	“Astound’s Acquisition Closing Date” means March 27, 2001.

	“Astound’s Contact Center Business” means certain assets of Astound, Inc. known as its contact center business unit, which are expected to be sold by Genesys S.A. on or before 31 December 2002.

	“Authorised Signatory” means, in relation to an Obligor, any person who is duly authorised (in such manner as may be reasonably acceptable to the Agent) to sign or execute documents on behalf of such Obligor.

	“Available Commitment” means, in relation to a Lender at any time, the aggregate of its Available Term Commitment and Available Revolving Commitment.

	“Available Revolving Commitment” means, in relation to a Lender at any time and save as otherwise provided herein, the aggregate of its Available Revolving 1 Commitment and its Available Revolving 2 Commitment at such time.

	“Available Revolving 1 Commitment” means, in relation to a Lender at any time and save as otherwise provided herein, its Revolving 1 Commitment less its share of the amount of the Revolving 1 Outstandings at such time provided that such amount shall not be less than zero.

	“Available Revolving 2 Commitment” means, in relation to a Lender at any time and save as otherwise provided herein, its Revolving 2 Commitment less its share of the amount of the Revolving 2 Outstandings at such time provided that such amount shall not be less than zero.

	“Available Revolving Facility” means, at any time, the aggregate amount of the Available Revolving Commitment adjusted, in the case of any proposed utilisation, to take into account:


	(a)	any reduction in the Revolving Commitment of a Lender pursuant to the terms hereof;


	(b)	any Revolving Advance, pursuant to any other utilisation which is effectively scheduled to be made in accordance with the terms hereof; and


	(c)	any Revolving Advance which is effectively scheduled to be repaid in accordance with the terms hereof,


	“Available Term Commitment” means, in relation to a Lender at any time and save as otherwise provided herein, the aggregate of its Available Term A1 Commitment, its Available Term A2 Commitment and its Available Term B Commitment at such time.

	“Available Term A1 Commitment” means, in relation to a Lender at any time and save as otherwise provided herein, its Term A1 Commitment at such time less the aggregate of its share of the Term A1 Advances which are then outstanding.

	“Available Term A2 Commitment” means, in relation to a Lender at any time and save as otherwise provided herein, its Term A2 Commitment at such time less the aggregate of its share of the Term A2 Advances which are then outstanding.

	“Available Term B Commitment” means, in relation to a Lender at any time and save as otherwise provided herein, its Term B Commitment at such time less the aggregate of its share of the Term B Advances which are then outstanding.

	“Available Term A1 Facility” means, at any time, the aggregate amount of the Available Term A1 Commitment adjusted, in the case of any proposed utilisation, so as to take into account any reduction in the Term A1 Commitment of a Lender on or before the proposed Utilisation Date relating to such utilisation.

	“Available Term A2 Facility” means, at any time, the aggregate amount of the Available Term A2 Commitment adjusted, in the case of any proposed utilisation, so as to take into account any reduction in the Term A2 Commitment of a Lender on or before the proposed Utilisation Date relating to such utilisation.

	“Available Term B Facility” means, at any time, the aggregate amount of the Available Term B Commitment adjusted, in the case of any proposed utilisation, so as to take into account any reduction in the Term B Commitment of a Lender on or before the proposed Utilisation Date relating to such utilisation.

	“Available Term Facilities” means, at any time, the aggregate of the Available Term A1 Facility, the Available Term A2 Facility and the Available Term B Facility at such time and “Available Term Facility” means the amount of any such available facility.

	“B Margin” means, in relation to the Term B Outstandings, 2.75% per annum.

	“Budget” means the forecasted annual profit and loss accounts, balance sheet and cash flow statement in agreed form for the period beginning on 1 January and ending on 31 December of each year starting with 2002 to be delivered by Genesys S.A. to the Agent pursuant to Clause 19.7 (Budget).

	“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for general business in Paris and London, and in relation to any date for payment of any sum by any of the Borrowers, in Paris and New York.

	“Business Plan” means the financial projections including profit and loss, balance sheet and cash flow projections in agreed form relating to the Group, each prepared by the management of Genesys S.A., (assuming completion of the Acquisition and accordingly including Vialog Corporation and its subsidiaries) together with a written business plan


	in agreed form, delivered to the Agent in accordance with Clause 2.3 (Conditions Precedent).

	“Capital Expenditure” has the meaning given to it in Schedule 9 (Financial Definitions).

	“Cash Equivalent Investments” means:


	(a)	debt securities denominated in dollars or euros issued by the United States of America or each member state of the European Union which has adopted euro as its lawful currency which are not convertible into any other form of security;

	(b)	debt securities denominated in dollars or euros which are not convertible into any other form of security, rated P-1 or P-2 (Moody’s Investor Services Inc.) or A-1 or A-2 (Standard & Poor’s Corporation), which are not issued or guaranteed by any member of the Group;

	(c)	certificates of deposit denominated in dollars or euros issued by, and acceptances by, banking institutions authorised under applicable legislation of the European Union, rated P-1 or P-2 (Moody’s Investor Services Inc.) or A-1 or A-2 (Standard & Poors’ Corporation) which at the time of making such issue or acceptances, have outstanding debt securities rated as provided in paragraph (b) above; and

	(d)	such other securities (if any) as are approved in writing by the Agent.


	“Cash Flow” has the meaning given to the term “Consolidated Cash Flow” in Schedule 9 (Financial Definitions).

	“Closing Date” means 24 April 2001 or any other date to be agreed by the Borrowers and the Agent.

	“Commitment” means, in relation to a Lender at any time, the aggregate of its Term Commitment and its Revolving Commitment.

	“Compliance Certificate” means a certificate substantially in the form set out in Schedule 5 (Form of Compliance Certificate).

	“Convertible Bonds” means the existing convertible bonds issued by Genesys S.A.

	“Convertible Bonds Indebtedness” means a principal amount up to 8,000,000 euros which is owed by Genesys S.A. in respect of its Convertible Bonds.

	“Deferred Payment” means the deferred consideration payable to the shareholders of Astound under the Astound’s Acquisition, which shall not exceed the aggregate of (i) 4,000,000 euros and interest thereon accrued at the rate of LIBOR (as defined for purposes of the Astound Acquisition Agreement) plus a 2.75% margin from the Astound’s Acquisition Closing Date to January 4, 2002 or the date on which full payment of such deferred consideration shall be made and (ii) 50% of the net proceeds of the sale of the Astound’s Contact Center Business.


	“Dispute” means any dispute referred to in Clause 42 (Jurisdiction).

	“Due Diligence Reports” means the market report prepared by Wainhouse, the tax and finance due diligence report prepared by Ernst & Young the legal due diligence report prepared by Joël Walker from Breslow & Walker and the technical due diligence report prepared by David Detert, together with any reliance letter addressed to the Arrangers, provided that such reliance letters shall be in form and substance satisfactory to the Arrangers.

	“Employee Plan” means an “employee benefit plan” as defined in Section 3(3) of ERISA, other than a Multiemployer Plan, that is maintained for, or under which contributions are made on behalf of, employees of any US Group Member or any ERISA Affiliate.

	“EMU” means the Economic and Monetary Union.

	“EMU Legislation” means legislative measures of the European Union for the introduction of, changeover to or operation of the euro in one or more member states, being in part legislative measures to implement EMU.

	“Encumbrance” means (a) a hypothèque, a charge, mortgage, pledge, lien, priorité or other encumbrance securing any obligation of any person, (b) any arrangement under which money or claims to, or the benefit of, a bank or other account may be applied or made subject to a combination of accounts so as to effect discharge of any sum owed or payable to any person or (c) any other type of preferential arrangement (including any outright transfer and retention arrangement) having a similar effect.

	“Environmental Claim” means any claim, proceeding or investigation by any person pursuant to any Environmental Law.

	“Environmental Law” means any applicable law in any jurisdiction in which any member of the Group conducts business which relates to the pollution or protection of the environment.

	“Environmental Permits” means any permit, licence, consent, approval and other authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of the business of any member of the Group conducted on or from the properties owned or used by the relevant member of the Group.

	“ERISA” means, at any date, the US Employee Retirement Income Security Act of 1974 (as amended) and the regulations promulgated and rulings issued thereunder, all as the same shall be in effect at such date.

	“ERISA Affiliate” means any person that for purposes of Title I and Title IV of ERISA and Section 412 of the US Code is a member of any US Group Member’s controlled group, or under common control with any US Group Member, within the meaning of Section 414(b) or (c) of the Code.

	“ERISA Event” shall mean any of the events described below in paragraphs (i) to (v) inclusive:


	(i)	(A) any reportable event, as defined in Section 4043 of ERISA, with respect to an Employee Plan, as to which PBGC has not by regulation waived the


		requirement of Section 4043(a) of ERISA that it be notified within thirty days of the occurrence of such event (provided that a failure to meet the minimum funding standard of Section 412 of the US Code or Section 302 of ERISA shall be a reportable event for the purposes of this paragraph (i) regardless of the issuance of any waivers in accordance with Section 412(d) of the US Code) or (B) the requirements of subsection (1) of Section 4043(b) of ERISA (without regard to subsection (2) of such Section) are met with respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of an Employee Plan and an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur with respect to such Employee Plan within the following 30 days;

	(ii)	the filing under Section 4041(c) of ERISA of a notice of intent to terminate any Employee Plan or the termination of any Employee Plan under Section 4041(c) of ERISA;

	(iii)	the institution of proceedings under Section 4042 of ERISA by the PBGC for the termination of, or the appointment by PBGC of a trustee under Section 4042 of ERISA, to administer, any Employee Plan;

	(iv)	the failure to make a required contribution to any Employee Plan that would result in the imposition of an Encumbrance under Section 412 of the US Code or Section 302 of ERISA;

	(v)	an engagement in a non-exempt prohibited transaction within the meaning of Section 4795 of the US Code or Section 406 of ERISA;

	(vi)	a complete or partial withdrawal by a US Group Member or any ERISA Affiliate from a Multiemployer Plan, or notification that a Multiemployer Plan is in reorganisation; and

	(vii)	the aggregate liabilities (determined on an ongoing basis) among all defined pension plans maintained by any US Group Members or ERISA Affiliate exceeds the values of such plans,


	in each case if the occurrence of which would reasonably be likely to have a Material Adverse Effect.

	“Event of Default” means any circumstance described as such in Clause 23 (Events of Default).

	“Exchangeable Bond Agreement” means the agreement dated March 27, 2001 entered into between Genesys S.A. and Geene SAS, which provides for the issuance by Genesys S.A. of exchangeable bonds to Geene SAS.

	“Existing Financial Indebtedness” means at the date hereof an existing Financial Indebtedness of Genesys S.A. of a maximum aggregate amount of USD 750,000.

	“Facilities” means the Term Facilities and the Revolving Facilities.

	“Facility Office” means, in relation to the Agent, the office identified with its signature below or such other office as it may select by notice and, in relation to any Lender, the office notified by it to the Agent in writing prior to the date hereof (or, in the case of a


	New Lender, at the end of the Transfer Agreement to which it is a party as New Lender) or such other office as it may from time to time select by notice to the Agent.

	“Final Maturity Date” means, in relation to the Term A1 Facility and the Term A2 Facility, 28 April 2006 and in relation to the Term B Facility “Final Maturity Date” means 31 October 2006.

	“Finance Documents” means this Agreement, the fee letters referred to in Clause 24.2 (Arrangement Fee) and Clause 24.3 (Agency Fee), the Security Documents, the Intra-Group Loan Agreements, the Hedging Agreements entered into by a Lender or an affiliate of a Lender (but not any other financial institution) and any documents evidencing the terms of any other agreement or document that may be entered into or executed pursuant to any of the foregoing by any Obligors and any other document which is designated a “Finance Document” in writing signed by a Borrower and the Agent.

	“Finance Lease” means, in respect of any person, a contract treated as a finance or capital lease in accordance with accounting principles applied for the preparation of such person’s audited financial statements and which has the economic effect of a borrowing.

	“Finance Parties” means the Agent, the Security Agent, the Arrangers, the Lenders and any Hedge Counterparties which are Lenders or affiliates of Lenders.

	“Financial Indebtedness” means, in respect of any person, any indebtedness for or in respect of:


	(a)	moneys borrowed;

	(b)	any amount raised by acceptance under any acceptance credit facility or any amount borrowed under any overdraft facility;

	(c)	any amount raised pursuant to any note or the issue of bonds, notes or any similar instrument;

	(d)	any amount raised by the issue of shares redeemable at the sole option of the holders thereof;

	(e)	all unconditional and irrevocable obligations to repurchase, retire, defease or otherwise reacquire for value (i) any share capital of such person or (ii) any warrants, rights or options to acquire such share capital, in respect of transactions which, in each such case, have the economic effect of a borrowing or which finance a member of the Group or the Group’s operations or capital requirements;

	(f)	the amount of any liability in respect of any lease or hire purchase contract which would be a Finance Lease;

	(g)	the amount of any liability in respect of any advance or deferred purchase agreement other than normal payment terms agreed by suppliers and other parties with whom such person has commercial or contractual relations;


	(h)	receivables sold or discounted (other than on a non recourse basis);

	(i)	any agreement or option to re-acquire an asset if the sole reason for entering into such agreement or option is to raise finance;

	(j)	any documentary or standby letter of credit or performance bond facility;

	(k)	any sums due under (i) interest rate swap, currency swap, forward foreign exchange transaction, cap, floor, collar or option transaction or (ii) any other treasury transaction or any combination thereof or (iii) any other transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and the amount of the Financial Indebtedness in relation to any such transaction shall be calculated by reference to the mark-to-market valuation of such transaction at the relevant time).

	(l)	any guarantee or indemnity issued in connection with any of the items referred to in paragraphs (a) to (k) above.


	“Financial Quarter” has the meaning given to it in Schedule 9 (Financial Definitions).

	“French GAAP” means generally accepted accounting principles in France.

	“Governmental Entity” means the United States Environmental Protection Agency, the United States Department of Labor, the United States Department of Transportation, any successors thereto, or any other federal, state or local governmental agency now or hereafter regulating substances and materials in the environment located at or adjacent to properties owned by any US Group Member.

	“Group” means Genesys S.A. and its consolidated subsidiaries for the time being and the Vialog Corporation’s Group for the time being (before as well as after the Closing Date).

	“Group Structure Chart” means the group structure chart in agreed form showing:


	(a)	all members of the Group;

	(b)	any person in which any Group member has an interest in the issued share capital or equivalent ownership interest of such person;

	(c)	the jurisdiction of incorporation or establishment of each person within paragraph (a) above;

	(d)	all members of the Group that are wholly-owned subsidiaries of Genesys S.A.

“Guarantees” means (i) a guarantee à première demande issued by Genesys S.A. in favour of the Security Agent in respect of the obligations of Vialog Corporation under the Term A1 Facility, the Term B Facility and the Revolving 1 Facility, (ii) a guarantee issued by Vialog Corporation in favour of the Security Agent in respect of the obligations of Genesys S.A. under the Term A2 Facility and the Revolving 2 Facility, (iii) each of the guarantees issued by the Vialog Subsidiaries and Genesys Conferencing Inc. in favour of the Security Agent in respect of the obligations of (a) Vialog Corporation under the Term A1 Facility, the Term B Facility and the Revolving 1


	Facility, and (b) Genesys S.A. under the Term A2 Facility and the Revolving 2 Facility, and (iv) any of the guarantees to be issued by each Material Subsidiary in accordance with Clause 35.2 (Request for Additional Guarantor).

	“Guarantors” means each of the companies listed in Schedule 7 (List of Guarantors) and each Additional Guarantor.

	“Hazardous Substances” means and includes (a) any solid, gaseous or liquid wastes (including hazardous wastes), hazardous air pollutants, hazardous substances, hazardous materials, regulated substances, restricted hazardous wastes, hazardous chemical substances, mixtures, toxic substances, pollutants or contaminants or terms or similar import, as such terms are defined in any Environmental Law, as such definition may change from time to time, (b) any substance or material which now or in the future is known to constitute a threat to health, safety, property or the environment or which has been or is in the future determined by any Governmental Entity to be capable of posing a risk of injury to health, safety, property or the environment or exposure to which is prohibited, limited or regulated by any Environmental Law or Governmental Entity, including all of those materials, wastes and substances designated now or in the future as hazardous or toxic by any Governmental Entity, and (c) any petroleum or petroleum products or by-products, radioactive materials, asbestos, whether friable or non-friable, urea formaldehyde foam insulation, polychlorinated biphenyls, or radon gas.

	“Hedge Counterparty” means a Lender or an affiliate of a Lender or any other duly licensed bank or financial institution.

	“Hedging Agreements” means each of the agreements entered into or to be entered into between the Group member(s) approved by the Agent and a Hedge Counterparty for the purpose of hedging interest rate liabilities in accordance with Clause 22.29 (Hedging).

	“Information Memorandum” means the document concerning the Group which is to be prepared in relation to the transactions in this Agreement (it being understood that such document shall incorporate — by reference or in reprinted form as the Arrangers shall deem fit — all recent disclosure documents issued by Genesys S.A. and/or Vialog Corporation), to be reviewed by Genesys S.A. and distributed by the Arrangers (subject to Genesys S.A.’s prior consent) prior to the Syndication Date in connection with the primary syndication of the Facilities.

	“Intellectual Property” means all patents, trade marks, service marks, designs, business names, copyrights, design rights, moral rights, inventions, know-how and other intellectual property rights and interests, whether registered or unregistered, and the benefit of all licenses, applications, rights to use and monies deriving from any such intellectual property now or hereafter belonging to any member of the Group.

	“Intellectual Property Rights” means the trade marks and patents directly or indirectly acquired by Genesys S.A. pursuant to the Acquisition Agreement.

	“Interest Period” means, save as otherwise provided herein, any of those periods mentioned in Clause 4.1 (Interest Periods).


	“Intra-Group Loan Agreements” means all intra-Group loan agreements setting out the terms and conditions of the intra-Group loans entered into amongst any member of the Group.

	“IP Licence” means any licence or other agreement pursuant to which any Intellectual Property (including any Intellectual Property Right) is held, used or exploited by any Group member.

	“Joint Venture” means any joint venture entity, whether a company, unincorporated firm, undertaking, association, joint venture or partnership or any other entity.

	“Key-man Policy” means the life insurance policy (in form and substance satisfactory to the Agent) relating to the death or disability and made in favour of Genesys S.A. in respect of the death or disability of François Legros for a period of 5 years and for a minimum coverage amount of USD 1,000,000 and required to be delivered in accordance with Clause 22.30 (Key-man Policy) or any substituted policy or any new policy previously approved by the Agent.

	“Legal Opinions” means the legal opinions delivered to the Agent pursuant to Clause 2.3 (Conditions Precedent) and Clause 35.2 (Request for Additional Guarantor).

	“Lender” means any financial institution:


	(a)	named in Schedule 1 (The Lenders); or

	(b)	which has become a party hereto in accordance with Clause 34 (Changes to the Lenders),


	and which has not ceased to be a party hereto in accordance with the terms hereof.


	(a)	the applicable Screen Rate; or

	(b)	(as the Agent and the Borrowers may agree and/or if no Screen Rate is available for the currency or period of that Advance) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request quoted by the Reference Banks to leading banks in the London interbank market,


	on the Quotation Date for the offering of deposits in the currency of that Advance and for a period comparable to the relevant interest period for that Advance;

	where “Screen Rate” means the percentage rate per annum determined by the British Bankers Association Interest Settlement Rate for the relevant period on page 37.50 of Telerate and/or the appropriate page of Reuters.

	“Majority Lenders” means:


	(a)	whilst there are no Outstandings, a Lender or Lenders whose Commitments amount (or, if each Lender’s Commitment has been reduced to zero, did


		immediately before such reduction to zero, amount) in the aggregate to more than sixty-six and two thirds per cent (66 2/3%) of the Total Commitments; and

	(b)	whilst there are Outstandings, a Lender or Lenders to whom in the aggregate more than sixty-six and two thirds per cent (66 2/3%) of the amount of the Outstandings is owed.


	“Mandatory Cost” means the rate determined in accordance with Schedule 8 (Mandatory Costs).

	“Margin” means the A1 Margin, the A2 Margin, the B Margin, the Revolving 1 Margin or the Revolving 2 Margin.

	“Margin Stock” means margin stock or “margin security” within the meaning of Regulations T, U and X.

	“Material Adverse Effect” means an adverse effect which (a) is material on the business, operations, property, assets, liabilities, condition (financial or otherwise), performance of the Borrowers, any Material Subsidiary, or the Group, considered as a whole; or (b) is likely to materially impair the ability of an Obligor to perform its payment obligations under the Finance Documents or likely to result in any breach of any financial condition under Clause 21 (Financial Condition) or (c) is likely to materially affect the validity or enforceability of the Finance Documents or the rights or remedies of any Finance Party thereunder.

	“Material Subsidiary” means (A) until the first quarterly consolidated financial statements are delivered to the Agent under Clause 19.3 (Quarterly Statements), (i) Vialog Corporation (after the closing of the Acquisition in accordance with the terms of the Acquisition Agreement); (ii) Genesys Conferencing Inc.; (iii) Genesys Conferencing Ltd.; and (iv) Genesys Conferencing A.B., and (B) thereafter any other subsidiary of Genesys S.A. which has:


	(a)	earnings before interest and tax (calculated on the same basis as EBIT as defined in Clause 21 (Financial Condition)) representing 10 per cent. or more of the consolidated earnings before interest and tax of the Group; or

	(b)	Total Assets representing 10 per cent. or more of Total Assets of the Group; or

	(c)	turnover representing 10 per cent. or more of consolidated turnover of the Group,

Compliance with the conditions set out in paragraphs (a), (b) or (c) above shall be determined by reference to the most recent Compliance Certificate executed by Genesys S.A.’s auditors or two directors of Genesys S.A. (in accordance with Clause 19.6 (Compliance Certificates)), as the case may be, or the latest audited financial statements of such subsidiary (consolidated in the case of a subsidiary which itself has subsidiaries) and the latest audited consolidated financial statements of the Group provided that:


	(i)	if a subsidiary has been acquired since the date as at which the latest audited consolidated financial statements of the Group were prepared, such financial statements shall be adjusted in order to take into account the acquisition of such


		subsidiary (such adjustment being certified by the Group’s auditors or two directors of Genesys S.A. (in accordance with clause 19.6 (Compliance Certificates)), as representing an accurate reflection of the revised consolidated earnings before interest and tax, Total Assets or turnover of the Group);

	(ii)	if, in the case of any subsidiary which itself has subsidiaries, no consolidated financial statements are prepared and audited, its consolidated profits before interest and tax, Total Assets and turnover shall be determined on the basis of pro forma consolidated financial statements of the relevant subsidiary and its subsidiaries, prepared for this purpose by the auditors of Genesys S.A. or the auditors for the time being of the relevant subsidiary or two directors of Genesys S.A. (in accordance with Clause 19.6 (Compliance Certificates)); and

	(iii)	if any intra-group transfer or re-organisation takes place, the audited financial statements of the Group and of all relevant subsidiaries shall be adjusted by the Group’s auditors or two directors of Genesys S.A. (in accordance with Clause 19.6 (Compliance Certificates)) in order to take into account such intra-group transfer or reorganisation.


	A determination by the auditors of Genesys S.A. that a subsidiary is or is not a Material Subsidiary shall, in the absence of manifest error, be conclusive and binding on all parties hereto.

	“Multiemployer Plan” means a “multiemployer plan” (as defined in Section 4001(a)(3) in ERISA) maintained or contributed to for employees of (a) any US Group Member or (b) any ERISA Affiliate.

	“Notice of Drawdown” means a notice substantially in the form set out in Schedule 4A (Notice of Drawdown).

	“Obligor” means a Borrower or a Guarantor and “Obligors” means the Borrowers and the Guarantors.

	“Original Financial Statements” means in relation to each Obligor its audited financial statements for its financial year ended 31 December 2000.

	“Outstandings” means at any time, the Term Outstandings and the Revolving Outstandings.

	“Overnight LIBOR” means, in relation to any Facility, the applicable Screen Rate or if no Screen Rate is available for the currency or period of that Advance, the arithmetic means of the rates (rounded upwards to four decimal places) as supplied on such day to the Agent at its request quoted by the Reference Banks to leading banks in the London interbank market on the Quotation Date, for the offering of deposits in the relevant currency for the period form one Business Day to the immediately following Business Day,

	where “Screen Rate” means the percentage rate per annum determined by the British Bankers Association Interest Settlement Rate for the relevant period on page 37.50 of Telerate and/or the appropriate page of Reuters.


	“Party” means a party to this Agreement and includes its successors in title, permitted assigned and permitted transferees.

	“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to all or any of its functions under ERISA.

	“Permitted Disposals” means any disposal:


	(a)	of Cash Equivalent Investments on arm’s length terms;

	(b)	for cash on arm’s length terms of any surplus, old or obsolete assets not required for the continuing operation of the business of the Group;

	(c)	of the Astound’s Contact Center Business; and

	(d)	for cash on arm’s length terms of any asset whatsoever (other than assets disposed of in accordance with paragraphs (a) to (c) above) by a Group member, where the aggregate value of the cash proceeds received by the Group in respect of disposals permitted under this paragraph (d) do not exceed USD 2,000,000 (or its equivalent) per calendar year.

(a)

any Encumbrance over or affecting (i) any asset acquired by a member of the Group after the date hereof or (ii) any asset of any company which becomes a member of the Group after the date hereof, where such Encumbrance is created prior to the date on which such company becomes a member of the Group, provided that, in any case,

	(i)		such Encumbrance was not created in contemplation of the acquisition of such asset by a member of the Group or the acquisition of such company; and

	(ii)		the amount thereby secured has not been increased in contemplation of, or since the date of, the acquisition of such asset by a member of the Group or the acquisition of such company;

(b)		any outright transfer or retention of title arrangement entered into by any member of the Group in the normal course of its business;

(c)		any lien or privilège arising by operation of law and in the normal course of business;

(d)		any Encumbrance arising under or evidenced by a Security Document;

(e)		any Encumbrance entered into pursuant to this Agreement; and

(f)		any pre-existing liens filed against any specific equipment used by Vialog Corporation or one of its subsidiaries in the ordinary course of business.

(a)		any Financial Indebtedness arising under or permitted pursuant to the Finance Documents;

(b)		any Financial Indebtedness arising under sub-paragraphs (a), (b) or (e) of the Permitted Transactions;

(c)		any Financial Indebtedness arising under Permitted Treasury Transactions;

(d)		any Financial Indebtedness arising under the Intra-Group Loan Agreements;

(e)		any Financial Indebtedness constituted by the Deferred Payment;

(f)		receivables sold on a discounted basis (other than a non recourse basis provided that it does not exceed USD 1,000,000 (on a consolidated basis));

(g)		any Financial Indebtedness arising under any guarantee given by Genesys S.A. in connection with the disposal of the Astound Contact Center, provided that and to the extent the amount of such guarantee does not exceed 100% of the cash proceeds to the Group of such disposal;

(h)		any Financial Indebtedness arising under debt unsecured and subordinated to

		the Facilities provided that the leverage ratio as defined in sub-paragraph 21.1.3 remains below 1.5;

(i)		the Convertible Bonds Indebtedness; and

(j)		any Financial Indebtedness not falling within paragraphs (a) to (i) above provided that the aggregate amount does not exceed USD 4,000,000 (or its equivalent) for the Group.

	(1)		a loan which is subject to an Intra-Group Loan Agreement; or

	(2)		a loan to Astound for working capital purposes or the conversion of the exchangeable shares issued by Astound; or

	(3)		a trade credit/or indemnity granted in the ordinary course of trading and upon terms usual for trade; or

	(4)		a loan to an Obligor to fund:

	(A)		obligations under the Finance Documents; or

	(B)		working capital requirements; or

(5)

a loan by a member of the Group which is not an Obligor to another member of the Group which is not an Obligor; or

(ii)

in respect of any loan made to a Group member whose shares are subject to an Encumbrance constituted by the Security Documents, subject to not being in breach of any applicable law prohibiting financial assistance, security satisfactory to the Agent over such loans (other than loans amounting to less than USD 250,000 whose maturities are less than 6 months provided that the aggregate outstanding amount for the Group of such loans does not exceed USD 1,000,000 per financial year) has been provided in favour of the Finance Parties to secure all or any of the obligations of the Obligors under the Finance Documents;

(b)

the payment or declaration of any dividend, return on capital, repayment of capital contributions or other distributions by any Group member other than:

	(i)		by Genesys S.A.; or

	(ii)		by a Group member which is an Obligor to another Group member which is not an Obligor;

(c)

the purchase, subscription for, or other acquisition of any shares (or other securities or any interest therein) in:

	(i)		any Obligor by any other Obligor;

	(ii)		any Group member which is not an Obligor by any other Group member which is not an Obligor; and

	(iii)		any Group member which is not an Obligor by any Obligor,

		provided that, if any such shares (or other securities or any interest therein) are issued by a Group member whose shares are subject to an Encumbrance constituted by the Security Documents, in any such case such shares (or other securities or any interest therein) are made subject to security satisfactory to the Agent to secure all the obligations of the Obligors under the Finance Documents;

(d)		the giving by any Group member of any guarantee, bond or indemnity in respect of the liabilities or obligations of any other Group member provided that no Obligor shall give any guarantee, bond or indemnity in respect of the liabilities or obligations of any Group member which is not an Obligor;

(e)	(i)	any netting or set-off arrangement entered into by any member of the Group in the normal course of its banking arrangements with any clearing bank for the purpose of netting debit and credit balances on bank accounts of members of the Group operated on a net balance basis;

	(ii)	any netting or set-off arrangement under a Hedging Agreement where the obligations of other parties thereunder are calculated by reference to net exposure thereunder (but not any netting or set-off relating to such Hedging Agreement in respect of cash collateral or any other Encumbrance except as otherwise permitted hereunder); and

“Permitted Treasury Transactions” means the Treasury Transactions entered into (i) in accordance with Clause 22.29 (Hedging) or (ii) in the normal course of business for purpose of protection against fluctuation in any rate (including interest rate) or price (including currency prices and exchange rates).

“Potential Event of Default” means any event which is reasonably likely to become (with the passage of time, the giving of notice, the making of any determination hereunder or any combination thereof) an Event of Default.

“Quotation Date” means, in relation to any period for which an interest rate is to be determined hereunder, the day on which quotations would ordinarily be given by prime banks in the relevant interbank market for deposits in the currency in relation to which such rate is to be determined for delivery on the first day of that period, provided that, if, for any such period, quotations would ordinarily be given on more than one date, the Quotation Date for that period shall be the last of those dates.

“Reference Banks” means the principal London offices of Barclays Bank PLC, The Royal Bank of Scotland PLC and HSBC and such banks as may be appointed as such by

“Regulations T, U and X” means, respectively, Regulations T, U and X of the Board of Governors of the Federal Reserve System of the United States of America (or any successor).

“Repayment Date” means, in relation to any Revolving Advance, the last day of the Term thereof.

(a)		on the Closing Date and on the first date on which an Advance is made under the Facilities, all of the representations set out in Clause 18 (Representations) other than Clause 18.17 (Information Memorandum); and

(b)		on all dates contemplated by Section 18.40(a) other than the Closing Date and the first date on which an Advance is made under the Facilities:

	(i)		each of the representations set out in Clause 18.1 (Status) to Clause 18.11 (No Deduction or Withholding);

	(ii)		each of the representations set out in Clause 18.14 (No Winding-up or insolvency proceedings) to Clause 18.39 (Claims against Vialog Corporation) other than the representations set out in Clauses 18.17 (Information Memorandum) and other than the representations on Business Plan, Due Diligence Reports or on the Original Financial Statements set out in Clause 18.12 (Reports).

“Revolving Advance” means a Revolving 1 Advance or a Revolving 2 Advance.

“Revolving 1 Advance” means an advance made or to be made by the Lenders under the Revolving 1 Facility.

“Revolving 2 Advance” means an advance made or to be made by the Lenders under the Revolving 2 Facility.

“Revolving 1 Margin” means, in relation to the Revolving 1 Outstandings and subject to Clause 7.3 (Revolving Margin Ratchet), 2.25% per annum.

“Revolving 2 Margin” means, in relation to the Revolving 2 Outstandings and subject to Clause 7.3 (Revolving Margin Ratchet), 2.25% per annum.

“Revolving Commitment” means, in relation to a Lender at any time and save as otherwise provided herein, the aggregate of its Revolving 1 Commitment and its Revolving 2 Commitment.

“Revolving 1 Commitment” means, in relation to a Lender at any time and save as otherwise provided herein, the amount set opposite its name under the heading “Revolving 1 Commitment” in Schedule 1 (The Lenders).

“Revolving 2 Commitment” means, in relation to a Lender at any time and save as otherwise provided herein, the amount set opposite its name under the heading

“Revolving 1 Facility” means the revolving loan facility granted to Vialog Corporation under sub-clause 2.1.3 of Clause 2.1 (Grant of the Facilities).

“Revolving 2 Facility” means the revolving loan facility granted to Genesys S.A. under sub-clause 2.1.5 of Clause 2.1 (Grant of the Facilities).

“Revolving Facilities” means the Revolving 1 Facility and the Revolving 2 Facility and “Revolving Facility” shall mean one of them.

“Revolving Outstandings” means, at any time, the aggregate of the Revolving 1 Outstandings and the Revolving 2 Outstandings at such time.

“Revolving 1 Outstandings” means, at any time, the aggregate of principal amounts of each outstanding Revolving 1 Advance.

“Revolving 2 Outstandings” means, at any time, the aggregate of principal amounts of each outstanding Revolving 2 Advance.

“Revolving Termination Date” means with respect to Revolving 1 Facility and Revolving 2 Facility, the day which is 5 years after the date hereof.

“Security” means the security from time to time constituted by or pursuant to the Security Documents.

“Security Documents” means, inter alia, each of the following documents in agreed form delivered to the Agent in accordance with Clause 2.3 (Conditions Precedent):

(a)		Each of the Guarantees issued by each of the Guarantors in favour of the Security Agent;

(b)		A Pledge Agreement between Genesys S.A. as pledgor and the Security Agent as beneficiary, with respect to the shares of Vialog Corporation and Genesys Conferencing Inc.;

(c)		A Pledge Agreement between Genesys S.A. as pledgor and the Security Agent as beneficiary, with respect to the shares of Genesys Conferencing Ltd.;

(d)		A Pledge Agreement between Genesys S.A. as pledgor and the Security Agent as beneficiary, with respect to the shares of Genesys Conferencing AB;

(e)		A Pledge Agreement between Vialog Corporation as pledgor and the Security Agent as beneficiary, with respect to the shares of each of the subsidiaries of Vialog Corporation;

(f)		A Security Agreement between all the subsidiaries of Vialog Corporation as pledgors and the Security Agent as beneficiary, with respect to the assets of the Subsidiaries of Vialog Corporation;

(g)		A Security Agreement between Genesys Conferencing Inc. as pledgor and the Security Agent as beneficiary, with respect to the receivables of Genesys Conferencing Inc.;

(h)		A Security Agreement between Vialog Corporation as pledgor and the Security Agent as beneficiary with respect to the assets of Vialog Corporation.

together with any other document entered into by any member of the Group creating or evidencing an Encumbrance for all or any part of the obligations of the Obligors or any of them under any of the Finance Documents.

“Selection Notice” means a notice substantially in the form set out in Schedule 4B (Selection Notice).

“Syndication Date” means the day specified by the Arrangers as the day on which primary syndication of the Facilities is completed.

“Term” means, save as otherwise provided herein, in relation to any Advance, the period for which such Advance is borrowed, as specified in the Notice of Drawdown relating thereto.

“Term Advance” means a Term A1 Advance, a Term A2 Advance or a Term B Advance.

“Term A1 Advance” means an advance (as from time to time consolidated, divided or reduced by repayment) made or to be made by the Lenders under the Term A1 Facility.

“Term A2 Advance” means an advance (as from time to time consolidated, divided or reduced by repayment) made or to be made by the Lenders under the Term A2 Facility.

“Term B Advance” means an advance (as from time to time consolidated, divided or reduced by repayment) made or to be made by the Lenders under the Term B Facility.

“Term Availability Period” means in relation to the Term A1 Facility, the Term A2 Facility or the Term B Facility, the period from and including the date hereof to and including the earlier of (a) two months after the date hereof, and (b) the first Business Day on which the Available Term A1 Commitment (in the case of the Term A1 Facility) or the Available Term A2 Commitment (in the case of the Term A2 Facility) or the Available Term B Commitment (in the case of the Term B Facility) of each of the Lenders is zero.

“Term Commitment” means, in relation to a Lender at any time and save as otherwise provided herein, the aggregate of its Term A1 Commitment, its Term A2 Commitment and its Term B Commitment.

“Term A1 Commitment” means, in relation to a Lender at any time and save as otherwise provided herein, the amount set opposite its name under the heading “Term A1 Commitment” in Schedule 1 (The Lenders).

“Term A2 Commitment” means, in relation to a Lender at any time and save as otherwise provided herein, the amount set opposite its name under the heading “Term A2 Commitment” in Schedule 1 (The Lenders).

“Term B Commitment” means, in relation to a Lender at any time and save as otherwise provided herein, the amount set opposite its name under the heading “Term B Commitment” in Schedule 1 (The Lenders).

“Term Facilities” means the Term A1 Facility, the Term A2 Facility and the Term B Facility and “Term Facility” shall mean any one of them.

“Term A1 Facility” means the term loan facility granted to Vialog Corporation under sub-clause 2.1.1 of Clause 2.1 (Grant of the Facilities).

“Term A2 Facility” means the term loan facility granted to Genesys S.A. under sub-clause 2.1.4 of Clause 2.1 (Grant of the Facilities).

“Term B Facility” means the term loan facility granted to Vialog Corporation under sub-clause 2.1.2 of Clause 2.1 (Grant of the Facilities).

“Term Outstandings” means, at any time, the aggregate of the Term A1 Outstandings, the Term A2 Outstandings and the Term B Outstandings at such time.

“Term A1 Outstandings” means, at any time, the aggregate principal amount of the outstanding Term A1 Advances.

“Term A2 Outstandings” means, at any time, the aggregate principal amount of the outstanding Term A2 Advances.

“Term B Outstandings” means, at any time, the aggregate principal amount of the outstanding Term B Advances.

“Term Repayment Date” means each of the dates specified in Clause 10.1 (Term A1 Advances and Term A2 Advances Repayment Instalments), provided that if such date is not a Business Day, it shall be deemed to be the next succeeding Business Day.

“Total Commitments” means, at any time, the aggregate of the Lenders’ Commitments.

“Transfer Agreement” means an agreement substantially in the form set out in Schedule 2 (Form of Transfer Agreement)

	(a)		the proposed Transfer Date specified in the Transfer Agreement; and

	(b)		the date on which the Agent executes the Transfer Agreement.

“Treasury Transaction” means any currency or interest purchase, cap or collar agreement, forward rate agreements, interest rate or currency future or option contract, foreign exchange or currency purchase or sale agreement, interest rate swap, currency swap or combined interest rate and currency swap agreement and any other similar agreement.

		“Unpaid Sum” means any sum due and payable but unpaid by an Obligor under the Finance Documents.

		“US Code” means the United States of America Internal Revenue Code of 1986 (as amended) and the regulations promulgated and rulings issued thereunder all as the same shall be in effect at such date.

		“US GAAP” means generally accepted accounting principles in the United States of America.

		“US Group Member” means each Group member incorporated in the United States of America.

		“Utilisation Date” means, in relation to an Advance, the date on which it is to be made.

		“Vialog Corporation’s Group” means Vialog Corporation and the Vialog Subsidiaries.

		“Vialog Subsidiaries” means Telephone Business Meetings, Inc.; Conference Source International, Inc.; A Business Conference Call, Inc.; Kendall Square Teleconferencing; American Conferencing Company, Inc.; Communication Development Corporation; A Better Conference, Inc.; and Conference Pros International, Inc.

1.2		Interpretation

		Any reference in this Agreement to:

		the “Agent”, the “Arrangers”, the “Security Agent”, any “Hedge Counterparty”, or any “Lender” shall be construed so as to include it and any subsequent successors and permitted transferees and assigns in accordance with their respective interests;

		a document in “agreed form” is a document that has been initialled as such on or before the Closing Date for the purposes of identification by or on behalf of any of the Borrower and any Arranger or Agent or is executed on or before the Closing Date by the Borrowers and any Arranger or Agent or, if not so executed or initialled, is in form and substance reasonably satisfactory to the Agent;

		“assets” includes present and future properties, revenues and rights of every description;

		“consolidated” and “consolidation” means (i) a reference to the French rules applicable to consolidated financial statements as provided for in the Règlement No.99-02 of the Comité de la réglementation comptable including:

	(a)		the intégration globale (global consolidation); or

	(b)		the intégration proportionnelle (proportional consolidation); or

	(c)		the intégration par mise en équivalence (compared consolidation), or

		(ii) a reference to the rules applicable to consolidated financial statements under the US GAAP and the IAS 17 principles.

		“continuing”, in relation to an Event of Default, shall be construed as a reference to an Event of Default which has not been waived in accordance with the terms hereof or

		remedied and, in relation to a Potential Event of Default, one which has not been remedied within the relevant grace period or waived in accordance with the terms hereof;

		“corporate reconstruction” includes in relation to any company any contribution of part of its business in consideration of shares (apport partiel d’actifs) and any demerger (scission) implemented in accordance with articles L.236-1 to L.236-24 of the French Code de commerce;

		“disposal” includes any sale, lease transfer or other disposal;

		the “equivalent” on any date in one currency (the “first currency”) of an amount denominated in another currency (the “second currency”) is a reference to the amount of the first currency which could be purchased with the amount of the second currency at the spot rate of exchange quoted by the Agent at or about 12.00 a.m. on such date for the purchase of the first currency with the second currency;

		“gross negligence” means “faute lourde”;

		a “guarantee” includes any “cautionnement”, “aval” and any “garantie” which is independent from the debt to which it relates;

		a “holding company” of a company or corporation shall be construed as a reference to any company or corporation of which the first-mentioned company or corporation is a subsidiary;

		“indebtedness” shall be construed so as to include any obligation (whether incurred as principal or as surety) for the payment or repayment of money borrowed, whether present or future, actual or contingent;

		a “law” shall be construed as any law, code, statute, constitution, decree, judgment, treaty, regulation, directive, by-law, order or any other legislative measure of any government, supranational, local government, statutory or regulatory body or court;

		a “member state” shall be construed as a reference to a member state of the European Union;

		“merger” includes any fusion implemented in accordance with articles L.236-1 to L.236-24 of the French Code de commerce;

		a “month” is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next succeeding calendar month save that:

	(a)		if any such numerically corresponding day is not a Business Day, such period shall end on the immediately succeeding Business Day to occur in that next succeeding calendar month or, if none, it shall end on the immediately preceding Business Day; and

	(b)		if there is no numerically corresponding day in that next succeeding calendar month, that period shall end on the last Business Day in that next succeeding calendar month,

		a “partnership” shall be construed as a reference to any société en nom collectif, a société civile or any other association or corporation having an unlimited liability for its members;

		a “person” shall be construed as a reference to any person, firm, company, corporation, government, state or agency of a state or any association or partnership (whether or not having separate legal personality) of two or more of the foregoing;

		a “regulation” includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

		the “relevant interbank rate” is a reference to LIBOR;

		“repay” (or any derivative form thereof) shall, subject to any contrary indication, be construed to include “prepay” (or, as the case may be, the corresponding derivative form thereof);

		a “security interest” includes any type of security (sûreté réelle) and transfer by way of security;

		a “subsidiary” of a company or corporation shall be construed as a reference to any company or corporation which is controlled, directly or indirectly, by the first-mentioned company or corporation;

		a “successor” shall be construed so as to include an assignee or successor in title of such party and any person who under the laws of its jurisdiction of incorporation or domicile has assumed the rights and obligations of such party under this Agreement or to which, under such laws, such rights and obligations have been transferred;

		“tax” shall be construed so as to include any tax (which shall include, but not be limited to, corporation tax and advance corporation tax), levy, impost, duty or other charge of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same);

		“VAT” shall be construed as a reference to value added tax including any similar tax which may be imposed in place thereof from time to time;

		a “wholly-owned subsidiary” of a company or corporation shall be construed as a reference to any company or corporation which has no other members holding a substantial equity interest therein except that other company or corporation and that other company’s or corporation’s wholly-owned subsidiaries or persons acting on behalf of that other company or corporation or its wholly-owned subsidiaries;

		“wilful misconduct” means “dol”; and

		the “winding-up”, “dissolution” or “administration” of a company or corporation shall be construed so as to include any equivalent or analogous proceedings under the law of

		the jurisdiction in which such company or corporation is incorporated or any jurisdiction in which such company or corporation carries on business including the seeking of liquidation, winding-up, reorganisation, dissolution, administration, arrangement, adjustment, protection or relief of debtors, redressement judiciaire, cession totale de l’entreprise or liquidation judiciaire.

1.3		Currency Symbols and Definitions

	1.3.1		“USD” and “dollars” denote the lawful currency of the United States of America.

	1.3.2		“euro” denotes the single currency of the European Union and as referred to in EMU Legislation.

	1.4.1		this Agreement or any other agreement or document shall be construed as a reference to this Agreement or, as the case may be, such other agreement or document as the same may have been, or may from time to time be, amended, varied, novated or supplemented; and

	1.4.2		a statute or treaty shall be construed as a reference to such statute or treaty as the same may have been, or may from time to time be, amended or, in the case of a statute, re-enacted.

1.5		Headings

		Clause and Schedule headings are for ease of reference only.

1.6		Time

		Any reference in this Agreement to a time of day shall, unless a contrary indication appears, be a reference to Paris time.

2.		THE FACILITIES

2.1		Grant of the Facilities

	•		The Lenders hereby grant to Vialog Corporation, upon the terms and subject to the conditions hereof:

	2.1.1		a senior amortising term loan A1 facility in an aggregate principal amount of USD 50,000,000;

	2.1.2		a senior term loan B facility in an aggregate principal amount of USD 30,000,000; and

	2.1.3		a revolving 1 loan facility in an aggregate principal amount of USD 5,000,000.

	•		The Lenders hereby grant to Genesys S.A., upon the terms and subject to the conditions hereof:

	2.1.4		a senior amortising term loan A2 facility in an aggregate principal amount of USD 35,000,000; and

	2.1.5		a revolving 2 loan facility in an aggregate principal amount of USD 5,000,000.

	2.2.1		The Term A1 Facility and the Term B Facility are intended for the purpose of refinancing (in part or in whole) the existing debt of Vialog Corporation (high yield bond and short-term debt) and financing (in part or in whole) the transaction fees and expenses (including, without limitation, any fees payable to financial advisors, accountants, auditors and legal advisors) incurred or to be incurred by Vialog Corporation in connection with such refinancing and related transactions.

	2.2.2		The Term A2 Facility is intended for the purpose of partially refinancing the existing debt of Genesys S.A.

	2.2.3		The Revolving 1 Facility is intended for financing (in part or in whole) general working capital requirements of Vialog Corporation.

	2.2.4		The Revolving 2 Facility is intended for financing (in part or in whole) general working capital requirements of Genesys S.A. and/or the Group.

	2.2.5		Accordingly, each Borrower shall so apply all amounts raised by it hereunder in accordance with sub-clauses 2.2.1 to 2.2.4 and none of the Finance Parties shall be obliged to concern themselves with such application.

	2.3.1		Save as the Arrangers may otherwise agree, none of the Borrowers shall deliver any Notice of Drawdown unless the Agent has received all of the documents and other evidence listed in Schedule 3 (Conditions Precedent) in form and substance satisfactory to the Arrangers.

	2.3.2		On the date of this Agreement, the Borrowers shall deliver or procure the delivery of all of the documents listed in Part A of Schedule 3 (Conditions Precedent), each in form and substance satisfactory to the Arrangers.

2.4		Several Obligations

		The obligations of each Lender are several and not joint (conjointes et non solidaires) and the failure by a Lender to perform its obligations hereunder shall not affect the obligations of an Obligor or the other Lenders towards any other party hereto nor shall any other party be liable for the failure by such Lender to perform its obligations hereunder.

2.5		Several Rights

		The rights of each Finance Party are several and not joint (conjointes et non solidaires) and any debt arising hereunder at any time from an Obligor to any Finance Party hereto shall be a separate and independent debt. Each such party shall be entitled to protect and

		enforce its individual rights arising out of this Agreement independently of any other party (so that it shall not be necessary for any party hereto to be joined as an additional party in any proceedings for this purpose).

3.		UTILISATION OF THE TERM FACILITY

3.1		Utilisation Conditions for Term Advances

		A Term Advance will be made by the Lenders to a Borrower if:

	3.1.1		by 12.00 noon three Business Days before the proposed Utilisation Date, the Agent has received a completed Notice of Drawdown from such Borrower;

	3.1.2		the proposed Utilisation Date is a Business Day within the relevant Term Availability Period;

	3.1.3		the amount of such Term Advance is (a) in the case of a Term A1 Advance (i) equal to or less than the amount of the Available Term A1 Facility and (ii) at least equal to the lower of (x) USD 5,000,000 and (y) the Available Term A1 Facility, (b) in the case of a Term A2 Advance (i) equal to or less than the amount of the Available Term A2 Facility and (ii) at least equal to the lower of (x) USD 5,000,000 and (y) the Available Term A2 Facility and (c) in the case of a Term B Advance (i) equal to or less than the amount of the Available Term B Facility and (ii) at least equal to the lower of (x) USD 5,000,000 and (y) the Available Term B Facility; and

	3.1.4		on the date of the Notice of Drawdown and on and as of the proposed date for the making of such Term Advance (a) no Event of Default or Potential Event of Default is continuing or shall occur as a result of the making of such Term Advance and (b) the Repeated Representations are true (before and after the making of such Term Advance).

3.2		Each Lender’s Participation in Term Advances

		Each Lender will participate through its Facility Office in each Term Advance made pursuant to Clause 3.1 (Utilisation Conditions for Term Advances) in the proportion borne by its relevant Available Term Commitment to the relevant Available Term Facility immediately prior to the making of that Term Advance.

3.3		Reduction of Available Term Commitment

		If a Lender’s relevant Available Term Commitment is reduced in accordance with the terms hereof at the option of the applicable Borrower after the Agent has received the Notice of Drawdown for a Term Advance and such reduction was not taken into account in calculating the relevant Available Term Facility, then the amount of that Term Advance shall be reduced accordingly.

4.		INTEREST PERIODS FOR TERM ADVANCES

4.1		Interest Periods

		The period for which a Term Advance is outstanding shall be divided into successive Interest Periods each of which (other than the first, which shall begin on the day such Term Advance is made) shall start on the first day following the last day of the preceding such Interest Period.

4.2		Duration

		The duration of each Interest Period shall, save as otherwise provided herein, be one, two, three or six months, in each case as the Borrower to which such Term Advance is made may select in a Selection Notice to be received by the Agent at the latest by 12:00 noon three Business Days prior to the first day of the relevant Interest Period, or such other period as the Lenders agree, provided that:

	4.2.1		if such Borrower fails to give such notice of its selection in relation to an Interest Period, the duration of that Interest Period shall, subject to sub-clauses 4.2.2 and 4.2.3, be three months;

	4.2.2		to the extent necessary to ensure at any time Advances (in an aggregate amount not less than the amount of the next scheduled repayment of principal hereunder) have Interest Periods expiring on the relevant scheduled Repayment Date, any Interest Period which would otherwise end during the month preceding, or extend beyond, a Term Repayment Date or Final Maturity Date shall be of such duration that it shall end on that Term Repayment Date or Final Maturity Date; and

	4.2.3		prior to the Syndication Date, Interest Periods shall be one month or such other period as the Agent and the applicable Borrower may agree, except for the first Interest Period which shall begin on the day such Term Advance is made until the last Business Day of the then current month. The next Interest Period shall start on the first day following the last day of this first Interest Period.

4.3		Adjustment of Length of Interest Period

		The Agent may, with the agreement of the applicable Borrower, adjust any Interest Period to such length as it considers appropriate for the purpose of ensuring such Interest Period ends on the same day on which any payments are to be made in connection with a Treasury Transaction falling within paragraph (i) of the definition of “Permitted Treasury Transaction” in Clause 1.1 (Definitions).

5.		PAYMENT AND CALCULATION OF INTEREST ON TERM ADVANCES

5.1		Payment of Interest

		On the last day of each Interest Period relating to a Term Advance (and, if the Interest Period of such Term Advance exceeds six months, on the expiry of each period of six months during that Interest Period) the Borrower to which such Term Advance has been made shall pay accrued interest on the Term Advance to which such Interest Period relates.

5.2		Calculation of Interest

	5.2.1		The rate of interest (expressed as a percentage per annum) applicable to a Term Advance from time to time during an Interest Period relating thereto shall be the percentage rate per annum which is the sum of the Margin on the Quotation Date therefor, the Mandatory Cost (if any) (expressed as in percentage per annum terms) in respect thereof at such time and LIBOR at such time.

	5.2.2		In the event that, in application of Clauses 4.2.2 or 4.2.3, an Interest Period lasts less than one week, the rate of interest (expressed as a percentage per annum) applicable to such Term Advance shall be the sum of the Margin on the Quotation Date therefor, the Mandatory Cost (if any) (expressed in percentage per annum terms) in respect thereof at such time and LIBOR for an interest period of one week at such time. Should the Interest Period lasts more than one week (other than Interest Periods of one, three, six or twelve months), the rate of interest applicable to such Term Advance shall be the sum of the Margin on the Quotation Date therefor, the Mandatory Cost (if any) (expressed in percentage per annum terms) in respect thereof at such time and LIBOR for an interest period of the number of months rounded to the next month.

5.3.1

Subject to sub-clause 5.3.3, if after the first anniversary of the date hereof the ratio of Consolidated Net Indebtedness to Consolidated EBITDA in respect of the most recent Relevant Period (as defined in Clause 21 (Financial Condition)) is within the range set out in column 1 of the margin grid table set out below, then the A1 Margin and the A2 Margin (expressed per annum) shall be the percentage per annum set out opposite such range.

	5.3.2		Any reduction or increase to the A1 Margin or the A2 Margin provided for in sub-clause 5.3.1 shall take effect only in relation to any Advance made or Interest Period commencing at least 5 Business Days after receipt by the Agent for the Relevant Period of both (a) (in the case of a Relevant Period ending on the last day of Genesys S.A.’s financial year) the annual audited financial statements of the Group in accordance with Clause 19.1 (Annual Statements) or (in the case of a Relevant Period ending on the last day of Genesys S.A.’s half financial year) the semi-annual financial statements of the Group in accordance with Clause 19.2 (Semi-Annual Statements) or (in the case of a Relevant Period ending on the last day of any other Financial Quarter of Genesys S.A.) quarterly financial statements of the Group in accordance with Clause 19.3 (Quarterly Statements) for such Relevant Period and (b), in each case, a Compliance Certificate for such Relevant Period pursuant to Clause 19.6 (Compliance Certificates).

	5.3.3		If at any time an Event of Default is continuing, the A1 Margin and the A2 Margin shall be 3.25% per annum.

	5.3.4		If at any time an Event of Default is continuing, the B Margin shall be 3.75% per annum.

	5.3.5		The change to the A1 Margin and the A2 Margin set out in sub-clause 5.3.3 and the change to the B Margin set out in sub-clause 5.3.4 shall apply from the date certified by the Agent (in writing) as the date on which an Event of Default has occurred or come into existence until the date certified by the Agent (in writing) as the date by which such Event of Default is no longer continuing. The Agent shall give such certification promptly (in any event within two Business Days) upon occurrence of an Event of Default or its ceasing to be continuing.

6.		UTILISATION OF THE REVOLVING FACILITY

6.1		Utilisation Conditions for the Revolving Facility

		Save as otherwise provided herein, a Revolving Advance will be made by the Lenders to a Borrower if:

	6.1.1		not more than ten nor less than three Business Days before the proposed Utilisation Date, the Agent has received a completed Notice of Drawdown from such Borrower stating whether the utilisation is to be made by way of Revolving Advance;

	6.1.2		the proposed Utilisation Date is a Business Day falling one month or more before the Revolving Termination Date and the proposed Term of the Revolving Advance would not expire after the Revolving Termination Date;

	6.1.3		in respect of a Revolving 1 Advance, the amount of such Revolving 1 Advance is (a) (if less than the Available Revolving 1 Facility) an amount not less than

			USD 1,000,000 and an integral multiple of USD 250,000 or (b) equal to the amount of the Available Revolving 1 Facility;

	6.1.4		in respect of a Revolving 2 Advance, the amount of such Revolving 2 Advance is (a) (if less than the Available Revolving 2 Facility) an amount not less than USD 1,000,000 and an integral multiple of USD 250,000 or (b) equal to the amount of the Available Revolving 2 Facility;

	6.1.5		(in respect of a Revolving Advance), the proposed Term of the Revolving Advance requested is a period of one, three, six or twelve months (provided that prior to the Syndication Date only periods of one month or less will be selected as the Agent and the Borrower may agree, except for the first Revolving Advance which shall begin on the day such Revolving Advance is made and will expire on the last Business Day of the current month) in each case ending on or before the Revolving Termination Date;

	6.1.6		there would not, immediately after the making of such Revolving Advance, be more than five Revolving 1 Advances outstanding and five Revolving 2 Advances outstanding; and

	6.1.7		on the date of the Notice of Drawdown and on and as of the proposed Utilisation Date, (a) no Event of Default or Potential Event of Default is continuing or shall occur as a result of the making of such Revolving Advance and (b) the Repeated Representations are true (before and after the making of such Revolving Advance).

6.2		Each Lender’s Participation in Revolving Advances

		Each Lender will participate through its Facility Office in each Revolving Advance made pursuant to this Clause 6 in the proportion borne by its Available Revolving Commitment to the Available Revolving Facility immediately prior to the making of that Revolving Advance.

6.3		Reduction of Available Revolving Commitment

		If a Lender’s Revolving Commitment is reduced in accordance with the terms hereof at the option of the applicable Borrower after the Agent has received the Notice of Drawdown for a Revolving Advance and such reduction was not taken into account in the Available Revolving Facility, then the amount of that Revolving Advance shall be reduced accordingly.

6.4		Clean-Out Period

		The Borrowers shall ensure the amount of the Revolving Outstandings is reduced to zero for not less than 5 consecutive Business Days (the “Clean-Out Period”) in any 12 month period and not less than 1 month shall elapse between the expiry of one Clean-Out Period and the beginning of the immediately succeeding Clean-Out Period.

7.		PAYMENT AND CALCULATION OF INTEREST ON REVOLVING ADVANCES

7.1		Payment of Interest

		On the Repayment Date relating to each Revolving Advance (and, if the Term of such Revolving Advance exceeds six months, on the expiry of each period of six months during such Term) the Borrower to which such Revolving Advance has been made shall pay accrued interest on that Revolving Advance.

7.2		Calculation of Interest

	7.2.1		The rate of interest (expressed as a percentage per annum) applicable to a Revolving Advance from time to time during its Term shall be the rate per annum which is the sum of the Margin on the Quotation Date therefor, the Mandatory Cost (if any) (expressed in percentage per annum terms) in respect thereof at such time and LIBOR at such time.

	7.2.2		In the event that, in application of Clauses 6.1.2 and 6.1.5, the term of a Revolving Advance is less than one week, the rate of interest (expressed as a percentage per annum) applicable to such first Revolving Advance shall be the sum of the Margin on the Quotation Date therefor, Mandatory Cost (if any) (expressed in percentage per annum terms) in respect thereof at such time and LIBOR for an interest period of one week at such time. Should the Interest Period lasts more than one week (other than Interest Periods of one, three, six or twelve months), the rate of interest applicable to such Revolving Advance shall be the sum of the Margin on the Quotation Date therefor, the Mandatory Cost (if any) (expressed in percentage per annum terms) in respect thereof at such time and LIBOR for an interest period of the number of months rounded to the next month.

7.3.1

Subject to sub-clause 7.3.3, if after the first anniversary of the date hereof the ratio of Consolidated Net Indebtedness to Consolidated EBITDA in respect of the most recent Relevant Period is within the range set out in column 1 of the margin grid table set out below, then the Revolving 1 Margin and the Revolving 2 Margin shall be the percentage per annum set out opposite such range.

	7.3.2		Any reduction or increase to the Revolving Margin provided for in sub-clause 7.3.1 shall take effect only in relation to any Revolving Advance made at least 5 Business Days after receipt by the Agent for the Relevant Period of both (a) (in the case of a Relevant Period ending on the last day of Genesys S.A.’s financial year) the annual audited financial statements of the Group in accordance with Clause 19.1 (Annual Statements) or (in the case of the Relevant Period ending on the last day of Genesys S.A.’s half financial year) the semi-annual financial statements of the Group in accordance with Clause 19.2 (Semi-Annual Statements) or (in the case of the Relevant Period ending on the last day of any other Financial Quarter of Genesys S.A.) quarterly financial statements of the Group in accordance with Clause 19.3 (Quarterly Statements) for such Relevant Period and (b), in each case, a Compliance Certificate for such Relevant Period pursuant to Clause 19.6 (Compliance Certificates).

	7.3.3		If at any time an Event of Default is continuing the Revolving 1 Margin and the Revolving 2 Margin shall be 3.25% per annum.

	7.3.4		The change to the Revolving 1 Margin and the Revolving 2 Margin set out in sub-clause 7.3.3 shall apply from the date certified by the Agent (in writing) as the date on which an Event of Default has occurred or come into existence until the date certified by the Agent (in writing) as the date by which such Event of Default is no longer continuing. The Agent shall give such certification promptly (in any event within two Business Days) upon occurrence of an Event of Default or its ceasing to be continuing.

8.		MARKET DISRUPTION AND ALTERNATIVE INTEREST RATES

8.1		Market Disruption

		If, in relation to any Advance:

	8.1.1		the relevant interbank rate is to be determined by reference to Reference Banks and at or about 12.00 a.m. on the Quotation Date for the relevant Interest Period or Term none or only one of the Reference Banks supplies a rate for the purpose of determining the relevant interbank rate, for the relevant Interest Period or Term; or

	8.1.2		before the close of business of the Agent on the Quotation Date for such Advance the Agent has been notified by a Lender or each of a group of Lenders to whom in aggregate two-thirds or more of such Advance is owed (or, in the case of an undrawn Advance, if made, would be owed) that the relevant interbank rate does not accurately reflect the cost of funding its participation in such Advance,

then, the Agent shall notify the relevant Borrower and the Lenders of such event and, notwithstanding anything to the contrary in this Agreement, Clause 8.2 (Substitute Interest Period and Interest Rate) shall apply to such Advance (if it is a Term Advance which is already outstanding ). If sub-clause 8.1.1 or 8.1.2 applies to a proposed Advance, such Advance shall not be made until the substitute interest is determined or the Notice of Drawdown is cancelled by the applicable Borrower.

8.2		Substitute Interest Period and Interest Rate

		If sub-clause 8.1.1 of Clause 8.1 (Market Disruption) applies to an Advance, the duration of the relevant Interest Period or Term shall be one month or, if less, such that it shall end on the next succeeding Repayment Date. If either sub-clause 8.1.1 or 8.1.2 of Clause 8.1 (Market Disruption) applies to an Advance, the rate of interest (expressed as a percentage per annum) applicable to such Advance during the relevant Interest Period or Term shall (subject to any agreement reached pursuant to Clause 8.3 (Alternative Rate)) be the rate per annum which is the sum of:

	8.2.1		the Margin applicable to the relevant Facility on the applicable Quotation Date;

	8.2.2		the Mandatory Cost (if any) (expressed in percentage per annum terms) in respect thereof at such time; and

	8.2.3		the rate per annum determined by the Agent to be the arithmetic mean (rounded upwards to four decimal places) of the rates notified by each Lender to the Agent before the last day of such Interest Period or Term to be those which express as a percentage rate per annum the cost to each Lender of funding from whatever sources it may select its portion of such Advance during such Interest Period or Term.

	8.3.1		either of those events mentioned in sub-clauses 8.1.1 and 8.1.2 of Clause 8.1 (Market Disruption) occurs in relation to an Advance; or

	8.3.2		circumstances affect the LIBOR during any period of three consecutive Business Days,

then, in any such case, if the Agent or Genesys S.A. so requires, the Agent and Genesys S.A. shall enter into negotiations in good faith and will make their best endeavours to agree an alternative basis:

	(a)		for determining the rates of interest from time to time applicable to the Advances; and/or

	(b)		upon which the Advances may be maintained thereafter,

		and any such alternative basis that is agreed shall take effect in accordance with its terms and be binding on each party hereto, provided that the Agent may not agree any such alternative basis without the prior consent of each Lender.

9.		NOTIFICATION

9.1		Advances

		Not less than two Business Days before the first day of an Interest Period or Term, the Agent shall notify each Lender:

	(a)		of the Facility that is to be utilised;

	(b)		the name of the Borrower;

	(c)		the amount of the relevant Advance;

	(d)		the proposed length of the relevant Interest Period or Term; and

	(e)		the aggregate principal amount of the relevant Advance allocated to such Lender pursuant to this Agreement.

9.2		Interest Rate Determination

		The Agent shall promptly notify the applicable Borrower and the Lenders of each determination of LIBOR, the Margin, and the Mandatory Cost.

9.3		Changes to Advances or Interest Rates

		The Agent shall promptly notify the applicable Borrower and the Lenders of any change to any interest rate occasioned by the operation of Clause 8 (Market Disruption and Alternative Interest Rates).

9.4		*Effective Global Rate (Taux Effectif Global***)

		For the purposes of Articles L.313-1 et seq., R.313-1 and R.313-2 of the Code de la consommation, the Parties acknowledge that by virtue of certain characteristics of the Facilities (and in particular the variable interest rate applicable to the Facilities and the Borrower’s right to select the duration of the Interest Period of each Facility) the taux effectif global cannot be calculated at the date of this Agreement. However, the Borrowers acknowledge that they have received from the Agent a letter containing an indicative calculation of the taux effectif global, based on figured examples calculated on assumptions as to the taux de période and durée de la période set out in the letter. The Parties acknowledge that that letter forms part of this Agreement.

10.		REPAYMENT OF THE TERM FACILITIES

10.1		Term A1 Advances and Term A2 Advances Repayment Instalments

10.1.1

Each Borrower which has drawn a Term A1 Advance or a Term A2 Advance shall repay the Term A1 Outstandings or the Term A2 Outstandings, as the case may be, in instalments by repaying on each Term Repayment Date the principal amount set out opposite each Term Repayment Date below:

10.2		Reduction

		If a Borrower cancels the whole or any part of the Available Term A1 Facility or the Available Term A2 Facility in accordance with Clause 13.1 (Cancellation of the Term Facility), then the amount of the Repayment Instalment due by such Borrower for each Repayment Date falling after that cancellation will be reduced pro rata by the amount cancelled.

10.3		Term B Advances Repayment

		Vialog Corporation shall repay the Term B Outstandings in full on the Final Maturity Date of the Term B Facility.

11.		REPAYMENT OF THE REVOLVING FACILITIES

		Each Borrower to which a Revolving Advance has been made shall repay in full the Revolving Advance made to it on the Revolving Termination Date.

12.		MANDATORY PREPAYMENT

12.1		Definitions

		For the purposes of this Clause 12:

		“Net Disposal Amounts” means an amount equal to the proceeds (including any amount received in repayment of intercompany debt) of any disposal of any asset of any member of the Group after deducting:

	(a)		reasonable out of pocket expenses (including brokers’ fees and commissions, fees and expenses of advisors and counsels) incurred by any member of the Group due to such disposal;

	(b)		VAT or any other taxes paid or payable by any member of the Group due to such disposal (as reasonably determined by such member of the Group, acting

in good faith, on the basis of existing rates and taking account of any available credit, deduction or allowance),

provided that the following disposal proceeds shall not constitute Net Disposal Amounts:

	(i)		proceeds received in respect of any disposal referred to in paragraph (a) of the definition of Permitted Disposals; and

	(ii)		proceeds received in respect of any disposal referred to in paragraphs (b) and (d) of the definition of Permitted Disposals if:

	(1)		such proceeds, when aggregated with any other such disposal proceeds within the most recent twelve month period is less than USD 1,000,000 (or its equivalent); or

	(2)		any proceeds which are, within a period of six months of receipt by the relevant member of the Group (or such longer period as the Agent may agree) reinvested in assets serving a similar purpose (when aggregated on a financial year basis the “Reinvested Amount”); and

(iii)

proceeds received in respect of any disposal referred to in paragraph (c) of the definition of Permitted Disposals if such proceeds are less than USD 5,000,000 (or its equivalent).

“Net Insurance Amounts” means an amount equal to the proceeds of any insurance claim received by any member of the Group (after deducting any reasonable out of pocket expenses incurred by any member of the Group in relation to such claim) other than any proceeds which are:

	(a)		to meet a third party claim and are applied in meeting such claim; or

	(b)		to be applied to the replacement, reinstatement and/or repair of the assets in respect of which the relevant insurance claim was made as soon as reasonably practicable and, in any event, within six months of receipt of such proceeds (or such longer period as agreed by the Agent).

“Net Acquisition Recovery Amounts” means an amount equal to the proceeds to Genesys S.A. of any claim (a “Recovery Claim”) for breach of contract or warranty by, misrepresentation by, indemnity or other similar claim against Vialog Corporation or any of its affiliates (or any employee, officer or adviser) in relation to the Acquisition Documents (after deducting any reasonable out of pocket expenses incurred by any member of the Group in relation to such claim) other than any proceeds which are:

	(a)		in respect of a liability or a charge or claim upon a Group member arising from such Recovery Claim and will be properly applied in the discharge of that liability, charge or claim; or

	(b)		paid to a Group member by way of reimbursement of monies disbursed by such Group member in connection with discharging any liability, charge or claim referred to in paragraph (a) above; or

	(c)		applied in the replacement, reinstatement and/or repair of assets of a Group member which have been lost, destroyed or damaged as a result of the events or circumstances giving rise to such Recovery Claim; or

	(d)		are required to be paid to third parties,

		provided that proceeds referred to in paragraphs (a) to (d) above are properly applied in discharge of such liability, charge or claim or applied in such replacement, reinstatement or repair or payment to such third party as soon as possible, but in any event within six months of receipt of such proceeds (or such longer period as the Agent may agree).

12.2		Mandatory Prepayment of Amounts

		On receipt by any member of the Group of Net Disposal Amounts, Net Insurance Amounts or Net Acquisition Recovery Amounts as defined above, Genesys S.A. or Vialog Corporation, as the case may be, shall procure that a portion of the Outstandings due by Genesys S.A. or Vialog Corporation, as the case may be, calculated in accordance with Clause 12.7 (Application of Prepayments), shall be prepaid in an aggregate amount equal to the sum of (i) the Net Disposal Amounts, (ii) the Net Insurance Amounts and (iii) the Net Acquisition Recovery Amounts.

12.3		Mandatory Prepayment from Excess Cash Flow

		Genesys S.A. or Vialog Corporation shall procure that within 14 days of delivery of the annual consolidated accounts of the Group under Clause 19.1 (Annual Statements), the Outstandings shall be prepaid in an aggregate amount equal to 50% of the Excess Cash Flow of the Group above USD 2,500,000. Any such prepayment shall be applied in accordance with Clause 12.7 (Application of Prepayments).

12.4		Mandatory Prepayment from bonds

		Save for the issuance by Genesys S.A. of bonds for the Astound’s Acquisition up to USD 50,000, Genesys S.A. or Vialog Corporation shall procure that within 10 days of the issuance of bonds (or any similar instrument) of any member of the Group, the Outstandings shall be repaid in an aggregate amount equal to the net cash proceeds of such issuance of bonds after deduction of all discounts, commissions, costs and expenses. Any such prepayment shall be applied in accordance with Clause 12.7 (Application of Prepayments).

12.5		Mandatory Prepayment from capital increase

		Genesys S.A. or Vialog Corporation shall procure that within 10 days of the net cash proceeds of any capital increase of any of such Borrower or any of its consolidated subsidiaries, the Outstandings shall be prepaid in an aggregate amount equal to 50% of the net cash proceeds of any capital increase up to a cumulative amount of USD 40,000,000. Any such prepayment shall be applied in accordance with Clause 12.7 (Application of Prepayments).

12.6		Mandatory Prepayment on Change of Control

		Each of the Borrowers shall prepay the full amount of the Outstandings due by it if:

	12.6.1		if any person or group of person acting in concert gains more than 331/3% of the shares of Genesys S.A.;

	12.6.2		upon the occurrence of a loss of ownership or control of any Material Subsidiary by Genesys (directly or indirectly).


	For the purpose of Clause 12.6 (Mandatory Prepayment on Change of Control) “Control” has the meaning given in Article L.233-3 of the French Code de commerce and “acting in concert” has the meaning given in Article L.233-10 of the French Code de commerce.

12.7.1

Any prepayment made under Clause 12.2 (Mandatory Prepayment of Amounts), Clause 12.3 (Mandatory Prepayment from Excess Cash Flow), Clause 12.4 (Mandatory Prepayment from bonds) or Clause 12.5 (Mandatory Prepayment from capital increase) shall be applied in repayment:

	(a)		first, pro rata between the Term B Outstandings, the Term A1 Outstandings and the Term A2 Outstandings in inverse chronological order of maturity; and

	(b)		second, when the Term Outstandings have been repaid in full, in repayment of the Revolving Outstandings (and any amounts so repaid may not be reborrowed and the Revolving Commitments of the Lenders will be reduced pro rata).


	Any prepayment of Term Outstandings in respect of a Term Facility shall be applied against Term Advances then outstanding under that Facility pro rata.

12.7.2

Any prepayment of Term Outstandings shall satisfy the remaining obligations under Clause 10 (Repayment of the Term Facilities).

	13.1.1		Each of the Borrowers may, by giving to the Agent not less than ten Business Days’ prior notice to that effect, cancel the whole or any part (being an amount not less than USD 1,000,000 and an integral multiple of USD 250,000) of any of its Available Term Facility. Any such cancellation shall reduce the Available Term Commitments of the Lenders in respect of such Available Term Facility rateably.

	13.1.2		Should any of the Borrowers cancel the whole of the Available Term Facility or Facilities available to it, no other Revolving Advance will be made available to such Borrower and any unutilised portion of its Revolving Facility shall be cancelled and the corresponding Available Revolving Commitments of the applicable Lenders shall be reduced to zero.

	13.2.1		Should any of the Borrowers decide to prepay its Term Outstandings, such Borrower shall, if it has given to the Agent not less than five Business Days’ prior notice to that effect, ensure that such Term Outstandings are prepaid in whole or part (being an amount such that the amount of the Term Outstandings will be reduced by an amount of not less than USD 2,000,000 and an integral multiple of USD 250,000) on the last day of any Interest Period (relating to the Term Advance or Term Advances to be repaid) which ends after the last day of the Term Availability Period for the Term Facility under which such Term Advance was made.

	13.2.2

	(i)		Any prepayment made by Genesys S.A. shall be applied to the Term A2 Outstandings in inverse chronological order of maturity;

	(ii)		Any prepayment made by Vialog Corporation shall be applied pro rata to the Term A1 Outstandings and Term B Outstandings;

	(iii)		Any prepayment of Term A2 Outstandings made by Genesys S.A. shall be applied in inverse chronological order of maturity.

	13.2.3		Any prepayment of Term Outstandings shall be applied pro rata between (x) the Term A2 Advances then outstanding in the case of Genesys S.A. or (y) the Term A1 Advances and Term B Advances then outstanding in the case of Vialog Corporation.

	13.2.4		Any prepayment of Term Outstandings in respect of a Term Facility shall satisfy the applicable remaining obligations under Clause 10 (Repayment of the Term Facilities).

Each of the Borrowers may, by giving to the Agent not less than ten Business Days’ prior notice to that effect, cancel the whole or any part (being an amount of not less than USD 1,000,000 and an integral multiple of USD 250,000) of its Available Revolving Facility. Any such cancellation shall reduce the applicable Available Revolving Commitment and Revolving Commitment of each applicable Lender rateably.

Provided its whole Term Outstandings have been prepaid, the Borrower to which a Revolving Advance has been made may, by giving to the Agent not less than five Business Days’ prior notice to that effect, prepay the whole or any part of any of its Revolving Advances (being an amount such that the amount of such Revolving Advance will be reduced by an amount of not less than USD 2,000,000 or integral multiple of USD 250,000) together with all accrued interest and all amounts due under Clause 27 (Break Costs) (if any).


	Any notice of cancellation or prepayment given by a Borrower pursuant to this Clause 13 shall be irrevocable, shall specify the date upon which such cancellation or prepayment is to be made and the amount of such cancellation or prepayment and, in the case of a notice of prepayment, shall oblige the relevant Borrower to make such prepayment on such date.

	13.6.1		any sum payable to any Lender by an Obligor is required to be increased pursuant to Clause 14.2 (Tax gross-up); or

	13.6.2		any Lender claims indemnification from an Obligor under Clause 14.3 (Tax indemnity) or Clause 15.1 (Increased Costs); or

	13.6.3		any sum payable to any Lender by an Obligor pursuant to Schedule 8 (Mandatory Cost),


	the concerned Borrower or Borrowers may, whilst such circumstance continues, give the Agent at least ten Business Days notice (which notice shall be irrevocable) of its intention if such circumstance relates to a Lender to cancel, repay in respect of the Commitment of such Lender.


	On the day the notice referred to in Clause 13.6 (Notice of Removal of a Lender) expires the concerned Borrower or Borrowers shall repay such Lender’s portion of the Advances and any other applicable interest or cost, if any, due to such Lender.

A Lender for whose account a repayment is to be made under Clause 13.6 (Notice of Removal of a Lender) shall not be obliged to participate in the making of Advances on or after the date upon which the Agent receives a Borrower’s notice of its intention to procure the repayment of such Lender’s share of the Outstandings, and such Lender’s Available Term Commitment and Available Revolving Commitment shall be reduced to zero.


	None of the Borrowers shall repay or cancel all or any part of the Outstandings except at the times and in the manner expressly provided for in this Agreement.


	None of the Borrowers shall be entitled to reborrow any amount of any Term Facility which is repaid or prepaid by it or to reborrow any amount of the Revolving Facility which is repaid or prepaid by it where such repayment or prepayment permanently reduces the Revolving Facility.


	“Protected Party” means a Finance Party which is or will be, for or on account of tax, subject to any liability or required to make any payment in relation to a sum received or receivable (or any sum deemed for the purposes of tax to be received or receivable) under a Finance Document.

	“Tax Credit” means a credit against, relief or remission for, or repayment of any tax.

	“Tax Deduction” means a deduction or withholding for or on account of tax from a payment under a Finance Document.

	“Tax Payment” means an increased payment made by an Obligor to a Finance Party under Clause 14.2 (Tax gross-up) or a payment under Clause 14.3 (Tax indemnity).

(b)

In this Clause 14 a reference to “determines” or “determined” means a determination made in the absolute discretion of the person making the determination.

(a)		Each Borrower shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.

(b)		The Borrower or a Lender shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly. If the Agent receives such notification from a Lender it shall notify the Borrower and that Obligor.

(c)		If a Tax Deduction is required by law under this Agreement to be made by a Borrower, the amount of the payment due from that Borrower shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.

(d)		If a Borrower is required to make a Tax Deduction, that Borrower shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

(e)		Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Borrower making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

(a)

The Borrower shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party

		determines will be or has been (directly or indirectly) suffered for or on account of tax by that Protected Party.

(b)		Paragraph (a) above shall not apply with respect to any tax assessed on:

	(A)		under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or

	(B)		under the law of the jurisdiction in which that Finance Party’s Facility Office is located in respect of amounts received or receivable in that jurisdiction,


	if that tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party.

(c)		A Protected Party making, or intending to make a claim pursuant to paragraph (a) above shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Borrower.

(d)		A Protected Party shall, on receiving a payment from an Obligor under this Clause 14.3, notify the Agent.


	If an Obligor makes a Tax Payment and the relevant Finance Party determines that:

	(a)		a Tax Credit is attributable to that Tax Payment; and

	(b)		that Finance Party has obtained, utilised and retained that Tax Credit,


	the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after-tax position as it would have been in had the Tax Payment not been made by the Obligor.


	The Borrower shall pay and, within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar taxes payable in respect of any Finance Document.

(a)

All consideration payable under a Finance Document by a Borrower to a Finance Party shall be deemed to be exclusive of any VAT. If VAT is chargeable, the Borrower shall pay to the Finance Party (in addition to and at the same time as paying the consideration) an amount equal to the amount of the VAT.

(b)

Where a Finance Document requires a Borrower to reimburse a Finance Party for any costs or expenses, that Borrower shall also at the same time pay and indemnify that Finance Party against all VAT incurred by that Finance Party in respect of the costs or expenses save to the extent that that Finance Party is entitled to repayment or credit in respect of the VAT.

(a)		Subject to Clause 15.3 (Exceptions) the Borrowers shall, within three Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any duly documented Increased Costs incurred by that Finance Party or any of its affiliates (being its subsidiary or its holding company) as a result of (i) the introduction of or any change in (or in the interpretation or application of) any law or regulation or (ii) compliance with any law or regulation, in each case made after the date of this Agreement.

(b)		In this Agreement “Increased Costs” means:

	(i)		a reduction in the rate of return from the Facility or on a Finance Party’s (or its affiliate’s) overall capital;

	(ii)		an additional or increased cost; or

	(iii)		a reduction of any amount due and payable under any Finance Document,


	which is incurred or suffered by a Finance Party or any of its affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.

(a)		A Finance Party intending to make a claim pursuant to Clause 15.1 (Increased costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrower.

(b)		Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs.

(a)

Clause 15.1 (Increased costs) does not apply to the extent any Increased Cost is:

	(i)		attributable to a Tax Deduction required by law to be made by an Obligor;

	(ii)		compensated for by Clause 14.3 (Tax indemnity) (or would have been compensated for under Clause 14.3 (Tax indemnity) but was not so compensated solely because one of the exclusions in paragraph (b) of Clause 14.3 (Tax indemnity) applied);

	(iii)		compensated for by the payment of the Mandatory Cost; or

(iv)

attributable to the wilful breach by the relevant Finance Party or its affiliates of any law or regulation.

(b)

In this Clause 15.3, a reference to a “Tax Deduction” has the same meaning given to the term in Clause 14.1 (Definitions).


	If, at any time, it is or will become unlawful for a Lender to make, fund, issue, participation or allow to remain outstanding all or part of its share of the Advances, then that Lender shall, promptly after becoming aware of the same, deliver to the applicable Borrower through the Agent a notice to that effect and:

	16.1.1		such Lender shall not thereafter be obliged to participate in any Advance and the amount of its Available Term Commitment and Available Revolving Commitment shall be immediately reduced to zero; and

	16.1.2		if the Agent on behalf of such Lender so requires, the applicable Borrower shall procure that each Borrower shall on such date as the Agent shall have specified:

	(a)		repay such Lender’s share of any outstanding Advances together with accrued interest thereon and all other amounts owing to such Lender under the Finance Documents and any repayment of any Term Advance so made after the last day of the Term Availability Period shall reduce rateably the remaining obligations under Clause 10.1 (Term A1 Advances and Terms A2 Advances Repayment Instalments) in respect of the outstandings under the Term Facility under which such Term Advance was made; and

	(b)		ensure that the liabilities of such Lender are reduced to zero or otherwise secured.


	If, in respect of any Lender, circumstances arise which would or would upon the giving of notice result in:

	17.1.1		an increase in any sum payable to it or for its account pursuant to Clause 14.2 (Tax gross-up); or

	17.1.2		a claim for indemnification pursuant to Clause 14.3 (Tax indemnity) or Clause 15.1 (Increased Costs); or

	17.1.3		any sum being payable to any Lender by an Obligor pursuant to Schedule 8 (Mandatory Cost); or

	17.1.4		the reduction of its Available Term Commitment and Available Revolving Commitment to zero or any repayment to be made pursuant to Clause 16 (Illegality),


	then, without in any way limiting, reducing or otherwise qualifying the rights of such Lender or the obligations of the Obligors under any of the Clauses referred to, such

Lender shall, upon request by the applicable Borrower and, in consultation with the Agent and the applicable Borrower and to the extent that it can do so lawfully and without prejudice to its own position, use its best efforts (including a change of location of its Facility Office or the transfer of its rights, benefits and obligations hereunder to another financial institution acceptable to the applicable Borrower and willing to participate in the Facilities) to mitigate the effects of such circumstances, provided that such Lender shall be under no obligation to take any such action if, in the opinion of such Lender, to do so might have any adverse effect upon its business, operations or financial condition (other than any minor costs and expenses of an administrative nature).

Each of the Borrowers shall make the representations and warranties set out in Clause 18.1 (Status) to Clause 18.39 (Claims against Vialog Corporation) to the Finance Parties in respect of itself, each member of the Group which is a subsidiary of such Borrower, or each of its Material Subsidiaries, as the case may be (assuming for the purposes of the representations made on the date hereof and the Closing Date, that completion of the Acquisition has occurred) provided that the representations and warranties contained in Clause 18.12 (Reports) and Clause 18.39 (Claims against Vialog Corporation) shall be made by Genesys S.A. only. Each of the Borrowers acknowledges that the Finance Parties have entered into this Agreement in reliance on those representations and warranties. Without limiting the generality of clause 18.40 (Repetition of Representations) the representations and warranties in Clause 18.17 (Information Memorandum) shall only be made on the dates specified in Clause 18.40 (Repetition of Representations).


	Such Borrower and each of its Material Subsidiaries is a corporation duly organised and validly existing under the law of its jurisdiction of incorporation and has the power and all necessary governmental and other material consents, approvals, licences and authorisations under any applicable jurisdiction to own its property and assets and to carry on its business as currently conducted.


	In any proceedings taken in France in relation to the Finance Documents, the choice of French law as the governing law of certain of the Finance Documents and any judgment obtained in France will be recognised and enforced.


	The obligations expressed to be assumed by such Borrower and any of its subsidiaries in the Finance Documents to which it is or they are a party, are legal and valid obligations binding on it or them and enforceable against it or them in accordance with the terms hereof and thereof.

The execution by such Borrower and any of its subsidiaries of the Finance Documents, and the Acquisition Documents to which it is or they are a party and its or their exercise of its or their rights and performance of its or their obligations thereunder and the transactions contemplated thereby (including, without limit, borrowing hereunder or thereunder and granting any security or guarantees contemplated hereunder or thereunder) do not and will not:

	18.4.1		conflict in any material respect with any agreement, hypothèque, mortgage, bond or other instrument or treaty to which such Borrower or the applicable subsidiary is a party or which is binding upon such Borrower or the applicable subsidiary or any of its assets; or

	18.4.2		conflict in any material respect with its or the applicable subsidiary’s constitutive documents; or

	18.4.3		conflict in any material respect with any applicable law or any applicable official or judicial regulation or order.

Such Borrower and each of its subsidiaries has the power to enter into and perform its obligations under the Finance Documents and the Acquisition Documents to which it is or they are a party and all corporate and other action required to authorise the execution, delivery and performance of the Finance Documents and the Acquisition Documents to which it is or they are a party and the transactions contemplated therein have been duly taken. No limit on its or any of its applicable subsidiaries’ powers will be exceeded as a result of the borrowings, granting of security or giving of guarantees contemplated by the Finance Documents to which it or any such subsidiary is a party.


	No action or administrative proceeding of or before any court, arbitrator or agency (including, but not limited to, investigative proceedings) which is likely to have a Material Adverse Effect has been started or threatened against such Borrower or any of its Material Subsidiaries or its or their assets, nor are there any circumstances likely to give rise to any such action or proceedings.

18.6.1

Its Original Financial Statements and its most recent audited financial statements delivered to the Agent (consolidated in the case of Genesys S.A.):

	(a)		were prepared in accordance with accounting principles generally accepted in France or in the United States of America (as the case may be) and consistently applied and comply with Clause 19.9 (Accounting Policies);

	(b)		give a true and fair view of (in the case of audited financial statements under French GAAP) or fairly present (in the case of financial statements audited under US GAAP or unaudited financial statements) the financial

condition and the results of the operations of such Borrower or, as the case may be, each of such Borrower’s subsidiaries during the relevant period.

18.6.2

Such Borrower’s financial year end and the financial year end of each of each of the such Borrowers’ consolidated subsidiaries end 31 December and will remain on such date except for Genesys Open Media S.A., Axone and Astound.


	Since the date of the Original Financial Statements of such Borrower or, if later, the date as at which its most recent audited financial statements (consolidated in the case of Genesys S.A. or Vialog Corporation) were stated to be prepared, no event or circumstances have occurred which caused a Material Adverse Effect.


	All acts, conditions and things required to be done, fulfilled and performed in order:

	18.8.1		to enable such Borrower or any of its subsidiaries lawfully to enter into, exercise its rights under and perform the obligations expressed to be assumed by it or any of its subsidiaries in the Finance Documents;

	18.8.2		to ensure that the obligations expressed to be assumed by such Borrower or any of its subsidiaries in the Finance Documents are legal, valid, binding and enforceable; and

	18.8.3		to make the Finance Documents admissible in evidence in France subject to the translation thereof in French:

	(i)		for any period prior to 31 May 2001: have been or will promptly be done, fulfilled and performed; or

	(ii)		for any period after 31 May 2001: have been done, fulfilled and performed.

Under the laws of France or the United States in force at the date hereof, the claims of the Finance Parties against such Borrower or any of its subsidiaries under the Finance Documents will rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors save those whose claims are preferred solely by any bankruptcy, insolvency, liquidation or other similar laws of general application or subject to any privilège arising by operation of law.

Under the laws of France (in the case of Genesys S.A.) or the United States (in the case of Vialog Corporation) in force at the date hereof, it is not required that the Finance Documents to which such Borrower or any of its subsidiaries is a party be filed, recorded or enrolled with any court or other authority in such jurisdiction or that any stamp, registration or similar tax be paid on or in relation to such Finance Documents save for any service of notice by bailiff (huissier) or any recording of or tax payable in


	connection with the security document referred to in sub-paragraph (e) of the definition of the Security Documents, any filings required under Uniform Commercial Code (or any state laws regarding matters covered or purported to be covered thereby), which will be effected or paid promptly after the date hereof.


	Under the laws of France or the United States in force at the date hereof, such Borrower will not be required to make any deduction or withholding from any payment hereunder.


	The Due Diligence Reports, the Budget and the Business Plan have been prepared after due and careful consideration and Genesys S.A.:

	18.12.1		is not aware of any inaccuracy as to factual matters relating to Vialog Corporation contained in the Due Diligence Reports or the Business Plan;

	18.12.2		believes that such Reports, Budget and Business Plan were based on reasonable assumptions (as of the date of the respective Reports, Budget and Business Plan); and

	18.12.3		is not aware of any facts or matters not stated in the Due Diligence Reports, the Business Plan or the Original Financial Statements, the omission of which make any statements contained therein misleading in any material respect.

	18.13.1		The Group Structure Chart delivered to the Agent pursuant to Schedule 3 (Conditions Precedent) is true, complete and accurate; and

	18.13.2		all necessary inter-company loans, transfers, share exchanges and other steps resulting in the final Group structure set out in the Group Structure Chart have been (or will be, for any period prior to 31 May 2001) taken in compliance with all relevant laws and regulations and all requirements of relevant regulatory authorities.

Such Borrower has not, and no member of the Group which is a subsidiary of such Borrower has, taken any corporate action nor have any other steps been taken or legal proceedings been started or (to the best of its knowledge and belief having made all reasonable enquiry) threatened against any member of such Borrower’s Group for its winding-up, dissolution, administration or re-organisation including proceedings for règlement amiable under article L.611-3 and following of the French Code de commerce, proceedings under Chapter 11 of the United States Code (whether by voluntary arrangement, scheme of arrangement or otherwise save for any solvent reorganisation previously approved by the Majority Lenders in writing) or for the enforcement of an Encumbrance over all or any of its revenues or assets or for the appointment of a receiver, administrator, administrative receiver, conservator, liquidator, custodian, trustee, creditor representative or similar officer of it or of any or all of its assets or


	revenues or a judgment for redressement judiciaire, cession totale de l’entreprise or liquidation judiciaire under article L.620-1 and following of the French Code de commerce.


	No such Borrower and no member of the Group which is a subsidiary of such Borrower:

	18.15.1		are in breach of or in default or in potential default under any agreement to which such Borrower and such member of the Group are a party or which is binding on such Borrower, such member of the Group or any of its assets to an extent or in a manner which is likely to have a Material Adverse Effect; or

	18.15.2		are in breach of or in default under any material agreement to which such Borrower or such member of the Group is party or which is binding on such Borrower or such member of the Group or any of its assets as a result of entering into and performing its obligations under the Finance Documents;

	18.15.3		are aware of the occurrence of any Event of Default or any Potential Event of Default.

All of the written information supplied by such Borrower, any Obligor which is a subsidiary of such Borrower and any advisers thereto to the Agent and/or the Lenders and/or their advisers pursuant to the Finance Documents is true, complete and accurate in all material respects as at the date such information was supplied and does not fail to include any information necessary to make the statements made therein not misleading in any material respect.

The factual information contained in the Information Memorandum is true, complete and accurate in all material respects, the financial projections contained therein have been prepared on the basis of recent historical information and on the basis of fair and reasonable assumptions and nothing has occurred or been omitted that renders the information contained in the Information Memorandum inaccurate, and there is no failure to disclose any information necessary to make the statement therein not misleading, in any material respect.

Such Borrower and each of the Material Subsidiaries of such Borrower have duly performed and observed in all material respects all Environmental Law, Environmental Permits and all other material covenants, conditions, restrictions or agreements directly or indirectly concerned with any contamination, pollution or waste or the release or discharge of any toxic or hazardous substance in connection with any real property which is or was at any time owned, leased or occupied by any member of the Group or on which any member of the Group has conducted any activity where failure to do so could reasonably be expected to have a Material Adverse Effect.


	No Environmental Claim has been commenced or (to the best of such Borrowers’ knowledge and belief) is threatened against such Borrower or any Material Subsidiary of such Borrower where such claim could reasonably be expected, if determined against such Borrower or Material Subsidiary, to have a Material Adverse Effect.

	18.20.1		Save for Permitted Encumbrances, no Encumbrance exists over all or any of the assets of any Material Subsidiary of such Borrower.

	18.20.2		Save for Permitted Financial Indebtedness, such Borrower has no Financial Indebtedness.

	18.20.3		The execution of the Finance Documents to which such Borrower or any of its subsidiaries is a party and the exercise by it or them of its rights thereunder will not result in the existence or imposition of nor oblige any such Borrower or any Group member which is a subsidiary of such Borrower to create any Encumbrance (save for Permitted Encumbrances) in favour of any person over any of its present or future assets of such Group member.


	Each of the Obligors (other than Genesys S.A.) is a wholly-owned subsidiary of Genesys S.A.


	To the extent permitted under any applicable law, each of the Material Subsidiaries of such Borrower will become a Guarantor in accordance with Clause 35.2 (Request for Additional Guarantor).

All necessary consents, licences, authorisations, and approvals to the transactions constituted by the Acquisition and the Finance Documents have been obtained or waived and all consents, licences, authorisations and other approvals necessary for the conduct of the business of the Group of such Borrower as carried on at the date hereof have been, or when required will be obtained, their terms and conditions have been complied with in all material respects and they have not been and, so far as it is aware, will not be revoked or otherwise terminated.

18.24.1

Such Borrower and each Group member which is a subsidiary of such Borrower has duly and punctually paid and discharged all taxes, assessments and governmental charges imposed upon it or its assets within the time period allowed therefor without imposing tax penalties or creating any Encumbrance with priority to the Lenders or the security granted or evidenced by the Security Documents (save to the extent payment thereof is being contested in good faith

			by the relevant Group member and adequate reserves are being maintained for those taxes and where payment thereof can lawfully be withheld and would not result in an Encumbrance with priority to the security created or evidenced by the Security Documents; in relation to the representation made under this Clause 18.24 (Taxation) on the date hereof, this provision shall only apply to the extent any such payment has been previously disclosed to the Agent in writing).

	18.24.2		No such Borrower and no Group member which is a subsidiary of such Borrower are materially overdue in the filing of any tax returns.

	18.24.3		No claims are being or are reasonably likely to be asserted against such Borrower and any Group member which is a subsidiary of such Borrower with respect to taxes which could reasonably be expected to have a Material Adverse Effect.

	18.25.1		Each Security Document to which it is a party creates the security interest which that Security Document purports to create or, if that Security Document purports to evidence a security interest, accurately evidences a security interest which has been validly created and each security interest ranks in priority as specified in the Security Document creating or evidencing that interest.

	18.25.2		The shares of such Borrower and any Group member which is a subsidiary of such Borrower which are subject to an Encumbrance under the Security Documents are fully paid and not subject to any option to purchase or similar rights and the constitutional documents of any such Group member do not and could not restrict or inhibit (whether absolutely, partly, under a discretionary power or otherwise) any transfer of such shares pursuant to enforcement of the Security Documents.


	Such Borrower is not aware of any adverse circumstance relating to validity, subsistence or use of any of its or any of its consolidated subsidiaries’ Intellectual Property which could reasonably be expected to have a Material Adverse Effect.


	Such Borrower and each of its consolidated subsidiaries has good title to or valid leases of or other appropriate licence, authorisation or consent to use its assets necessary to carry on its business as presently conducted (including, without limitation, Intellectual Property Rights).


	Save for minor or technical amendments, variations or waivers, there has been no amendment, variation or waiver of the terms of the Acquisition Documents save as approved in writing by the Agent.

Such Borrower and each of its consolidated subsidiaries is the owner (subject to any necessary registrations in the books of the entity whose shares are being charged or any other legal formalities referred to in the Legal Opinions which will be effected promptly after the date hereof) of all its assets subject to any Permitted Encumbrances and to any security granted under the Security Documents to which it is a party.

Save to the extent contemplated in Clause 22.21 (Share Capital) or in the Exchangeable Bond Agreement and any related corporate resolutions there are no agreements in force or corporate resolutions passed which call for the present or further issue or allotment of, or grant to any person the right (whether conditional or otherwise) to call for the issue or allotment of any share, loan note or loan capital of Genesys S.A. or any Group member (including an option or right of pre-emption or conversion).


	In any proceedings taken in the jurisdiction of incorporation of such Borrower in relation to this Agreement, it will not and none of its consolidated subsidiaries will be entitled to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process.


	None of the Material Subsidiary of such Borrower is engaged in any business which is unrelated to the general nature of the business of the Group as carried on at the date hereof.

No such Borrower and none of the consolidated subsidiaries of such Borrower have any material liability in respect of its pension plan or any other pension scheme and there are no circumstances which may give rise to such a liability. Such Borrower and each member of the Group which is its subsidiary are in material compliance with all applicable laws and contracts relating to the pension schemes including ERISA.


	All insurance normally required by the Group of such Borrower is in force and no insurance policies payments are outstanding.

(a)

No ERISA Affiliates of such Borrower, nor is such Borrower, making or accruing an obligation to make contributions or have within any of the five calendar years immediately preceding the date of this Agreement made or accrued an obligation to make contributions to any Multiemployer Plan. If such Borrower and all ERISA Affiliates of such Borrower were to completely or partially withdraw from all Multiemployer Plans, the resulting aggregate withdrawal liability would not exceed USD 250,000.

	(b)		To the best knowledge of such Borrower, each Employee Plan is currently in compliance in all material respects in form and operation with ERISA and the US Code and all other applicable laws, rules and regulations.

	(c)		All required governmental approvals for any Employee Plan have been or will, within the time permitted by law, be obtained and a favourable determination as to qualification under Section 401(a) of the US Code of each of the Employee Plans which is an employee pension benefit plan (within the meaning of section 3(2) of ERISA), and which is intended to qualify under Section 401(a) of the US Code, has been made by the Internal Revenue Service (or, in the case application for such determination has been made and is currently pending, will be made within the remedial amendment period (as defined in Section 401(b) of the US Code) applicable to such plans and all changes required by the Internal Revenue Service in order for a determination letter to be issued will be made) and a recognition of exemption from federal income taxation under Section 501 (c) (9) of the US Code of each trust, if any, established in connection with an Employee Plan which is an employee welfare benefit plan (within the meaning of Section 3(1) of ERISA) has been or will, within the time permitted by law, be made by the Internal Revenue Service and, to the knowledge of its ERISA Affiliates, nothing has occurred since the date of such determination (or, as the case may be, application for such determination) or recognition letter that would adversely affect such qualification.

	(d)		With respect to each Employee Plan that is subject to the provisions of Title I, Subtitle B, Part 3 of ERISA, the funding method used in connection with such Employee Plan is acceptable under ERISA, and the actuarial assumptions used in connection with such Employee Plan satisfy the requirements of Section 302 of ERISA except as disclosed in a schedule in agreed form to the Agent.

	(e)		The fair market value of the assets of each Employee Plan subject to Title IV of ERISA (other than the Multiemployer Plans) are at least equal to the present value of the greater of (a) accrued benefits (both vested and non-vested) under such Employee Plan or (b) “benefit liabilities” (within the meaning of Section 4001(a)(16) of ERISA) under such Employee Plan, in each case as of the latest actuarial valuation date for such Employee Plan (determined using the actuarial assumptions and method used by the actuary to such Employee Plan in its valuation of such Employee Plan as at such valuation date).

	(f)		No Employee Plan has incurred any “accumulated funding deficiency” (as defined in Section 412 of the Code).

	(g)		To the best knowledge of such Borrower there are no material actions, suits or claims which are pending against an Employee Plan of any such Borrower and any subsidiary of such Borrower (other than routine claims for benefits) or, to the knowledge of any member of the Group or any ERISA Affiliate, that could reasonably be expected to be asserted successfully against any Employee Plan.

	(h)		To the best knowledge of such Borrower no civil or criminal action brought pursuant to the provisions of Title I, Subtitle B, Part 5 of ERISA is pending or

			threatened against any fiduciary or any Employee Plan of any such Borrower and the subsidiary of such Borrower.

	(i)		None of the Employee Plans of such Borrower nor any member of the Group or any fiduciary thereof (in its capacity as such) has been the direct or indirect subject of any audit, investigation or examination of any governmental or quasi-governmental agency that could reasonably be expected to have a Material Adverse Effect.

	(j)		Each of the ERISA Affiliates has made all material contributions to or under each such Employee Plan required by law within the applicable time limits prescribed thereby, the terms of such Employee Plan, or any contract or agreement requiring contributions to an Employee Plan where failure to do so could reasonably be expected to have a Material Adverse Effect.

	(k)		No ERISA Affiliate has ceased operations at a facility so as to become subject to the provisions of Section 4062(e) of ERISA, withdrawn as a substantial employer so as to become subject to the provisions of Section 4063 of ERISA or ceased making contributions to any Employee Plan subject to Section 4064(a) of ERISA to which it (or any Borrower or any subsidiary thereof) made contributions.

	(l)		No ERISA Affiliate has incurred or caused to occur a “complete withdrawal” (within the meaning of Section 4203 of ERISA) or a “partial withdrawal” (within the meaning of Section 4205 of ERISA) from any Multiemployer Plan that is an Employee Plan.

	(m)		(Without regard to subsequent reduction or waiver of such liability under Section 4207 or 4208 of ERISA) no ERISA Affiliate has been a party to a transaction or agreement under which the provisions of Section 4204 of ERISA were applicable.

	(n)		No notice of intent to terminate an Employee Plan has been filed, nor has any Employee Plan been terminated pursuant to the provisions of Section 4041(c) of ERISA.

	(o)		None of the ERISA Affiliates has incurred or reasonably expects to incur any material liability to PBGC and the PBGC has not instituted proceedings to terminate (or appoint a trustee to administer) an Employee Plan and no event has occurred or condition exists that might constitute grounds under the provisions of Section 4042 of ERISA for the termination of (or the appointment by PBGC of a trustee to administer) any such Employee Plan.

	(p)		No “Reportable Event”, as such term is defined in Section 4043 of ERISA, with respect to which requirement of notice has not been waived by the PBGC, has occurred or is continuing with respect to any Employee Plan.

	(q)		No prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the US Code) has occurred with respect to any Employee Plan of any Group member subject to Part 4 of Subtitle B of Title I of ERISA.

Neither such Borrower nor any of the consolidated subsidiaries of such Borrower owns any Margin Stock, the proceeds of the borrowings made hereunder will not be used, directly or indirectly, for the purpose of purchasing or carrying any Margin Stock or for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry Margin Stock or for any other purpose which might constitute any of the Revolving Facility or the Term Facility a “purpose credit” within the meaning of Regulation U or Regulation X. Neither such Borrower nor any of its consolidated subsidiaries of such Borrower or any agent acting in their behalf has taken or will take any action which might cause this Agreement or any of the documents or instruments delivered pursuant hereto to violate any regulation of the Board of Governors of the Federal Reserve System of the United States of America or to violate the US Securities Exchange Act of 1934 or any applicable U.S. federal or state securities laws.


	The consummation of the transactions contemplated under the Finance Documents, the Acquisition Documents and the Astound’s Acquisition Agreement shall not result in the making of any payment by a US Group Member that would not be deductible by a US Group Member or an ERISA Affiliate because of the application of Section 280G of the US Code.

To the best of Genesys S.A.’s and Vialog’s knowledge, no Borrower and no member of the Group which is a Genesys S.A’s subsidiary and a Vialog Corporation’s subsidiary as the case may be, is subject to regulation under the United States of America Public Utility Holding Company Act of 1935, the United States of America Federal Power Act or the United States of America Investment Company Act of 1940 or to any United States of America federal or state statute or regulation limiting its ability to incur indebtedness, no Borrower and no member of the Group which is a Genesys S.A.’s subsidiary is an “investment company,” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company,” as such terms are defined in the US Investment Company Act of 1940, as amended (15 U.S.C. Articles 80a-1, et seq.) and none of the transactions contemplated by the Finance Documents will violate such Act.


	Genesys S.A. is not aware of any event, fact or circumstance which would constitute a breach of warranty or misrepresentation or breach of contract or other claim against Vialog Corporation which would likely constitute a Material Adverse Effect if all references in the Acquisition Documents to “so far as the vendor is aware” or similar were deleted.

(a)

The Repeated Representations shall be deemed to be repeated by the relevant Obligor by reference and subject to the facts and circumstances then existing on (i) the Closing Date, (ii) the date of each Notice of Drawdown and each Selection Notice, (iii) the first day of each Interest Period, (iv) each date on which an Advance is or is to be made (or any Advance is rolled over), or its Term extended and (v) the last day of each Financial Quarter of the Group.

	(b)		Clause 18.17 (Information Memorandum) shall be deemed to be made solely on the date of the Information Memorandum; and

	(c)		the representations on Business Plan, Due Diligence Reports or on the Original Financial Statements set out in Clause 18.12 (Reports) shall be deemed to be made solely on the Closing Date.

Each Borrower shall as soon as the same become available, but in any event within 120 days after the end of each of its financial years, deliver to the Agent in sufficient copies (not to exceed 30 copies) for the Lenders its audited social and financial statements and, in the case of Genesys S.A., the consolidated financial statements of the Group for such financial year, audited by an internationally recognised firm of independent auditors licensed to practise in France or in the United States of America, and the related auditor’s reports.


	Such audited financial statements of Genesys S.A. shall be accompanied by a statement of Genesys S.A. showing a comparison of actual performance by the Group with the performance in the previous year projected by the budget for such period and (in respect of first two sets of accounts) the Business Plan for such period.


	Each Borrower shall as soon as the same become available, but in any event within 90 days after the end of each half of each of its financial year, deliver to the Agent in sufficient copies (not to exceed 30 copies) for the Lenders its financial statements and, in the case of Genesys S.A., the consolidated financial statements of the Group for such period.


	Such semi-annual statements shall be in a form reasonably acceptable to the Agent and shall include a balance sheet, profit and loss account and cash flow statement and, in the case of the consolidated semi-annual statements of the Group:

	19.2.1		beginning in 2002, a comparison of actual performance by the Group with the performance projected by the budget for such period which comparison shall only begin in January 2002 and (in respect of periods commencing within two years of the Closing Date) the Business Plan for such period;

	19.2.2		a rolling reforecast to the end of the current financial year; and

	19.2.3		beginning in 2002, in respect of each six months period commencing with the first half-year ending after 31 December 2001, a comparison with the performance in the corresponding period of the previous year.

19.3		Quarterly Statements

		Each Borrower shall as soon as the same become available, but in any event within 60 days after the end quarter of each of its financial years, deliver to the Agent in sufficient copies (not to exceed 30 copies) for the Lenders its financial statements and, in the case of Genesys S.A., the consolidated financial statements of the Group for such period.

		Such quarterly statements shall be in a form reasonably acceptable to the Agent and shall include a balance sheet, profit and loss account and cash flow statement and, in the case of the consolidated quarterly statements of the Group:

	19.3.1		a comparison of actual performance by the Group with the performance projected by the budget for such period and (in respect of periods commencing within two years of the Closing Date) the Business Plan for such period;

	19.3.2		a rolling reforecast to the end of the current financial year; and

	19.3.3		in respect of each Financial Quarter commencing with the first Financial Quarter ending after the Closing Date, a comparison with the performance in the corresponding period of the previous year.

19.4		Monthly Management Statements

		Genesys S.A. shall as soon as the same become available but in any event within 40 days after the end of each month deliver to the Agent in sufficient copies for the Lenders (not to exceed 30 copies) its consolidated financial statements of the Group for such period consisting of its monthly sales (chiffre d’affaires), gross margin (marge brute), Capital Expenditure, EBIT, EBITDA and Cash, together with summary comments and a comparison of actual performance by the Group with the performance projected by the budget for such period and (starting for the year 2002) with the performance in the corresponding calendar month of the previous financial year.

19.5		Requirements as to Financial Statements

		Each of the Borrowers shall ensure that each set of financial statements delivered by it pursuant to this Clause 19 is certified by an Authorised Signatory of such Borrower as giving a true and fair view of (in the case of audited financial statements under French GAAP) or fairly presents (in the case of financial statement audited under US GAAP and unaudited financial statements) its financial condition (or in the case of Genesys S.A., the consolidated financial condition of the Group) as at the end of the period to which those financial statements relate and of the results of its (or, as the case may be, the Group’s) operations during such period.

19.6		Compliance Certificates

		Each of the Borrowers shall ensure that each set of financial statements delivered by it pursuant to Clause 19.1 (Annual Statements), Clause 19.2 (Semi-Annual Statements) and Clause 19.3 (Quarterly Statements) is accompanied by a Compliance Certificate signed by its auditors (in the case of a Compliance Certificate delivered with its annual financial statements and semi-annual financial statements) or signed by two Directors of each

		Borrower (in the case of a Compliance Certificate delivered with its quarterly financial statements).

19.7		Budget

		The Borrowers shall, not later than 31 of January of any financial year, deliver to the Agent in sufficient copies (not to exceed 30 copies) for the Lenders the Budget and an annual budget (in a form agreed with the Agent) prepared by reference to each Financial Quarter in respect of such financial year of the Group including:

	19.7.1		projected annual profit and loss accounts (including projected turnover and operating costs) for and projected balance sheets and cash flow statements on a quarterly basis for such financial year on a consolidated basis for the Group;

	19.7.2		a qualitative analysis and commentary from the management on its proposed activities for such financial year.

		The Borrowers shall provide the Agent with details of any material changes in the projections delivered under this Clause 19.7 within 10 days after such change is made.

19.8		Other Financial Information

		Each Borrower shall from time to time on the request of the Agent, furnish the Agent with such information about the business, condition (financial or otherwise), operations, performance, properties or prospects of the Group as the Agent or any Lender (through the Agent) may reasonably require.

19.9		Accounting Policies

		Each Borrower shall ensure that each set of financial statements delivered pursuant to this Clause 19 is prepared using accounting policies, practices, procedures and reference period substantially consistent with those applied in the preparation of the Original Financial Statements (with normal period end adjustments for monthly and quarterly accounts) (the “Reference Financial Statements”) unless, in relation to any such set of financial statements, the relevant Borrower notifies the Agent that there have been one or more material changes in any such accounting policies, practices, procedures or reference period and the auditors of such Borrower provide:

	19.9.1		a description of the changes and the material adjustments which would be required to be made to those financial statements in order to cause them to use the accounting policies, practices, procedures and reference period upon which the Reference Financial Statements were prepared; and

	19.9.2		sufficient information, in such detail and format as may be reasonably required by the Agent, to enable the Lenders to make an accurate comparison between the financial position indicated by those financial statements and the Reference Financial Statements.

If there has been a material change in accounting policies, practices, procedures or reference period and the description and information required by this Clause 19.9 have been provided by the auditors in connection with such material change and any

		amendments have been agreed pursuant to Clause 19.10 (Material Change in Accounting Policies) in connection with such material change, then such material change shall become part of the normal accounting policies, practices, procedures and reference period as if it were used in the preparation of the Reference Financial Statements.

19.10		Material change in Accounting Policies

		If there has been one or more such material changes in any accounting policies, practices or procedures or reference period:

	19.10.1		the Agent and the applicable Borrower(s) shall (in consultation with the auditors of such Borrower(s)), at the Agent’s request, negotiate in good faith with a view to agreeing such amendments to the financial covenants in Clause 21 (Financial Condition) the term margin ratchet in Clause 5.3 (Term Margin Ratchet) and the revolving margin ratchet in Clause 7.3 (Revolving Margin Ratchet) and/or in each case, the definitions used therein as may be necessary to grant to the Lenders protection comparable to that granted on the date hereof, and any amendments as agreed will have effect on the date agreed between the Agent and such Borrower(s); and

	19.10.2		if no such agreement is reached within 30 days of the Agent’s request, the Agent shall (if so requested by the Majority Lenders) instruct the auditors of the applicable Borrower or independent accountants (approved by such Borrower or, in the absence of such approval within 5 days of request by the Agent therefor, a firm with recognised expertise) to determine any amendment to Clause 21 (Financial Condition) which those auditors or, as the case may be, accountants (acting as experts and not arbitrators) consider appropriate to grant to the Lenders protection comparable to that granted on the date hereof, which amendments shall take effect when so determined by those auditors, or as the case may be, accountants. Where such auditors or accountants are instructed hereunder, the cost and expense of those auditors or accountants shall be for the account of the applicable Borrower.

19.11		Annual Presentation

		Once in every financial year of Genesys S.A., at least one executive director of Genesys S.A. will give a single presentation to the Lenders, at a time and venue agreed with the Agent, about the business and financial performance of the Group and such other related matters as any of the Lenders may reasonably request with a prior notice of 10 Business Days.

20.		OTHER INFORMATION

20.1		Information as to Guarantors

		Genesys S.A. shall from time to time, at the request of the Agent, furnish the Agent with a report issued by its auditors stating which of its subsidiaries are Material Subsidiaries.

20.2		Shareholder Information

		Each of the Borrowers shall, as soon as reasonably practicable, after the same are supplied or made available, furnish the Agent with such general information as is required by law to be supplied or made available to all of its shareholders (in their capacity as such).

20.3		Auditors

		Each of the Borrowers shall at the request of the Agent require and authorise its Auditors to discuss with the Agent the information and other matters related to or arising out of the annual audit of the Group by the Auditors.

20.4		Litigation and Environmental Claims

		Each of the Borrowers shall advise the Agent forthwith of the details of:

	20.4.1		each litigation, arbitration or administrative proceeding pending or threatened against it or any or its consolidated subsidiaries which may result in its liability or in liability of such subsidiary in an amount in excess of USD 200,000 (or its equivalent); and

	20.4.2		each Environmental Claim which may involve liability or expenditure in excess of USD 200,000.

20.5		Shareholders of Genesys S.A.

		Genesys S.A. shall promptly inform the Agent in writing upon any transfer of any of the shares of Genesys S.A. of which it is aware representing at least 5% of the share capital of Genesys S.A. or any change of control of such a portion of the share capital of Genesys S.A. of which it is aware and such notice shall include details of the previous owner or controller and the new owner or controller and the number and type of shares affected.

20.6		Information Undertakings

		The Borrowers shall procure that any notices required to be delivered to the Agent under Clause 22 (Undertakings) are delivered in accordance with such Clause.

21.		FINANCIAL CONDITION

21.1		Financial Condition

		Genesys S.A. shall ensure that the financial condition of the Group shall be such that:

21.1.1

Cash Cover: Cash Cover for each Relevant Period specified in column 1 below shall not be less than the ratio set out in column 2 below opposite such Relevant Period.

“Cash Cover” means, in relation to any Relevant Period, the ratio of Consolidated Cash Flow to Consolidated Debt Service for such Relevant Period.

21.1.2

Interest Cover: Interest Cover for each Relevant Period specified in Column 1 below shall not be less than the ratio set out in Column 2 below opposite each Relevant Period.

			“Interest Cover” means, in relation to any Relevant Period, the ratio of Consolidated EBITDA to Consolidated Net Interest Expense for such Relevant Period.

	21.1.3		Leverage: The ratio of outstanding Consolidated Net Indebtedness to Consolidated EBITDA for each Relevant Period specified in column 1 below shall not exceed the ratio set out in column 2 below opposite such Relevant Period.

21.1.4

Capital Expenditures: The Group shall not in any financial year incur Capital Expenditures in excess of the amounts set out below:

			provided that, to the extent that in any financial year the amount spent in making Capital Expenditures on assets is less than the maximum expenditure limit agreed for such period, 50% of such shortfall (the “Shortfall”) may be carried forward for the following financial year only and added to the maximum expenditure limits specified above in respect of such following financial year but provided further that if such Shortfall is not spent within such following financial year it shall cease to be available.

			For the purposes of determining whether the Shortfall has been spent in such following financial year, it will be presumed that such Shortfall is spent after all of the other Capital Expenditures permitted to be spent in such following financial year have been spent.

			For the purposes of determining the thresholds set out above, the amount spent in Capital Expenditures shall not include any Reinvested Amount (as defined in Clause 12.1 under the definition of Net Disposal Amount).

21.2		Financial Testing

		The financial covenants set out in Clause 21 (Financial Condition) shall be tested first on 31 December 2001 and then on a quarterly basis by reference to each of the financial statements and/or each Compliance Certificate delivered pursuant to Clause 19 (Financial Information).

21.3		Auditor’s Verification

		The Agent may, at any time if it has reasonable grounds for believing that the figures prepared by the Borrowers are materially incorrect, materially inaccurate or materially incomplete require the auditors of the Group to verify the figures supplied by the Borrowers in connection with:

	21.3.1		the financial conditions set out in Clause 21.1 (Financial Condition) ;or

	21.3.2		the financial conditions to be satisfied in order to permit a reduction in margin in accordance with Clause 5.3 (Term Margin Ratchet) or Clause 7.3 (Revolving Margin Ratchet).

provided that the expenses related to such verification by the auditors of the Group shall be borne by Genesys S.A. if (i) it is the first such verification by the auditors in the financial year of Genesys S.A., or (ii) the auditors determine that the figures prepared by the Borrower were materially incorrect, materially inaccurate or materially incomplete and by the Lenders otherwise.

		The Agent may, in accordance with this Clause 21.3, request verification of any figure or calculation made in a Compliance Certificate delivered under Clause 20 (Other Information) and/or any figure contained in the financial statements delivered under Clause 19 (Financial Information) which is relevant to the calculation of the financial conditions referred to above.

		If such auditors fail to verify such figures to the reasonable satisfaction of the Agent after being requested to do so, the Agent on behalf of the Majority Lenders may appoint an independent firm of accountants to carry out an appropriate investigation and give a certificate in a form and content reasonably satisfactory to the Agent certifying or verifying the relevant figures and satisfaction of the above financial conditions shall be determined by reference to the figures so verified or certified even if the audited or management accounts for the same date or period have not yet been published. The expenses related to such verification shall be borne as provided above.

21.4		Accounting Terms

		All accounting expressions, to the extent that not otherwise defined herein, shall be construed in accordance with generally accepted accounting principles in France or in the United States of America.

22.		UNDERTAKINGS

		The undertakings in this clause 22 remain in force from the date of this Agreement as long as any amount is outstanding under any Finance Documents.

22.1		Maintenance of Legal Validity and Legal Status

		Each of the Borrowers shall and shall procure that each Obligor which is its subsidiary shall, do all such things as are necessary to maintain its existence as a legal person and obtain, comply, in all material respects, with the terms of and do all that is necessary to maintain in full force and effect all authorisations, approvals, licences, consents and exemptions required in or by the laws of France and the laws of the United States of America, to enable it lawfully to enter into and perform its obligations under the Finance Documents to which it is expressed to be a party and to ensure the legality, validity, enforceability or admissibility in evidence in France of the Finance Documents and, on request of the Agent, supply a copy (certified by an Authorised Signatory of the relevant Obligor as true, complete and up to date) of any such authorisations, approvals, licences, consents and exemptions.

22.2		Insurance

22.2.1

Each of the Borrowers shall and shall procure that each of its Material Subsidiaries shall, effect and maintain insurances on and in relation to its business and assets with reputable underwriters or insurance companies against such risks and to such extent as is usual for prudent companies carrying on a business such as that carried on by such member of the Group (including, but not limited to, loss of earnings, business interruption, directors and officers liability cover).

	22.2.2		Without prejudice to sub-clause 22.2.1, each of the Borrowers shall, and shall procure that each of its Material Subsidiaries shall, effect and maintain insurances on and in relation to its business and assets against such risks and at such levels or such higher levels as are normally maintained by persons carrying on the same business as that carried on by such Group member.

	22.2.3		Each of the Borrowers (if so requested in writing) shall, and shall procure that each of its Material Subsidiaries shall, supply the Agent with a copy of all such insurance policies or certificates of insurance in respect thereof or (in the absence of the same) such other evidence of the existence of such policies as may be reasonably acceptable to the Agent. Each of the Borrowers shall ensure the interest of the Security Agent is noted on such policies which are asset insurance policies within 60 days of the date hereof and that the Security Agent be named as loss payee. The Agent shall not be liable for any omissions or inaccuracy in such insurance policies or certificate.

	22.3.1		Each of the Borrowers shall, and shall procure that each of its Material Subsidiaries shall, comply in all material respects with all Environmental Law and obtain and maintain any Environmental Permits and take all reasonable steps in anticipation of known or expected future material changes to or obligations under the same, breach of which (or failure to obtain, maintain or take which) could reasonably be expected to have a Material Adverse Effect.

	22.3.2		Each of the Borrowers shall, and shall procure that each of its Material Subsidiaries shall, inform the Agent in writing as soon as reasonably practicable upon becoming aware of the same if any Environmental Claim has been commenced or (to the best of its knowledge and belief) is threatened against it in any case where such claim would be reasonably likely to have a Material Adverse Effect or of any facts or circumstances which will or are reasonably likely to result in any Environmental Claim being commenced or threatened against it in any case where such claim could reasonably be expected to have a Material Adverse Effect.

22.4		Notification of Events of Default

		Each of the Borrowers shall, and shall procure that each of its consolidated subsidiaries shall, inform the Agent of the occurrence of any Event of Default or Potential Event of Default and, upon receipt of a written request to that effect from the Agent, confirm to the Agent that, save as previously notified to the Agent or as notified in such confirmation, no Event of Default or Potential Event of Default has occurred.

22.5		Claims *Pari Passu*

		Each of the Borrowers shall ensure that at all times the claims of the Finance Parties against it or any of its subsidiaries under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors save those whose claims are preferred by any bankruptcy, insolvency, liquidation or other similar laws of general application.

22.6		Consents and Approvals

		Each of the Borrowers shall, and shall procure that each of its Material Subsidiaries shall, comply in all material respects with all applicable laws, rules, regulations and orders and obtain and maintain all governmental and regulatory consents, licences, authorisations, including, inter alia, any stock exchange regulations in France and in the United States of America, and approvals the failure to comply with which or the failure to obtain and maintain which could be reasonably be expected to have a Material Adverse Effect.

22.7		Conduct of Business

		Each of the Borrowers shall, and shall procure that each of its Material Subsidiaries shall, ensure that it has the right and is duly qualified to conduct its business as it is conducted from time to time in all applicable jurisdictions and does all things necessary to obtain, preserve and keep in full force and effect all rights including, without limitation, all franchises, contracts, licences, consents and other rights which are necessary for the conduct of its business.

22.8		Tax

	22.8.1		Each of the Borrowers shall, and shall procure that each of its Material Subsidiary shall, duly and punctually pay and discharge (a) all taxes, assessments and governmental charges imposed upon it or its assets within the time period allowed therefore without imposing penalties and without resulting in an Encumbrance with priority to any Lender or any security purported to be granted by or created pursuant to the Security Documents (save to the extent payment thereof is being contested in good faith by the applicable Borrower or its consolidated subsidiary and adequate reserves are being maintained for those taxes and where payment thereof can lawfully be withheld and would not result in an Encumbrance with priority to the security created or evidenced by the Security Documents) and (b) all lawful claims which, if unpaid, would by law become Encumbrances upon its assets.

	22.8.2		Without the prior written consent of the Majority Lenders which shall not be unreasonably withheld, none of the Borrowers nor their consolidated subsidiaries shall change (i) its place of residence for tax purposes (except for Vialog Corporation from Massachusetts to Delaware), (ii) its tax structure or (iii) the tax structure of the Group, unless such changes have no adverse effect on the Lenders.

22.9		Preservation of Assets

		Each of the Borrowers shall, and shall procure that each of its Material Subsidiaries shall, use reasonable commercial efforts to maintain and preserve all of its assets that are necessary in the conduct of its business as conducted at the date hereof in good working order and condition, ordinary wear and tear excepted.

	22.10.1		Each of the Borrowers shall, and shall procure that each of its Material Subsidiaries shall, at its own expense, take all such action as the Agent or the Security Agent may require for the purpose of perfecting or protecting the Agent’s or Security Agent’s rights under and preserving the security interests intended to be created or evidenced by any of the Finance Documents and following the making of any declaration pursuant to Clause 23.22 (Acceleration and Cancellation) or 23.23 (Advances Due on Demand) for facilitating the realisation of any such security or any part thereof.

	22.10.2		Each of the Borrowers shall, and shall procure that each of its Material Subsidiaries shall, to the extent legally possible and as required by the Agent (acting on the instructions of the Majority Lenders) from time to time, (a) promptly create or procure the creation of security over the shares of any of its Material Subsidiaries in favour of the Finance Parties to secure all or any of the obligations of each of the Borrowers under the Finance Documents, (b) procure the compliance with this Agreement of any Group member.

	22.11.1		Each of the Borrowers shall, and shall procure that each of its Material Subsidiary shall, ensure that all pension schemes are fully funded based on reasonable actuarial assumptions and recommendations and as required by law.

	22.11.2		Each of the Borrowers shall deliver to the Agent at intervals of no more than three calendar years, and in any event at such time as those reports are prepared in order to comply with the then current statutory or auditing requirements, actuarial reports in relation to the pension schemes for the time being operated by or maintained for the benefit of such Borrower and any of its consolidated subsidiaries and/or any of its employees.

22.12		Access

		Genesys S.A. shall procure that any one or more representatives, agents and advisers of the Agent and/or any of the Lenders will be allowed to have access to the assets, books, records and premises of Genesys S.A. and each of its consolidated subsidiaries and to inspect the same during normal business hours, subject to reasonable prior notice.

22.13		Intellectual Property

22.13.1

Each of the Borrowers shall, and shall procure that each of its Material Subsidiaries shall:

(a)

having given due consideration to the cost and benefit thereof and do all acts as are reasonably practicable to maintain, protect and safeguard the Intellectual Property material for the business of the relevant Material Subsidiary and not terminate or discontinue the use of any such Intellectual Property which is material to its ongoing business;

	(b)		use all reasonable endeavours to police against and detect any material infringement of, or detect any material challenge to, any of the Intellectual Property material for the business of the relevant Material Subsidiary and, immediately after becoming aware of any material infringement thereof or material challenge thereto, inform the Agent thereof and, to the extent reasonably necessary in the context of the applicable Material Subsidiary ‘s business take such steps as the Agent may from time to time reasonably direct in relation to such material infringement or material challenge including any steps in relation to the settlement of any legal proceedings brought or defended in relation thereto. Subject always, in the case of any material infringement or material challenge, to any directions given by the Agent, the relevant Material Subsidiary shall not be precluded from taking such steps as it shall consider necessary or desirable in relation to any material infringement of or material challenge to any of such Intellectual Property;

	(c)		observe and comply in all material respects with all material obligations and laws to which it in its capacity as registered proprietor, beneficial owner, user, licensor or licensee of the Intellectual Property or any part thereof is subject where failure to do so could reasonably be expected to have a Material Adverse Effect; and

	(d)		pay all fees necessary to maintain, protect and safeguard the Intellectual Property (as it is owned or licensed by a Material Subsidiary) which is material for the business of the relevant Material Subsidiary and the registrations reasonably necessary or desirable to be made in connection therewith before the latest time provided for payment thereof and not permit any registration of such property to terminate, be abandoned, cancelled, lapse or be liable to any claim of abandonment. Promptly upon request by the Agent for the same, Genesys S.A. will deliver or will procure delivery to the Agent of, a receipt for such fees or other evidence of the payment thereof.

22.13.2

Each of the Borrowers shall not, and shall procure that each of its Material Subsidiaries shall not:

	(a)		use or allow to be used, or take any step or omit to take any step in respect of any of the Intellectual Property, in any way which could reasonably be expected to materially and adversely affect the existence or value thereof or imperil the right of any of its Material Subsidiaries to use any such property which is material to its ongoing business;

	(b)		without the prior written consent of the Agent, which shall not be unreasonably withheld dispose of or transfer or terminate or enter into any contract or licence in respect of Intellectual Property, other than (i) any licensing arrangements between each of the Borrowers or amongst it and/or its consolidated subsidiaries and (ii) the entering into such

contracts or licences in the ordinary course of business where this would not have a material adverse effect on the value of the Intellectual Property.

	22.14		Negative Pledge

			None of the Borrowers shall, and each of the Borrowers will procure that none of its Material Subsidiaries shall, without the prior written consent of the Majority Lenders, which shall not be unreasonably withheld create or permit to subsist any Encumbrance over all or any of its assets other than a Permitted Encumbrance.

	22.15		Loans and Guarantees

			None of the Borrowers shall, and each of the Borrowers will procure that none of its consolidated subsidiaries shall, without the prior written consent of the Majority Lenders, which shall not be unreasonably withheld make any loans, grant any credit or other financial accommodation or give any guarantee or indemnity (except as permitted or required by the Finance Documents) to or for the benefit of any person or otherwise voluntarily assume any liability, whether actual or contingent, in respect of any obligation of any other person except:

	22.15.1		trade credit or indemnities granted in the ordinary course of trading and upon terms usual for such trade; or

	22.15.2		Permitted Transactions; or

	22.15.3		loans to or guarantees of liabilities of employees or directors of any Borrower or its consolidated subsidiaries not exceeding USD 500,000 in aggregate at any time; or

	22.15.4		Intra-Group Loan Agreements.

	22.16		Financial Indebtedness

			None of the Borrowers shall, and each of the Borrowers will procure that none of its consolidated subsidiary shall, incur, create or permit to subsist or have outstanding any Financial Indebtedness or enter into any agreement or arrangement whereby it is entitled to incur, create or permit to subsist any Financial Indebtedness other than, in either case, Permitted Financial Indebtedness.

	22.17		Disposals

			None of the Borrowers shall, and each of the Borrowers shall procure that none of its consolidated subsidiaries shall, without the prior written consent of the Majority Lenders, which shall not be unreasonably withheld sell, lease, transfer or otherwise dispose of, by one or more transactions or series of transactions (whether related or not), the whole or any part of its revenues or its assets or its business or undertakings other than Permitted Disposals.

	22.18		Mergers

			None of the Borrowers shall, and each of the Borrowers shall procure that none of its consolidated subsidiaries shall, merge or consolidate with any person other than with its

			wholly-owned subsidiaries, enter into any demerger transaction or participate in any other type of corporate reconstruction except for the acquisitions permitted under Clause 22.19 (Acquisitions).

	22.19		Acquisitions

			Other than the Permitted Transactions, the Acquisition and the Astound’s Acquisition no Obligor shall, and each Obligor shall procure that no member of the Group shall:

	22.19.1		purchase, subscribe for or otherwise acquire any shares (or other securities or any interest therein) in, or incorporate, any other company or agree to do any of the foregoing; or

	22.19.2		purchase or otherwise acquire any assets (other than in the ordinary course of business) or (without limitation to any of the foregoing) acquire any business or interest therein or agree to do so; or

	22.19.3		form, or enter into, any partnership, consortium, joint venture or other like arrangement or agree to do so.

			Notwithstanding sub-paragraphs 22.19.1 to 22.19.3 above each of the Borrowers may carry out any of the transactions contemplated if the following conditions are satisfied:

	(i)		any contemplated purchase (or similar transaction) is disclosed to the Agent by a twenty Business Days prior written notice before the signing date of the acquisition document;

	(ii)		any contemplated purchase (or similar transaction) will be funded (i) in the case of Genesys S.A., by a capital increase, or (ii) in the case of a subsidiary of Genesys S.A., by a capital increase subscribed by a third party or by way of a share exchange;

	(iii)		the target company has had a positive EBITDA for at least two years (except for any acquisition of a minority interest in a corporation not exceeding 33% and in that case with an expressed undertaking that under no circumstances will Genesys S.A. or any of its subsidiaries support the target company with cash or any other asset injection);

	(iv)		no contingent liabilities are provided for or derived from the contemplated purchase (or similar transaction) except for an amount equal to the aggregate of (x) USD 250,000 and (y) the Financial Indebtedness of the target company and provided that the liabilities covered by guarantees or indemnities given in connection with the acquisition shall not be taken into account;

	(v)		any contemplated purchase (or similar transaction) will be subject to a satisfactory and complete due diligence by one or several reputable firms;

	(vi)		such contemplated purchase (or similar transaction) is related to the corporate purpose (objet social) of such Borrower; and

	(vii)		Genesys S.A. will, after such acquisition, own or control, directly or indirectly, less than one-third or more than 95% of the share capital or voting rights of the target company.

	22.20.1		None of the Borrowers shall, and each of the Borrowers shall procure that none of its consolidated subsidiaries shall, pay, make or declare any dividend, return on capital, repayment of capital contributions or other distribution (whether in cash or in kind) or make any distribution of assets or other payment whatsoever in respect of share capital whether directly or indirectly save for Permitted Transactions.

	22.20.2		None of the Borrowers shall, and each of the Borrowers shall procure that none of its consolidated subsidiaries shall, pay any interest or return on principal or repayment of principal or other distribution (in cash or in kind) or make any distribution of assets or other payment whatsoever in respect of any loan notes or loan capital whether directly or indirectly save for Permitted Transactions.

22.21		Share Capital

		Save for any obligation under the Acquisition Agreement, the Astound’s Acquisition Agreement, plans or employee stock options or other similar program and for the acquisitions permitted under Clause 22.19 (Acquisitions), none of the Borrowers shall, and each of the Borrowers shall procure that none of its Material subsidiaries shall, issue or redeem or repurchase, purchase, defease or retire any shares or grant any person the right (whether conditional or unconditional) to call for the issue or allotment of any share of Genesys S.A. or any of its consolidated subsidiaries (including an option or right of pre-emption or conversion) or any other equity investments, howsoever called, or alter any rights attaching to its issued shares (including ordinary and preference shares) other than:

	(a)		any issue of shares by a Borrower (other than Genesys S.A.) to another wholly-owned subsidiary of such Borrower; and

	(b)		the redemption, repurchase, defeasance or retirement by or purchase by a consolidated subsidiary of such Borrower of shares or share capital owned by such Borrower.

22.22		Amendments

		None of the Borrowers shall, and each of the Borrowers shall procure that none of its consolidated subsidiaries shall, amend, vary, novate, supplement or terminate any of the Acquisition Documents, the constitutional documents or any other document delivered to the Agent pursuant to Clauses 2.3 (Conditions Precedent) or 35.2 (Request for Additional Guarantor) or waive any right thereunder in any manner whatsoever which is likely to have a Material Adverse Effect.

22.23		Change of Business

		None of the Borrowers shall, and each of the Borrowers shall procure that none of its consolidated subsidiaries shall carry on any business which is unrelated to the general nature of the business of the Group as carried on at the date hereof.

22.24		Fees and Commissions

		None of the Borrowers shall, and each of the Borrowers shall procure that none of its consolidated subsidiaries shall, other than as required or permitted hereunder, pay any fees or commissions to any person other than any fees payable on arm’s length terms to third parties who have rendered service or advice to such consolidated subsidiary required by such consolidated subsidiary in the ordinary course of business.

22.25		Arm’s Length Basis

		None of the Borrowers shall, and each of the Borrowers shall procure that none of its consolidated subsidiaries shall, enter into any arrangement or contract with any of its affiliates or any of its consolidated subsidiaries save where:

	22.25.1		each party to the arrangement is a Borrower; or

	22.25.2		in any other case:

	(a)		such arrangement or contract is entered into on an arm’s length basis and is fair and equitable to such Borrower or its consolidated subsidiary; and

	(b)		if so requested by the Agent the benefit of such arrangement is charged as security for amounts owing hereunder (to the extent legally possible); and

	(c)		if so requested by the Agent, claims in respect of such arrangements are subordinated to the claims of the Finance Parties under the Finance Documents (to the extent legally possible).

		For the purposes of this Clause 22.26 “affiliate” of the specified person means any other person directly or indirectly controlling or controlled by or under common control with such specified person or which is a director, officer or partner (limited or general) of such specified person and for this purpose “control”, has the meaning given in article L.233-3 of the French Code de commerce.

22.26		Treasury Transactions

		None of the Borrowers shall, and each of the Borrowers shall procure that none of its Material Subsidiary shall, enter into any Treasury Transaction which is not a Permitted Treasury Transaction.

22.27		Joint Ventures

		Unless permitted under Clause 22.19 (Acquisitions), none of the Borrowers shall, and each of the Borrowers shall procure that none of its Material Subsidiaries shall, enter into or acquire or subscribe (or agree to enter into or acquire or subscribe) for any shares,

		stocks, securities or other interest in or transfer of any assets to or lend to or guarantee or give security for the obligations of any Joint Ventures.

22.28		Acquisition of Vialog Corporation

	(a)		in relation to the Acquisition, comply in all material respects with all relevant laws and all requirements of relevant regulatory authorities;

	(b)		at the request of the Agent, provide the Agent with any material information in the possession of the Group relating to the Acquisition as the Agent may reasonably request;

	(c)		use reasonable endeavours to ensure that no publicity material, press releases or other public documents in relation to the Acquisition (other than those required by law or regulation) are published or released by or on behalf of it, or their advisers which refer to any of the Agent, the Arrangers, the Security Agent, the Lenders, this Agreement or the Facilities unless such reference and the context in which it appears have previously been approved by the Agent and the Arrangers (such approval not to be unreasonably withheld or delayed); and

	(d)		not withhold its consent to any reasonable request by the Arrangers or Agent to publicise the Facilities and the involvement of the Arrangers, Agent, the Security Agent, and the Lenders therein and the transactions contemplated thereby after the Closing Date.

22.29		Hedging

		Each of the Borrowers shall, within 45 days of the Closing Date enter into hedging arrangements with an Hedge Counterparty in order to cap its total interest cost in respect of at least 50% of its Term Outstandings, for a period of 3 years and shall provide to the Agent the main terms and conditions of such hedging agreements.

22.30		Key-man Policy

		Genesys S.A. shall ensure within 60 days of the Closing Date, it obtains and maintains on terms approved by the Agent the Key-man Policy in the name and in favour of Genesys S.A. and the Security Agent and ensure the Security Agent’s security interests in such policy has been noted thereon and procure the renewal or replacement of the Key-man Policy prior to its expiry on terms acceptable to the Agent.

22.31		Subsidiaries

		Genesys S.A. shall procure that any member of the Group which is a Material Subsidiary is or shall, as soon as reasonably practicable after becoming a Material Subsidiary become an Additional Guarantor in accordance with Clause 35 (Changes to the Obligors) unless legal counsel to the Agent has confirmed there is a legal impediment to such Material Subsidiary becoming an Additional Guarantor.

	22.32.1		Each of the Borrowers will provide, within 30 days of the date hereof a copy of each of the Intra-Group Loan Agreements to which it or any of its consolidated subsidiaries is a party, which shall be in a form satisfactory to the Agent. The Intra-Group Loan Agreements must incorporate subordination clauses whereby the intra-group lender will agree to be fully subordinated to the Lenders’ debt arising out of this Agreement.

	22.32.2		Each of the Borrowers will or will cause each of the intra-group lenders to provide, within 30 days of the date hereof a written commitment confirming the entering into and the binding effect of the subordination arrangement referred to above.

22.33		SEC Filings

		Genesys S.A. shall procure that each US Group Member shall deliver to the Agent promptly, and in any event within fifteen (15) days, upon the issuance thereof, copies of all reports, if any, to or other documents filed by any of Genesys S.A.’s consolidated subsidiaries Group member with the Securities and Exchange Commission under the Securities Act of 1933 or the Securities Exchange Act of 1934 (other than on Form S-8 or 8-A or similar forms).

22.34		US Group Member Covenants

		Genesys S.A. shall procure that each US Group Member shall and shall procure that each ERISA Affiliate shall:

	(a)		as soon as practicable after the filing thereof with the Internal Revenue Service of the United States of America, deliver to the Agent copies of each Schedule B (Actuarial Information) to the Annual Report (IRS Form 5500 Series) with respect to each applicable Employee Plan;

	(b)		promptly and in any event within ten days after it or any ERISA Affiliate becomes aware that any ERISA Event (a) has occurred or (b) will occur in the case of any ERISA Event that requires advance notice under Section 4043(b)(3) of ERISA, deliver to the Agent a statement of its chief financial officer or that of the ERISA Affiliate describing such ERISA Event and the action, if any, that it or such ERISA Affiliate proposes to take with respect thereto; provided, however, that no such notice shall be required unless the unfunded liability in connection with the ERISA Event would exceed USD 100,000 (or its equivalent);

	(c)		promptly and in any event within five business days after receipt thereof by it or any ERISA Affiliate or any administrator of an Employee Plan, deliver to the Agent copies of each notice from PBGC stating its intention to terminate any Employee Plan or to have a trustee appointed to administer any Employee Plan;

	(d)		(except as disclosed pursuant to Clause 18.35 (ERISA)) ensure that, during the term of this Agreement, neither it nor any ERISA Affiliate shall agree to contribute, or assume any obligation to contribute, to any Multiemployer Plan

			that would give rise to any US Group Member of any ERISA Affiliate having potential withdrawal liabilities in excess of USD 50,000;

	(e)		pay and discharge when due any material liability imposed on it pursuant to Title IV of ERISA other than premium payments to the PBGC;

	(f)		promptly upon becoming aware of any event or condition which would in all reasonable likelihood constitute grounds for the termination of (or the appointment by PBGC of a trustee to administer) any Employee Plan pursuant to Section 4042 of ERISA, deliver an explanation of such event or condition given by its chief financial officer or the chief financial officer of the ERISA Affiliate affected by such event or condition;

	(g)		ensure that neither it nor any ERISA Affiliate shall adopt an amendment to an Employee Plan requiring the provision of security under Section 307 of ERISA or Section 401(a)(29) of the US Code;

	(h)		ensure that no Employee Plan is terminated under Section 4041 of ERISA unless such termination would not be reasonably likely to have a Material Adverse Effect;

	(i)		provide notice to the Agent within 15 days if it obtains knowledge of any potential withdrawal liability (whether determined as to each such plan, or in the aggregate for all such plans contributed to by any US Group Member and ERISA Affiliates) that would exceed USD 100,000 with respect to Multiemployer Plans; and

	(j)		provide notice within 15 days if the aggregate present value of the liabilities of the defined benefit pension plans maintained by all US Group Members and all ERISA Affiliates, determined on an ongoing basis, exceeds the aggregate assets of all such plans by more than USD 100,000.

22.35		US Group Member Information

		Each US Group Member shall deliver and Genesys S.A. shall procure delivery to the Agent:

		forthwith, and in any event within fifteen (15) Business Days after any US Group Member obtains knowledge thereof, notice:

	(1)		of receipt by any US Group Member or any subsidiary thereof, or any tenant or other occupant of any property owned, operated, leased or occupied by a US Group Member or subsidiary thereof, of any claim, complaint, charge or notice of a violation or potential violation of any Environmental Law; involving a potential liability or claim in excess of USD 100,000;

	(2)		of the occurrence of a spill or other release of a Hazardous Substance upon, under or about or affecting any of the properties owned, operated, leased or occupied by a US Group Member or subsidiary thereof, or Hazardous Substances at levels or in amounts that may have to be reported, remedied or responded to under any Environmental Law are detected on or in the soil or groundwater;

	(3)		that a US Group Member or subsidiary thereof is or may be liable for any costs of cleaning up or otherwise responding to a release of Hazardous Substances, where such costs may exceed USD 100,000;

	(4)		that any part of the properties owned, operated, leased or occupied by a US Group Member or any subsidiary thereof is or may be subject to an Encumbrance under any Environmental Law; or

	(5)		that a US Group Member or subsidiary will undertake or has undertaken any cleanup or other response action with respect to any Hazardous Substances; and

		not later than twenty (20) days after entering into such agreement or agreements, copies of all new employment agreements to which a US Group Member is a party if the employee’s yearly salary together with bonuses, and any other form of remuneration or compensation, is at least USD 500,000.

22.36		Information for Security Documents

		Each US Group Member shall deliver and Genesys S.A. shall procure delivery to the Agent, promptly following signing of this Agreement, of all necessary information in order to create and perfect all the security created pursuant to the Security Documents entered into by the US Group Members.

23.		EVENTS OF DEFAULT

		Each of Clause 23.1 (Failure to Pay) to Clause 23.20 (Tax Structure) describes circumstances which constitute an Event of Default for the purposes of this Agreement.

23.1		Failure to Pay

		Any amount due from an Obligor or the Obligors under the Finance Documents is not paid at the time, in the currency and in the manner specified herein unless such failure to pay is caused by technical difficulties with the banking system in relation to the transmission of funds and payment is made within two Business Days of the due date.

23.2		Misrepresentation

		Any representation or statement made or deemed to be made by an Obligor in any Finance Document or in any notice or other document, certificate or statement delivered by it pursuant thereto or in connection therewith is or proves to have been materially incorrect or materially misleading when made or deemed to be made, unless such representation or statement (to the extent it may be remedied) are remedied within 15 days of notification (pursuant to Clause 22.4 (Notification of an Event of Default)) of the fact that it was incorrect or materially misleading.

23.3		Financial Condition

		Any of the requirements of Clause 19 (Financial Information), Clause 21.1 (Financial Condition), Clause 22.5 (Claims Pari Passu), Clause 22.10 (Security), Clause 22.14 (Negative Pledge), Clause 22.15 (Loans and Guarantees), Clause 22.20 (Dividends and Distributions), Clause 22.21 (Share Capital), Clause 22.22 (Amendments) and Clause 22.31 (Subsidiaries) are not satisfied at the time provided therein, unless such

		requirements are remedied within 15 days of the notification (pursuant to Clause 22.4 (Notification of an Event of Default)) that such requirements were not satisfied.

23.4		Other Obligations

		An Obligor fails duly to perform or comply in all material respects with any other obligation expressed to be assumed by it in the Finance Documents and such failure, if capable of remedy, is not remedied within fifteen days after the earlier to occur of the date the Agent has given notice thereof to the Borrowers or such Obligor and the date the Obligor or the Borrowers has actual knowledge.

23.5		Cross Default

23.5.1

Any Financial Indebtedness of any member of the Group is not paid when due, any Financial Indebtedness of any member of the Group is declared to be or otherwise becomes due and payable prior to its specified maturity, any commitment for any Financial Indebtedness of any member of the Group is cancelled or suspended by a creditor of any member of the Group or any creditor of any member of the Group becomes entitled to declare any Financial Indebtedness of any member of the Group due and payable prior to its specified maturity, provided that it shall not constitute an Event of Default if the aggregate amount of all such Financial Indebtedness is less than USD 500,000.

	23.6.1		Any member of the Group ceases or suspends generally payment of its debts or announces an intention to do so (or is deemed for the purposes of any law applicable to it to be) or is unable to pay its debts as they fall due or commences negotiations with or makes a proposal to any one or more of its creditors with a view to the general readjustment or rescheduling of its indebtedness or makes a general assignment for the benefit of or a composition with its creditors or a moratorium is declared in respect of the indebtedness of any Group member.

	23.6.2		In respect of any US Group Member, a proceeding or case shall be commenced, without the application or consent of such US Group Member, in any court of competent jurisdiction, seeking (a) its reorganisation, liquidation, dissolution, arrangement or winding-up, or the composition or readjustment of its or his debts, (b) the appointment of a receiver, custodian, trustee, examiner, liquidator or the like of the US Group Member or of all or any substantial part of its property, or (c) similar relief in respect of the US Group Member under any law relating to the bankruptcy, insolvency, reorganisation, winding-up, or composition or adjustment of debts; and any such proceeding or case referred to in paragraphs (a), (b) or (c) above shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 or more days, or an order for relief against the US Group Member shall be entered in an involuntary case under Title 11 of the United States of America Code entitled Bankruptcy (or any successor thereto), as amended

(a)

Any corporate action, legal proceedings or other procedure or step is taken in relation to:

	(i)		the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, bankruptcy, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any member of the Group other than a solvent liquidation or reorganisation of any member of the Group which is not an Obligor;

	(ii)		a composition, assignment or arrangement with any creditor of any member of the Group;

	(iii)		the appointment of a liquidator (other than in respect of a solvent liquidation of a member of the Group which is not an Obligor), receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of any member of the Group or any of its assets;

	(iv)		enforcement of any security over any assets of any member of the Group; or

	(v)		any analogous procedure or step is taken in any jurisdiction,

			and any such action, proceedings or other procedure referred to in paragraphs (i) to (v) above shall continue undismissed, or an order, judgement or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 or more days.

	(b)		A Borrower or any member of the Group commences proceedings for règlement amiable in accordance with articles L.611-3 to L.611-6 of the French Code de commerce.

	(c)		Proceedings for redressement judiciaire, cession totale de l’entreprise or liquidation judiciaire are entered in relation to a Borrower or any member of the Group under articles L.620-1 to L.628-3 of the French Code de commerce and such proceedings shall continue undismissed, or an order, judgement or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 or more days.

	(d)		Any US Group Member (a) applies for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, examiner or liquidator of itself or of all or a substantial part of its property, (b) makes a general assignment for the benefit of its creditors, (c) commences a voluntary case under Title 11 of the United States of America Code entitled Bankruptcy (or any successor thereof), as amended, (d) files a petition with respect to itself seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganisation, liquidation, dissolution, arrangement or winding-up, or

composition or readjustment of debts, or (e) takes any corporate action for the purpose of effecting any of the foregoing with respect to itself.

23.8		Execution or Distress

		Any execution or distress is levied against, or any encumbrancer(s) take possession of, the whole or a material part of, the property, undertaking or assets of any Material Subsidiary or any event occurs which under the laws of any jurisdiction has a similar or analogous effect in respect of indebtedness exceeding USD 250,000 (or equivalent) in aggregate at any time and which, in any case, is not stayed or discharged within 30 days after such levy, taking of possession or effect and during such 30 day period is contested in good faith by appropriate means diligently pursued.

23.9		Failure to Comply with Final Judgment

		Any member(s) of the Group fail to comply with or pay any sum due from it or them under any final judgment or any final order made or given by any court of competent jurisdiction when such sums exceed USD 250,000 (or equivalent) in aggregate at any time.

23.10		Governmental Intervention

		By or under the authority of any government:

	23.10.1		the management of any Material Subsidiary is wholly or partially displaced or the authority of any Material Subsidiary in the conduct of its business is wholly or partially curtailed and is likely to cause a Material Adverse Effect; or

	23.10.2		all or a majority of the issued shares of any member of the Group or the whole or any material part of its revenues or assets is seized, nationalised, expropriated or compulsorily acquired.

23.11		Ownership of a member of the Group

		After the Closing Date, any change of ownership of more than 5% of any member of the Group, save and except for:

	(i)		any change of ownership of Genesys S.A;

	(ii)		any ownership increase by Genesys S.A. in Genesys Iberia;

	(iii)		any change of ownership within the Group to the extent that the relevant member(s) of the Group continue to be directly or indirectly wholly owned by Genesys S.A.; and

	(iv)		any change of ownership permitted under the provisions set out in sub-paragraph 22.19.3 of Clause 22.19 (Acquisitions) provided that the relevant member(s) of the Group continue to be directly or indirectly at least 75% owned by Genesys S.A.

23.12		Occurrence of ERISA Event

		With respect to any US Group Member or any ERISA Affiliate thereof, an ERISA Event shall occur with respect to an Employee Plan or any US Group Member or any ERISA Affiliate shall fail to pay the full amount of any instalment due under Section 412(m) of the US Code and as a result either (a) such occurrence or failure to pay would be reasonably likely to have a Material Adverse Effect or (b) any US Group Member would be reasonably likely to become liable to pay any amount exceeding USD 250,000 following such ERISA Event or failure to pay.

23.13		The Group’s Business

		Any Material Subsidiary, subject to Permitted Disposals, carries on any business which is unrelated to the general nature of the business of the Group as carried on at the date hereof.

23.14		Repudiation

		Any Finance Document or the security intended to be constituted by under any of the Finance Documents is repudiated by any person (other than a Finance Party) or any person (other than a Finance Party) does or causes to be done any act or thing evidencing an intention to repudiate any Finance Document or any such security or subordination or any Finance Document is not or ceases to be in full force and effect or the validity or applicability thereof to any sums due or to become due thereunder is disaffirmed by or on behalf of any Obligor.

23.15		Illegality

		At any time any Obligor no longer has the legal power to perform its obligations under the Finance Documents to which it is a party or to own its assets or to carry on its business or at any time it is or becomes unlawful for an Obligor to perform or comply with any or all of its obligations under any Finance Document to which it is a party or any of the obligations of an Obligor thereunder are not or cease to be legal, valid, binding and enforceable.

23.16		Auditor’s Qualification

		The auditors of the Borrowers or any member of the Group qualify their annual audit report to the consolidated accounts of the Group or the unconsolidated accounts of any Group member in a manner which is, in the reasonable opinion of the Majority Lenders, material in the context of the Facilities and is likely to have a Material Adverse Effect.

23.17		Environmental

		Any Material Subsidiary breaches any Environmental Law or any Environmental Claim is made or threatened against any Material Subsidiary which, in either case, is likely to have a Material Adverse Effect.

23.18		Litigation

		Any litigation, arbitration, administrative proceedings or governmental or regulatory investigations, proceedings or disputes are commenced against any Group member or its respective assets or revenues or there are any circumstances likely to give rise to any such litigation, arbitration, administrative proceedings or governmental or regulatory investigations, proceedings or disputes which is likely to have a Material Adverse Effect.

23.19		Material Adverse Change

		Any event or circumstance occurs which the Majority Lenders reasonably believes is likely to have a Material Adverse Effect.

23.20		Tax Structure

		Any advice or recommendation made in the tax Due Diligence Report which is likely to have an adverse effect is not applied by any Group member, or a Group member does not comply with the recommendations made in the Due Diligence Report which are likely to have an adverse effect or the tax structure as contemplated by the tax Due Diligence Report is amended or altered, which is likely to have a Material Adverse Effect.

23.21		Genesys S.A. Refinancing

		If on or prior to 31 May 2001, Genesys S.A. fails to refinance the USD 35,000,000 loan extended to it by Fortis Banque France S.A. in accordance with sub-clause 2.2.2.

23.22		Acceleration and Cancellation

		Upon the occurrence of an Event of Default at any time thereafter, the Agent may, without any mise en demeure or any judicial or extra judicial step (and, if so instructed by the Majority Lenders, shall) by notice to the Borrowers but subject to the mandatory provisions of articles L.620-1 to L.628-3 of the French Code de commerce:

	23.22.1		declare all or any part of the Advances to be immediately due and payable (whereupon the same shall become so payable together with accrued interest thereon and any other sums then owed by the Obligors under the Finance Documents) or declare all or any part of the Advances to be due and payable on demand of the Agent; and/or

	23.22.2		declare that any unutilised portion of the Facilities shall be cancelled, whereupon the same shall be cancelled and the Available Commitment of each Lender shall be reduced to zero; and/or

	23.22.3		exercise or direct the Security Agent to exercise all rights and remedies.

provided that, notwithstanding the above, if there shall occur an Event of Default under Clause 23.6.2 or Clause 23.7(d), then all of the Advances shall automatically be due and payable and any unutilised portion of the Facilities shall automatically be cancelled and the Available Commitment of each Lender shall be automatically reduced to zero, in each case without any action by the Agent or any Lender.

23.23		Advances Due on Demand

		If, pursuant to Clause 23.22 (Acceleration and Cancellation), the Agent declares all or any part of the Advances to be due and payable on demand of the Agent, then, and at any time thereafter, the Agent or the Security Agent, as the case may be, may (and, if so instructed by the Majority Lenders, shall) by notice to the Borrowers:

	23.23.1		require repayment of all or such part of the Advances on such date as it may specify in such notice (whereupon the same shall become due and payable on the date specified together with accrued interest thereon and any other sums then owed by the Obligors under the Finance Documents) or withdraw its declaration with effect from such date as it may specify; and/or

	23.23.2		select as the duration of any Interest Period or Term which begins whilst such declaration remains in effect a period of six months or less;

	23.23.3		declare that the Security Documents (or any of them) shall have become enforceable; and/or

	23.23.4		send a Valid Claim (as defined in the Guarantee signed on the date hereof by Genesys S.A.) to Genesys S.A. to request payment of all sums due hereunder by Vialog Corporation, provided that such Valid Claim may not be sent to Genesys S.A. before the Agent declares the relevant Advance due and payable as a result of an Event of Default.

(a)

Vialog Corporation shall pay to the Agent (for the account of each Lender) a commission in dollars computed at a rate of:

	(i)		50% per annum of the A1 Margin on that Lender’s Available Term A1 Commitment for the Term Availability Period applicable to the Term A1 Facility; and

	(ii)		50% per annum of the B Margin on that Lender’s Available Term B Commitment for the Term Availability Period applicable to the Term B Facility; and

	(iii)		50% per annum of the Revolving 1 Margin on that Lender’s Available Revolving 1 Commitment.

(b)

Genesys S.A. shall pay to the Agent (for the account of each Lender) a commission in dollars computed at a rate of:

	(i)		50% per annum of the A2 Margin on that Lender’s Available Term A2 Commitment for the Term Availability Period applicable to the Term A2 Facility; and

	(ii)		50% per annum of the Revolving 2 Margin on that Lender’s Available Revolving 2 Commitment.

(c)

The accrued commitment commission is payable on the last day of each quarter, on the last day of the Availability Period and on the cancelled amount of the relevant Lender’s Commitment at the time the cancellation is effective.

24.2		Arrangement Fee

		Each of the Borrowers shall pay on the date hereof to the Arrangers a fee (the amount being agreed in a separate letter (the “Arrangement Fee Letter”)) net of VAT on the aggregate maximum amount of the Facilities.

24.3		Agency Fee

		Each of the Borrowers shall pay to the Agent for its own account the agency fees (the amount being agreed in a separate letter (the “Agency Fee Letter”)).

25.		COSTS AND EXPENSES

25.1		Transaction Expenses

		The Borrowers shall, from time to time on demand of the Agent, reimburse each of the Agent, the Security Agent and the Arrangers and any of their affiliates (on a full indemnity basis whether or not any of the Facilities are drawndown or utilised) for all reasonable costs and expenses (including reasonable legal fees, accounting fees and translation fees) together with any VAT thereon incurred by it in connection with:

	25.1.1		any due diligence carried out by it or on its behalf in connection with the Finance Documents and the transactions contemplated thereby;

	25.1.2		the negotiation, preparation, execution and perfection of the Finance Documents, any other document referred to in the Finance Documents and the completion of the transactions therein contemplated; and

	25.1.3		the syndication of the Facilities.

25.2		Preservation and Enforcement of Rights

		Each of the Borrowers shall, from time to time on demand of the Agent or Security Agent, reimburse the Finance Parties for all reasonable and duly documented costs and expenses (including legal fees) on a full indemnity basis together with any VAT thereon incurred in or in connection with the preservation and/or enforcement of any of the rights of the Finance Parties under the Finance Documents against such Borrower and any document referred to in the Finance Documents (including, without limitation, any costs and expenses relating to any investigation as to whether or not an Event of Default might have occurred or is likely to occur in respect of such Borrower’s Facilities or any steps necessary or desirable in connection with any proposal for remedying or otherwise resolving an Event of Default or Potential Event of Default in respect of such Borrower’s Facilities).

25.3		Stamp Taxes

		Each of the Borrowers shall, to the extent it relates to such Borrower, pay all stamp, registration and other taxes to which the Finance Documents, any other document

		referred to in the Finance Documents or any judgment given in connection therewith is or at any time may be subject and shall, from time to time on demand of the Agent, indemnify the Finance Parties against any liabilities, costs, claims and expenses resulting from any failure to pay or any delay in paying any such tax.

25.4		Amendment Costs

		If an Obligor requests any amendment, waiver or consent then the applicable Borrower shall, within five Business Days of demand by the Agent, reimburse the Finance Parties for all reasonable and duly documented costs and expenses (including legal fees) together with any VAT thereon incurred by such person in responding to or complying with such request.

25.5		Lenders’ Liabilities for Costs

		If a Borrower fail to perform any of its obligations under this Clause 25, each Lender shall, prorata to its Commitment, indemnify each of the Agent, the Security Agent and the Arrangers against any loss incurred by any of them (or their affiliates, in the case of costs and expenses referred to in Clause 25.1 (Transaction Expenses)) as a result of such failure.

26.		DEFAULT INTEREST

26.1		If a Borrower fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue to the fullest extent permitted by law on the overdue amount from the due date up to the date of actual payment (both before and after judgment) on a day-to-day basis at a rate per annum equal to the sum of the Overnight LIBOR, the applicable Margin, the Mandatory Cost (if any) (expressed as a percentage per annum) and one per cent (1%). Any interest accruing under this Clause 26.1 shall be immediately payable by the Borrower on demand by the Agent.

26.2		Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount only if, within the meaning of Article 1154 of the French Code civil, such interest is due for a period of at least one year, but will remain immediately due and payable.

27.		BREAK COSTS

		If any Lender or the Agent on its behalf receives or recovers all or any part of an Advance otherwise than on the last day of an Interest Period or Term relating thereto, the applicable Borrower shall pay to the Agent on demand for account of such Lender an amount equal to the amount (if any) by which (a) the additional interest which would have been payable by such Borrower on the amount so received or recovered had it been received or recovered on the last day of that Interest Period or Term exceeds (b) the amount of interest which in the opinion of the Agent would have been payable to the Agent on the last day of that Interest Period or Term in respect of a deposit in the currency of the amount so received or recovered equal to the amount so received or recovered placed by it with a prime bank in the relevant interbank market for a period starting on the third Business Day following the date of such receipt or recovery and ending on the last day of that Interest Period or Term.

28.		OTHER INDEMNITIES

28.1		Other Indemnities

		Each of the Borrowers undertakes to indemnify:

	28.1.1		each Finance Party against any cost, claim, loss, expense (including reasonable legal fees) or liability together with any VAT thereon, whether or not reasonably foreseeable, which it may sustain or incur as a consequence of the occurrence of any Event of Default or any material default by any Obligor in the performance of any of the obligations expressed to be assumed by it in any Finance Document to the extent the same relate to such Borrower;

	28.1.2		the Agent against any cost or loss it may suffer or incur as a result of its entering into, or performing, any foreign exchange contract for the purposes of Clause 30 (Payments) in respect of such Borrower;

	28.1.3		each Lender against any cost or loss it may suffer under Clause 25.5 (Lenders’ Liabilities for Costs) or Clause 33.10 (Lenders Indemnity to the Agent) in respect of such Borrower;

	28.1.4		each Lender against any cost or loss it may suffer or incur as a result of its funding or making arrangements to fund its portion of an Advance requested by such Borrower but not made by reason of the operation of any one or more of the provisions hereof;

	28.1.5		each Lender against any cost or loss it may suffer including any reduction in the rate of return it would have received but for performing its obligations to such Borrower under this Agreement as a result of any minimum reserve requirements imposed on it by the European Central Bank in relation to an Advance or funding an Advance; and

	28.1.6		each Finance Party and in each case each of their affiliates and each of their respective officers, directors, employees, agents, advisors and representatives (each, an “Indemnified Party”) from and against any and all claims, damages, losses, liabilities, costs and expenses (including, without limitation, fees and disbursements of legal counsel), joint or several, that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or relating to any investigation, litigation or proceeding or the preparation of any defence with respect thereto, arising out of or in connection with or relating to the Finance Documents or the transactions contemplated hereby or thereby in respect of such Borrower or any use made or proposed to be made with the proceeds of the Facilities, whether or not such investigation, litigation or proceeding is brought by a member of the Group, any of shareholder or creditors of any member of the Group, an Indemnified Party or any other person, except to the extent that such claim, damage, loss, liability, cost or expense is found by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or wilful misconduct.

28.2		Currency Indemnity

		If any sum (a “Sum”) due from an Obligor under the Finance Documents or any order, judgment, award or decision given or made in relation thereto has to be converted from the currency (the “First Currency”) in which such Sum is payable into another currency (the “Second Currency”) for the purpose of:

	28.2.1		making or filing a claim or proof against such Obligor;

	28.2.2		obtaining or enforcing an order, judgment, award or decision in any court, arbitral proceedings or other tribunal.

		the applicable Borrower shall indemnify each person to whom such Sum is due from and against any loss suffered or incurred as a result of any discrepancy between (a) the rate of exchange used for such purpose to convert such Sum from the First Currency into the Second Currency and (b) the rate or rates of exchange available to such person at the time of receipt of such Sum.

29.		CURRENCY OF ACCOUNT AND PAYMENT

29.1		Currency of Account

		Dollars is the currency of account and payment for each and every sum at any time due from an Obligor hereunder, provided that:

	29.1.1		each repayment of an Advance or Unpaid Sum or a part thereof shall be made in the currency in which such Advance or Unpaid Sum is denominated at the time of that repayment;

	29.1.2		each payment of interest shall be made in the currency in which the sum in respect of which such interest is payable is denominated;

	29.1.3		each payment in respect of costs and expenses shall be made in the currency in which the same were incurred;

	29.1.4		each payment pursuant to Clause 14.3 (Tax Indemnity), Clause 15.1 (Increased Costs) or Clause 28.1 (Other Indemnities) shall be made in the currency specified by the party claiming thereunder; and

	29.1.5		any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.

30.		PAYMENTS

30.1		Payments to the Agent

		On each date on which this Agreement requires an amount to be paid by an Obligor or a Lender, such Obligor or, as the case may be, such Lender shall make the same available to the Agent for value on the due date at such time and in such funds and to such account with such bank as the Agent shall specify from time to time.

30.1.1

Save as otherwise provided herein, each payment received by the Agent pursuant to Clause 30.1 (Payments to the Agent) shall:

(a)

in the case of a payment received for the account of a Borrower, be made available by the Agent to that Borrower by application:

	(i)		first, in or towards payment (on the date, and in the currency and funds, of receipt) of any amount then due from that Borrower hereunder to the person from whom the amount was so received or in or towards the purchase of any amount of any currency to be so applied; and

	(ii)		secondly, in or towards payment (on the date, and in the currency and funds, of receipt) to such account with such bank in the principal financial centre of the country of the currency of such payment (or, in relation to the euro, in a financial centre in a state which has adopted the euro for its currency) as that Borrower shall have previously notified to the Agent for this purpose; and

(b)

in the case of any other payment, be made available by the Agent to the person entitled to receive the payment in accordance with this Agreement (in the case of a Lender, for the account of the Facility Office) for value the same day by transfer to such account of such person with such bank in the principal financial centre of the country of the currency of such payment [(or, in relation to the euro, in a financial centre in a state which has adopted the euro for its currency)] as that person has previously notified to the Agent.

30.1.2

A payment will be deemed to have been made by the Agent on the date on which it is required to be made under this Agreement if the Agent has, on or before that date, taken steps to make that payment in accordance with the regulations or operating procedures of the clearing system used by the Agent in order to make the payment.

30.2		Payments by the Agent to the Lenders

		Any amount payable by the Agent to the Lenders under this Agreement shall be paid in dollars.

30.3		No Set-off

		All payments required to be made by an Obligor under any Finance Document shall be calculated without reference to any set-off or counterclaim and shall be made free and clear of and without any deduction for or on account of any set-off or counterclaim.

30.4		Clawback

		Where a sum is to be paid under a Finance Document to the Agent for account of another person, the Agent shall not be obliged to make the same available to that other person or to enter into or perform any exchange contract in connection therewith until it has been able to establish to its satisfaction that it has actually received such sum, but if it does so

		and it proves to be the case that it had not actually received such sum, then the person to whom such sum or the proceeds of such exchange contract was so made available shall on request refund the same to the Agent together with an amount sufficient to indemnify the Agent against any cost or loss it may have suffered or incurred by reason of its having paid out such sum or the proceeds of such exchange contract prior to its having received such sum.

30.5		Partial Payments

		If and whenever a payment is made by an Obligor hereunder and the Agent receives an amount less than the due amount of such payment the Agent may apply the amount received towards the obligations of the Obligors under this Agreement in the following order:

	30.5.1		first, in or towards payment of any unpaid costs and expenses of each of the Agent, the Security Agent and the Arranger;

	30.5.2		second, in or towards payment pro rata of any accrued interest, commitment commission due but unpaid under the applicable Facility;

	30.5.3		third, in or towards payment pro rata of any Outstandings due but unpaid under the applicable Facility; and

	30.5.4		fourth, in or towards payment pro rata of any other sum due but unpaid under the applicable Facility.

30.6		Variation of Partial Payments

		The order of partial payments set out in Clause 30.5 (Partial Payments) shall override any appropriation made by the Obligor to which the partial payment relates but the order set out in sub-clauses 30.5.2, 30.5.3, 30.5.4 of Clause 30.5 (Partial Payments) may be varied if agreed by all the Lenders.

30.7		Business Days

	30.7.1		Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).

	30.7.2		During any extension of the due date for payment of any principal under this Agreement interest is payable on the principal at the rate payable on the original due date.

31.		SET-OFF

31.1		Contractual Set-off

		Each Obligor authorises each Lender after the occurrence of an Event of Default and while such Event of Default is continuing to apply any credit balance to which such Obligor is entitled on any account of such Obligor with such Lender in satisfaction of any sum due and payable from such Obligor to such Lender under any Finance Document but unpaid. For this purpose, each Lender is authorised to purchase with the

		moneys standing to the credit of any such account such other currencies as may be necessary to effect such application.

31.2		Set-off not Mandatory

		No Lender shall be obliged to exercise any right given to it by Clause 31.1 (Contractual Set-off).

32.		SHARING

32.1		Payments to Lenders

		If a Lender (a “Recovering Lender”) applies any receipt or recovery from an Obligor to a payment due under this Agreement and such amount is received or recovered other than in accordance with Clause 30 (Payments), then such Recovering Lender shall:

	32.1.1		notify the Agent of such receipt or recovery;

	32.1.2		at the request of the Agent, promptly pay to the Agent an amount (the “Sharing Payment”) equal to such receipt or recovery less any amount which the Agent determines may be retained by such Recovering Lender as its share of any payment to be made in accordance with Clause 30.5 (Partial Payments).

32.2		Redistribution of Payments

		The Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Lender) in accordance with Clause 30.5 (Partial Payments).

32.3		Recovering Lender’s Rights

		The Recovering Lender will be subrogated into the rights of the parties which have shared in a redistribution pursuant to Clause 32.2 (Redistribution of Payments) in respect of the Sharing Payment (and the relevant Obligor shall be liable to the Recovering Lender in an amount equal to the Sharing Payment).

32.4		Repayable Recoveries

		If any part of the Sharing Payment received or recovered by a Recovering Lender becomes repayable and is repaid by such Recovering Lender, then:

	32.4.1		each party which has received a share of such Sharing Payment pursuant to Clause 32.2 (Redistribution of Payments) shall, upon request of the Agent, pay to the Agent for account of such Recovering Lender an amount equal to its share of such Sharing Payment; and

	32.4.2		such Recovering Lender’s rights of subrogation in respect of any reimbursement shall be cancelled and the relevant Obligor will be liable to the reimbursing party for the amount so reimbursed.

32.5		Exception

		This Clause 32 shall not apply if the Recovering Lender would not, after making any

		payment pursuant hereto, have a valid and enforceable claim against the relevant Obligor.

32.6		Recoveries Through Legal Proceedings

		If any Lender intends to commence any action in any court or arbitral proceedings it shall give prior notice to the Agent, the Security Agent and the other Lenders. If any Lender shall commence any action in any court or arbitral proceedings to enforce its rights hereunder and, as a result thereof or in connection therewith, receives any amount, then such Lender shall not be required to share any portion of such amount with any Lender which has the legal right to, but does not, join in such action or commence and diligently prosecute a separate action to enforce its rights in another court or arbitral proceedings.

33.		ROLE OF THE AGENT, THE SECURITY AGENT AND THE ARRANGERS

33.1		Appointment of the Agent and the Security Agent

	(a)		Each of the Arrangers and the Lenders appoint the Agent to act as its agent under and in connection with the Finance Documents (to the exclusion of the Security Documents) and each of the Arrangers and the Lenders appoint the Security Agent to act as its agent under and in connection with the Security Documents.

	(b)		Each of the Arrangers and the Lenders authorise the Agent to exercise the rights, powers, authorities and discretions specifically given to the Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions and each of the Arrangers and the Lenders authorise the Security Agent to exercise the rights, powers, authorities and discretions specifically given to the Security Agent under or in connection with the Security Documents together with any other incidental rights, powers, authorities and discretions.

	(c)		Each of the Arrangers and the Lenders authorise the Security Agent to sign in their name and on their behalf (i) all Security Documents, (ii) any other document in connection with the Security Documents, at the time of execution or enforcement of the security created pursuant to the Security Documents and (iii) any document relating to the enforcement of the security created pursuant to the Security Agreement.

	(a)		The Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party.

	(b)		If the Agent receives notice from a Party referring to this Agreement, describing an Event of Default or a Potential Event of Default and stating that the circumstance described is an Event of Default or a Potential Event of Default, it shall promptly notify the Lenders.

	(c)		The Agent shall promptly notify the Lenders of any Event of Default or a Potential Event of Default arising under Clause 23.1 (Failure to pay).

	(d)		The Agent’s duties under the Finance Documents are solely mechanical and administrative in nature.

33.3		Role of the Arrangers

		Except as specifically provided in the Finance Documents, the Arrangers have no obligations of any kind to any other Party under or in connection with any Finance Document.

33.4		Rendering of Account

		Neither the Agent nor the Arrangers shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.

33.5		Business with the Group

		The Agent and the Arrangers may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group.

33.6		Rights and discretions of the Agent and the Security Agent

	(i)		any representation, notice or document believed by it to be genuine, correct and appropriately authorised; and

	(ii)		any statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.

(b)

The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that:

	(i)		no Event of Default or a Potential Event of Default has occurred (unless it has actual knowledge of an Event of Default or a Potential Event of Default arising under Clause 23.1 (Failure to pay);

	(ii)		any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised; and

	(iii)		any notice or request made by Genesys S.A. (other than Notice of Drawdown) is made on behalf of and with the consent and knowledge of all the Obligors.

	(c)		The Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.

	(d)		The Agent may act in relation to the Finance Documents through its personnel and agents.

(e)

The Security Agent may (i) accept without inquiry any title which an Obligor may have to any asset intended to be the subject of the security created by the Security Documents and (ii) hold or deposit any title deeds, Security Documents or any other documents in connection with any of the assets charged by the Security Documents with any banker or banking company or any company whose business includes undertaking the safe custody of deeds or documents or with any lawyer or firm of lawyers and it shall not be responsible for or be required to insure against any loss incurred in connection with any such holding or deposit and it may pay all amounts required to be paid on account or in relation to any such deposit.

	(a)		Unless a contrary indication appears in a Finance Document, the Agent shall (a) act in accordance with any instructions given to it by the Majority Lenders (or, if so instructed by the Majority Lenders, refrain from acting or exercising any right, power, authority or discretion vested in it as Agent) and (b) not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with such an instruction of the Majority Lenders.

	(b)		Unless a contrary indication appears in a Finance Document, any instructions given by the Majority Lenders will be binding on all the Lenders and the Arrangers.

	(c)		The Agent may refrain from acting in accordance with the instructions of the Majority Lenders (or, if appropriate, the Lenders) until it has received such security as it may require for any cost, loss or liability (together with any associated VAT) which it may incur in complying with the instructions.

	(d)		In the absence of instructions from the Majority Lenders, (or, if appropriate, the Lenders) the Agent may act (or refrain from taking action) as it considers to be in the best interest of the Lenders.

	(e)		The Agent is not authorised to act on behalf of a Lender in any legal or arbitration proceedings relating to any Finance Document, without first obtaining that Lender’s authority to act on its behalf in those proceedings.

	(a)		is responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, the Arrangers, an Obligor or any other person given in or in connection with any Finance Document or the Information Memorandum; or

	(b)		is responsible for the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Finance Document.

	(a)		Without limiting paragraph (b) below, the Agent will not be liable for any action taken by it under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct.

	(b)		No Party (other than the Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Agent may rely on this Clause.

	(c)		The Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent if the Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent for that purpose.

33.10		Lenders’ indemnity to the Agent

		Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Agent, within three Business Days of demand, against any cost, loss or liability incurred by the Agent (otherwise than by reason of the Agent’s gross negligence or wilful misconduct) in acting as Agent under the Finance Documents (unless the Agent has been reimbursed by an Obligor pursuant to a Finance Document).

33.11		Resignation of the Agent

	(a)		The Agent may resign and appoint one of its affiliates (being the Agent’s subsidiary or holding company) acting through an office in France as successor by giving notice to the Lenders and the Borrowers.

	(b)		Alternatively the Agent may resign by giving notice to the Lenders and the Borrowers, in which case the Majority Lenders may appoint a successor Agent.

	(c)		If the Majority Lenders have not appointed a successor Agent in accordance with paragraph (b) above within 30 days after notice of resignation was given, the Agent (after consultation with Genesys S.A.) may appoint a successor Agent acting through an office in France).

	(d)		The retiring Agent shall, at its own cost, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents.

	(e)		The Agent’s resignation notice shall only take effect upon the appointment of a successor.

	(f)		Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this Clause 33. Its successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

	(g)		After consultation with the Borrowers, the Majority Lenders may, by notice to the Agent, require it to resign in accordance with paragraph (b) above. In this event, the Agent shall resign in accordance with paragraph (b) above.

	(a)		In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.

	(b)		If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it.

	(c)		Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor the Arrangers are obliged to disclose to any other person (i) any confidential information or (ii) any other information if the disclosure would or might in its reasonable opinion constitute a breach of any law or a breach of a fiduciary duty.

	(a)		The Agent may treat each Lender as a Lender, entitled to payments under this Agreement and acting through its Facility Office unless it has received not less than five Business Days prior notice from that Lender to the contrary in accordance with the terms of this Agreement.

	(b)		Each Lender shall supply the Agent with any information required by the Agent in order to calculate the Mandatory Cost in accordance with Schedule 8 (Mandatory Cost).

33.14		Credit appraisal by the Lenders

		Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Agent and the Arrangers that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:

	(a)		the financial condition, status and nature of each member of the Group;

	(b)		the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;

	(c)		whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and

	(d)		the adequacy, accuracy and/or completeness of the Information Memorandum and any other information provided by the Agent, any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document.

34.		CHANGES TO THE LENDERS

34.1		Assignments and transfers by the Lenders

34.1.1

Subject to this Clause 34, a Lender (the “Existing Lender ”) may:

	(a)		assign any of its rights; or

	(b)		transfer any of its rights and obligations,

			to another bank or financial institution which is licensed to do banking transactions in France and/or which is an internationally recognised financial institution (the “New Lender”).

	34.1.2		Any Security attached to the rights assigned or the rights and obligations transferred to a New Lender shall be automatically transferred to the New Lender prorata to the Commitments and Advances assigned or transferred.

	(a)		The consent of Genesys S.A. is not required for an assignment or transfer by a Lender to another Lender or an affiliate of a Lender.

	(b)		Any assignment or transfer shall be of a minimum amount of USD 2,000,000.

	(c)		The consent of Genesys S.A. and/or Vialog Corporation is required for an assignment or transfer by a Lender to New Lender which is not a Lender or an affiliate of the Lender.

	(d)		The consent of Genesys S.A. and/or Vialog Corporation to an assignment or transfer must not unreasonably be withheld or delayed. Genesys S.A. will be deemed to have given its consent eight days after the Lender has requested it unless consent is expressly refused for valid reasons by Genesys S.A. within that time.

	(e)		The consent of Genesys S.A. and/or Vialog Corporation to an assignment or transfer must not be withheld solely because the assignment or transfer may result in an increase of the Mandatory Cost.

BETWEEN:


(1)		[...] (the “Existing Lender”)

AND:

(2)		[...] (the “New Lender”)

WHEREAS


(A)		The Existing Lender has entered into a senior term loan facility in an aggregate amount equal to [...], and a revolving loan facility in an aggregate amount equal to [...] under a facility agreement dated [...], between the Borrowers, the Lenders listed in Schedule 1 to that facility agreement, BNP Paribas, CIBC World Markets PLC and Fortis Bank N.V./S.A. acting as Arrangers, and [...] acting as Agent of the Lenders (the “Facility Agreement”).

(B)		The Existing Lender wishes to transfer and the New Lender wishes to acquire [all] of the Existing Lender’s Commitment, rights and obligations referred to in Schedule A to this Transfer Agreement.

(C)		Terms defined in the Facility Agreement have the same meaning when used in this Transfer Agreement.

1.		The Existing Lender and the New Lender agree to the transfer (cession) of [all] of the Existing Lender’s Commitment, rights and obligations referred to in Schedule A to this Transfer Agreement in accordance with Clause 34 of the Facility Agreement (Changes to the Lenders).

2.		The proposed Transfer Date is [...].

3.		The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 38.2 (Addresses) are set out in Schedule A to this Transfer Agreement.

4.		The New Lender confirms to the other Finance Parties represented by the Agent that it will assume the same obligations to those Parties as it would have been under if it was an initial Lender listed in Schedule 1.

5.		The Existing Lender and the New Lender agree that any amounts to be paid by the Agent after the Transfer Date will be paid to the New Lender.

6.		This Transfer Agreement is governed by French law. The Tribunal of Commerce of Paris shall have jurisdiction in relation to any dispute concerning it.

1.		Existing Lender:

2.		New Lender:

3.		Transfer Date:

4.		Existing Lender’s Participation in the Term Facilities:

(a)	Existing Lender’s Term A1 Commitment	Portion Transferred

(b)	Existing Lender’s Term A2 Commitment	Portion Transferred

(c)	Existing Lender’s Term B Commitment	Portion Transferred

5.		Term Advances:

(a)	Term A1 Advances

Amount of Existing Lender’s Participation		Interest Period Portion Transferred

(b)	Term A2 Advances

Amount of Existing Lender’s Participation		Interest Period Portion Transferred

(c)	Term B Advances

Amount of Existing Lender’s Participation		Interest Period Portion Transferred


6.	Existing Lender’s Participation in the Revolving Facility:

	Existing Lender’s Revolving 1 Commitment	Portion Transferred

	Existing Lender’s Revolving 2 Commitment	Portion Transferred

7.	[Each New Lender which is or will be a Hedge Counterparty, by executing this Transfer Agreement, undertakes and agrees to be bound by the terms of Clause 22.30 of the Credit Agreement as a Hedge Counterparty and further agrees to procure that, if any of its affiliates becomes a Hedge Counterparty, such affiliate shall accede to the Credit Agreement and agree in writing to undertake and be bound by Clause 22.30 of the Credit Agreement.]

A.	Corporate Documents

1.	In relation to any Obligor:

	(a)	a certificate of incorporation for each Obligor incorporated outside France and a K-bis extract for each Obligor incorporated in France, not more than one month old;

	(b)	copies, certified by an Authorised Signatory of each Obligor as being true, complete and up to date, of the constitutional documents of such Obligor;

	(c)	copies or extracts, certified by an Authorised Signatory of each Obligor and each Group member granting a Security as being true, complete and up to date and in full force and effect and confirming the same have not been superseded, of the resolutions by the board of directors of such Obligor authorising (to the extent required by law or by the constitutional documents of such Obligor or Group member) the execution, delivery and performance of the Finance Documents to which such Obligor or Group member is a party and approving the terms and conditions thereof in accordance inter alia with Article L.225-35 of the French Code de commerce and authorising a person or persons to sign each Finance Document and any documents to be delivered by such Obligor pursuant thereto;

	(d)	evidence that the signatory of each Finance Document on behalf of an Obligor is an Authorised Signatory of such Obligor.

2.	In relation to Genesys Conferencing Ltd:

	(a)	a copy of the memorandum and articles of association (reflecting the alteration contained in the resolution of Genesys S.A. dated 20 April 2001), certified as true and up to date;

	(b)	written resolution of Genesys S.A., sole member of Genesys Conferencing Ltd, amending the articles of association.

3.	The Group Structure Chart (showing all members of the Group, assuming that the Acquisition is completed).

4.	To the extent not delivered under A1 or A2 the constitutional documents of each Group member whose shares are subject to a Security or which grant a Security.

B.	Accounts and Reports

1.	The Budget and Business Plan for 2001 through 2006 signed by an Authorised Signatory of Genesys S.A. in form and substance satisfactory to the Arrangers.

2.		The Due Diligence Reports together with any reliance letter issued in connection therewith provided that such reliance letters are addressed to the Arrangers and shall be in form and substance satisfactory to the Arrangers.

3.		A copy, certified a true copy by an Authorised Signatory of the applicable Borrower, of the audited financial statements of each of the Borrowers for the year ended 31 December 2000, together with a side letter of the auditors confirming that, if the acquisition and the Astound’s Acquisition are completed, these accounts will be certified without any reserve after the shareholders’ board meeting of Genesys S.A.

4.		A copy, certified a true copy by an Authorised Signatory of the applicable Borrower, of the unaudited quarterly statements (comprising sales, gross margin, EBIT and EBITDA) of each of the Borrowers for the period ended 31 March 2001.

5.		Evidence that the Consolidated Cash of the Group at the Closing Date is on a pro forma basis at least USD 7,000,000 assuming the following:

		(a)	any Intra-Group Loans are entered into;

		(b)	the reimbursement of all Vialog Corporation’s short term debt is made,

		(c)	the Astound’s Acquisition is completed, and

		(d)	all payments to be made on the Closing Date are made.

6.		Evidence on the Closing Date that the consolidated Financial Indebtedness of the Group is not more than (i) USD 90,000,000 drawn under the Facilities, (ii) USD 35,000,000 of debt linked of Genesys S.A., (iii) any Existing Financial Indebtedness, and (iv) the Convertible Bonds Indebtedness.

7.		Evidence that the pro forma consolidated EBITDA (excluding pro forma synergy savings) for the year ended 31 December 2000 for the Group is at least USD 26,600,000.

8.		Evidence that the consolidated shareholders’ equity for the Group at the Closing Date is at least USD 225,000,000.

C.		Acquisition Documents and Related Matters

1.		An executed copy, certified by an Authorised Signatory of Genesys S.A. as true, complete and up-to-date, of the Acquisition Agreement.

2.		Certificate to the effect that the Acquisition has been completed, substantially in accordance with the terms of the Acquisition Documents, subject only to the filing of a certificate of merger at the Closing Date.

3.		Certificate to the effect that Genesys S.A. will, upon merger of Vialog Corporation and ABC Corporation, own all of the outstanding shares of Vialog Corporation.

4.		Evidence that the Acquisition will be financed only by the issuance of shares or ADSs of Genesys S.A., without any payment in cash, except for a maximum amount of USD 1,500,000 to be paid in connection with residuals (rompus) and/or dissenters’ rights, if any.

5.	Evidence that, without limiting the generality of the foregoing, as a result of and after giving effect to the transactions envisaged herein, no Group member shall have any Financial Indebtedness outstanding (other than Existing Financial Indebtedness) and that, without limiting of the generality of the foregoing, all Financial Indebtedness outstanding (other than Existing Financial Indebtedness) of any Group member will be paid in full and all Encumbrances (other than Permitted Encumbrances) and guarantees have been or will be, concurrently with the making of the first Advance hereunder, terminated and discharged.

6.	Evidence that all governmental and regulatory consents and other clearances (including, but not limited to, tax clearances) and all third party consents and approvals necessary or desirable in connection with the Acquisition have been obtained including, but not limited to:

	•	the consents and clearances which are conditions precedent pursuant to the Acquisition Documents in respect of the closing of the Acquisition (other than any COB approval and the filing of the merger certificate in respect of the Acquisition); and

	•	a letter from Ernst & Young addressed to the Arrangers confirming the ability for Vialog Corporation to fully deduct the interest arising under the Facilities relating to, inter alia, the “earning stripping”.

D.	Other Financing Documents

1.	Evidence that the Intra-Group Loan made (or to be made or subsisting on the Closing Date) between Genesys S.A. and Vialog Corporation exists and is subordinated as required by the terms of the Agreement.

2.	A funds flow statement in a form agreed to by the Arrangers or Agent detailing the proposed movement of funds on the Closing Date.

3.	A Certificate of Genesys S.A. relating to the estimation of the Acquisition Costs.

4.	A memorandum prepared by the legal counsel to Genesys S.A. describing the procedure by Vialog Corporation to defease its bonds and an undertaking by Vialog Corporation that its bonds will be defeased within 30 days of the date hereof.

E.	Security, Guarantee and Priority Documents

1.	The Security Documents duly executed and delivered by the relevant Obligors granting, evidencing or pursuant to which the security will be granted and enforceable.

2.	Share certificates in relation to the shares in Group members which have been pledged and are evidenced by share certificates (i.e. share certificates of Genesys Conferencing AB, Genesys Conferencing Inc. and Genesys Conferencing Ltd. (to be provided by Fortis Bank N.V./S.A. after repayment of the USD 35,000,000 loan with respect to the shares of Genesys Conferencing Inc. and Genesys Conferencing Ltd.) and the ABCD Merger stock certificate with respect to Vialog Corporation.

3.	Stock transfer form signed by Genesys Conferencing UK Ltd.

4.	Copy of the register of members of Genesys Conferencing Ltd. and the share registry of Genesys Conferencing AB.

F.	Legal Opinions

	Legal Opinions, dated the Closing Date, of:

	(i)	Clifford Chance, Paris, the Arrangers’ and Agent’s counsel;

	(ii)	Cleary, Gottlieb, Steen and Hamilton, Paris, Genesys S.A.’s counsel;

	(iii)	Clifford Chance Rogers & Wells, the Arrangers’ and Agent’s New York counsel;

	(iv)	Mirrick O’Connell, Vialog Corporation’s Massachusetts counsel;

	(v)	Clifford Chance, London, the Arranger’s and Agent’s counsel; and

	(vi)	Advokatfirman Vinge, Sweden, the Arranger’s and Agent’s counsel;

	in each case in form and substance satisfactory to the Arrangers.

G.	Miscellaneous

1.	A certificate of a duly authorised officer of each of the Borrowers confirming that the aggregate of all Financial Indebtedness of such company together with the maximum amount of the Facilities, does not and would not if fully drawn or utilised, exceed any borrowing limit in that company’s constitutive documents or any other agreement to which that company is a party and confirming that the transactions contemplated by and the entering into of the Finance Documents will not contravene any other provision of that company’s constitutional documents.

2.	A list of Genesys S.A. confirming which companies within the Group are Material Subsidiaries.

3.	A certificate of duly authorised officers of each of the Borrowers confirming that there is no Event of Default or Potential Event of Default.

4.	A list certified by a director of Genesys S.A., of the declared shareholders of Genesys S.A. owning more than 5% of the share capital of Genesys S.A based on the most recent available information.

5.	A written confirmation by Genesys S.A. that it will be possible for the Arrangers to use the Wainhouse Report for the syndication.

6.	Evidence that the fees required to be paid by each of the Borrowers pursuant to Clause 24.2 (Arrangement fee) have been paid.

7.	A Market Flex and Clear Market Letter duly executed by each of the Borrowers.

	For the purposes of Schedule 3 “evidence” means a written opinion, a certificate or a written attestation by the auditors, counsel or Authorised Signatory of the Borrowers.

Notice of Drawdown

From:	[Insert name of Borrower]

To:	[Insert name of Agent]

Dated:

Dear Sirs,

1.	We refer to the agreement (the “Credit Agreement”) dated [...] and made between, inter alia, Genesys S.A. and Vialog Corporation as borrowers, BNP Paribas as agent and security agent and the financial institutions named therein as Lenders. Terms defined in the Credit Agreement shall have the same meaning in this notice.

2.	This notice is irrevocable.

3.	We hereby give you notice that, pursuant to the Credit Agreement, we wish the Lenders to make a [Term]/[Revolving] Advance as follows:

	(a)	Borrower:

	(b)	[principal]/[face] amount;

	(c)	Utilisation Date:

	(d)	[Interest Period] /[Term];

	(e)	[Repayment Date]

4.	We confirm that, at the date hereof, the Repeated Representations are true and no Event of Default [or Potential Event of Default] is continuing.

5.	The proceeds of this drawdown should be credited to [insert account details].

.............................
Authorised Signatory
for and on behalf of
[Insert name of Borrower]

Selection Notice

From:	[Insert name of Borrower]

To:	[Insert name of Agent]

Dated:

Dear Sirs,

1.		We refer to the agreement (the “Credit Agreement”) dated [...] 2001 and made between, inter alia, a group of borrowers including Genesys S.A., BNP Paribas as agent and security agent and the financial institutions named therein as Lenders. Terms defined in the Credit Agreement shall have the same meaning in this notice.

2.		We particularly refer to the Term Advance drawn on [relevant Utilisation

		Date] with an Interest Period ending on [...].

3.		We hereby request that the next Interest Period for the above Term Advance is [...].

4.		We confirm that, at the date hereof, the Repeated Representations are

		true and no Event of Default or Potential Event of Default is continuing.

5.		This notice is irrevocable.

.............................
Authorised Signatory
for and on behalf of
[Insert name of Borrower]

Form of Compliance Certificate

To:	[Insert name of Agent]

Date:

Dear Sirs,

1.		We refer to an agreement (the “Credit Agreement”) dated April [20] 2000 and made between, inter alia, a group of borrowers including Genesys S.A., BNP Paribas as agent and security agent, the financial institutions defined therein as Lenders and others.

2.		Terms defined in the Credit Agreement shall bear the same meaning herein.

3.		We confirm that:

4.		[to be given by Auditors: we are independent auditors in respect of Genesys S.A. and attached hereto is a copy of Genesys S.A. annual consolidated audited financial statements in respect of which we have issued our audit report]

5.		[to be given by Auditors: we are independent auditors in respect of Genesys S.A. and attached hereto is a copy of Genesys S.A. semi-annual consolidated unaudited financial statements in respect of which we have completed a limited review in accordance with our professional rules (it being understood that such limited review does not constitute an audit [insert other customary disclaimers as auditors may deem fit].]

6.		[to be given by Genesys S.A.: we confirm that the following companies constitute Material Subsidiaries for the purposes of the Credit Agreement: [...].]

7.		[to be given by Genesys S.A.: we confirm that the aggregate tangible net worth of the Guarantors (in each case calculated on an unconsolidated basis and excluding all intra-Group items and investments in subsidiaries of any member of the Group) exceeds [...] % of the Total Assets of the Group].

8.		[to be given by Genesys S.A. or Vialog Corporation, as the case may be: we confirm that no Event of Default or Potential Event of Default was continuing unremedied or unwaived on [...] [other than [...] ].

9.		[to be given by Genesys S.A. or Vialog Corporation, as the case may be: we confirm that the Repeated Representations were true in all material respects on [specify year end or quarter end date to which certificate relates] [other than [...]].

10.		A detailed calculation of any amounts due pursuant to Clause 12 (Mandatory Prepayment).

1.		A copy, certified as at the date of the Guarantor a true and up-to-date copy by an Authorised Signatory of the Additional Guarantor, of the constitutional documents of such proposed Additional Guarantor.

		A certificate of incorporation for the Additional Guarantor and a K-bis extract for French Additional Guarantor no more than one month old.

2.		To the extent required by law or the applicable constitutional documents of the Guarantor, a certified copy or extract of any board resolution of such Additional Guarantor approving the execution and delivery of a Guarantee the performance of its obligations as guarantor and authorising a named person or persons to sign such a Guarantee, any other Finance Document and any other documents to be delivered by such Additional Guarantor pursuant thereto.

3.		A certificate of an Authorised Signatory of the Additional Guarantor setting out the names and signatures of the person or persons authorised to sign, on behalf of such proposed Additional Guarantor, the Guarantee, any other Finance Documents and any other documents to be delivered by such Additional Guarantor pursuant thereto.

4.		A copy of the Guarantee duly signed by the proposed Additional Guarantor in form and substance satisfactory to the Security Agent.

5.		A copy, certified a true copy by an Authorised Signatory of the Additional Guarantor, of its latest financial statements.

6.		If the Additional Guarantor is incorporated in a jurisdiction other than France, an opinion of the Lenders’ local counsel in the relevant jurisdiction in form and substance satisfactory to the Agent.

7.		An opinion of Clifford Chance, counsel to the Agent, in form and substance satisfactory to the Security Agent.

8.		An opinion of in-house counsel to the Borrowers, in form and substance satisfactory to the Security Agent.


(i)	Genesys S.A.

(ii)	Vialog Corporation

(iii)	Vialog Subsidiaries

(iv)	Genesys Conferencing, Inc.

1.		The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Financial Services Authority (or, in either case, any other authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank.

2.		On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall calculate, as a percentage rate, a rate (the “Additional Cost Rate”) for each Lender, in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Agent as a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the relevant Facilities) and will be expressed as a percentage rate per annum.

3.		The Additional Cost Rate for any Lender lending from a Facility Office in a state which has adopted the euro will be the percentage notified by that Lender to the Agent as the cost of complying with the minimum reserve requirements of the European Central Bank.

4.		The Additional Cost Rate for any Lender lending from a Facility Office in the United Kingdom will be calculated by the Agent as follows:

		in relation to a Facility in any currency other than sterling:

	Where:

	E	is the rate of charge payable by that Lender to the Financial Services Authority pursuant to the Fees Regulations (but, for this purpose, ignoring any minimum fee required pursuant to the Fees Regulations) and expressed in pounds per £1,000,000 of the Fee Base of that Lender.

5.	For the purposes of this Schedule:

	(a)	"Fees Regulations” means the Banking Supervision (Fees) Regulations 2000 of United Kingdom or such other law or regulation as may be in force from time to time in respect of the payment of fees for banking supervision; and

	(b)	"Fee Base” has the meaning given to it, and will be calculated in accordance with, the Fees Regulations.

6.	Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information in writing on or prior to the date on which it becomes a Lender:

	(a)	its jurisdiction of incorporation and the jurisdiction of its Facility Office; and

	(b)	any other information that the Agent may reasonably require for such purpose.

	Each Lender shall promptly notify the Agent in writing of any change to the information provided by it pursuant to this paragraph.

7.	The percentages or rates of charge of each Lender for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraph 6 above and on the assumption that, unless a Lender notifies the Agent to the contrary, each Lender’s obligations in relation to cash ratio deposits, the Fees Regulations are the same as those of a typical bank from its jurisdiction of incorporation with a Facility Office in the same jurisdiction as its Facility Office.

8.	The Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to assume that the information provided by any Lender pursuant to paragraphs 3 and 6 above is true and correct in all respects.

9.	The Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender pursuant to paragraphs 3 and 6 above.

10.	Any determination by the Agent pursuant to this Schedule in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the absence of manifest error, be conclusive and binding on all Parties.

11.	The Agent may from time to time, after consultation with the Borrowers and the Lenders, determine and notify to all Parties any amendments which are required to be made to this Schedule in order to comply with any change in law, regulation or any requirements from time to time imposed by the Financial Services Authority or the European Central Bank (or, in any case, any other authority which replaces all or any of its functions) and any such determination shall, in the absence of manifest error, be conclusive and binding on all Parties.

12.	Notwithstanding anything to the contrary contained herein or in the Agreement to which this Schedule is attached, no Lender shall charge or pass on to any Borrower any Mandatory Cost unless (and then only to the extent) such Lender customarily charges or passes on Mandatory Costs to its corporate clients.

1.	Financial Definitions

	In Clause 21 (Financial Condition) the following terms have the following meanings.

	“Capital Expenditure” means any expenditure or obligations in respect of expenditure (including any obligation in respect of the capital element of any Finance Lease) for the acquisition of equipment, fixed assets, real property, intangible assets and other assets of a capital nature, or for the replacements or substitutions therefor or additions or improvements thereto, that in any such case have a useful life of more than one year together with costs incurred in connection therewith.

	“Cash” means, at any time, cash at bank denominated in dollars and credited to an account in the name of any member of the Group with an Eligible Deposit Lender and to which the Obligor alone entitled and for so long as (a) such cash is repayable on demand and (b) repayment of such cash is not contingent on the prior discharge of any other indebtedness of any Group member or of any other person whatsoever or on the satisfaction of any other condition.

	“Consolidated Cash Flow” means, in respect of any Relevant Period, EBITDA of the Group after adding back:

	(a)	any decrease in the amount of Working Capital; and

	(b)	any cash receipt in respect of any exceptional or extraordinary item;

	and deducting:

	(i)	any amount of Capital Expenditure actually made by any member of the Group;

	(ii)	any increase in the amount of Working Capital;

	(iii)	any amount actually paid or due and payable in respect of taxes on the profits of any member of the Group; and

	(iv)	any cash payment in respect of any exceptional or extraordinary item,

	and no amount shall be included or excluded more than once.

	“Consolidated Debt Service” means, in respect of any Relevant Period, the aggregate of:

	(a)	Consolidated Net Interest Expense; and

	(b)	the aggregate of scheduled and mandatory payments of any Financial Indebtedness falling due (but excluding any amounts falling due under the Revolving Facility other than any payments required to be made in permanent reduction of the Revolving Facility).

		“Consolidated EBITDA” means, in any Relevant Period, the EBITDA of the Group.

		“Consolidated Net Interest Expense” means, in respect of any Relevant Period, the aggregate amount of the interest (including the interest element of leasing and hire purchase payments) commission, fees, discounts and other finance payments payable by any member of the Group,

		including any commission, fees, discounts and other finance payments payable by any member of the Group under any interest rate hedging arrangement,

		but deducting (a) any commission, fees, discounts and other finance payments receivable by any member of the Group under any interest rate hedging instrument permitted by this Agreement, (b) any interest receivable by any member of the Group on any deposit or bank account.

		For the avoidance of doubt, any amount corresponding to the amortisation of the transaction expenses (including fees) relating to the Acquisition or this Agreement will be excluded from the scope of this definition.

		“Consolidated Net Indebtedness” means, at any time (without double counting), the aggregate indebtedness of any Group member constituting Financial Indebtedness but:

		(a)	excluding such Indebtedness of any Group member to another Group member to the extent permitted under this Agreement; and

		(b)	deducting the Cash held by the Group at such time.

		“Current Assets” means the aggregate of inventory, trade and other receivables of each member of the Group including sundry debtors (but excluding cash at bank [and Cash Equivalent Investments]) maturing within twelve months from the date of computation and excluding amounts due from Vialog Corporation in connection with the Acquisition.

		“Current Liabilities” means the aggregate of all liabilities (including trade creditors, accruals and provisions and prepayments) of each member of the Group falling due within twelve months from the date of computation but excluding consolidated aggregate Financial Indebtedness of the Group falling due within such period and any interest accruing on such Financial Indebtedness due in such period and excluding amounts due to the Vendors in connection with the Acquisition.

		“EBIT” means, in respect of any Relevant Period, the consolidated net income of the Group before:

		(a)	any provision on account of taxation;

		(b)	any interest (including capitalised interest), commission, discounts or other fees incurred or payable, received or receivable by any member of the Group in respect of Financial Indebtedness;

		(c)	any amounts received or paid pursuant to the interest hedging arrangements entered into in respect of the Facilities;

		(d)	any items treated as exceptional or extraordinary items;

		(e)	any amount attributable to goodwill arising on the Acquisition,

		“EBITDA” means, for any Relevant Period, EBIT before any amount attributable to amortisation of intangible assets (including goodwill if not already covered by the definition of EBIT) and depreciation of tangible assets and amortisation, or the writing off of transaction expenses in relation to the Acquisition (to the extent, in each case, deducted in calculated EBIT).

		“Eligible Deposit Lenders” means any bank or financial institution with a short term rating of at least A1 granted by Standard and Poors Corporation or P1 granted by Moody’s Investors Services, Inc.

		“Excess Cash Flow” means, in respect of any Relevant Period, the difference between Consolidated Cash Flow and the Consolidated Debt Service.

		“Financial Quarter” means the period commencing on the day after one Quarter Date and ending on the next Quarter Date.

		“Fixed Assets” means the aggregate of property and machinery of each member of the Group excluding property or machinery which a member of the Group buys or sells in the ordinary course of business of such member of the Group.

		“Intangible Assets” means the goodwill and all IP Licences and Intellectual Property Rights of each member of the Group.

		“Quarter Date” means each of 31 March, 30 June, 30 September and 31 December.

		“Relevant Period” means each period of twelve months ending on the last day of each Financial Quarter of Genesys S.A.’s financial year provided however that the Relevant Period ending on 31 December 2001 shall be the period from 1st April 2001 to 31st December 2001.

		“Total Assets” means at any time the aggregate of the Current Assets, the Fixed Assets and the Intangible Assets of the Group.

		“Working Capital” means on any date Current Assets less Current Liabilities.


/s/	François Legros
By:	François Legros

Address:	4, rue Jules Ferry BP 1145 34008 Montpellier Cedex 1 France

Tel:	+ 33.4.67.06.27.67

Fax:	+ 33.4.67.06.27.90

Attention:	Chairman and Chief Executive Officer

Copy:	General Counsel


/s/	Kim Mayyasi
By:	Kim Mayyasi

Address:	32, Crosby Drive Bedford, MA 01730 United States of America

Tel:	(718).761.6200

Fax:	(718).761.6300

Attention:	President and Chief Executive Officer

Copy:	General Counsel


The Arrangers

BNP PARIBAS

/s/ Christophe Lenouvel
By: Christophe Lenouvel

Address:	1)	16, boulevard des Italiens 75009 Paris France

	2)	ref 384 37, place du Marché Saint-Honoré 75031 Paris Cedex 01

Tel:		+ 33.1.42.98.75.50

Fax:		+ 33.1.42.98.43.17

Attention:		Sergio Collavini

CIBC WORLD MARKETS PLC



/s/ Heinz Noeding
By: Heinz Noeding

(1)		Credit Matters

(i) Address:		Cottons Centre Cottons Jane London England SE1 2 QL

Tel:		+ 44.207.234.6941

Fax:		+ 44.207.234.7115

Mail:		heinz.noeding@cibc.co.uk (Attention: Heinz Noeding)

(ii) Address:		Cottons Centre Cottons Jane London England SE1 2 QL

Tel:		+ 44.207.234.6854

Fax:		+ 44.207.234.7115

Email:		alastair.brown@cibc.co.uk (Attention: Alastair Brown)



(2)		Operations/Administration

(i) Address:		Cottons Centre Cottons Jane London England SE1 2 QL

Fax:		+ 44.207.234.6406

Email:		amy.bickford@cibc.co.uk (Attention: Amy Bickford)

(ii) Address:		Cottons Centre Cottons Jane London England SE1 2 QL

Fax:		+ 44.207.234.6433

Attention:		Brian Hayden


/s/ Christian Van der Stichele
By: Christian Van der Stichele

Address:		Montagne du Parc 3 B-10000 Brussels Belgium

Tel:		+ 32.2.518.2074

Fax:		+ 32.2.518.4779

E-mail:		benoit.melot@fortisbank.com

Attention:		Benoît Mélot Deputy Director


The Agent

BNP PARIBAS

/s/ Cécile Bloy
By: Cécile Bloy

(1)		Credit and Documentation Matters

(i) Address:		Ref 384 37, place du Marché Saint-Honoré 75031 Paris Cedex 01
Tel:		00.33.1.42.98.75.50

Fax:		00.33.1.42.98.43.17

Attention:		Sergio Collavini Senior Agency Administrator

(ii) Address:		Ref 384 37, place du Marché Saint-Honoré 75031 Paris Cedex 01 France

Tel:		00.33.1.42.98.19.24

Fax:		00.33.1.42.98.43.17

Attention:		Paulette Privat Agency Administrator

(2)		Operational Matters

(i) Address:		16 boulevard des Italiens 75009 Paris France

Tel.:		00.33.1.42.98.57.24

Fax:		00.33.1.42.98.04.61

Attention:		Benoit Danga


(1)		Credit and Documentation Matters

(i) Address:		Ref 384 37, place du Marché Saint-Honoré 75031 Paris Cedex 01

Tel:		00.33.1.42.98.75.50

Fax:		00.33.1.42.98.43.17

Telex:

Attention:		Sergio Collavini Senior Agency Administrator

(ii) Address:		Ref 384 37, place du Marché Saint-Honoré 75031 Paris Cedex 01 France

Tel:		00.33.1.42.98.19.24

Attention:		00.33.1.42.98.43.17

Attention:		Paulette Privat Agency Administrator

(2)		Operational Matters

(i) Address:		16 boulevard des Italiens 75009 Paris France

Tel.:		00.33.1.42.98.57.24

Fax:		00.33.1.42.98.04.61

Attention:		Benoit Danga


/s/ Cécile Bloy
By: Cécile Bloy

Address:	1)	16, boulevard des Italiens 75009 Paris France

	2)	ref 384 37, place du Marché Saint-Honoré 75031 Paris Cedex 01

Tel:		+ 33.1.42.98.75.50

Fax:		+ 33.1.42.98.43.17

Attention:		Sergio Collavini

CIBC WORLD MARKETS PLC



/s/ Heinz Noeding
By: Heinz Noeding

(1)		Credit Matters

(i) Address:		Cottons Centre Cottons Jane London England SE1 2 QL

Tel:		+ 44.207.234.6941

Fax:		+ 44.207.234.7115

Mail:		heinz.noeding@cibc.co.uk (Attention: Heinz Noeding)

(ii) Address:		Cottons Centre Cottons Jane London England SE1 2 QL

Tel:		+ 44.207.234.6854


Fax:		+ 44.207.234.7115

Email:		alastair.brown@cibc.co.uk (Attention: Alastair Brown)

(2)		Operations/Administration

(i) Address:		Cottons Centre Cottons Jane London England SE1 2 QL

Fax:		+ 44.207.234.6406

Email:		amy.bickford@cibc.co.uk (Attention: Amy Bickford)

(ii) Address:		Cottons Centre Cottons Jane London England SE1 2 QL

Fax:		+ 44.207.234.6433

Attention:		Brian Hayden

Email:		brian.hayden@cibc.co.uk (Attention: Brian Hayden)


/s/ Christian Van der Stichele
By: Christian Van der Stichele

Address:		56, rue du Châteaudun 75009 Paris France

Tel:		+ 33.1.42.80.85.36

Fax:		+ 33.1.42.80.87.86

E-mail:		dominique.pestre@fortisbanque.fr

Attention:		Dominique Pestre

By:   /s/ Bruno Tassart
          Bruno Tassart
          Head of Corporate Acquisition Finance

GENESYS CONFERENCING INC. (FORMERLY VIALOG CORPORATION)
as Term A1, Term B and Revolver 1 Borrower

(1)		GENESYS CONFERENCING INC. (formerly Vialog Corporation) in its capacity as borrower under the Term A1 Facility, Term B Facility and the Revolving 1 Facility (“GCM” and together with Genesys S.A. the “Borrowers”);

(2)		GENESYS S.A. in its capacity as borrower under the Term A2 Facility and the Revolving 2 Facility (“Genesys S.A.”);

(3)		BNP PARIBAS as agent for and on behalf of the Lenders (the “Agent”);

(4)		BNP PARIBAS as security agent for and on behalf of the Lenders (the “Security Agent”); and

(5)		THE LENDERS (as defined in the Original Facilities Agreement).

(A)		Pursuant to the Original Facilities Agreement, the Lenders have agreed to make the Facilities available to the Borrowers.

(B)		The Borrowers, the Agent, the Security Agent and the Lenders have agreed to amend the Original Facilities Agreement in accordance with the terms hereof.

1.		DEFINITIONS AND INTERPRETATION

1.1		Definitions

		In this Agreement:

		“Amended Agreement” means the Original Facilities Agreement, as amended by this Agreement.

		“Effective Date” means 11 June 2002.

		“Original Facilities Agreement” means the term and revolving facilities agreement dated 20 April 2001 between the Borrowers, the Agent, the Security Agent, BNP Paribas, CIBC World Markets plc and Fortis Bank N.V./S.A. as arrangers and the Lenders, as amended by the Amendment Agreement N°1 dated 19 November 2001 between the same parties.

1.2		Interpretation

	Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Original Facilities Agreement.

		In this Agreement any reference to a “Clause” or “Schedule” is, unless the context otherwise requires, a reference to a Clause or Schedule hereof. Clause headings are for ease of reference only.

2.		AMENDMENT OF THE ORIGINAL FACILITIES AGREEMENT

2.1		Financial Condition

		2.1.1 Clause 21.1 (Financial Condition) of the Original Facilities Agreement is deleted and restated as follows:

		“Genesys S.A. shall ensure that the financial condition of the Group shall be such that:

		21.1.1 Cash Cover: Cash Cover for each Relevant Period specified in column 1 below shall not be less than the ratio set out in column 2 below opposite such Relevant Period.

			“Cash Cover” means, in relation to any Relevant Period, the ratio of Consolidated Cash Flow to Consolidated Debt Service for such Relevant Period.

21.1.2 Interest Cover: Interest Cover for each Relevant Period specified in Column 1 below shall not be less than the ratio set out in Column 2 below opposite each Relevant Period.

“Interest Cover” means, in relation to any Relevant Period, the ratio of Consolidated EBITDA to Consolidated Net Interest Expense for such Relevant Period.

21.1.3 Leverage: The ratio of outstanding Consolidated Net Indebtedness to Consolidated EBITDA for each Relevant Period specified in column 1 below shall not exceed the ratio set out in column 2 below opposite such Relevant Period.

21.1.4 Capital Expenditures: The Group shall not in any financial year incur Capital Expenditures in excess of the amounts set out below:

			To the extent that in any financial year the amount spent in making Capital Expenditures on assets is less than the maximum expenditure limit set out above, 50% of such shortfall (the “Shortfall”) may be carried forward for the following financial year and added to the maximum expenditure limits specified above in respect of such following financial year, always provided that if the Shortfall is not spent within such following financial year it shall cease to be available.

			For the purposes of determining whether the Shortfall has been spent in such following financial year, it will be presumed that the Shortfall is spent after the total amount permitted to be spent on Capital Expenditures in such following financial year has been spent.

			For the purposes of determining the thresholds set out above, the amount spent in Capital Expenditures shall not include any Reinvested Amount (as defined in Clause 12.1 under the definition of “Net Disposal Amount”).

	2.1.2		The parties acknowledge that notwithstanding any provisions to the contrary contained in the Original Facilities Agreement, contracts entered into in connection with the leasing of bridges and other teleconferencing equipment and which are treated as a finance or capital lease in accordance with accounting principles applied for the preparation of the applicable lessor’s audited financial statements and which have the effect of a borrowing will be deemed not to be “Finance Leases” for purposes of the definition of “Financial Indebtedness”; provided, that the aggregate amount of principal payments under such contracts shall not exceed:


	(i) 1.6 million euros under the contracts to be entered into during the third Financial Quarter of 2002;


	(ii) 1.5 million euros under the contracts to be entered into during the fourth Financial Quarter of 2002; and

	(iii) 1.25 million euros per Financial Quarter during each Financial Quarter of 2003.

	If, during any Financial Quarter, the aggregate amount of principal payments is inferior to the limit authorised above for each Financial Quarter, the excess of the authorised amount of principal payments, under the sub-paragraphs above, over the actual aggregate amount of principal payments during such Financial Quarter may be carried forward within the next four Financial Quarters and increase the maximum amount of principal permitted hereunder accordingly but with a maximum cumulated amount for such increases of 5 million euros during any period of four consecutive Financial Quarters. In the event that the amounts of principal payments authorised above are exceeded, such contracts shall be deemed to be “Finance Leases” for purposes of the definition of “Financial Indebtedness” for the relevant “Financial Quarter”;

2.1.3

Clause 6.4 of the Original Facilities Agreement is deleted and restated as follows:


	“The Borrowers shall ensure that the amount of the Revolving Outstanding is reduced, for not less than 5 consecutive Business Days (the “Clean-Out Period”) to:

	(i) not more than USD 5,000,000 during the period that will expire on [October 31, 2002]; and

	(ii) no more than zero during any subsequent 12 month period.


	Not less than 1 month shall elapse between the expiry of one Clean-Out Period and the beginning of the immediately succeeding Clean-Out Period.”;

2.1.4

The definitions of “Consolidated Cash Flow”, “Consolidated Debt Service” and Consolidated EBITDA set forth in Schedule 9 to the Original Facilities Agreement are deleted and restated as follows:


	“Consolidated Cash Flow” means, in respect of any Relevant Period, Consolidated EBITDA after adding back:


	(a)	any decrease in the amount of Working Capital; and

	(b)	any cash receipt in respect of any exceptional or extraordinary item;


	(i)	any amount of Capital Expenditure actually made by any member of the Group;

	(ii)	any increase in the amount of Working Capital;

	(iii)	any amount actually paid or due and payable in respect of taxes on the profits of any member of the Group; and

	(iv)	any cash payment in respect of any exceptional or extraordinary item,

and no amount shall be included or excluded more than once; provided that for the year 2002, such definition shall:

	•	include for the first three quarters of 2002 the capital increase carried out in October 2001 for a net amount of 20,845,746 euros; and

	•	exclude the change in the working capital due to the USD 3,821,698 deferred consideration paid on 4 January 2002 to Astound’s shareholders.


	“Consolidated Debt Service” means, in respect of any Relevant Period, the aggregate of:

(b)

the aggregate of scheduled and mandatory payments of any Financial Indebtedness falling due (but excluding any amounts falling due under the Revolving Facilities other than any payments required to be made in permanent reduction of the Revolving Facilities),


	provided that, for [the financial year 2004 of Genesys S.A.], such definition shall exclude any principal payment falling due under the convertible bonds issued by Genesys S.A. on 6 August 1999.


	“Consolidated EBITDA” means, in any Relevant Period, the EBITDA of the Group provided that for the year 2002, such definition shall exclude:


	(i) for the third Financial Quarter of 2001, non-recurring costs in an amount of 1.2 million euros;

	(ii) for the fourth Financial Quarter of 2001, non-recurring costs in an amount of 1.1 million euros; and

	(iii) for the first Financial Quarter of 2002, non-recurring costs in an amount of 3.7 million euros.


	As a consequence, the retained quarterly EBITDA for the third and fourth Financial Quarters of 2001 and the first Financial Quarter of 2002, is of 5.6 million euros, 7.9 million euros and 6.8 million euros respectively.


	(b)	assign any of its rights; or

	(c)	transfer any of its rights and obligations,

	2.2.2	Paragraph (b) of Clause 34.2 of the Original Facilities Agreement is deleted and restated as follows:

	“(b)	Any assignment or transfer to a New Lender shall be of a minimum amount of USD 2,000,000.”

	2.2.3	Paragraph (c) of Clause 34.2 of the Original Facilities Agreement is deleted and restated as follows:

	“(c)	The consent of Genesys S.A. and/or Vialog Corporation (as relevant) is required for an assignment or transfer by a Lender to New Lender which is not a Lender or an affiliate of the Lender.”

	2.2.4	Paragraph (d) of Clause 34.2 of the Original Facilities Agreement is deleted and restated as follows:

	“(d)	The consent of Genesys S.A. and/or Vialog Corporation (as relevant) to an assignment or transfer must not unreasonably be withheld or delayed. Genesys S.A. will be deemed to have given its consent eight days after the Lender has requested it unless consent is expressly refused for valid reasons by Genesys S.A. within that time.”

	2.2.5	Paragraph (e) of Clause 34.2 of the Original Facilities Agreement is deleted and restated as follows:

	“(e)	The consent of Genesys S.A. and/or Vialog Corporation (as relevant) to an assignment or transfer must not be withheld solely because the assignment or transfer may result in an increase of the Mandatory Cost.”

	2.2.6	Paragraphs (h) and (f) of Clause 34.2 of the Original Facilities Agreement are deleted.

	2.2.7	Paragraph (a) of Clause 34.5 of the Original Facilities Agreement is deleted and restated as follows:

“Subject to the conditions set out in Clause 34.2 (Conditions of assignment or transfer) a transfer is effected in accordance with paragraph (b) below when the Agent executes, for acknowledgement, an otherwise duly completed Transfer Agreement delivered to it by the Existing Lender and the New Lender. The Agent shall, as soon as reasonably practicable (being a minimum of five Business Days) after receipt by it of a duly completed Transfer Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Agreement.

	This Amendment Agreement shall enter into force on the Effective Date and the amendments to the Original Facilities Agreement provided in this Amendment Agreement will be applicable as from the Effective Date.

4.	REPRESENTATIONS

	The Borrowers make the Repeated Representations as if each reference therein to “the Finance Documents” includes a reference to (a) this Agreement and (b) the Amended Agreement.

5.	CONTINUITY AND FURTHER ASSURANCE

	The provisions of the Original Facilities Agreement shall, save as amended hereby, continue in full force and effect.

5.2	Further Assurance

	Each of the Borrowers shall, at the request of the Agent and at its own expense, do all such acts and things necessary or desirable to give effect to the amendments effected or to be effected pursuant to this Agreement.

6.	INCORPORATION OF TERMS

	The provisions of clause 25.2 (Preservation and Enforcement of Rights), clause 25.3 (Stamp Taxes), clause 25.4 (Amendment Costs), clause 37 (Remedies and Waiver, Partial Invalidity), clause 41 (Governing Law) and clause 42 (Jurisdiction) of the Original Facilities Agreement shall be incorporated into this Agreement as if set out in full herein and as if references therein to “this Agreement” and “the Finance Documents” are references to this Agreement.

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o		REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 or

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the fiscal year ended December 31, 2001

or

o		TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the transition period from to


Title of each class:		Name of each exchange on which registered:

Ordinary shares, nominal value €5 per share*		Nasdaq Stock Market
American Depositary Shares, each representing one half of one ordinary share, nominal value €5 per share		Nasdaq Stock Market


TABLE OF CONTENTS
PART I
	Item 1. Identity of Directors, Senior Management and Advisers
	Item 2. Offer Statistics and Expected Timetable
	Item 3. Key Information
		A.Selected Financial Data
		B.Capitalization and Indebtedness
		C.Reasons for the Offer and Use of Proceeds
		D.Risk Factors
	Item 4. Information on the Company
		A.History and Development of the Company
		B.Business Overview
		C.Organizational Structure
		D.Property, Plants and Equipment
	Item 5. Operating and Financial Review and Prospects
		A.Operating Results
		B.Liquidity and Capital Resources
		C.Research and Development, Patents and Licenses, etc.
		D.Trend Information
		E.Critical accounting policies
	Item 6. Directors, Senior Management and Employees
		A.Directors and Senior Management
		B.Compensation
		C.Board Practices
		D.Employees
		E.Share Ownership
	Item 7. Major Shareholders and Related Party Transactions
		A.Major Shareholders
		B.Related Party Transactions
		C.Interests of Experts and Counsel
	Item 8. Financial Information
		A.Consolidated Statements and Other Financial Information
		B.Significant Changes
	Item 9. The Offer and Listing
		A.Offer and Listing Details
		B.Plan of Distribution
		C.Markets
		D.Selling Shareholders
		E.Dilution
		F.Expenses of the Issue
	Item 10. Additional Information
		A.Share Capital
		B.Memorandum and Articles of Association
		C.Material Contracts
		D.Exchange Controls
		E.Taxation
		F.Dividends and Paying Agents
		G.Statement by Experts
		H.Documents on Display
		I.Subsidiary Information.
	Item 11. Quantitative and Qualitative Disclosures about Market Risk
	Item 12. Description of Securities other than Equity Securities
PART II
	Item 13. Defaults, Dividend Arrearages and Delinquencies.
	Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds.
	Item 15. [Reserved]
	Item 16. [Reserved]
	Item 17. Financial Statements
	Item 18. Financial Statements
	Item 19. Exhibits
Exhibit Index
U.S. $125 Million Credit Facility - Vialog Corp.


		Page

PART I
Item 1.	Identity of Directors, Senior Management and Advisers		3
Item 2.	Offer Statistics and Expected Timetable		3
Item 3.	Key Information		4
	A. Selected Financial Data		4
	B. Capitalization and Indebtedness		7
	C. Reasons for Offer and Use of Proceeds		7
	D. Risk Factors		8
Item 4.	Information on the Company		15
	A. History and Development of the Company		15
	B. Business Overview		16
	C. Organizational Structure		26
	D. Property, Plants and Equipment		26
Item 5.	Operating and Financial Review and Prospects		28
Item 6.	Directors, Senior Management and Employees		42
	A. Directors and Senior Management		42
	B. Compensation		45
	C. Board Practices		46
	D. Employees		47
	E. Share Ownership		48
Item 7.	Major Shareholders and Related Party Transactions		50
	A. Major Shareholders		50
	B. Related Party Transactions		50
	C. Interests of Experts and Counsel		50
Item 8.	Financial Information		51
Item 9.	The Offer and Listing		52
	A. Offer and Listing Details		52
	B. Plan of Distribution		53
	C. Markets		53
	D. Selling Shareholders		54
	E. Dilution		54
	F. Expenses of the Issue		54
Item 10.	Additional Information		55
	A. Share Capital		55
	B. Memorandum and Articles of Association		55
	C. Material Contracts		55
	D. Exchange Controls		55
	E. Taxation		55
	F. Dividends and Paying Agents		60
	G. Statement by Experts		60
	H. Documents on Display		60
	I. Subsidiary Information		60


		Page

Item 11.	Quantitative and Qualitative Disclosures about Market Risk		61
Item 12.	Description of Securities other than Equity Securities		61
PART II
Item 13.	Defaults, Dividend Arrearages and Delinquencies		62
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds		62
Item 15.	[Reserved]		62
Item 16.	[Reserved]		62
PART III
Item 17.	Financial Statements		62
Item 18.	Financial Statements		62
Item 19.	Exhibits		62


N/A (Translation of Registrant’s name into English)		l’Acropole, 954-980 Avenue Jean Mermoz 34000 Montpellier France (Address of principal executive offices)		Republic of France (Jurisdiction of incorporation) or organization


Item 1.	Identity of Directors, Senior Management and Advisers



			As of and for the year ended December 31,

			1997			1998			1999			2000			2001			2001


			(thousands except share data)
Consolidated statement of operations data:
Revenue:
	Services		€	8,205		€	18,311		€	47,159		€	89,336		€	177,120		$	157,720
	Products			726			910			836			3,083			1,831			1,631

		Total revenues		8,931			19,221			47,995			92,419			178,951			159,351
Cost of revenue:
	Services			2,196			7,517			19,959			38,173			74,774			66,584
	Products			471			656			596			2,548			1,402			1,249

		Total cost of revenues		2,667			8,173			20,555			40,721			76,176			67,833

Gross profit				6,264			11,048			27,440			51,698			102,775			91,518
Operating expenses:
	Research and development			1,043			910			1,629			2,613			5,366			4,778
	Selling and marketing			2,903			5,747			10,130			17,867			42,718			38,039
	General and administrative			2,603			4,004			12,952			27,165			53,920			48,014
	Amortization and impairment of goodwill and other intangibles			300			1,396			3,216			7,015			92,037	⁽¹⁾		81,957

		Total operating expenses		6,849			12,057			27,927			54,660			194,041			172,788

Operating loss				(585	)		(1,009	)		(487	)		(2,962	)		(91,266	)		(81,270	)
Financial income (expense), net				(251	)		(335	)		(2,083	)		655			(6,722	)		(5,986	)
Equity in loss of affiliated company				—			—			(15	)		(76	)		(55	)		(49	)

Loss before income taxes and minority interest				(836	)		(1,344	)		(2,585	)		(2,383	)		(98,043	)		(87,305	)
	Income tax expense			(349	)		(293	)		(1,253	)		(3,589	)		(484	)		(431	)
Minority interest				(40	)		—			—			—			—			—

Net loss			€	(1,225	)	€	(1,637	)	€	(3,838	)	€	(5,972	)	€	(98,527	)	$	(87,736	)

Basic and diluted net (loss) per share			€	(0.51	)	€	(0.39	)	€	(0.60	)	€	(0.76	)	€	(7.65	)	$	(6.81	)
Weighted average number of ordinary shares outstanding				2,388,504			4,209,669			6,374,278			7,831,257			12,878,594			12,878,594


(1)	In 2001, €61.3 million represents impairment of intangibles in accordance with SFAS No. 121.


	Period-end		Average
	Rate		Rate⁽¹⁾		High		Low


	French francs per U.S. dollar
1997		6.02		5.84		6.35		5.19
1998		5.59		5.90		6.21		5.39


	*Our services may be interrupted by technological problems or affected by human error, which may cause us to lose customers.*


	•	*Genesys Meeting Center.* Genesys Meeting Center is a fully integrated audio and Web conferencing platform, accessible on-demand through the Web and over the phone. Our innovative service takes virtual communication to the next level and permits true real-time, multimedia collaboration. Genesys Meeting Center is a new platform that combines the simplicity of the telephone with the impact of the Internet, turning the PC into a universal communications tool. It incorporates our fully automated TeleMeeting audio conferencing, our proprietary Web technology, Multi-Conference Manager, our PowerShare Web conferencing application and Astound’s conference center resulting in a Web-based platform that gives users access to a virtual conference room 24 hours per day, 7 days per week.


		Genesys Meeting Center permits the moderator to manage all aspects of the meeting through the Internet and by a simple click of the mouse. Other features of Genesys Meeting Center include:


	•	*EventStream and PowerStream.* EventStream and PowerStream are both based on our rich media technology, a powerful interface that enables the synchronization of video and/or audio with texts, images, slides, graphic animation and interactive modules. Conferences or events, can be transmitted live over the Web or recorded for later playback.


Australia	France	Portugal	Taiwan
Belgium	Germany	Singapore	The Netherlands
Canada	Hong Kong	Spain	United Kingdom
Denmark	Italy	Sweden	United States
Finland	Norway


Item 3.	Key Information



	As of and for the year ended December 31,

	1997			1998			1999			2000			2001			2001

																(in thousands
	(in thousands of €)															of $)
Consolidated balance sheet data:
Total current assets		11,242			25,408			32,194			77,338			80,465			71,652
Total assets		34,777			51,620			122,890			207,169			410,404			365,453
Total current liabilities		6,754			8,172			19,500			34,633			72,704			64,741
Total long-term liabilities		12,665			7,382			62,056			44,423			174,832			155,683
Total shareholders’ equity		15,358			36,066			41,334			128,113			162,868			145,029
Cash flow statement data:
Cash flows provided by (used in) operating activities		1,718			(28	)		3,945			9,302			(18,299	)		(16,295	)
Cash flows used in investing activities		(23,540	)		(5,932	)		(60,571	)		(28,235	)		(36,057	)		(32,108	)
Cash flows provided by financing activities		28,147			18,468			50,517			53,561			20,701			18,434


		Period-end		Average
		Rate		Rate⁽¹⁾		High		Low


		U.S. dollar per euro
1999			1.01		1.06		1.18		1.00
2000			0.94		0.92		1.03		0.83
2001			0.89		0.89		0.95		0.84
2002 (through May 31, 2002)			0.93		0.92		0.94		0.90
2001
	December		0.89		0.89		0.90		0.88
2002
	January		0.86		0.88		0.90		0.86
	February		0.87		0.87		0.88		0.86
	March		0.88		0.88		0.88		0.87
	April		0.90		0.89		0.90		0.88
	May		0.93		0.92		0.94		0.90


	*Development of Our Business*


	Country of		Ownership
Significant Subsidiary or Affiliate	Incorporation		Interest

Genesys Conferencing, Inc.		United States		100	%
Genesys Conferencing of Massachusetts, Inc.		United States		100	%
Genesys Conferencing Ltd.		United Kingdom		100	%


North America	Europe	Asia/Pacific

Headquarters:	Headquarters:	Headquarters:

Denver, Colorado	London, England	Singapore

Call Centers:	Call Centers:	Call Centers:

Montgomery, Alabama*	Croydon, England	Melbourne, Australia
Bedford, Massachusetts*	Thatcham, England	Hong Kong
Denver, Colorado*	Roedermark, Germany
Reston, Virginia
Chanhassen, Minnesota
Honolulu, Hawaii


*	Call center to be closed as part of North American call center consolidation.


	*Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)*



	Year ended December 31,


	2000				2001

	in thousands		% of		in thousands		% of
	of €		revenues		of €		revenues

Audio conferencing		75,541		81.7%		157,707		88.1%
Video conferencing		12,238		13.2%		10,944		6.1%
Data conferencing and Web streaming		1,557		1.8%		8,469		4.7%
Products		3,083		3.3%		1,831		1.1%

Total revenues		92,419		100.0%		178,951		100.0%


*	Includes data collaboration and Web streaming services in 2000.



	Payments due by period

			2003-		2005-		2007 and
	2002		2004		2006		thereafter		Total

Term loans, variable rate	€	6,007		€44,510		€78,295		—		€128,812
Revolving loans, variable rate		762		—		11,346		—		12,108
3% Convertible notes		—		8,281		—		—		8,281
Interest free loan from ANVAR		132		84		36		—		252
Capital lease obligations		266		164		7		—		437

Total long-term debt, excluding interests		7,167		53,039		89,684		—		149,890
Operating leases		10,347		12,572		5,629		6,651		35,199
Other long term liabilities		—		2,480		1,124		—		3,604

Total contractual cash obligations	€	17,514		€68,091		€96,437		€6,651		€188,693


	*Impairment of goodwill and identifiable intangible assets*


François Legros	Age:	36
Chairman and	First elected:	June 1997
Chief Executive Officer	Term expires:	2002
	Principal occupation:	Chief Executive Officer, Genesys
	Other directorships and business experience:	Director of Genesys Conferencing Inc., Genesys Conferencing Ltd, Genesys Conferencing Ltd (HK), Genesys Conferencing Pte Ltd, Genesys Conferencing Pty Ltd, Maga Fund Ltd and Astound Inc.

Jean-Jacques Bertrand	Age:	49
Director	First elected:	October 1998*
	Term expires:	2002
	Principal occupation:	Managing Director, BNP Paribas Private Equity
	Other directorships and business experience:	Former Executive Vice President, Head of Communications Industry at Banexi; Director of Multitel (Spain) and Firstmark France.

Jean-Charles Bouillet	Age:	55
Director	First elected:	March 2000*
	Term expires:	2003
	Principal occupation:	Director for Corporate Development, Unilog S.A. France
	Other directorships and business experience:	Director of Shanghai Integrata


Patrick S. Jones	Age:	58
Director	First elected:	June 2001
	Term expires:	2004
	Principal occupation:	Retired
	Other directorships and business experience:	Chairman of the Board, Dione Plc; Director of InterTrust Technologies Inc. and QRS Corp.; Former Senior Vice President, Chief Financial Officer, Gemplus S.A.; Former Vice President and Corporate Controller of Intel Corp.

Philippe Piriou*	Age:	48
Director	First elected:	2000
	Term expires:	2002
	Principal occupation:	Investment Director, Part’Com
	Other directorships and business experience:	Representative of In’Com on board of Jeriko et FA Technology; representative of Part’Com on board of C2A.

Alan Senter	Age:	61
Director	First elected:	2001
	Term expires:	2004
	Principal occupation:	Chairman, AZ Senter Consulting
	Other directorships and business experience:	Director of XL Capital Ltd. and Hippographics Inc.; Former Executive Vice President and Chief Financial Officer of NYNEX Corporation.


Director	Attendance Fees

François Legros	€	0
Jean-Jacques Bertrand	€	4,000
Jean-Charles Bouillet	€	4,000
Patrick Jones	€	15,000
David Lougee*	€	10,000
Philippe Piriou	€	4,000
Alan Senter	€	10,000

Total	€	47,000


	Number
	of		Exercise		Expiration
Employee	Options		Price		Date

François Legros		25,000	€	15.86		11 Nov 2009
Andrew Pearce		22,500	€	15.86		11 Nov 2009
Margie Medalle		15,000	€	22.09		24 Apr 2009
		5,000	€	15.86		11 Nov 2009
Olivier Fourcade		5,000	€	15.86		11 Nov 2009
Jim Huzell		50,000	€	15.86		11 Nov 2009
Michael E. Savage		100,000	€	15.86		11 Nov 2009
Marie Capela-Laborde		25,000	€	15.86		11 Nov 2009
Rolf Dahlin		5,000	€	39.83		26 Feb 2009
Kailash Ambwani		75,000	€	25.03		13 Mar 2009



	As of December 31:

	2001		%		2000		%		1999		%

Europe		494		32.3%		380		54.7%		248		44.8%
North America		971		63.5%		272		39.1%		273		49.4%
Asia Pacific		65		4.2%		43		6.2%		32		5.8%

TOTAL		1,530		100,0%		695		100,0%		553		100,0%


					% of Outstanding
Name		Shares Owned			Shares

François Legros			22,559			*
Jean-Jacques Bertrand			347,001	⁽¹⁾		2.3	%
Jean-Charles Bouillet			350			*
Patrick S. Jones			500	⁽²⁾		*
Philippe Piriou			150			*
Alan Senter			50	⁽²⁾		*
David Detert			648			*
Andrew Pearce			509			*
Margie Medalle			0			*
Olivier Fourcade			574			*
Jim Huzell			0			*
Michael E. Savage			117			*
Marie Capela-Laborde			2,152			*
Rolf Dahlin			1,000			*
Kailash Ambwani			55,381			*

	All directors and senior management as a group (15 individuals)		430,991			2.8	%


		Number of Shares			Exercise		Expiration
Name		underlying options			Price		Date

François Legros			110,320	⁽¹⁾	€	9.91		09/23/06
			12,363	⁽²⁾	€	15.32		09/15/07
			50,000	⁽³⁾	€	50.42		09/08/08
			25,000	⁽⁴⁾	€	15.86		11/11/09
			50,000	⁽⁴⁾	€	14.30		01/07/10

David Detert			40,559	⁽¹⁾	€	9.91		09/23/06

Andrew Pearce			22,000	⁽²⁾	€	15.32		09/15/07
			5,000	⁽²⁾	€	53.17		03/08/06
			22,500	⁽⁴⁾	€	15.86		11/11/09

Margie Medalle			30,000	⁽²⁾	€	15.32		09/15/07
			10,000	⁽²⁾	€	53.17		03/08/08
			15,000	⁽³⁾	€	22.09		04/24/09
			5,000	⁽⁴⁾	€	15.86		11/11/09

Olivier Fourcade			57,727	⁽¹⁾	€	9.91		09/24/06
			10,000	⁽³⁾	€	50.42		09/08/08
			5,000	⁽⁴⁾	€	15.86		11/11/09

Jim Huzell			100,000	⁽³⁾	€	50.42		09/08/08
			50,000	⁽⁴⁾	€	15.86		11/11/09

Michael E. Savage			1,676	⁽⁵⁾		$11.93		01/26/10
			8,379	⁽⁵⁾		$14.92		02/10/10
			33,515	⁽⁵⁾		$10.63		11/11/09
			100,000	⁽⁴⁾	€	15.86		11/11/09
			26,390	⁽⁵⁾		$31.33		10/02/10

Marie Capela-Laborde			3,000	⁽²⁾	€	15.32		09/15/07
			7,000	⁽²⁾	€	53.17		03/08/08
			3,000	⁽³⁾	€	50.42		09/08/08
			25,000	⁽⁴⁾	€	15.86		11/11/08

Rolf Dahlin			13,383	⁽¹⁾	€	9.91		09/23/06
			5,000	⁽³⁾	€	39.38		02/26/09

Kailash Ambwani			75,000	⁽³⁾	€	25.05		03/13/09


	All senior management as a group (10 individuals)		921,812


Item 7.	*Major Shareholders and Related Party Transactions*


	Number of
Name	Shares		% of Class

Schroder Investment Management Limited		1,547,538		10.13%
J. Hassett Group		903,406		5.91%



	Euronext Paris				Nasdaq

Period	High		Low		High		Low


	(ordinary share				(ADS price
	price in €)				in $)
1998
beginning (October 1, 1998)		12.04		8.54		—		—
1999		37.00		9.90		—		—
2000		79.50		30.00		—		—
First Quarter		79.50		30.00		—		—
Second Quarter		63.60		32.10		—		—
Third Quarter		62.00		42.00		—		—
Fourth Quarter		60.90		47.20		—		—
2001		53.80		9.76		—		—
First Quarter		53.80		20.12		—		—
Second Quarter (Nasdaq beginning April 26, 2001)		35.82		26.02		15.29		9.90
Third Quarter		25.60		9.76		11.00		4.55
Fourth Quarter		16.94		11.03		8.35		5.10
2002
First Quarter		14.45		7.57		6.80		3.55
2001
December		15.60		11.03		7.20		5.10
2002
January		14.45		11.67		6.80		5.00
February		12.56		7.57		5.73		3.55
March		14.29		10.68		6.60		4.60
April		14.33		10.80		6.54		5.10
May		11.20		7.50		5.36		3.66


	•	you are a U.S. resident within the meaning of the Treaty;


Item 11.	Quantitative and Qualitative Disclosures about Market Risk