EXHIBIT 2.1
SHARE PURCHASE AGREEMENT
DATED AS OF 9 FEBRUARY 0000
XXXXXXXXX
XXXXXXX XXXXXXXXXXXXXX 0X XX
TABLE OF CONTENTS
BACKGROUND.....................................................................2
1. DEFINITIONS..............................................................2
2. SALE AND PURCHASE.......................................................10
3. PURCHASE PRICE..........................................................11
3.1 PURCHASE PRICE........................................................11
3.2 DCC SHARES............................................................12
4. CLOSING.................................................................18
4.1 THE CLOSING...........................................................18
4.2 CONDITIONS PRECEDENT TO THE CLOSING...................................18
4.3 DELIVERIES AND ACTIONS AT THE CLOSING.................................20
4.4 SELLERS' WAIVER.......................................................21
5. REPRESENTATIONS AND WARRANTIES OF SELLERS...............................22
6. REPRESENTATIONS AND WARRANTIES OF PURCHASER.............................37
7. INDEMNIFICATIONS AND LIMITATIONS........................................38
7.1 INDEMNIFICATION.......................................................38
7.2 LIMITATIONS...........................................................38
7.3 THIRD PARTY CLAIMS....................................................40
7.4 EXCLUSIVE REMEDY......................................................41
8 SPECIFIC INDEMNITY......................................................41
9 JOINT AND SEVERAL LIABILITY.............................................43
10 NON-COMPETE.............................................................43
11. MISCELLANEOUS...........................................................44
11.1 NOTICES...............................................................44
11.2 COSTS.................................................................45
11.3 HEADINGS..............................................................45
11.4 ASSIGNMENT............................................................45
11.5 NO WAIVER.............................................................46
11.6 SEVERABILITY..........................................................46
11.7 CONFIDENTIALITY.......................................................46
11.8 ANNOUNCEMENTS.........................................................47
11.9 ENTIRE AGREEMENT; AMENDMENTS..........................................47
11.10 NO SET-OFF............................................................47
11.11 GOVERNING LAW.........................................................47
11.12 ARBITRATION...........................................................48
SELLERS SHAREHOLDER GUARANTEE.................................................50
SELLERS SHAREHOLDER GUARANTEE.................................................51
SELLERS SHAREHOLDER GUARANTEE.................................................52
PURCHASER HOLDING COMPANY GUARANTEE...........................................53
LIST OF SCHEDULES
SCHEDULE A
SCHEDULE B.1
SCHEDULE B.1 A
SCHEDULE B.1 B
SCHEDULE B.1 C
SCHEDULE B.1 D
SCHEDULE B.1 E
SCHEDULE B.2
SCHEDULE B.2 A
SCHEDULE B.2 B
SCHEDULE B.2 C
SCHEDULE B.2 D
SCHEDULE B.2 E
SCHEDULE B.2 F
SCHEDULE B.2 G
SCHEDULE B.2 H
SCHEDULE 1.1
SCHEDULE 1.1 A
SCHEDULE 1.1 B
SCHEDULE 1.1 C
SCHEDULE 1.3
SCHEDULE 1.3 A
SCHEDULE 3.2
SCHEDULE 4.3.2
SCHEDULE 5.1.10
SCHEDULE 5.1.26
SCHEDULE 5.1.29
SCHEDULE 5.1.29 A
SCHEDULE 5.1.29 B
SCHEDULE 5.1.29 C
SCHEDULE 5.1.30
SCHEDULE 5.1.30 A
SCHEDULE 5.1.34
SCHEDULE 5.1.37
THIS SHARE PURCHASE AGREEMENT has been entered into on this 9th day of February,
2005, by and between:
1. Xxxxx Investment Group AB, org. no. 556669-3668, a limited
company organised and existing under the laws of Sweden, having
its registered office at Xxxxxxxxx 00, 000 00 Xxxxxxxxx, Xxxxxx;
2. Red River Investment Group AB, org. no. 556669-3643, a limited
company organised and existing under the laws of Sweden, having
its registered office at Xxxxxxxxx 00, 000 00 Xxxxxxxxx, Xxxxxx;
3. Newco 0000 Xxxxxx AB (under change of name to Halo Investment
Group AB), org. no. 556669-3635, a limited company organised and
existing under the laws of Sweden , having its registered office
at Fruangsgatan 15; 000 00 Xxxxxxxxx, Xxxxxx;
4. Xxxx Xxxxx, a U.S. citizen with Swedish social security no.
720118- 2032, having his permanent residence at Xxxxxxxxxxxx 00x
0xx, 000 00 Xxxxxxxxx, Xxxxxx; and
5. Xxxxxxx Xxxxx, a U.S. citizen born June 28, 1947; having his
permanent residence at 0000 Xxxxxxxxx Xx, Xxxxxxxxx, XX 00000,
XXX.
the parties in item 1 - 5 are hereinafter referred to collectively as the
"SELLERS" and severally as a "SELLER"; and
6. Interchange Europe Holding Corporation, a limited company
organised and existing under the laws of the State of Delaware,
having its registered office at 00000 Xxxxxxx xx xx Xxxxxxx,
Xxxxx 000, Xxxxxx Xxxxx, XX 00000, XXX (the "PURCHASER"); and
7. solely for purposes of Section 3.3 of this Agreement,
Interchange Corporation, a corporation organised existing under
the laws of the State of Delaware, having its registered office
at 00000 Xxxxxxx xx xx Xxxxxxx, Xxxxx 000, Xxxxxx Xxxxx, XX
00000, XXX ("INTERCHANGE").
the parties above are hereinafter referred to collectively as the "PARTIES" and
severally as a "PARTY".
1
BACKGROUND
A. The Sellers are the owners of all the issued shares in Inspire
Xxxxxxxxxxxxxx 0x XX, org. no. 556612-9309, a Swedish limited company
with an issued and registered share capital of SEK 100,000, divided into
1,000 shares, each having a nominal value of SEK 100 (the "COMPANY").
The shares of the Company are held among the Sellers as set out in
SCHEDULE A, which also shows the ultimate ownership of the corporate
Sellers listed as Parties 1 to 3 above.
B. The Sellers are willing to sell to the Purchaser and the Purchaser is
willing to purchase from the Sellers all 1,000 of the issued shares of
the Company (the "SHARES").
The Parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement (as defined below), unless expressly otherwise
stated, the following terms shall have the following meanings, the
singular (where appropriate) shall include the plural and vice versa and
references to Schedules and Sections shall mean Schedules and Sections
of this Agreement:
"ACCOUNTING means such accounting principles which are, and have
PRINCIPLES" been as at the relevant dates, in accordance with
applicable Laws, regulations and guidelines and which in
all respects conform to generally accepted accounting
principles for limited companies in Sweden (Sw. "god
redovisningssed").
2
"ACCOUNTS" means the audited annual reports of the Company as at
and for the periods ending at 31 December 2002, 31
December 2003, and 31 December 2004, respectively,
attached as SCHEDULE 1.1.
"ACCOUNTS DATE" means 31 December 2002, 31 December 2003 and 31 December
2004, as applicable.
"AGREEMENT" means this Share Purchase Agreement and the Schedules
hereto.
"BLACKOUT PERIOD" shall have the meaning set out in Section 3.3.2.
"BUSINESS DAY" means any day on which banks are open for general
banking business in Stockholm, Sweden.
"CHANGE OF CONTROL" means (i) the acquisition, directly or indirectly, by
any person or group of the beneficial ownership of
securities of the Company (or the corporate Seller, as
the case may be), possessing more than fifty percent
(50%) of the total combined voting power of all
outstanding voting securities of the Company (or the
corporate Seller, as the case may be); (ii) the sale,
transfer or other disposition (in one transaction or a
series of transactions) of all or substantially all of
the assets of the Company (or the corporate Seller, as
the case may be); or (iii) the approval by the
shareholders of the Company (or the corporate Seller, as
the case may be) of a plan or proposal for the
liquidation or dissolution of the Company (or the
corporate Seller, as the case may be).
3
"CLAIM" means a claim made by the Purchaser against any of the
Sellers under Section 7.
"CLOSING" means the completion on the Closing Date of the transfer
of the Shares as contemplated in Section 4.
"CLOSING DATE" shall have the meaning set out in Section 4.1.1.
"COMPANY" shall have the meaning set out in the introductory
paragraph hereof.
"CONFIDENTIAL means any and all information of any kind or nature
INFORMATION" whatsoever, whether written or oral, including, without
limitation, financial information, trade secrets,
customers lists and other information, regarding the
Company and which is not known to the general public.
"DCC DETERMINATION" shall have the meaning set out in Section 3.2.3.
"DCC DISPUTE NOTICE" shall have the meaning set out in Section 3.2.3.
"DCC SHARES" means 447,067 Interchange Common Shares which may be
delivered to the Sellers in accordance with Section 3.2.
"EMPLOYEES" means Xxx Xxxxx.
"EMPLOYMENT shall have the meaning set out in Section 4.2.1.
AGREEMENTS"
4
"ENCUMBRANCE" means any claim, charge, mortgage, lien, option,
hypothecation, usufruct, retention of title, right of
pre-emption (except the pre-emption rights stipulated in
the Company's articles of association), right of first
refusal or other third party rights or security interest
of any kind or an agreement to create any of the
foregoing.
"ESCROW AMOUNT" means USD 1,500,000 and 149,022 DCC Shares.
"GROUP COMPANIES" means the Company and the Subsidiaries.
"INDEMNIFICATION shall have the meaning set out in Section 3.1.2.
ESCROW ACCOUNT"
"INTELLECTUAL means patents, know-how, trademarks, registered designs,
PROPERTY RIGHTS" applications for any of the foregoing, copyrights and
registerable business names and any similar rights in
any country, and all rights under licenses and consents
in relation to any of the foregoing.
"INTERCHANGE" shall have the meaning set out in the introductory
paragraph hereof.
"INTERCHANGE means the common stock of Interchange, par value
COMMON SHARES" $0.00001 per share, and any securities into which such
common stock may hereafter be reclassified.
"KEY EMPLOYEES" means Xxxxxx Xxxxxxx, Xxxx Xxxxx, Xxx Xxxxx and Xxxxx
Xxxxxxx.
5
"LAWS" means laws, acts, regulations and statutes, including,
but not limited to, applicable Swedish, EU, Spanish,
U.K. and U.S. laws and regulations.
"LIABILITY" means all indebtedness, obligations and other
liabilities of a person, whether absolute or contingent
(or based upon any contingency), known or unknown, fixed
or otherwise, due or to become due, whether or not
accrued or paid, and whether required or not required to
be reflected in financial statements under the
Accounting Principles, Spanish GAAP or UK GAAP, as
applicable.
"LOSS" means any and all damages, fines, fees, taxes,
penalties, deficiencies, losses (including lost profits
and diminution in value) and expenses, including
interest, reasonable expenses of investigation, court
costs, reasonable fees and expenses of attorneys,
accountants and other experts, and other expenses of any
legal or other action or proceeding or of any claim,
default or assessment (such fees and expenses to include
all fees and expenses, including fees and expenses of
attorneys, incurred in connection with (a) the
investigation or defense of any third party claim or (b)
asserting or disputing any right under this Agreement
against any party hereto or otherwise), net of any
insurance proceeds (if any) actually received (without
any adverse effect on the premiums paid for such
insurance).
6
"MATERIAL CONTRACTS" means an agreement or commitment to which a Group
Company is bound and which involves a commitment for
either party of more than USD 15,000 per fiscal year; or
which otherwise is material to the Group Company or its
business, but shall not include employment agreements.
"PARTY" shall have the meaning set out in the introductory
paragraph hereof.
"PURCHASE PRICE" shall have the meaning set out in Section 3.1.1.
"PURCHASER" shall have the meaning set out in the introductory
paragraph hereof.
"REGISTRABLE shall have the meaning set out in Section 3.3.2.
SECURITIES"
"RESALE REGISTRATION shall have the meaning set out in Section 3.3.2.
STATEMENT"
"SECURITIES ACT" shall have the meaning set out in Section 5.1.62.
"SELLER" shall have the meaning set out in the introductory
paragraph hereof.
7
"SELLERS KNOWLEDGE" means the actual knowledge of any of the Sellers and any
knowledge such Seller should have had after due and
careful enquiries. "Seller" shall for the purpose of
this definition include Xxxxxx Xxxxxxx, Xxxx Xxxxx,
Claes Xxxxxxx, Xxx Sutie and Xxxxxxx Xxxxx.
"SELLERS REGISTRABLE shall have the meaning set out in Section 3.3.2.
SECURITIES"
"SELLER means Xxxxxx Xxxxxxx, which hereby is duly authorized by
REPRESENTATIVE" each Seller to represent the Sellers as set out in this
Agreement.
"SHARES" shall have the meaning set out in Recital C.
"SPANISH GAAP" means statutory accounting rules and generally accepted
accounting principles in Spain and applicable to Inspire
Infrastructure Espana SL.
"SUBSIDIARIES" means each of Inspire Infrastructure Espana SL, reg. no.
("Identificacion Fiscal") B83841957; and having its
registered office at XX XXXXXXXXXX 0, XXXXX XXXXXX 00000
XXXXXX, Xxxxx; and Inspire Infrastructure (UK) Limited,
xxx.xx. 4638588 and having its registered office at 00
Xxxxxx Xx., Xxxxxx, X0X 0XX, X.X.
8
"SUBSIDIARY ACCOUNTS" means the unaudited annual report for Inspire
Infrastructure (UK) Limited as at and for the period
ending January 31, 2004, attached as SCHEDULE 1.3
hereto.
"TAXES" means, wherever arising, all direct and indirect taxes,
charges, fees, duties and other assessments imposed by
any governmental or regulatory authority, including,
without limitation, to income (whether actual or
deemed), yield, sales, use, transfer, stamp,
transaction, real estate, investment, value added,
withholding, employment, asset holding, registration,
preliminary and deferred tax, specific salary tax on
pension costs and social security fees, together with
any interest, penalties, penalty tax, residual tax
charges, additions to tax or any other amount imposed by
any governmental or regulatory authority.
"UK GAAP" means statutory accounting rules and generally accepted
accounting principles in the United Kingdom and
applicable to Inspire Infrastructure (UK) Ltd.
"US GAAP" means statutory accounting rules and generally accepted
accounting principles in the United States as
promulgated by the Financial Accounting Standards Board
and the U.S. Securities and Exchange Commission.
9
"US GAAP FINANCIAL means audited financial statements for the Company that
STATEMENTS" conform to US GAAP for the fiscal years beginning on
January 1, 2003, and ending on December 31, 2003, and
beginning on January 1, 2004, and ending on December 31,
2004.
"WARRANTIES" means the representations and warranties of the Sellers
set out in Section 5.
2. SALE AND PURCHASE
2.1 Subject to the terms the conditions set out in this Agreement, each of
the Sellers agrees to sell and the Purchaser agrees to purchase the
Shares.
2.2 The Shares shall be sold free and clear of any Encumbrances and together
with all accrued rights and benefits attaching thereto at the Closing.
2.3 The title to the Shares, including all rights of any nature which are
now or which may at any time become attached to the Shares or accrue in
respect of them, including all dividends and distributions declared or
paid in respect of the Shares on or after the Closing Date, shall pass
from the Sellers to Purchaser at the Closing on the Closing Date through
the fulfilment and completion of the Closing procedures set out in
Section 4 below.
2.4 Each of the Sellers hereby waives any right of redemption, pre-emption
or first or last refusal that it may have in connection to the Shares
under the articles of association of the Company, any shareholders'
agreement or otherwise with respect to the transfer of the Shares
contemplated under this Agreement.
10
3. PURCHASE PRICE
3.1 PURCHASE PRICE
3.1.1 The aggregate consideration to be paid by the Purchaser for the Shares
shall be USD 15,000,000 (the "PURCHASE PRICE") plus the right to
receive, as additional consideration, the DCC Shares as set forth in
Section 3.2 below.
3.1.2 USD 13,500,000 of the Purchase Price in cash, shall be deposited into an
escrow account with a third party escrow agent on terms agreeable to the
Purchaser on the date of this Agreement (the "PURCHASE PRICE ESCROW
ACCOUNT"). The Purchase Price less the cash portion of the Escrow Amount
shall be released from the Purchase Price Escrow Account and paid in
cash to the Sellers on the Closing Date as set out in Section 4.3.2
below.
3.1.3 The Escrow Amount shall be held by Purchaser until deposited into an
escrow account with a third party escrow agent on terms mutually
agreeable to Purchaser and the Seller Representative in accordance with
Section 4.3.3 (the "INDEMNIFICATION ESCROW ACCOUNT"). After the
Indemnification Escrow account has been established, Purchaser shall
deposit USD 1,500,000 in cash and 149,022 of the DCC Shares into the
Indemnification Escrow Account. The remaining DCC Shares which have not
been deposited into the Indemnification Escrow Account shall be held by
the Purchaser and shall be delivered (if any are earned) to the Sellers
in accordance with the terms and conditions of Section 3.2.
3.1.4 In the event that not all Shares would be effectively delivered to the
Purchaser on the Closing Date, then Purchaser shall have the option to
waive the closing condition set forth in Section 4.2.1 (iii) and then
the Purchase Price shall be reduced proportionately in relation to the
portion of the Shares not effectively delivered.
11
3.2 DCC SHARES
3.2.1 If:
(i) no direct or indirect Change of Control or ownership in any of
the corporate Sellers have occurred; and
(ii) the Company meets the financial and business performance
criteria set forth on SCHEDULE 3.2 on or before the dates
required for such criteria as set forth on Schedule 3.2;
then, the Sellers shall be entitled to receive the number of Interchange
Common Shares corresponding to such satisfied criteria specified in
Schedule 3.2 (the "DCC SHARES") as soon as practicable after such
determination. The DCC Shares (if any) shall be allocated among the
Sellers based on their respective percentage ownership of the Shares
immediately prior to the Closing Date as set forth on Schedule A, which
Schedule also sets forth rounding rules (since fractional shares cannot
be delivered).
3.2.2 The provisions of this Agreement relating to the DCC Shares shall be
interpreted and applied in a manner consistent with Schedule 3.2.
Notwithstanding anything to the contrary in this Agreement and the
schedules hereto, the maximum aggregate number of shares of Interchange
Common Stock to be delivered pursuant to this Section 3.2 is the number
arrived at following the calculation set out in the definition of DCC
Shares.
3.2.3 No later than twenty (20) Business Days following the completion of the
audit for the calendar year ended December 31, 2005, and the calendar
year ended December 31, 2006, the Purchaser shall provide the Seller
Representative a statement describing which relevant conditions have and
have not been satisfied (in whole or in part) (such statement, including
the information required to be included therein by Schedule 3.2, a "DCC
DETERMINATION"). The Seller Representative shall have
12
twenty (20) Business Days after the DCC Determination is deemed given
pursuant to Section 11.1 to review and consider such DCC Determination.
At the request of the Seller Representative, representatives of the
Purchaser and the Seller Representative shall meet to discuss such DCC
Determination within the twenty (20) Business Days after the DCC
Determination is deemed given pursuant to Section 11.1; provided that if
agreement is not reached, the Seller Representative shall have twenty
(20) Business Days after such DCC Determination is deemed given pursuant
to Section 11.1 to notify the Purchaser in writing that the Seller
Representative disputes such DCC Determination, setting forth in
reasonable detail the basis for any dispute (each a "DCC DISPUTE
Notice"). If the Seller Representative does not deliver a DCC Dispute
Notice within twenty (20) Business Days after the DCC Determination is
deemed given pursuant to Section 11.1 or if the Seller Representative
accepts the DCC Determination in writing, such DCC Determination shall
be final, binding and conclusive upon the Purchaser and each Seller. In
the event a DCC Dispute Notice is delivered, the Seller Representative
and representatives of Purchaser shall meet within twenty (20) Business
Days after the DCC Dispute Notice is deemed given pursuant to Section
11.1 and shall negotiate in good faith to resolve such dispute. If a
final resolution of such dispute is reached, the agreed-upon amount
shall be reduced to writing and shall be final, binding and conclusive
upon Purchaser and each Seller. If no final resolution is reached within
twenty-five (25) Business Days after a DCC Dispute Notice is deemed
given pursuant to Section 11.1, the final determination of such dispute
shall be submitted to arbitration in accordance with the procedures set
forth in Section 11.12 of this Agreement. The determination of the
arbitrators shall be final, binding and conclusive upon Purchaser and
each Seller.
3.2.4 No interest in the DCC Shares or any portion thereof, no right to
participate, in whole or in part, in this Section 3.2, may be assigned
or transferred to any person (whether by operation of law or otherwise),
and any attempt to do so shall be void. The DCC Shares and the
provisions of this Section 3.2 are intended solely for the benefit of
the Sellers. The right (if any) to receive distributions of DCC Shares
pursuant to this Section 3.2 shall be personal to the Sellers.
13
3.2.5 No interest shall accrue or be paid on any portion of the DCC Shares or
any payment or distribution pursuant to Section 3.2.
3.3 REGISTRATION RIGHTS
3.3.1 It is the intention of the parties that the DCC Shares which may be
delivered to the Sellers pursuant to Section 3.2 will be transferred
pursuant to an exemption from the registration requirements of the
Securities Act. Accordingly, each Seller acknowledges and agrees that:
(i) the DCC Shares issued in connection with this Agreement will not
be registered under the Securities Act and will constitute
"restricted securities" within the meaning of the Securities
Act; and
(ii) any certificates representing the DCC Shares shall bear
appropriate legends to identify such privately placed shares as
being restricted under the Securities Act, to comply with
applicable state securities laws and, if applicable, to notice
the restrictions on transfer of such shares.
3.3.2 Interchange agrees to:
(i) file a registration statement on Form S-3 ("Form S-3") with the
Securities and Exchange Commission on or before November 15,
2005 or, if Interchange is not eligible to file a registration
statement on Form S-3 on or before November 15, 2005 then as
soon as practicable after Interchange becomes eligible to use a
Form S-3, covering the resale of the DCC Shares which may be
delivered to the Sellers pursuant to Section 3.2 (the
"REGISTRABLE SECURITIES"). In the event that Interchange does
not become eligible to file a registration statement on Form S-3
prior to April 4, 2006, then by April 4, 2006, Interchange must
file a registration statement on Form SB-2 or such other form
for which Interchange is eligible to register the Registrable
Securities for resale in accordance with applicable regulations
and Interchange company policies ("Form SB-2," and together
14
with the Form S-3, as applicable, the "RESALE REGISTRATION
STATEMENT"); and
(ii) use all reasonable endeavours to cause such Resale Registration
Statement to be declared effective as promptly as reasonably
practicable thereafter and use all reasonable efforts to comply
with the Securities Act and the U.S. Securities and Exchange Act
of 1934 and the rules and regulations thereunder so as to permit
the registration of the Registrable Securities in accordance
with the intended distribution contemplated hereby; and
(iii) use all reasonable endeavours to maintain the continual
effectiveness of the Resale Registration Statement until such
date as is the earlier of (x) the date when all Registrable
Securities covered by such Resale Registration Statement have
been sold or (y) as to any particular Seller, the date on which
all such Seller's Registrable Securities may be sold without any
restriction pursuant to Rule 144(k); provided, however, that if
Purchaser or Interchange shall furnish to the Sellers'
Representative a certificate signed by the Chairman of the
Board, the Chief Executive Officer or the Chief Financial
Officer of Interchange stating that a material corporate
development has occurred or a material corporate transaction is
under consideration and, in the good faith judgment of
Interchange, disclosure of such development or transaction in an
amendment or supplement to the Resale Registration Statement (or
the related prospectus) would be seriously detrimental to
Interchange (or would deprive Interchange of the opportunity to
pursue a significant favourable transaction), then Interchange
shall have the right to suspend the effectiveness of such Resale
Registration Statement and to prohibit each holder of
Registrable Securities from effecting any sale of DCC Shares
pursuant to such Resale Registration Statement (and the related
prospectus) for not more than two periods, which shall not
exceed forty-five (45) days in any single instance or ninety
(90) days in the aggregate (each such period, a "BLACKOUT
PERIOD"). Interchange will use its commercially reasonable
endeavours to end such suspension and prohibition periods
promptly after Interchange has determined in good faith that
such suspension and prohibition is no longer required.
15
Registration Procedures
3.3.3 Interchange further agrees that:
(i) In connection with the filing by Interchange of the Resale
Registration Statement, Interchange shall furnish each holder of
Registrable Securities a copy of the prospectus, including a
preliminary prospectus, in conformity with the requirements of
the Securities Act.
(ii) Interchange shall use its commercially reasonable endeavours to
register or qualify the Registrable Securities covered by the
Resale Registration Statement under the securities laws of each
state of the United States; provided, however, that Interchange
shall not be required to qualify as a foreign corporation or
execute a general consent to service of process in any
jurisdiction, unless Interchange is already subject to service
in such jurisdiction.
(iii) If Interchange has delivered preliminary or final prospectuses
to the holders of Registrable Securities and after having done
so the prospectus is amended or supplemented to comply with the
requirements of the Securities Act, Interchange shall promptly
notify such holders of Registrable Securities and, if requested
by Interchange, such holders of Registrable Securities shall
immediately cease making offers or sales of shares under the
Resale Registration Statement and return all prospectuses to
Interchange; provided that Interchange shall promptly provide
the holders of Registrable Securities with revised or
supplemented prospectuses and, following receipt of the revised
or supplemented prospectuses, the holders of Registrable
Securities shall be free to resume making offers and sales under
the Resale Registration Statement.
16
Requirements of Holders of Registrable Securities
3.3.4 Interchange shall not be required to include any Registrable Securities
in the Resale Registration Statement unless the Registrable Security
holder has furnished to Interchange written information regarding such
Registrable Security holder and the proposed sale of the Registrable
Securities by such Registrable Security holder as Interchange may
reasonably request in writing in connection with the Resale Registration
Statement or as shall be required in connection therewith by the
Securities and Exchange Commission or any state securities law
authorities; provided, however, that Interchange shall provide all such
Registrable Security holders no later than thirty (30) days prior to the
anticipated filing of the Resale Registration Statement with a selling
shareholder questionnaire requesting all required information necessary
for inclusion in the Resale Registration Statement.
Assignment of Resale Registration Rights
3.3.5 A holder of Registrable Securities may not assign any of its
registration rights provided under this Section 3.3 without the written
consent of Interchange.
Expenses of Registration
3.3.6 All expenses of Interchange in connection with registration (including,
without limitation, qualification, preparation and distribution) of
Registrable Securities incurred pursuant to this Agreement shall be
borne by the Purchaser or Interchange. In addition, Interchange shall
pay the actual costs and fees of one legal counsel retained by the
holders of Registrable Securities as a group (but not in excess of ten
thousand dollars ($10,000)). The holders of Registrable Securities shall
be solely responsible and Interchange shall have no obligation or
liability for all brokerage fees, selling commissions or underwriting
discounts incurred by the holders of Registrable Securities in
connection with sales under the Resale Registration Statement.
17
4. CLOSING
4.1 THE CLOSING
4.1.1 The Closing shall occur as soon as practically possible, but not more
than one (1) Business Day, after the Company has delivered to the
Purchaser the US GAAP Financial Statements. The Closing shall occur,
however, irrespective of whether the US GAAP Financial Statements have
been delivered or not, no later than 4 April 2005. The date on which the
Closing occurs is called the "CLOSING DATE".
4.1.2 The Closing shall, unless otherwise agreed, take place on the Closing
Date commencing at 9:00 a.m., Swedish time, at the offices of Xxxxxxxx &
Danielsson Advokatbyra KB, Stockholm.
4.2 CONDITIONS PRECEDENT TO THE CLOSING
4.2.1 The obligations of the Purchaser to consummate the transactions
contemplated herein shall be subject to the satisfaction, on or before
the Closing, of each of the following conditions, subject to Section
4.1.1 above, unless duly waived in writing by the Purchaser:
(i) the Company shall be the owner of 75 per cent of the shares and
any other equity instruments, free of any Encumbrances, in
Inspire Infrastructure Espana SL and 100 percent of the shares
and any other equity instruments, free of any Encumbrances, in
Inspire Infrastructure (UK) Limited;
(ii) each Seller shall have confirmed in writing (which confirmation
shall form an integral part of this Agreement) to the Purchaser
that per the Closing Date there is no breach of representation
or warranty made by the Sellers in Section 5.1.61 - 5.1.66 of
this Agreement;
(iii) the Shares represent 100 percent of the entire share capital of
the Company and there shall have not occurred any direct or
indirect change in the
18
ownership or control over (a) the Shares or (b) any of the
Sellers in comparison to what is set out in Schedule A hereto;
(iv) the Company shall have brought its Accounts into conformity with
accounting principles generally accepted in the United States of
America and delivered to the Purchaser the US GAAP Financial
Statements;
(v) the Company and the Key Employees and the individuals listed on
SCHEDULE B.1 shall have entered into employment agreement
included in Schedule B.1 (the "EMPLOYMENT AGREEMENTS");
(vi) the individuals listed on SCHEDULE B.2 shall have entered into
the personnel waivers and apartment lease guarantees included in
Schedule B.2;
(vii) if the closing condition set out in Section 4.2.1 (iv) has not
been satisfied or waived by Purchaser by 6 p.m. PST on the day
falling twenty-one (21) calendar days from the date of execution
of this Agreement, then the closing condition set out in Section
4.2.1 (iv) shall be deemed waived by Purchaser and Purchaser
shall be obligated to close the transaction contemplated by this
Agreement if the other conditions in this Section 4.2.1 have
been satisfied or waived if, and only if, a material adverse
change in the business or operations of the Company has not
occurred since the date of execution of this Agreement (for the
purposes of this section, "material adverse change" shall mean
either of (i) any loss of the Company's customer base to such
extent that such loss, would it have occurred on 1 January 2004,
would have resulted in a loss of more than 50% of the Company's
revenues for the financial year 2004, or (ii) the filing, notice
or threat (in writing) by a third party of a material lawsuit,
which means a lawsuit in the amount of at least USD 500,000,
against the Company).
4.2.2 The obligations of either the Purchaser or the Sellers (jointly, but not
severally) to consummate the Closing shall also be subject to the
satisfaction that the completion
19
of the sale and purchase of the Shares is not prohibited by any
applicable Laws, judgment, order or injunction.
4.3 DELIVERIES AND ACTIONS AT THE CLOSING
4.3.1 At the Closing, each of the Sellers shall do, or procure to be done, all
acts necessary in order to consummate the transactions contemplated
herein, including but not limited to the delivery to the Purchaser, of
the following:
(i) copies of appropriate documents evidencing completion of the
conditions precedent set out in Section 4.2.1 above;
(ii) the share certificates representing the Shares duly endorsed to
the Purchaser;
(iii) the Company's share register, setting forth the Purchaser as the
owner of the Shares.
(iv) a certificate by the Seller Representative, in form and
substance satisfactory to the Purchaser, certifying that the
Sellers and/or the Company have satisfied each of the conditions
set forth in Section 4.2.1 above, as applicable.
4.3.2 At the Closing, the Purchaser shall do, or procure to be done, all acts
necessary in order to consummate the transactions contemplated herein,
including but not limited to causing the Purchase Price to be paid to
each Seller out of the Purchase Price Escrow Account in accordance with
the wiring instructions set forth on SCHEDULE 4.3.2. The Purchaser shall
cause all interest amounts earned on the Purchase Price by Purchaser
during the term the Purchase Price is held in the Purchase Price Escrow
Account to be paid to the Sellers as additional purchase price;
provided, however, if the Closing occurs on or after the date which is
twenty-one (21) days after the date of this Agreement then fifty percent
(50%) of such
20
earned interest amount shall be delivered by the Purchaser to the
Sellers as additional purchase price.
4.3.3 Purchaser shall hold the Escrow Amount until it is deposited with a
third-party escrow agent on terms agreeable to Purchaser and Seller
Representative. Such escrow account shall be established as soon as
practicable, but no later than fifteen (15) Business Days from the
Closing Date. The terms of the escrow agreement will provide that
distributions from the escrow account will be made by the escrow agent
upon: (i) joint written instructions from the Seller Representative and
Purchaser, (ii) the expiration of a twenty (20) Business Day period
following written notice from Purchaser to the escrow agent and the
Seller Representative of a claim upon the Escrow Amount so long as the
Seller Representative has not delivered a written notice objecting to
the claims made by the Purchaser (such dispute will be resolved through
negotiation or subsequent arbitration), and/or (iii) written
instructions from an arbitrator following final arbitration of the
matter in accordance with Section 11.12.1. The escrow agreement will
also include provisions for the distribution of the remaining Escrow
Amount following the two-year anniversary of the Closing including a
provision that requires the escrow agent to distribute all of the
remaining Escrow Amount to the Sellers on the day which is twenty (20)
Business Days following the second anniversary of the Closing unless the
Purchaser has delivered a written notice to the escrow agent and the
Seller Representative prior to such date that there are outstanding
unresolved claims. Any and all interest earned on the Escrow Amount
shall be added to the Escrow Amount and distributed to the Purchaser to
satisfy indemnification claims or to the Sellers in accordance with the
terms of the escrow agreement.
4.4 SELLERS' WAIVER
Subject to the Closing and what follows from the Employment Agreements,
as applicable, each Seller hereby waives, on behalf of itself and any
person affiliated to it, in favour of the Purchaser and the Company, any
claim for any fees, damages
21
or other compensation in respect of services provided by such Seller or
such affiliated person at any time prior to the Closing Date.
5. REPRESENTATIONS AND WARRANTIES OF SELLERS
5.1 Each Seller represents and warrants to the Purchaser that each of the
Warranties are true, complete and correct as of this day and, unless
otherwise is explicitly set out in the specific Warranty, as of the
Closing Date.
Corporate Matters
5.1.1 Each corporate Seller set out in item 1. - 3. in the introductory
paragraph of this Agreement is a company duly incorporated and validly
existing under the laws of Sweden and has full corporate power and
authority to execute and perform this Agreement and consummate the
transactions contemplated hereby.
5.1.2 Each corporate Seller set out in item 1. - 3. in the introductory
paragraph of this Agreement is wholly owned by the individuals as set
out in Schedule A and such ownership is free and clear of any
Encumbrances.
5.1.3 Each Seller set out in item 4. - 5. in the introductory paragraph of
this Agreement is an individual with legal capacity and authority to
execute and perform this Agreement and consummate the transactions
contemplated hereby.
5.1.4 This Agreement has been duly authorised and constitutes a binding
obligation of and is enforceable against each Seller in accordance with
the terms hereof. The execution and performance by a Seller of this
Agreement and the consummation of the transactions contemplated herein
do not and will not:
(i) violate or conflict with or constitute a default (or event
which, with notice or lapse of time, or both would constitute a
default) under, or give rise to a
22
right of termination or modification, or acceleration of the
performance by any licence, permit, approval or other
authorisation of any Group Company or a Seller issued by any
governmental or regulatory authority;
(ii) result in a breach of any judgement, decree or order of any
court or governmental or regulatory authority, or applicable
Laws or the articles of association of any Group Company or a
Seller, as applicable;
(iii) result in the creation of any liens, claims, options and other
encumbrances upon any of the assets of any Group Company; or
(iv) require a Seller or any Group Company to make any registration
or filing with or consent, approval, permit, authorisation or
action by any governmental or regulatory authority.
5.1.5 The Shares represent 100 per cent of the entire issued share capital of
the Company and such shares are legally and validly issued, fully paid
and duly registered.
5.1.6 The Sellers have full title to the Shares and have the right to sell and
deliver the Shares to Purchaser in accordance with the terms of this
Agreement. The Shares are free and clear of any Encumbrances.
5.1.7 Apart from this Agreement, there is no agreement, arrangement or
commitment outstanding which calls for the allotment, issue or transfer
of, or accords to any person the right to call for the allotment, issue
or transfer of, any share or loan capital of any Group Company.
5.1.8 No Group Company has at any time:
(i) reduced its share capital;
(ii) redeemed any share capital; or
(iii) purchased any of its shares; or
23
(iv) forfeited any of its shares.
5.1.9 The fully diluted equity spreadsheet set out in Schedule A fully and
accurately details the holders' name, address (being the residential or
principal place of business), number of shares held and/or any rights to
call for the allotment, issue, sale, transfer or conversion of any share
or loan capital under any option or other agreement (including
conversion rights) and (if applicable) under which employee share option
scheme such options were granted, in the Company and each of its
Subsidiaries.
5.1.10 The Company has full title to such portion of the issued and outstanding
shares of capital stock in each Subsidiary as set out in SCHEDULE
5.1.10; and such shares are legally and validly issued, fully paid and
duly registered; and such shares so held are free and clear of any
Encumbrances. There are no outstanding shares, equity instruments
(including any rights to purchase capital stock) or shares of capital
stock reserved for future issuance in each Subsidiary except as set out
in Schedule 5.1.10.
5.1.11 No resolutions (other than resolutions that have been fully implemented
and registered prior to the date hereof) have been made in any Group
Company regarding the issue of new shares, convertible debt instruments,
debt instruments with a right to subscribe for new shares or any other
equivalent instruments.
5.1.12 No Group Company has (i) any direct or indirect interest in any other
company or enterprise (except for the Company's interest in the
Subsidiaries), including, without limitation, by way of joint venture;
(ii) has undertaken to or committed itself to acquire any such interest
in the future; and (iii) is negotiating to acquire any such interest.
24
5.1.13 Each Group Company is duly organised and validly existing under the laws
of its respective jurisdiction and has full corporate power to conduct
its business as now conducted and intended to be conducted on the
Closing Date.
5.1.14 [Intentionally left blank]
5.1.15 No Group Company has filed (or have had filed against it) or is aware of
any petition for its winding-up, reconstruction, reorganization,
bankruptcy or comparable proceedings.
Financial
5.1.16 The Accounts (including the notes therein), as applicable, have been and
will be, as applicable, prepared in accordance with the Accounting
Principles and provide a true and fair picture (Sw. "rattvisande bild")
of the financial position and result of operations as at the respective
Accounts Date, as applicable. No independent auditor's report in respect
of the Accounts, as applicable, contains any reservation or
supplementary information and such auditor's report(s) certify, and will
certify, as applicable such accounts unconditionally and without
reservation.
5.1.17 The Accounts include all of the Company's assets, liabilities,
provisions, pledges, guarantees and other undertakings as per the
respective Accounts Date, which ought to appear in the Accounts, as
applicable, according to the Accounting Principles.
5.1.18 At the respective Accounts Date, the Company owned all of the assets
shown in the Accounts.
5.1.19 The Company has not pledged any assets, and has not made any
commitments, guarantees, provisions or contingent liabilities other than
as disclosed in the Accounts, and the Company has and will have full and
exclusive title to all assets in the balance sheets of the Accounts, and
the assets are not the subject of any liens,
25
mortgages, pledges, claims, options, encumbrances or any other form of
third party rights.
5.1.20 All proper and necessary accounting, financial, corporate and other
records have in all material respects been accurately maintained and
retained (in accordance with the bookkeeping act (Sw. "bokforingslagen")
by each Group Company, is in the possession of the Group Company and
give a true, fair and complete view of matters which ought to appear in
them and do not contain or reflect any inaccuracies or discrepancies.
5.1.21 The assets and rights of the Company as of 31 December 2004 constitute
all of the assets and rights necessary to conduct the business as
presently being conducted and, immediately after Closing, necessary for
it to continue to conduct the business as presently being conducted.
5.1.22 The Warranties in Sections 5.1.16 - 5.1.21 shall apply mutatis mutandis
to each of the Subsidiaries, subject to appropriate adjustments to
applicable Laws. For the purpose hereof, "Accounts" as referred to in
Sections 5.1.16 - 5.1.21 shall mean Subsidiary Accounts.
5.1.23 Where any of the records of any Group Company are kept on computer, such
Group Company:
(i) is the owner of all hardware and all software necessary to
enable it to use the records as they have been used in its
business to the date of this Agreement and to the Closing Date;
(ii) does not share any hardware or software relating to the records
with any person; and
(iii) maintains back up records and support in the event of any fault
or failure of such computer hardware and software in line with
reasonable business
26
practice for a company of similar size to such Group Company and
in the same business as such Group Company.
Ordinary Course and No Material Adverse Change
5.1.24 Since 31 December 2004 until the Closing, each Group Company's business
has been and will be conducted only in the ordinary course of business,
consistent with past practice; and during such period no dividend or
distribution has been declared or made by any Group Company; and during
such period there has not occurred or arisen any material adverse
change, extraordinary event or extraordinary loss in relation to any
Group Company or its business and no Group Company has agreed to or
arranged to do any of the foregoing.
5.1.25 Since 31 December 2004 until the Closing no Group Company has:
(i) incurred or committed to incur:
(1) material capital expenditure; or
(2) any material liability except for full value or in the
ordinary course of business;
(ii) acquired or agreed to acquire:
(1) any asset for a consideration higher than its market
value at the time of acquisition or otherwise than in
the ordinary course of business; or
(2) any business or substantial part of it or any share or
shares in a body corporate;
(iii) disposed of or agreed to dispose of, any of its assets except in
the ordinary course of business and for full value;
(iv) repaid wholly or in part any loan except upon the due date or
dates for repayment;
(v) issued or allotted share or loan capital, increased its
authorised share capital, purchased or redeemed any shares,
reduced or re-organised its share capital or agreed to do so.
27
Financial commitments and borrowings
5.1.26
(i) Complete and accurate details of all overdraft, loan and other
financial facilities available to each Group Company and the
amounts outstanding under them at the close of business on the
day preceding the date of this Agreement are set forth in
SCHEDULE 5.1.26 and the Sellers have not received any notice
that the continuance of any of those facilities might be
materially adversely affected or prejudiced.
(ii) No Group Company is a party to, or has agreed to enter into, any
lending, or purported lending, agreement or arrangement (other
than agreements to give credit in the ordinary course of its
business).
(iii) No Group Company is exceeding any borrowing limit imposed upon
it by its bankers, or other lenders, nor has any Group Company
entered into any commitment or arrangement which will lead it so
to do.
(iv) No overdraft or other financial facilities available to any
Group Company are dependent upon the guarantee of or security
provided by any other person.
(v) To the Sellers' Knowledge, no Group Company is in default under,
or in breach of, any of the material terms of any loan capital,
borrowing, debenture or financial facility of any Group Company.
(vi) No Group Company is, nor has it agreed to become, bound by any
guarantee, indemnity, surety or similar commitment.
(vii) No Group Company has any credit cards in issue in its own name
or that of any officer or employee of any Group Company or any
person connected with any officer or employee, except for a
corporate debit card held by Xxxx Xxxxx and which has a limit of
SEK 100,000 for each 30-day period.
(viii) Except for a loan from NUTEK to the Company in the amount of SEK
724,352, no Group Company has received any grants, allowances,
loans or
28
financial aid of any kind from any government departmental or
other board, body, agency or authority which may become liable
to be refunded or repaid in whole or in part.
(iv) No Group Company has engaged in financing of a type which is not
required to be, or has not been, shown or reflected in the
Accounts or the Subsidiary Accounts.
Insurance Coverage
5.1.27 The Company and its business has and maintains sufficient and adequate
insurance coverage with reputable and sound insurers in respect of the
Group Companies and its businesses covering against all risks normally
insured against by companies of a similar size and carrying on similar
businesses. Valid policies for such insurance are and will be
outstanding and duly in force on the Closing Date and at least one month
following the Closing Date. To the Sellers' Knowledge, there are no
circumstances that will lead to any such insurance being revoked,
violated or not renewed in the ordinary course.
Real Property
5.1.28 No Group Company owns any real property, nor is it registered as owner
of any real property.
5.1.29 No Group Company is a party to any real property lease agreement other
than included as copies in SCHEDULE 5.1.29. The offices leased by the
Company at Sveavagen 59 are adequate for use in the business operated by
the Company.
Intellectual Property Rights
5.1.30 All Intellectual Property Rights owned, licensed and used by the Group
Companies are listed in SCHEDULE 5.1.30. None of the Intellectual
Property Rights so accounted
29
for as owned is subject to any Encumbrances (including, but not limited
to, rights to acquire know-how, Intellectual Property Rights or source
codes). As accounted for in said Schedule, the Group Companies hold
licenses to use the software packages and programs currently used in
their business and are not in breach of such licenses.
5.1.31 All Intellectual Property Rights listed in Schedule 5.1.30 are valid,
subsisting and enforceable. All renewal applications, fees and other
steps required for maintenance, protection and enforcement of such
Intellectual Property Rights have been paid or taken.
5.1.32 To the Sellers' Knowledge, no third party infringes any of the
Intellectual Property Rights nor does any of the Group Companies
infringe any third party Intellectual Property Rights, including but not
limited to Intellectual Property Rights held by other employers (current
or former) of the employees set out in the Employee Agreements.
5.1.33 All software used by the Company operates substantially as intended and
no defects or flaws interfere in any material respect with the
operations thereof.
Contracts
5.1.34 All Material Contracts to which a Group Company is a party are listed in
SCHEDULE 5.1.34, complete copies of which have been delivered to the
Purchaser, and are valid, enforceable and binding in accordance with
their respective terms, and none of the Group Company or any
counter-parties to any Material Contract is in default of any Material
Contract and, save as provided for in Schedule 5.1.34, no event has
occurred which, but for the passage of time or giving of notice, would
constitute such default. Each Group Company has performed when due all
of their respective obligations under the Material Contracts. Except as
set forth on Schedule 5.1.34, no Group Company has received, nor has it
given, notice of termination of any Material Contract.
30
5.1.35 The execution and performance of this Agreement does not and will not
result in any breach or any third party having the right to terminate,
rescind or modify any Material Contract or arrangement material to the
business of any Group Company as presently conducted and intended to be
conducted until the Closing Date.
5.1.36 No Group Company is a party to or is bound by any contract, commitment,
agreement, order or letter of intent (i) not made in the ordinary course
of business; (ii) not entered on arm's length basis; or (iii) containing
any terms or conditions not consistent with fair market terms,
conditions and prices.
Employees, Etc.
5.1.37 Xxx Xxxxx is currently the only Employee of the Group Companies, with
the benefits described in Schedule 5.1.37. No collective agreements are
binding on the Group Companies as per the Closing Date. As of the
signing or effective date of the Employment Agreements, none of the Key
Employees are employed by any other employer . No employees in addition
to the Key Employees are required for the Group Companies' business
operations to be carried out as currently operated. Each of the Key
Employees has a permanent right to reside and work in Sweden.
5.1.38 Other than Xxx Xxxxx'x existing employment agreement with the Company,
there are no existing or former employees or other persons that have a
right of employment or re-employment with any Group Company.
5.1.39 The Group Companies do not have any consultants (Sw. "uppdragstagare")
and has not at any time had any consultant which under labour Laws or
Tax Laws would be deemed as an employee.
5.1.40 [Intentionally left blank]
31
5.1.41 No Group Company has any outstanding obligations towards any current or
former employee, including the Company's current and former management
and board of directors. Neither Xxx Xxxxx nor any former employee or any
other person is entitled to any pension benefits, profit sharing
arrangements, retirement plans, severance benefits, life or medical
insurance plans or programs, or bonus or incentive systems granted by or
relating to any Group Company.
5.1.42 There is no pending or threatened (i) claim by, or outstanding
settlement with, any current or former board director, executive
officer, or employee or any other affiliated person of any Group Company
against any Group Company, (ii) labour or union litigation in relation
to the Xxx Xxxxx or former employees or executive officers, or (iii)
strike.
5.1.43 All accrued costs or pensions, holidays, overtime and bonuses accrued up
to the respective Accounts Date are set out in the respective Accounts
and Subsidiary Accounts.
5.1.44 No Group Company has violated any labour, health or safety legislation,
regulation or agreement in any relevant jurisdiction including without
limitation the Swedish Co-Determination Act (Sw. "lagen (1976:580) om
medbestammande i arbetslivet"). No Group Company has received any notice
of any claim that it has not complied with any employment, labour,
health or safety or related Laws.
Compliance, Licenses and Consents
5.1.45 Each Group Company has maintained and is in full compliance with the
terms of all public approvals, permissions, authorisations and/or
licenses required to be obtained by it in connection with the conduct of
its business, and none of such approvals etc. has been obtained on terms
which have not been performed by such Group Company.
32
5.1.46 No licences, consents, permissions, authorisations and approvals
required by any Group Company or which any Group Company knows will be
required for the carrying on of its business.
5.1.47 No licence, consent, permission, authorisation or approval currently
held by any Group Company and necessary for the carrying on of the
business as carried on at the Closing will not be renewed in whole or in
part nor has any Group Company received any notice that any licence,
consent, permission, authorisation or approval is likely to be revoked,
suspended or cancelled.
5.1.48 Each Group Company is in compliance with all applicable Laws, including,
but not limited to, Laws relating to the environment and personal
integrity protection, and no claim has been made by any public authority
that any Group Company is non-compliance and there exists no ground for
any such claim. No Group Company has committed nor is it liable for, and
no claim has been made that it has committed or is liable for, any
criminal or illegal act and no Group Company has received notice that it
is in breach of any obligation or duty whether imposed by or pursuant to
statute or contract.
5.1.49 No Group Company is the subject of any public prohibition or injunction,
and no such prohibition or injunction is imminent and no proceedings in
respect thereof have been commenced. No Group Company has received
notification that any investigation or inquiry is being, or has been,
conducted by, or received any request for information from any
governmental or other authority, department, board, body or agency in
respect of its affairs.
5.1.50 Each agreement or transaction made between a Group Company and a Seller
or a party affiliated with a Seller has been made on arm's length basis
and in compliance with all applicable Laws.
33
Tax
5.1.51 All Tax returns and reports relating to Tax required to be filed by or
on behalf of each Group Company before the Closing or in respect of any
period before the Closing have been or will be properly filed, and any
and all information required to be filed for purposes of correct Tax
assessment has been duly filed. All Taxes due by each Group Company and
required to have been or to be paid by each Group Company on or prior to
the Closing have been or will be paid in full. All Taxes due by each
Group Company but that have not yet been paid are fully and adequately
provided for in the respective Accounts and Subsidiary Accounts as
required under the applicable accounting principles.
5.1.52 All Taxes payable by each Group Company but not yet due are fully and
adequately provided for in the respective Accounts and Subsidiary
Accounts, to the extent so required under applicable accounting
principles, and there will be no adverse Tax effects for the Group
Company as a result of any review or Tax assessment by any Tax authority
relating to any period prior to the Closing Date.
5.1.53 No Tax authority has commenced any Tax dispute against any Group Company
and there exists no ground for reassessment by the Tax authority for any
additional Taxes relating to the period up to and including Closing.
5.1.54 No Tax authority has commenced any Tax audit on any Group Company and to
Sellers' Knowledge no such audit is imminent.
Competition
5.1.55 No Group Company is in violation of applicable competition law; nor is
or has any Group Company been in violation of any applicable competition
law or subject to any examination by any competition authority.
34
Litigations and Disputes
5.1.56 There is no pending or threatened legal, arbitral, administrative,
criminal or governmental proceeding with respect to any Group Company,
whether as plaintiff, defendant or otherwise, and, to the Sellers'
Knowledge, there exists no ground for the commencement of any such
proceeding, arbitration or complaint against or by any Group Company.
5.1.57 No litigation, arbitration, administrative or criminal proceedings by or
against the Company or any person for whose acts it may vicariously be
liable are threatened or expected and none are pending. To the Sellers'
Knowledge, there are no facts or circumstances which will give rise to
any litigation, arbitration, administrative or criminal proceedings
against any Group Company or any person for whose acts it may be
vicariously liable.
5.1.58 No Group Company is subject to any judgment, injunction or other
judicial or arbitral decision or award which in any material respect
restricts the Group Company's present or future business.
Commission
5.1.59 No person is entitled to receive from the Company any finder's fee,
brokerage or other commission in connection with this Agreement or the
sale and purchase of all or part of the Shares. The Company is not
liable for fees for legal services provided to the Sellers in connection
with the transactions contemplated in this Agreement.
Inducements
5.1.60 To Sellers' Knowledge no officer, agent or employee of any Group Company
has paid or accepted any unlawful bribe or inducement (monetary or
otherwise) or used any of the Company's assets unlawfully to obtain an
advantage for himself or any other person.
35
US Securities Laws
5.1.61 Each Seller is experienced in evaluating and investing in securities of
companies such as Interchange, and has either individually or through
its current officers such knowledge and experience in financial and
business matters that such Seller is capable of evaluating the merits
and risks of such Seller's prospective investment in Interchange, and
has the ability to bear the economic risks of the investment.
5.1.62 Each Seller (other than Xxxxx Xxxxxxx is an "accredited investor" within
the meaning of Securities and Exchange Commission Rule 501 of Regulation
D, as presently in effect, under the Securities Act of 1933 of the
United States of America as amended (the "SECURITIES ACT").
5.1.63 Each Seller is acquiring the DCC Shares pursuant to this Agreement for
investment for such Seller's own account, not as nominee or agent, and
not with the view to, or for resale in connection with, any distribution
thereof in violation of the Securities Act.
5.1.64 Each Seller acknowledges that the DCC Shares must be held indefinitely
unless subsequently registered under the Securities Act or an exemption
from such registration is available. Such Seller is aware of the
provisions of Rule 144 promulgated under the Securities Act which permit
limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions.
5.1.65 Each Seller acknowledges that, to the extent applicable, each
certificate evidencing the DCC Shares shall be endorsed with the legends
substantially in the form set forth below, as well as any additional
legend imposed or required by Interchange Corporation's bylaws or
applicable federal or state securities laws:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR
36
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN
EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL
TO THE EFFECT THAT THE PROPOSED TRANSACTION DOES NOT INVOLVE A
VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE
SECURITIES LAWS."
Interchange shall remove such legends at such time as they are no longer
required by its bylaws or federal or state securities laws, as
applicable.
5.1.66 Each Seller has received and reviewed information about Interchange and
has had an opportunity to discuss Interchange Corporation's business,
management and financial affairs with its management. Such Seller
believes it has received all the information it considers necessary or
appropriate for deciding whether to acquire the DCC Shares. Such Seller
understands and acknowledges that such discussions, as well as any
written information issued by Interchange, (i) were intended to describe
the aspects of Interchange's business and prospects which Interchange
Corporation believes to be material, but were not necessarily an
exhaustive description, and (ii) may have contained forward-looking
statements involving known and unknown risks and uncertainties which may
cause Interchange's actual results in future periods or plans for future
periods to differ materially from what was anticipated and that no
representations or warranties were or are being made with respect to any
such forward-looking statements or the probability of achieving any of
the results projected in any of such forward-looking statements.
6. REPRESENTATIONS AND WARRANTIES OF PURCHASER
6.1 The Purchaser represents and warrants to the Seller that the
representations and warranties set forth below in this Section 6.1 are
true, complete and correct as of this day and the Closing Date. The
representations and warranties shall be separate and independent.
37
6.1.1 The Purchaser has full corporate power and authority to execute and
deliver this Agreement and consummate the transactions contemplated
hereby.
6.1.2 This Agreement has been duly authorised and constitutes a binding
obligation of and is enforceable against the Purchaser in accordance
with the terms hereof.
6.1.3 The execution and performance by the Purchaser of this Agreement and the
consummation of the transactions contemplated hereby do not and will not
violate the articles of association of the Purchaser or any applicable
Laws, judgement, decree or order of any court or governmental or
regulatory authority.
7. INDEMNIFICATIONS AND LIMITATIONS
7.1 INDEMNIFICATION
Sellers hereby agree to indemnify and hold harmless the Purchaser, or,
at Purchaser's option, any Group Company or any affiliate of the
Company, from and against any and all Losses or Liabilities, incurred or
suffered by Purchaser, any affiliate of Purchaser or any Group Company,
arising out of, related to, as a result of or in connection with any
misrepresentation, breach of Warranty or non-fulfilment of any agreement
or covenant of any Seller under this Agreement.
7.2 LIMITATIONS
7.2.1 The Sellers' liability for Claims is subject to the following
limitations set out in this Section 7.2.
7.2.2 No liability shall arise in respect of a Claim if and to the extent that
such Claim:
(i) occurs as a result of the passing of any legislation not in
force at the Closing Date, or which takes effect retroactively,
or occurs as a result of an increase
38
in the tax rate in force on the Closing Date or any change in
the generally established practise of the relevant tax
authorities;
(ii) is recoverable under an insurance policy or which would have
been recoverable had the insurance protection level, which
existed at the Closing Date, been continued;
(iii) would not have arisen but for any voluntary act, wilful omission
or transaction carried out by the Purchaser after the Closing;
and
(iv) is made good or is otherwise fully compensated for to any Group
Company and/or the Purchaser or an affiliate of the Purchaser
(and, for the avoidance of doubt, the Sellers shall not be
liable for Losses and Liabilities under Section 7 to the extent
the same Losses and Liabilities are actually compensated for by
application of Section 8).
7.2.3 If the Claim includes a tax-deductible cost for any of the Group
Companies, or if it reduces the taxable income of any of the Group
Companies, then the Claim shall be reduced by the actual tax savings
made by the concerned company.
7.2.4 Purchaser shall not be entitled to indemnification in respect of any
Claim unless the aggregate amount of all Claims, subject to any
restrictions under this Section 7, exceeds USD 50,000, in which case the
whole such amount and not only the excess shall be payable.
7.2.5 Purchaser may, without regard to the Purchaser's knowledge or the
limitations contained in Section 7.2.4, seek indemnification of any Loss
or Liability based on repayment in whole or in part of the NUTEK loan
referred to in Section 5.1.26 (viii), including any interest or
penalties that may have accrued or been levied against such loan,
anytime six months after the Closing Date. Any Claim satisfied in
connection with this Section 7.2.5 will not count against the aggregate
minimum referred to in Section 7.2.4.
7.2.6 No Claim shall entitle the Purchaser to compensation hereunder unless
notice in writing of any such Claim, accompanied by reasonable
particulars thereof specifying the nature of the Claim and, if possible,
the amount of the Claim, has been given to Seller no later than sixty
(60) days from the date when Purchaser
39
became aware of the circumstances giving rise to such Claim, and in any
event, save as set out below, no later than twenty-four (24) months
after the Closing Date.
7.2.7 In case of (A) any Claim or (B) any Claim related to any unmatured claim
related to facts and circumstances which would reasonably be expected to
lead to a Loss or Liability, arising out of or related to any claims
asserted by third parties (and such claim is not covered by the specific
indemnities set out in Section 8)) within two years following the
Closing Date, the 24-months' limitation period provided for in Section
7.2.6 shall be extended to the date which is ninety (90) days after the
earlier of (i) the expiry of the applicable statutory limitations period
with respect to such potential claims and (ii) a final decision, not
subject to appeal, by the competent authority or court; whichever is
later, but in no case later than five (5) years after the Closing Date.
This extension is only valid if the Sellers have been notified in
writing within the fifteen (15) calendar day period following the second
anniversary of the Closing that there is an unresolved claim. The
Sellers shall have the right to object to and subsequently arbitrate in
accordance with Section 11.12 the extension of the escrow period
pursuant to this Section 7.2.7.
7.2.8 The aggregate of the liability of the Sellers in respect of all Claims
under Section 7.1 shall in no event exceed the Escrow Amount.
7.3 THIRD PARTY CLAIMS
The Sellers shall, at its own cost, be given the opportunity to be fully
informed of the handling of and to participate in any proceedings
related to any claim from a third party (including but not limited to
policyholders and tax authorities) that may result in the Sellers being
liable pursuant to this Section 7. The Purchaser shall not, and shall
procure that any Group Company does not, admit such claim without the
prior written consent of any Sellers who are employed by the Company at
that time. If the Sellers decide to participate in the defence, the
Purchaser undertakes to co-operate with the Sellers.
40
7.4 EXCLUSIVE REMEDY
Without prejudice to Section 8, the remedy provided for in this Section
7 shall be exclusive in case of a misrepresentation or breach of a
Warranty and hence it is specifically agreed that no remedy whatsoever
under the Sale of Goods Act (Sw. "Koplagen (1990:931)") shall be
available to Purchaser in case of a misrepresentation or breach of a
Warranty.
8 SPECIFIC INDEMNITY
8.1 In addition to any other Warranties or covenants made by the Sellers in
this Agreement, and in addition and without prejudice to the Purchaser's
rights in Section 7 above, the Sellers hereby agree to indemnify and
hold harmless the Purchaser, or, at the Purchaser's option, any Group
Company, from and against any and all Losses or Liabilities incurred or
suffered by the Purchaser, any affiliate of Purchaser or any Group
Company, arising out of or in connection with:
(i) any breach of the Warranties set out in Sections 5.1.1-5.1.15;
(ii) any breach of the Warranties set out in Sections 5.1.51-5.1.54;
(iii) any of the Sellers' fraud, wilful misconduct or gross negligence
relating to any misrepresentation or breach of Warranty; and
(iv) any claim raised against any Group Company by any Seller or
party affiliated with a Seller and attributable to any period
prior to Closing.
8.2 The Parties expressly agree and acknowledge that the Sellers'
indemnification obligations in Section 8.1 shall apply irrespective of
the Purchaser's knowledge of the circumstances giving rise to the claim.
The Parties expressly agree and acknowledge that none of the limitations
set out in Section 7.2 above shall apply in respect of the Sellers'
indemnification obligations in Section 8.1; except that
41
(i) the limitations set out in Section 7.2.2 shall apply (and, for
the avoidance of doubt the Sellers shall not be liable for
Losses and Liabilities under Section 7 to the extent the same
Losses and Liabilities are actually compensated for by
application of this Section 8);
(ii) the limitations set out in Section 7.2.4 shall apply;
(iii) the aggregate of the liability of the Sellers in respect of all
claims under this Section 8 shall in no event exceed (a) the
Escrow Amount with respect to claims set forth in Section 8.1(i)
and 8.1(ii), or (b) the Purchase Price with respect to claims
set forth in Section 8.1(iii) and 8.1(iv); and
(iv) in order to seek indemnification under this Section 8, the
Purchaser shall give notice in writing to the Sellers of any
claim under this Section 8:
(a) as to Section 8.1(i): not later than five (5) years
following the Closing Date;
(b) as to Section 8.1(ii): when all assessments relating to
events prior to the Closing Date are legally barred from
being reviewed, or, if applicable, ninety (90) days
after the final decision has been finally determined by
the relevant tax authorities or courts; (c) as to
Section 8.1(iii): within a reasonable time after the
Purchaser having become aware of the basis for such
claim; and
(c) as to Section 8.1(iii): within a reasonable time after
the Purchaser having become aware of the basis for such
claim; and
(d) as to Section 8.1(iv): within a reasonable time after
the Purchaser having become aware of the basis for such
claim;
and such written notice shall be accompanied by reasonable
particulars thereof specifying the nature of the claim and, if
possible, the amount of the claim, but delay in giving such
specifications in the notice shall not relieve the Sellers of
their obligations in this Section 8, except to the extent such
delay with the specification shall have damaged the Sellers.
42
8.3 In the event that the Purchaser seeks indemnification for a claim
pursuant to Section 8.1(iii) at any time after the second anniversary of
the Closing, the Purchaser agrees to pay all of the legal fees and
expenses incurred by the Sellers defending such claim if, and only if,
the final arbitration decision of such claim determines that such claim
was not arising out of or in connection with any of the Sellers' fraud,
wilful misconduct or gross negligence.
9 JOINT AND SEVERAL LIABILITY
The Sellers shall be jointly and severally liable for all obligations
under this Agreement. This means for example that all Sellers shall be
liable in the event the Purchaser has a valid Claim against any Seller.
Notwithstanding anything to the contrary contained in this Agreement,
the joint and several liability of Xxxxxxx Xxxxx, as a Seller, shall not
exceed his pro rata share of the obligations under this Agreement,
limited to the Purchase Price; provided, however, that Xxxxxxx X. Xxxxx
shall be liable up to the total portion of the Purchase Price received
by him if the Purchaser has, using reasonably commercial standards
(including judicial and administrative proceedings, if appropriate)
attempted to collect such obligation from Xxxxxx Xxxxxxx.
10 NON-COMPETE
10.1 The Sellers agrees for a period of 36 months from the Closing Date not
to engage, directly or indirectly, in any activity or business which
competes with the business carried on by any Group Company at Closing.
43
11. MISCELLANEOUS
11.1 NOTICES
All notices or other communications under this Agreement shall be in
writing and in the English language, be sent by hand or fax and shall be
deemed to have been received by a Party:
(i) if delivered by hand, on the day of delivery; or
(ii) if sent by fax, upon receipt by the sender of the confirmation
receipt at the end of the transmission.
All such notices and other communications shall be addressed as set out
below or to such other addresses and telefax numbers as may be notified
in accordance with this Section.
If to any Seller: Xxxxxx Xxxxxxx
5 Xxxxxxx Close
Xxxxxxx Xxxxxxxxxx
Xxxx, XX00XX, U.K.
With a copy to: Xxxxxx Xxxxxxx
c/o N. Xxx
Xxxx Xxxxxxxxxxxxxx 00, 0xx
000 00 Xxxxxxxxx, Xxxxxx
Xxxxxxx Xxxxx
0000 Xxxxxxxxx Xx
Xxxxxxxxx, XX 00000, X.X.X.
44
If to the Purchaser: Interchange Europe Holding Company
00000 Xxxxxxx xx xx Xxxxxxx, Suite 120
Laguna Hills, CA 92653, U.S.A.
With a copy to: Xxxxx X. Xxxxxx, Esq.
Xxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000, U.S.A.
11.2 COSTS
The Sellers and the Purchaser will each bear its own fees and expenses,
including but not limited to legal fees and expenses, incurred in
connection with the negotiations, preparation and execution of this
Agreement and the transactions contemplated by this Agreement.
11.3 HEADINGS
The headings of this Agreement are for convenience of reference only and
shall not in any way limit or affect the meaning or interpretation of
the provisions of this Agreement.
11.4 ASSIGNMENT
This Agreement and the rights and obligations specified herein shall be
binding upon and inure to the benefit of the Parties hereto and shall
not be assignable by any of the Parties hereto, save for intra group
transfers by the Purchaser, provided that the obligations of the
Purchaser's assignee are guaranteed, as for debt of his own, by the
Purchaser.
45
11.5 NO WAIVER
Failure by any Party at any time or times to require performance of any
provisions of this Agreement shall in no manner affect its right to
enforce the same, and the waiver by any Party of any breach of any
provision of this Agreement shall not be construed to be a waiver by
such Party of any subsequent breach of such provision or waiver by such
Party of any breach of any other provision hereof.
11.6 SEVERABILITY
If any part of this Agreement is held to be invalid or unenforceable
such determination shall not invalidate or affect any other provision of
this Agreement; the Parties hereto shall attempt, however, through
negotiations in good faith, to replace any part of this Agreement so
held to be invalid or unenforceable. The failure of the Parties to reach
an agreement on a replacement provision shall not affect the validity of
the remaining part of this Agreement.
11.7 CONFIDENTIALITY
11.7.1 Each Party undertakes not to disclose any Confidential Information
unless:
(i) required to do so by Law or pursuant to any order of court or
other competent authority or tribunal;
(ii) required to do so by any applicable stock exchange regulations
or the regulations of any other recognised market place;
(iii) such disclosure has been consented to by the other Party in
writing (such consent not to be unreasonably withheld); or
(iv) it is disclosed to its professional advisers who are bound to
the Party by a duty of confidence which applies to any
information disclosed.
46
11.7.2 If a Party becomes required, in circumstances contemplated by (i) or
(ii), to disclose any information, the disclosing Party shall use its
reasonable best efforts to consult with the other Party prior to any
such disclosure.
11.8 ANNOUNCEMENTS
All press releases or other public relations activities by a Party with
regard to this Agreement or the transactions contemplated by it shall be
mutually approved by the Parties in advance of such release or activity.
A Party shall, however, not be prevented from, after reasonable
consultation with the other Party, disclosing information which is
required under applicable Laws or stock exchange regulations.
11.9 ENTIRE AGREEMENT; AMENDMENTS
11.9.1 This Agreement supersedes all prior agreements and understandings,
written and oral, between the Parties with respect to its subject matter
and constitutes the entire agreement between the Parties.
11.9.2 Any amendments to this Agreement shall be in writing and shall have no
effect unless signed by the duly authorised representatives of the
Parties.
11.10 NO SET-OFF
Unless specifically set out in this Agreement, all payments made by the
Parties under this Agreement shall be made in full without any set-off,
restriction or condition and without any deduction for any counterclaim.
11.11 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of Sweden.
47
11.12 ARBITRATION
11.12.1 Any dispute, controversy or claim arising out of or in connection with
this Agreement, or the breach, termination or invalidity thereof, shall
be finally settled by arbitration in accordance with the Rules of the
Arbitration Institute of the Stockholm Chamber of Commerce. The
arbitration tribunal shall be composed of three arbitrators. The place
of arbitration shall be Stockholm. The language to be used in the
arbitral proceedings shall be English.
11.12.2 In addition to what is set out in Section 11.12.1 above, the Sellers
expressly agree to that the Purchaser shall be entitled to initiate
either arbitral or court proceedings against a Seller in order to
enforce any arbitration award, decision or judgment rendered in
accordance with Section 11.12.1 above in any court or arbitrator with
jurisdiction in the matter under applicable Laws, and; for the avoidance
of doubt the Purchaser shall in such case not be obliged to initiate
such arbitral or court proceedings against any other Seller.
11.12.3 In arbitral proceedings, each party shall appoint one arbitrator. Where
there are multiple parties on either side, the multiple parties,
jointly, shall appoint one arbitrator. If such multiple parties are
respondent and would fail to make such joint appointment within 30 days
from receipt of the notice with request for arbitration, the Arbitration
Institute of the Stockholm Chamber of Commerce make the appointment for
that side. The chairman shall be appointed by the Arbitration Institute
of the Stockholm Chamber of Commerce. The chairman shall be a present or
retired Swedish Supreme Court justice or a present or retired Swedish
Appeal Court judge or a present member of the Swedish Bar Association,
which membership has lasted more than five years.
-----------
48
EXECUTION COPY
This Agreement has been executed in ten (10) originals, of which the signatories
have received one each.
XXXXX INVESTMENT INTERCHANGE EUROPE HOLDING
GROUP AB CORPORATION
/Xxxxxx Xxxxxxx /Xxxxx X. Xxxxxx
----------------------------------- -----------------------------------
Name: Xxxxxx Xxxxxxx Name: Xxxxx X. Xxxxxx
RED RIVER INVESTMENT Solely for purposes of Section 3.3
GROUP AB of this Agreement:
INTERCHANGE CORPORATION
/Xxx Xxxxx /Xxxxx X. Xxxxxx
----------------------------------- -----------------------------------
Name: Xxx Xxxxx Name: Xxxxx X. Xxxxxx
NEWCO 1454 SWEDEN AB UNDER
CHANGE OF NAME TO
HALO INVESTMENT GROUP AB
/Xxxxx Xxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxx
/Xxxx Xxxxx
-----------------------------------
Name: Xxxx Xxxxx
/Xxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxx Xxxxx
49
GUARANTEE
I, being the ultimate shareholder of Red River Investment Group AB, org. no.
556669-3643, hereby guarantee, as for my own debt (Sw. sasom for egen skuld),
the proper and punctual fulfillment by Red River Investment Group AB of all of
its obligations under the above Agreement (for the avoidance of doubt, including
but not limited to its joint and several obligations in accordance with Section
9 of the above Agreement); and adhere to the notice provisions set out in
Section 11.1 and the confidentiality undertaking set out in Section 11.7 in the
above Agreement.
This guarantee is a continuing guarantee and shall remain in force until all
obligations of Red River Investment Group AB under the above Agreement have been
performed.
This guarantee shall be governed by and construed in accordance with the laws of
Sweden.
Any dispute, controversy or claim arising out of or in connection with this
guarantee shall be finally settled in accordance with Section 11.12.1 in the
above Agreement.
/Xxx Xxxxx
------------------------------------
Name: Xxx Xxxxx
50
GUARANTEE
I, being the ultimate shareholder of Xxxxx Investment Group AB, org. no.
556669-3668, hereby guarantee, as for my own debt (Sw. sasom for egen skuld),
the proper and punctual fulfillment by Xxxxx Investment Group AB of all of its
obligations under the above Agreement (for the avoidance of doubt, including but
not limited to its joint and several obligations in accordance with Section 9 of
the above Agreement); and adhere to the notice provisions set out in Section
11.1 and the confidentiality undertaking set out in Section 11.7 in the above
Agreement.
This guarantee is a continuing guarantee and shall remain in force until all
obligations of Xxxxx Investment Group AB under the above Agreement have been
performed.
This guarantee shall be governed by and construed in accordance with the laws of
Sweden.
Any dispute, controversy or claim arising out of or in connection with this
guarantee shall be finally settled in accordance with Section 11.12.1 in the
above Agreement.
/Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
51
GUARANTEE
I, being the ultimate shareholder of Newco 0000 Xxxxxx AB (under change of name
to Halo Investment Group AB), org. no 556669-3635, hereby guarantee, as for my
own debt (Sw. sasom for egen skuld), the proper and punctual fulfillment by
Newco 0000 Xxxxxx AB of all of its obligations under the above Agreement(for the
avoidance of doubt, including but not limited to its joint and several
obligations in accordance with Section 9 of the above Agreement); and adhere to
the notice provisions set out in Section 11.1 and the confidentiality
undertaking set out in Section 11.7 in the above Agreement.
This guarantee is a continuing guarantee and shall remain in force until all
obligations of Newco 0000 Xxxxxx AB under the above agreement have been
performed.
This guarantee shall be governed by and construed in accordance with the laws of
Sweden.
Any dispute, controversy or claim arising out of or in connection with this
guarantee shall be finally settled in accordance with Section 11.12.1 in the
above Agreement.
/Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx
52
PURCHASER HOLDING COMPANY GUARANTEE
The undersigned shareholder of the Purchaser hereby unconditionally and
irrevocably guarantees, as for its own debt (Sw. sasom for egen skuld), the
proper and punctual fulfillment by the Purchaser of all of its obligations under
the above Agreement; and adhere to the notice provision set out in Section 11.1,
the confidentiality undertaking set out in Section 11.7, and the governing law
provision set out in Section 11.11 in the above Agreement.
This guarantee is a continuing guarantee and shall remain in force until all
obligations of the Purchaser under above Agreement have been performed.
Any dispute, controversy or claim arising out of or in connection with this
guarantee shall be finally settled by arbitration in accordance with Section
11.12.1 in the above Agreement.
INTERCHANGE CORPORATION
/Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
53
SCHEDULE B.1
EMPLOYMENTS AGREEMENTS
Copies enclosed:
B.1.A - Xxxxxx Xxxxxxx
B.1.B - Xxx Xxxxx
B.1.C - Xxxx Xxxxx
B.1.D - Xxxxx Xxxxxxx
B.1.E - Xxxx Xxxxxxx
SCHEDULE B.2
PERSONNEL WAIVERS
Copies enclosed:
B.2.A - Xxxxxx Xxxxxxx
B.2.B - Xxx Xxxxx
B.2.C - Xxxx Xxxxx
B.2.D - Xxxxx Xxxxxxx
B.2.E - Xxxx Xxxxxxx
B.2.F - Xxxxxx Xxxxxxx
APARTMENT GUARANTEES
Copies enclosed:
B.2.G - Xxxxxx Xxxxxxx
B.2.H - Xxxx Xxxxx
SCHEDULE 3.2
EARN-OUT
1. Financial Performance.
a. Financial Year 2005. If the Company's Net Sales (Sw.
"Nettoomsattning"), as reflected in the Company's audited annual
report (which report is consistent with the Accounting Principles
used in prior years) for the financial year January 1, 2005 to
December 31, 2005, is equal to or greater than 22,710,000 Swedish
Kronor, and if the Company's Net Profit (Sw. "Arets resultat"), as
reflected in the same audited annual report, is equal to or greater
than 4,550,000 Swedish Kronor (the "2005 Financial Performance
Target"), then the Sellers will be entitled to receive 111,766 DCC
Shares, which will be distributed to the Sellers as soon as
practicable after the DCC Determination on a pro-rata basis in
accordance with Schedule A ("2005 Financial Performance Award").
b. Financial Year 2006. If the Company's Net Sales (Sw.
"Nettoomsattning"), as reflected in the Company's audited annual
report (which report is consistent with the Accounting Principles
used in prior years) for the financial year January 1, 2006 to
December 31, 2006, is equal to or greater than 38,610,000 Swedish
Kronor, and if the Company's Net Profit (Sw. "Arets resultat"), as
reflected in the same audited annual report, is equal to or greater
than 7,725,000 Swedish Kronor (the "2006 Financial Performance
Target" and together with the 2005 Financial Performance Target, the
"Financial Performance Targets"), then the Sellers will be entitled
to receive 111,768 DCC Shares, which will be distributed to the
Sellers as soon as practicable after the DCC Determination on a
pro-rata basis in accordance with Schedule A (the "2006 Financial
Performance Award" and together with the 2005 Financial Performance
Award, the "Financial Performance Awards"). The 2006 Financial
Performance Targets will be reviewed by the Parties prior to the end
of 2005, and may be adjusted as the Purchaser and Sellers may
mutually agree.
c. Valuation Option. If some or all of the Financial Performance
Targets described in Sections 1(a) and 1(b) of this Schedule 3.2 are
not achieved, so that Sellers have not earned some or all of the
Financial Performance Awards, Sellers have the right, following the
calculation and determination of the Financial Performance Awards,
to request an independent valuation ("Valuation"), as described in
Section 1(d) of this Schedule 3.2 below. This Valuation will be used
as an alternative measurement of the Financial Performance Awards.
In cases where Sellers choose to invoke this alternative measurement
option (the "Valuation Option"), the Sellers will receive the
greater of the (1) number of DCC Shares due according to Sections
1(a) and 1(b) of this Schedule 3.2 above; or (2) the number of DCC
Shares due according to the Valuation, as described in Sections 1(d)
and (e) of this Schedule 3.2 below.
d. Valuation. For purposes of this Section 1(d), "fair market value"
shall be based on the enterprise value of the Company as the
theoretical price that a third party would pay to acquire the
Company, calculated generally as the Company's market capitalization
plus debt minus cash and cash equivalents. The value of the
Company's market capitalization shall be determined through analysis
of recent sales of securities by the Company and trading prices of
companies with a business comparable to the Company's business. The
fair market valuation shall also take into account a discounted cash
flow analysis and prices paid in private company sales of businesses
with a business comparable to the Company's business. The fair
market valuation will not apply a discount for the limited
marketability of the minority interest in the Company nor the
shares' non-preferential voting rights. The fair market value shall
be the value as per the date of the receipt of the notice
proclaiming exercise of the Valuation Option pursuant to Section
1(c) of this Schedule 3.2.
i. If the Valuation is performed, and any of the Parties to this
Agreement does not agree with the Valuation amount, such
Valuation shall, at the request of any Party to this
Agreement, be determined by an independent committee.
ii. The committee shall be comprised of two independent experts,
whereby one expert shall be appointed by Interchange, and the
second expert shall be appointed by the other involved
Party(ies) (jointly).
iii. The experts shall try to agree on the Valuation of the Company
as soon as practicable. In case of disagreement, they shall
each make an independent Valuation. The determined value shall
be the average value between the two Valuations, unless one of
the Valuations is more than 20 percent higher than the other.
iv. If one of the Valuations is more than 20 percent higher than
the other, the two appointed experts shall jointly appoint a
third expert, who shall make an independent Valuation of the
Company. If the two experts cannot agree on the appointment of
the third expert within one week, the third expert shall be
appointed by the President of the Stockholm Chamber of
Commerce at the request of either of the relevant Parties.
v. Following the completion of the third Valuation, the final
value of the Company shall be the value determined by
discarding both the highest and the lowest of the three
valuations and using the remaining, middle Valuation as the
value of the Company.
vi. The costs for the above Valuation experts shall be borne by
the Party(ies) (if more than one, jointly and severally) that
exercise the Valuation Option pursuant to Section 1(c) of this
Schedule 3.2.
vii. Each of the Parties agrees to accept the Valuation determined
pursuant to the provisions of this Section 1(d) and undertakes
not to initiate arbitration proceedings, or otherwise take
legal action against the experts' Valuation, unless a manifest
error can be established.
e. Valuation Awards. If the Valuation values the Company at 87,000,000
USD or more, then the Sellers will be entitled to receive 223,534
DCC Shares. If the Valuation values the Company at less than
50,000,000 USD, then no DCC Shares are due to the Sellers. If the
Valuation values the Company at between 50,000,000 USD and
87,000,000 USD, the Sellers will be entitled to receive up to
223,534 DCC Shares calculated on a pro-rata basis between the value
of 50,000,000 USD and 87,000,000 USD.
2. Geographic Expansion. As of the Closing Date, the Company had commercial
agreements with partners in Finland, Holland, United Kingdom, Ireland,
Spain, and Portugal (the "Existing Countries").
a. Calendar Year 2005. If, on December 31, 2005, the Company has
revenue-generating commercial agreements with partners in a total of
12 countries, excluding the Existing Countries, or such other number
of countries as the Purchaser and the Sellers may mutually agree,
then the Sellers will be entitled to receive 111,766 DCC Shares (the
"2005 Expansion Award"), which will be distributed to the Sellers,
as soon as practicable thereafter, on a pro-rata basis in accordance
with Schedule A.
b. Calendar Year 2006. If, on December 31, 2006, the Company has
revenue-generating commercial agreements with partners in a total of
24 countries, excluding the Existing Countries, or such other number
of countries as the Purchaser and the Sellers may mutually agree,
then the Sellers will be entitled to receive 111,767 DCC Shares (the
"2006 Expansion Award" and together with the 2005 Expansion Award,
the "Expansion Awards"), which will be distributed to the Sellers,
as soon as practicable thereafter, on a pro-rata basis in accordance
with Schedule A.
3. Change of Control. In the event of a Change of Control of the Company or
of Interchange, (i) all Financial Performance Awards and Expansion Awards
which the Sellers have earned because the requisite financial performance
standards have been satisfied in accordance with this Schedule 3.2 and
(ii) all Financial Performance Awards and Expansion Awards which measure
financial performance or geographic expansion for a time period which ends
following the date of a Change of Control, shall be deemed earned by the
Sellers as of the date of the Change of Control, and the Sellers shall be
entitled to receive such number of DCC Shares in accordance with Section
3.2 of the Agreement.
4. Net Sales and Net Profit. For purposes of this Schedule 3.2 only, "Net
Sales" (Sw. "Nettoomsattning") means the total sales of the Company before
any costs or expenses have been deducted, and "Net Profit" (Sw. "Arets
resultat") means the net
profit that the Company realizes after all costs, expenses, depreciation,
interest and taxes have been paid.
