Exhibit __._
SHAREHOLDER & SHARE PURCHASE AGREEMENT WITH BANK OF BERMUDA
AGREEMENT
Between:
The Bank of Bermuda Limited, incorporated under the laws of Bermuda, and having
a business address of 0 Xxxxx Xxxxxx, Xxxxxxxx XX 00, Xxxxxxx ("BoB")
And:
First Xxxx.xxx, Inc., incorporated under the laws of Nevada, U.S.A. and having a
business address of 0xx Xxxxx, Xxxxxx Xxxxxxxx, 0 Xxxxx'x Xxxx, Xxxxxxx, Xxxx
Xxxx ("FEC").
Whereas:
BoB currently owns the entire issued share capital of a Bermuda incorporated
company known as First Ecommerce Data Systems Limited ("FEDS");
FEDS is currently incorporated as a local company in Bermuda, and is required by
Bermuda law to ensure that not more than 40% of the total voting rights are
exercisable by non-Bermudians.
FEDS has undertaken or will undertake on behalf of BoB the business of credit
card payment processing, including such credit card payment processing as is
currently undertaken by BoB directly;
FEC wishes to become a shareholder in FEDS on the following terms and
conditions; and
The parties may wish to enter into more detailed documents concerning the same
but wish to document their principal understandings in this binding agreement
(the "Agreement").
The Parties agree as follows:
Share Purchase and Sale
FEC shall purchase from BoB shares in the capital of FEDS such that BoB will
remain a majority shareholder, and FEC will become a minority shareholder on the
following terms and conditions:
BoB shall retain 60% of the outstanding shares of FEDS and FEC will purchase 40%
of the outstanding shares.
BoB shall seek endorsement from relevant card associations to have FEDS become a
third party payment processor, and shall contribute its credit card processing
business to FEDS. BoB shall in addition contribute the following:
the current BoB business of credit card payment processing;
related hardware including the switch;
such BoB employees will be transferred or seconded or otherwise made available
to FEDS so as to enable FEDS to operate the credit card processing business.
The purchase price for the shares to be acquired by FEC for its interest is
US$3.0 million, which sum FEC shall tender by way of cash payment to BoB. BoB
shall deliver duly executed share certificates representing 40% of the shares of
FEDS in exchange for the US$3.0 million cost.
In addition to the US$3.0 million in cash, FEC shall grant to BoB at closing
options to purchase 500,000 FEC shares for $11.01 per share. (The exercise price
represents 120% of the average closing price of the shares of FEC for the 5
trading days prior to the date of this Agreement.) These option are not
transferable by BoB except to employees of FEDS or employees of BoB who are
seconded to FEDS. The options may be granted directly to employees of the Bank
or of FEDS if the parties hereto so agree. Half of the options shall vest on the
first anniversary of the closing of the purchase of the FEDS shares by FEC and
the other half of the options shall vest on the second anniversary of the
closing.
Shareholders Agreement
BoB and FEDS agree the following in respect of their ownership of shares FEDS
and the business of FEDS:
BoB and FEC covenant that there shall be representation on the board of
directors of FEDS in proportion to each party's respective shareholding. In the
event additional strategic investors are given board representation, BoB and FEC
shall retain an equal number of representatives on the board, subject to any
restrictions or requirements under the laws of Bermuda.
The Board of FEDS shall, independently of the parties hereto, have authority to
determine management, financing and business matters relevant to FEDS.
Future funding of FEDS shall be in proportion to each party's then current
interest.
FEDS shall house FEC's existing payment processing capabilities, including its
payment gateway and network operations; and
The parties agree that, subject to any restrictions or requirements under the
laws of Bermuda, it is in the best commercial interests of themselves and FEDS
to identify and invite key strategic investors as additional participants in the
ownership of FEDS from time to time.
Binding Nature
This Agreement constitutes a binding legal agreement between the parties. The
parties intend to continue negotiations with a view to concluding the details of
the joint venture between them. Any resulting documents shall contain
representations, warranties, covenants and conditions as are normal in such
circumstances, and the parties shall use commercially reasonable endeavors to
conclude the same no later than March 31, 2000.
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Closing
The closing of the purchase and sale of the FEC shares in FEDS shall occur on or
before Friday March 31, 2000.
Dated as of February 1, 2000.
For and on behalf of For and on behalf of The Bank of Bermuda Limited First
Xxxx.xxx, Inc.
(sgd.) X. X. Xxxxxxxxxx (sgd.) G. M. Pek
-------------------------------- -----------------------------------
Name: Xxxx X. Xxxxxxxxxx Name: Xxxxxxx X. Xxx
Title: Executive Vice President, Title: President & CEO
Retail Clients
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