FORM OF EARN OUT SETTLEMENT AGREEMENT
Exhibit
10.1
FORM OF
EARN OUT SETTLEMENT AGREEMENT
THIS EARN OUT SETTLEMENT AGREEMENT (this
“Agreement”) is made as of
September , 2007, by and among Skype Luxembourg
Holdings S.A.R.L., a limited company registered under the laws
of the Grand Duchy of Luxembourg (the
“Obligor”), eBay Inc., a Delaware corporation
(the “Purchaser”), Herho Holding B.V., a
company formed under the laws of the Netherlands, in its
capacity as the Earn Out Representative (as defined in the Earn
Out Agreement (as defined below)) (the “Earn Out
Representative”), and
[ ] (the “Earn Out
Seller”). Capitalized terms not otherwise defined
herein are used as defined in the Earn Out Agreement, dated as
of September 11, 2005 (the “Earn Out
Agreement”), by and among the Purchaser, Skype
Technologies S.A., a limited company registered under the laws
of the Grand Duchy of Luxembourg (the
“Company”), and the parties identified on
Schedule I thereto (the “Earn Out
Sellers”). Each of the Obligor, the Purchaser, the Earn
Out Representative and the Earn Out Seller is referred to herein
as a “Party” and, collectively, as the
“Parties.”
WHEREAS, pursuant to a Sale and Purchase Agreement, dated as of
September 11, 2005 (the “Purchase
Agreement”), by and among the Purchaser, the Company
and the shareholders and warrantholders of the Company
(collectively, the “Sellers”), the Purchaser
and the Obligor acquired from the Sellers the entire issued
share capital of the Company;
WHEREAS, the Obligor owns all of the shares of the Company,
except for one share that is owned by the Purchaser;
WHEREAS, concurrently with the execution and delivery of the
Purchase Agreement, the Purchaser, the Company and the Earn Out
Sellers entered into the Earn Out Agreement to provide for
certain rights and obligations of the Purchaser, the Company,
the Earn Out Sellers and the Earn Out Representative in
connection with the post-Completion management of the Company
and the delivery by the Purchaser to the Earn Out Sellers of any
Earn Out Election Per Share Post-Completion
Consideration; and
WHEREAS, the Parties desire: (i) to settle all Claims (as
defined below) as described below, other than Excluded Claims
(as defined below) and (ii) to agree to the termination of
the Earn Out Agreement as among such parties.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants and agreements set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the Parties, it is agreed that:
1. Settlement of Claims. The Parties agree as
follows:
(a) Within three Business Days following the execution of
this Agreement by the Parties, the Obligor shall pay an amount
in cash (the “Payment Amount”) equal to (i)
€375,000,000 multiplied by (ii) a fraction
(x) the numerator of which is the aggregate number of Earn
Out Election Shares of the Earn Out Seller, which number is set
forth on Schedule A hereto opposite the name of the
Earn Out Seller and (y) the denominator of which is
395,013, being the aggregate number of Earn Out Election Shares
of all Earn Out Sellers (such fraction, the “Payment
Fraction”), as follows:
(i) to the Earn Out Representative, an amount in cash equal
to the sum of (A) 1.5% of the aggregate amount to be
paid in respect of the Earn Out Election Shares of the Earn Out
Seller pursuant to this Agreement, such amount to be retained by
the Earn Out Representative as a fee for its services rendered
to the Earn Out Seller in connection with the negotiation and
implementation of this Agreement and (B) € 1,750,000,
representing the Earn Out Representative’s good faith
estimate of the amount required to satisfy actual and
prospective obligations of the Earn Out Sellers under
Section 5.1(e) of the Earn Out Agreement, Section 9 of
this Agreement, and that certain letter labeled “costs
letter” dated September 10, 2005 from Xxxxxx
Xxxxxxxxx to all holders of shares of the Company’s
Series A-1
preferred stock, Series B preferred stock,
Series A-2
preferred stock, and ordinary shares, and all holders of
warrants conferring the right to acquire the Company’s
Series A-1
preferred stock (such letter, the “Costs
Letter”), multiplied by the Payment Fraction
(the sum of the amounts referred to in this
Section 1(a)(i), subparagraphs (A) and (B) being
referred to herein as the “Earn Out Representative
Funding Amount”) by wire transfer of immediately
available funds to an account designated by the Earn Out
Representative. The Earn Out Representative shall hold the
portion of the Earn Out Representative Funding Amount referred
to in this Section 1(a)(i)(B) pending its application for
the purposes referred to in Section 5.1(e) of the Earn Out
Agreement, Section 9 of this Agreement, and the Costs
Letter. In the event that the Earn Out Representative
determines, in its sole discretion, that there is no reasonable
likelihood of any further costs, expenses, losses, claims,
damages or liabilities (or actions in respect thereof) in
relation to which it is entitled to be indemnified under such
provisions being incurred, paid or suffered, it will pay any
remaining amount of the portion of the Earn Out Representative
Funding Amount referred to in this Section 1(a)(i)(B) to
the Earn Out Seller by wire transfer of immediately available
funds to the account of the Earn Out Seller set forth opposite
the Earn Out Seller’s name on Schedule A hereto
(it being understood that neither the Obligor nor the Purchaser
shall have any responsibility, liability or obligation
whatsoever with respect to the Earn Out Representative Funding
Amount once paid to the Earn Out Representative); and
(ii) to the Earn Out Seller, an amount in cash equal to the
Payment Amount minus the Earn Out Representative Funding
Amount, by wire transfer of immediately available funds to the
account of the Earn Out Seller set forth opposite the Earn Out
Seller’s name on Schedule A hereto.
(b) The Parties acknowledge and agree that the payments
made pursuant to Section 1(a) of this Agreement, taken
together with the Releases provided in Section 2 of this
Agreement, shall constitute full payment for and settlement of
all claims, demands, disputes, controversies, rights,
liabilities, damages, debts, obligations, costs, expenses,
attorneys’ fees and causes of action of any kind or nature
that the Parties and their Related Parties (as defined in
Section 1(c) below) may have had in the past, may now have
or may have in the future, whether asserted or unasserted,
matured or unmatured, known or unknown, suspected or
unsuspected, contingent or actual, accrued or unaccrued, whether
based on contract, tort or other theories (including equitable
theories), in connection with, arising from or in any way
relating to the Earn Out Agreement or the transactions
contemplated thereby, including in any way relating to:
(i) the operation or management of the business of the
Company and any of its affiliates prior to the date hereof ;
(ii) the interpretation of the Earn Out Agreement; and
(iii) the negotiation and execution of this Agreement
(collectively, “Claims”) against any of the
other Parties and any of the Related Parties of any of the other
Parties, except for the Claims identified on
Schedule B hereto (the “Excluded
Claims”).
(c) For purposes of this Agreement: (i) a Party’s
or other person’s “Related Parties” shall
include: (1) such Party’s or person’s
shareholders (save in relation to shareholders in a public
company, including the Purchaser), former or present directors,
officers, employees, consultants, partners, trustees or
beneficiaries of a trust of which such Party or person is a
settler or actual or potential beneficiary, affiliates,
representatives, agents and advisors, including legal and
financial advisors and any affiliates of the foregoing;
(2) the shareholders (save in relation to shareholders in a
public company, including the Purchaser), directors, officers,
employees, consultants, partners, trustees, beneficiaries,
representatives, agents and advisors of such Party’s or
person’s affiliates or a trust of which such affiliate is a
settler or actual or potential beneficiary; and (3) the
predecessors, successors, assigns, heirs, legatees, executors,
guardians, custodians, administrators and conservators of any of
the persons described in clause “(1)” and
“(2)” of this sentence; provided, however,
that, for purposes of this Agreement, none of the Earn Out
Seller, the Earn Out Representative or any Related Party of the
Earn Out Seller or the Earn Out Representative shall constitute
a Related Party of the Purchaser or of the Obligor; and
(ii) “affiliates” means in relation to a Party or
other person, any person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is
under common control with, the relevant Party or person, and for
these purposes a person shall be deemed to control another
person if the first such person possesses, directly or
indirectly, the power to direct or cause the direction of the
management and policies of the second person, whether through
the ownership of voting securities, control of voting rights, by
contract or otherwise (it being understood that, for the
avoidance of doubt, the Company is an affiliate of the
Purchaser).
(d) The Obligor shall (i) be entitled to deduct and
withhold from any amounts payable pursuant to this Agreement
such amounts as are required to be deducted or withheld under
any provision of any federal, state, local or foreign Law and
(ii) promptly after determining that any such amount is so
required to be deducted or withheld, the Obligor shall provide
written notice to the Earn Out Representative or the Earn Out
Seller, as the case may be, indicating the amount that is
required to be deducted or withheld and the applicable provision
of law requiring such deduction or withholding. To the extent
such amounts are so deducted or withheld, such amounts shall be
treated for all purposes under this Agreement as having been
paid to the person to whom such amounts would otherwise have
been paid.
2. Release.
(a) Each of the Parties, on behalf of itself and its
Related Parties, hereby fully, irrevocably and unconditionally
releases and forever discharges each other Party and each of
such other Party’s Related Parties (including the Purchaser
and the Purchaser’s Related Parties) from any and all
Claims, other than in all cases the Excluded Claims, which
Excluded Claims shall remain in full force and effect and are
neither released nor discharged pursuant to this Agreement.
(b) Each of the Parties, on behalf of itself and its
Related Parties, with respect to the Claims against the other
Parties and the Related Parties of the other Parties, in any
case: (i) has been fully advised by his attorney of the
contents of Section 1542 of the Civil Code of the State of
California, United States of America, and (ii) hereby
expressly waives the benefits thereof and any rights such person
may have thereunder (it being acknowledged that
Section 1542 of the Civil Code of the State of California
provides as follows:
“A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the
time of executing the release, which if known by him must have
materially affected his settlement with the debtor.”)
(c) Each Party, on behalf of itself and its Related
Parties, with respect to the Claims against the other Parties
and the Related Parties of the other Parties, hereby waives the
benefits of, and any rights such Party (or any of their Related
Parties) may have under, any statute or common law principle
having any effect similar to the effect of Section 1542 of
the Civil Code of the State of California in any jurisdiction.
3. Warranties. Each Party hereby warrants as
follows:
(a) such Party has the legal capacity and the requisite
right, power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. Except
with respect to a Party that is an individual, the execution and
delivery of, and
the performance by such Party of its obligations under, this
Agreement have been duly authorized by all necessary action on
the part of such Party. This Agreement has been duly and validly
executed by such Party.
(b) assuming this Agreement has been duly and validly
authorized, executed and delivered by the other Parties, this
Agreement constitutes a valid and binding agreement of such
Party, enforceable against such Party in accordance with its
terms;
(c) there is no action, suit, proceeding, dispute,
litigation, claim, complaint or investigation by or before any
court or Governmental Entity or agency pending or, to the best
of the knowledge of such Party, threatened against such Party or
any of such Party’s Related Parties that challenges or
would challenge the execution and delivery of this Agreement or
the taking of any of the actions required to be taken by such
Party under this Agreement; and
(d) the execution and delivery of, and the performance by
such Party of its obligations under, this Agreement will not, so
far as applicable to it: (i) result in a breach of any
provision of the constitutional documents of such Party, if
applicable, (ii) result in a breach of, or constitute a
default under, any instrument to which such Party is a party or
by which such Party is bound, (iii) result in a breach of
any permit, concession, franchise, license, ordinance, rule or
regulation, order, judgment or decree of any court or
Governmental Entity or agency to which such Party is a party, by
which such Party is bound or which is applicable to such Party,
(iv) result in a breach of any Laws applicable to such
Party, or (v) require the authorization, consent or
approval of such Party’s shareholders or of any other
person.
| 4. | Additional Warranties and Agreements |
(a) If, on or prior to March 31, 2008, the Purchaser
directly or indirectly sells or transfers (in a single
transaction or through a series of related transactions) to any
third party (other than a direct or indirect wholly owned
Subsidiary of the Purchaser (disregarding directors’
qualifying shares and similar arrangements for purposes of
determining whether a Subsidiary is wholly owned by the
Purchaser for this purpose), provided that (A) such
Subsidiary assumes all of the Purchaser’s obligations under
this Agreement and (B) the Purchaser remains liable for any
breach of this Agreement by such Subsidiary):
(1) securities representing greater than 50% of the
outstanding voting power, or economic interest in, the Company
(whether by way of a sale of securities, merger or otherwise),
or (2) all or substantially all of the assets of the
Company and its Subsidiaries, taken as a whole (it being
understood that such a sale by the Purchaser of the outstanding
securities of a wholly owned Subsidiary held by the Purchaser
(disregarding directors’ qualifying shares and similar
arrangements for purposes of determining whether a Subsidiary is
wholly owned by the Purchaser for this purpose) shall constitute
a direct or indirect sale of all or substantially all of the
assets of such Subsidiary), then the Purchaser or the Obligor
shall pay to the Earn Out Seller an amount equal to the Payment
Fraction multiplied by the lesser of (i)
€138,411,300, and (ii) 60% multiplied by the
amount by which the Gross Sale Proceeds (as defined below)
exceeds Past Consideration (as defined below).
Notwithstanding anything to the contrary contained in this
Agreement: (x) this Section 4(a) shall not apply to
(1) a sale of any or all shares of the Purchaser (whether
by way of merger, consolidation or otherwise); (2) a sale
of substantially all of the assets of the Purchaser (including
the shares of the Purchaser’s Subsidiaries); or (3) a
sale of substantially all of the assets of the Purchaser (other
than the shares of the Purchaser’s Subsidiaries)
accompanied by a sale of substantially all of the assets of the
Purchaser’s Subsidiaries; and (y) for the avoidance of
doubt, “directly or indirectly sells or transfers”
shall mean actually consummates a sale or transfer and shall not
include the commencement of a process intended to result in a
sale or transfer or the execution by the Purchaser or any of the
Purchaser’s Related Parties of a definitive agreement with
respect to a sale or transfer.
(b) For the purposes of this Section 4 and this
Agreement:
(1) “Gross Sale Proceeds” shall have the
meaning given to it in the Earn Out Agreement.
(2) “Past Consideration” shall mean
€2,516,980,476.
(3) a “Subsidiary” shall mean, with
respect to any person, any entity in which such person, directly
or indirectly owns, beneficially or of record, an amount of
voting securities or other interests in such entity that is
sufficient to enable such person to elect at least a majority of
the members of such entity’s board of directors or other
governing body, or at least 50% of the outstanding equity,
voting or financial interests in such entity.
(c) The Earn Out Seller hereby warrants to and for the
benefit of the Purchaser and its Related Parties, and agrees, as
follows:
(1) The information contained on Schedule A
hereto, regarding the wire transfer information and the number
of Earn Out Election Shares of the Earn Out Seller, is accurate.
(2) The Earn Out Seller has not assigned, transferred,
conveyed or otherwise disposed of (or granted a security
interest in or otherwise encumbered): (A) any Claim against
the Purchaser or any of the Purchaser’s Related Parties, or
any interest in any such Claim, in whole or in part; or
(B) any rights in or interests under the Earn Out Agreement.
(3) To the best of the Earn Out Seller’s knowledge, no
other person has any interest in any of the Claims being
released hereunder.
(d) Upon the execution and delivery of this Agreement by
the Parties and payment of the Payment Amount to the Earn Out
Seller (including the payment of the Earn Out Representative
Funding Amount to the Earn Out Representative), the Earn Out
Agreement (except for Section 5.1(e) thereof as it relates
to the rights of the Earn Out Representative) shall cease to
have any further force or effect with respect to the Earn Out
Seller and, upon receipt by the Purchaser of executed agreements
similar to this Agreement from all Earn Out Sellers (as defined
in the Earn Out Agreement), the Earn Out Seller agrees that Earn
Out Agreement shall automatically be terminated and shall cease
to have any further force or effect.
(e) The Purchaser unconditionally and irrevocably
guarantees the performance of the Obligor’s obligations of
payment and performance under this Agreement. The Purchaser
waives any and all notice of the creation, renewal, extension or
accrual of any such obligation and waives diligence,
presentment, protest, demand for payment and notice of default
or nonpayment with respect to such obligations.
5. Indemnification. If any Party or any of its
Related Parties: (i) shall fail to observe, perform or
abide by, or shall breach, any restriction, covenant,
obligation, warranty or other provision contained in this
Agreement, or (ii) shall assert or purport to assert any
Claim released hereby, that Party shall indemnify and hold
harmless each other Party and each of such other Party’s
Related Parties against and from any loss, damage, injury, harm,
detriment, lost opportunity, liability, exposure, claim, demand,
settlement, judgment, award, fine, penalty, tax, fee, charge or
expense (including attorneys’ fees) (collectively the
“Loss”) that is suffered or incurred at any
time by such other Party or by any of such other Party’s
Related Parties, or to which such other Party or any of such
other Party’s Related Parties otherwise becomes subject at
any time, provided that such Loss arises out of the
circumstances described in clauses “(i)” or
“(ii)” of this Section 5. Nothing in this
Section 5 in any way limits any of the rights or remedies
otherwise available to the Party or Related Party suffering,
incurring or becoming subject to the Loss, provided that no
Party shall be entitled to rescind or repudiate this Agreement.
Notwithstanding anything to the contrary contained in this
Agreement, none of the Purchaser or any of its Related Parties
shall have any obligation or liability under this Section 5
in connection with, arising from or in any way relating to any
claim by any Earn Out Seller or any Related Party of any Earn
Out Seller or the Earn Out Representative or any Related Party
of the Earn Out Representative against any other Earn Out Seller
or any Related Party of any Earn Out Seller or against the Earn
Out Representative or any Related Party of the Earn Out
Representative (it being understood that for purposes of this
sentence only, the term Earn
Out Seller shall have the meaning given to it in the Earn Out
Agreement, rather than the meaning given to it in this
Agreement).
6. Nullity of Agreement. If the Purchaser
does not execute this Agreement by countersigning it on or
before 30 calendar days of the date on which the Earn Out Seller
has signed this Agreement, this Agreement shall be null and
void, and the Earn Out Seller shall have no obligation hereunder
or relating hereto.
7. Notices to Parties. All notices and
other communications under this Agreement shall be effective
upon receipt if hand delivered, on the first Business Day after
being sent by facsimile transmission (to the extent that the
sending Party has received electronic confirmation of
transmission) and on the first Business Day after being sent by
recognized “overnight” delivery service (or, in the
case of international delivery by a recognized international
delivery service, such number of days after being sent as such
delivery service guarantees delivery) to the addresses stated
below, or to such other addresses as to which a Party shall have
previously notified the other Parties in writing. Any such
notice not contemplated above shall be effective upon receipt.
For the purposes of this Section 7, the addresses of the
Parties shall be as follows:
If to the Obligor:
Skype Luxembourg Holdings S.A.R.L.
0, Xxx Xxx. Xxxxx,
X-0000
Xxxxxxxxxx
Attention: President
with a copy to:
0000 Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Fax: x0
(000) 000-0000
If the Purchaser:
0000 Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Fax: x0
(000) 000-0000
If to the Earn Out Representative:
Herho Holdings B.V.
Xxxxxxx 00
0000 XX Xxxxx xx Xxxxxxxxx
Xxx Xxxxxxxxxxx
Fax: x00 00 000 0000
If to the Earn Out Seller, to the address specified on
Schedule A hereto.
8. Entire Agreement. Each Party on behalf
of itself and as agent for each of its Related Parties
acknowledges and agrees with each other Party (each such Party
acting on behalf of itself and as agent for each of its Related
Parties) that:
(a) this Agreement and the Confidentiality Agreement
dated as of August 14, 2007, between the Earn Out
Representative and the Earn Out Seller constitutes the entire
and only agreement and understanding among the Parties and their
respective Related Parties relating to the subject matter of
this Agreement and supersedes all previous agreements
understandings or arrangements (in particular the Earn Out
Agreement except as specified in Section 4(d) of this
Agreement) whether oral or in writing, among the Parties or
their Related Parties relating to the subject matter hereof;
(b) neither it nor any of its Related Parties has
been induced to enter (or is entering) into this Agreement in
reliance upon, nor have they been given, nor do they rely upon,
any warranty, representation, statement, assurance,
understanding, covenant, agreement, undertaking, indemnity or
commitment of any nature whatsoever (in any case whether
written, oral or implied and whether relating to the business of
the Company or any of its affiliates, the possibility or
likelihood that any payments are or would become due under the
Earn Out Agreement, the meaning of any provision of the Earn Out
Agreement or any dispute relating thereto or otherwise)
(together defined as “Representation” for the purpose
of this Section 8), other than as are expressly set out in
this Agreement;
(c) the Parties and their Related Parties may have
information which they have not disclosed to some or all of the
other Parties and their Related Parties and none of the Parties
nor any of their Related Parties is under any obligation to
disclose any such information to any of the other Parties or
their Related Parties;
(d) without limiting any other provision of this
Agreement, it is understood and agreed that the facts relating
to this Agreement and each Party’s decision to enter into
this Agreement may prove to be other than or different from the
facts in that respect now known or believed by each Party to be
true; and with such understanding and agreement, each Party, on
behalf of itself and its Related Parties, expressly accepts and
assumes the risk of facts being other than or different from the
assumptions and perceptions as of any date prior to and
including the date hereof, and each Party, on behalf of itself
and its Related Parties, agrees that this Agreement shall be in
all respects effective and shall not be subject to termination
or rescission by reason of any such difference in facts;
(e) none of Xxxxxx Xxxxxxxxx, Xxxxx Xxxxx
Degnbol, Xxxxxxxx Xxxxxxxx or the Earn Out Representative has
had (or has) any authority on behalf of the Purchaser or any of
its Related Parties to make any Representation;
(f) no Party and no Related Party of any Party shall
have any liability to any other Party or any Related Party of
any other Party (based on contract, tort or other theories,
including equitable theories, or under the Xxxxxxxxxxxxxxxxx Xxx
0000 or otherwise) for any Representation that is not expressly
stated in this Agreement; and
(g) any statutory or common law warranties,
representations or conditions that are not expressly set out or
referred to in this Agreement and which might otherwise be
implied in respect of the subject matter of this Agreement are
expressly excluded.
PROVIDED THAT the provisions of this Section 8 shall not
exclude any liability of any person in respect of any
Representation made by such person which is determined in a
court judgment which is not subject to a right of appeal or in
respect of which all rights of appeal have been exhausted or
have expired, or is agreed by the relevant person, to have been
made fraudulently by such person prior to the execution of this
Agreement.
9. Independent Advice. In deciding to
execute this Agreement, each Party has relied entirely on its
own judgment and entered into this Agreement in the exercise of
that judgment and in the absence of duress or coercion, and has
taken all advice that it considers to be necessary in connection
with this Agreement. Each Party has had the opportunity to
consult individually with legal and other relevant professional
advisers of its own choosing.
10. Earn Out Representative. The Earn Out
Seller and its Related Parties shall severally indemnify and
hold harmless the Earn Out Representative, together with its
Related Parties (collectively the “Indemnified
Parties” and each of them an “Indemnified
Party”) from and against any and all costs, expenses,
losses, claims, damages or liabilities (or actions in respect
thereof) related to or arising out of this Agreement or the Earn
Out Agreement and the transactions contemplated hereby or
thereby and the performance of its function as Earn Out
Representative, including participation by the Earn Out
Representative in the negotiation and execution of this
Agreement, and will reimburse each Indemnified Party for all
expenses (including legal expenses) as they are incurred in
connection with investigating, preparing or defending any such
action or claim, whether or not in connection with pending or
threatened litigation in which such
Indemnified Party is a party, save only to the extent that, in
the case of any Indemnified Party, it is determined in a court
judgment which is not subject to a right of appeal or in respect
of which all rights of appeal have been exhausted or have
expired, or it is agreed by such Indemnified Party, that such
costs, expenses, losses, claims, damages or liabilities have
resulted solely from the fraud or dishonesty of such Indemnified
Party. No Indemnified Party shall have any liability (whether
direct or indirect, in contract or in tort or otherwise) to the
Earn Out Seller or any of its Related Parties related to or
arising out of this Agreement or the Earn Out Agreement or the
transactions contemplated hereby or thereby or the Earn Out
Representative’s performance of its function as Earn Out
Representative, including participation by the Earn Out
Representative in the negotiation and execution of this
Agreement, save only to the extent that it is determined in a
court judgment which is not subject to a right of appeal or in
respect of which all rights of appeal have been exhausted or
have expired, or it is agreed by such Indemnified Party, that
such costs, expenses, losses, claims, damages or liabilities
have resulted solely from the fraud or dishonesty of such
Indemnified Party. Notwithstanding anything to the contrary
contained in this Agreement, neither the Purchaser nor any
Related Party of the Purchaser shall have any obligation or
liability under this Section 10.
11. Governing Law; Consent to
Jurisdiction. This Agreement shall be governed by
and construed in accordance with English law. The courts of
England are to have exclusive jurisdiction to settle any dispute
arising out of or in connection with this Agreement. Nothing in
this Agreement shall preclude any Party from seeking interim
relief in any court of competent jurisdiction. Each Party waives
(and agrees not to raise) any objection, on the ground of
forum non conveniens or on any other ground, to the
jurisdiction of the English courts. Each Party also agrees that
a judgment against it in any proceedings or action arising out
of or in connection with this Agreement brought in England shall
be conclusive and binding upon it and may be enforced in any
other jurisdiction. Each Party irrevocably submits and agrees to
submit to the jurisdiction of the English courts.
12. Expenses. Except as otherwise specifically
provided herein, each Party shall pay its own legal fees and
expenses, accounting fees and other costs and expenses incurred
in connection with the negotiation, making, execution, delivery
and performance of this Agreement.
13. Binding Agreement; Successors; Amendment. This
Agreement shall be binding upon, inure to the benefit of and be
enforceable by the Parties and their respective successors and
assigns. No Party may assign any of its rights or delegate any
of its duties or obligations hereunder without the consent of
the other Parties. This Agreement may not be amended, modified,
altered or supplemented other than by means of a written
instrument duly executed and delivered by each Party whose
rights, liabilities or obligations may be affected by such
amendment, modification, alteration or supplement.
14. Headings. The section headings herein are for
reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement, nor are they deemed
to constitute a part of this Agreement.
15. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same instrument, which shall be effective upon the execution
hereof by all of the Parties. A complete set of counterparts
shall be made available to each Party.
16. Time of the Essence. Time shall be of the
essence of this Agreement and of each and every part thereof.
17. Severability. If any provision of this Agreement
or the application of any such provision shall be held invalid,
illegal or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provision hereof. In lieu of any such
invalid, illegal or unenforceable provision, the Parties shall
use all reasonable efforts to replace such invalid, illegal or
unenforceable provision with a valid and enforceable substitute
provision the effect of which is as similar to the intended
effect of such invalid, illegal or unenforceable provision as
may be possible.
18. Legal Expenses. In any action or proceeding
brought to enforce any provision of this Agreement, or where any
provision hereof is validly asserted as a defense, the
successful Party shall be entitled to recover its costs and
expenses, including legal expenses, incurred in connection
therewith, in addition to any other available remedy.
19. Third Party Rights. Any Related Party may
enforce the terms of this Agreement pursuant to the Contracts
(Rights of Third Parties) Xxx 0000 (the “Act”).
Save as aforesaid, a person who is not a party to this Agreement
shall have no right under this Agreement or the Act to enforce
any of its terms. The Parties may agree to vary or modify the
terms of this Agreement without having obtained the consent of
any person that is not a Party to this Agreement.
20. Miscellaneous. Notwithstanding anything to the
contrary contained in this Agreement including, without
limitation, Section 5, the Earn Out Seller (on behalf of
itself and on behalf of its Related Parties) agrees that none of
the Purchaser or any Related Party of the Purchaser shall have
any obligation or liability under this Agreement: (a) to
indemnify or hold harmless any Party or any Related Party of
such Party in connection with or arising from the StreamCast
Litigation; or (b) to make any payment to any person in
connection with the matters referred to in
clause ‘‘(a)” of this sentence. For purposes
of this Agreement, the “StreamCast Litigation” shall
mean: (i) the proceedings captioned StreamCast Networks,
Inc. v. Xxxxxx Xxxxxxxxx, et al., Case No. BC 371519,
Superior Court of the State of California, County of Los
Angeles; or (ii) any other proceedings brought by one or
more of the same claimants based on substantially the same
underlying facts as the proceedings referred to in clause
“(i)” of this sentence.
21. Interpretation.
(a) Each Party has participated in the drafting and
preparation of this Agreement, and, accordingly, in any
construction or interpretation of this Agreement, the same shall
not be construed against any Party by reason of the source of
drafting.
(b) The Parties agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting
party shall not be applied in the construction or interpretation
of this Agreement.
(c) Except as otherwise indicated, all references in this
Agreement to “Sections” and “Schedules” are
intended to refer to Sections of this Agreement and Schedules to
this Agreement.
(d) The words “herein,” “hereof,”
“herewith,” “hereby,” “hereunder”
and “hereto” and other words of similar import refer
to this Agreement as a whole and not to any particular Section,
section or other subdivision.
(e) As used in this Agreement, the words
“include” and “including,” and variations
thereof, shall not be deemed to be terms of limitation, and
shall be deemed to be followed by the words “without
limitation.”
(f) The term “person” as used in this Agreement
shall be broadly interpreted to include, without limitation, any
corporation, entity, trust, group, company, partnership, limited
liability company or individual.
(g) For purposes of this Agreement, whenever the context
requires the singular shall include the plural, and vice versa.
[signature
pages follow]
Signature
Page
IN WITNESS WHEREOF, the Parties have duly executed and delivered
this Agreement on the day and year first above written.
Skype Luxembourg Holdings S.A.R.L.
| By: |
|
Name:
| Title: |
| By: |
|
Name:
| Title: |
Herho Holding B.V.,
in its capacity as the “Earn Out Representative” under the Earn Out Agreement
in its capacity as the “Earn Out Representative” under the Earn Out Agreement
| By: |
|
Name:
| Title: |
Name of Earn Out Seller:
| By: |
|
Name:
| Title: |
Skype Technologies S.A.
| By: |
|
Name:
| Title: |
Schedule A
WIRE
TRANSFER INFORMATION
Earn Out Seller Name & Phone #
Earn Out Seller Mailing Address
Account No./IBAN *
Bank Name
City, State & Country
ABA/BIC (SWIFT) *
Other (ABA, BLZ, Sort code etc....)
INTERMEDIARY
BANK (if required)
Bank Name
BIC (SWIFT) *
City, State & Country
Reference
EARN OUT
INFORMATION
Total Number of Earn Out Shares
Number of Earn Out Shares of Earn Out Seller
Percentage Earn Out Holding of Earn Out Seller
(Being
Earn Out Seller’s percentage share of total Earn Out Shares)
Gross Earn Out Settlement Amount due Earn Out Seller
(€375 million
prorated based upon Percentage Earn Out Holding)
LESS Estimated Costs and Fees of Earn Out Representative
NET EARN OUT SETTLEMENT AMOUNT DUE TO EARN OUT SELLER
* Denotes as mandatory field for International Wire Payments
Schedule B
EXCLUDED
CLAIMS
1. Any and all Claims by the Earn Out Representative
against the Earn Out Seller under Section 5.1(e) of the
Earn Out Agreement or the Costs Letter, any and all rights of
the Earn Out Representative against any Earn Out Seller under
Section 5.1(e) of the Earn Out Agreement or the Costs
Letter and any and all obligations of the Earn Out Sellers under
Section 5.1(e) of the Earn Out Agreement or the Costs
Letter.
2. Any and all Claims that the Earn Out Seller may have
against the Purchaser and its Related Parties under the Purchase
Agreement as a holder of the Escrow Shares with respect to such
Escrow Shares.
3. If the Earn Out Agreement is not terminated as of the
date of this Agreement, any and all Claims by, for or for the
benefit of either the Purchaser or the Earn Out Representative
relating to the reimbursement by the other of any fees or
expenses to be paid by the other pursuant to the terms of the
Earn Out Agreement in connection with any dispute under the Earn
Out Agreement after the date of this Agreement.
4. Any and all Claims under this Agreement.
5. Any and all Claims of, by, or for the benefit of the
Purchaser or any of its Related Parties against the Earn Out
Seller or any of its Related Parties or the Earn Out
Representative or any of its Related Parties in connection with,
arising from or in any way relating to:
a. the Purchase Agreement.
b. any action taken (or any failure to act) in any capacity
other than as an Earn Out Seller or Earn Out Representative, as
the case may be, including in such person’s capacity as (or
while such person was serving as, or purporting to serve as) an
officer, director or employee of, or a consultant or advisor to,
the Purchaser, the Company
and/or any
of the Purchaser’s other Related Parties; or
c. any breach by such Party of any confidentiality
agreement, noncompetition agreement, nonsolicitation agreement
or other agreement (other than the Earn Out Agreement) with the
Purchaser, the Company
and/or any
of the Purchaser’s other Related Parties.
It being understood that solely for the purposes of this
Clause 5, the Earn out Agreement shall not be referred to
by the words “in connection with, arising from or in any
way relating to ... the Purchase Agreement”.
