SHARE PURCHASE
AGREEMENT
---------------
BY AND BETWEEN
D.L.C. TRUST LTD.
AND
EFI ELECTRONICS CORPORATION
---------------
SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT is made and entered into this 21st day of
November, 1997 to be effective as of January 1, 1998 (the "Agreement"), by and
between D.L.C. Trust Ltd., a registered limited company organized under the laws
of the Republic of Ireland having its principal place of business at 27 00 Xxxxx
Xxxxxxxx Xxxxxx, Xxxxxx 0, Xxxxxxxx xx Xxxxxxx and EFI Electronics Corporation,
a corporation organized under the laws of the State of Utah, U.S.A. with its
principal place of business at 1751 South 0000 Xxxx Xxxx Xxxx Xxxx, Xxxx 00000,
X.X.X. ("Purchaser").
W I T N E S S E T H :
WHEREAS, Seller owns 2,300 shares (the "Shares") of EFI Electronics Europe
SL, a Spanish company having its principal place of business at c/Xxxxxx
Xxxxxxxx, 43 Pol. Ind. Xxxxxx 08940 Corrella de LI. (Barcelona) Spain (the
"Company"), representing 50% of the issued and outstanding shares of the
Company.
WHEREAS, Seller desires to sell, transfer, assign and convey to Purchaser
and Purchaser desires to purchase and accept from Seller, all of Seller's right,
title and interest in and to the Shares in accordance with the terms of this
Agreement.
A G R E E M E N T :
NOW, THEREFORE, in consideration of the premises and of the mutual
promises and agreements set forth herein, the parties hereto agree as follows:
ARTICLE I
Purchase and Sale of Shares
Section 1.1 Sale of Shares. On the terms and subject to the conditions
herein set forth, and upon the representations and warranties herein made by
each of the parties to the other, on the Closing Date (as hereinafter defined),
Purchaser shall purchase from Seller and Seller shall sell, grant, transfer, and
assign to Purchaser all of Seller's right, title, and interest in the Shares,
free and clear of any and all liens, together with such bills of sale,
assignments, and instruments of conveyance as may be reasonably requested by
Purchaser as necessary or desirable to permit such delivery. Effective at the
Closing (as that term is defined herein), title to the Shares and risk of loss
shall transfer to Purchaser.
Section 1.2 Purchase Price. The purchase price (the "Purchase Price") for
the Shares shall be paid at Closing as follows:
(i) Purchaser shall pay to Seller the sum of $125,000 U.S.;
(ii) Purchaser shall deliver to Seller Purchaser's Note in
substantially the form attached hereto as Exhibit A (the "Promissory Note") in
the principal amount of $275,000 U.S. (subject to adjustment) payable in 24
monthly installments of principal and interest (with interest at 8 1/2% per
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annum) compounded annually; provided, however, the financial statements of the
Company shall be audited as of March 31, 1998 by Xxxxx Xxxxxxxx and, to the
extent the Company's net income before tax, determined in accordance with
generally accepted accounting principals is less than $400,000 U.S., the
principal amount of the Promissory Note shall be reduced, dollar for dollar, by
the difference between $400,000 U.S. and the actual amount of net income before
tax; and
(iii) Purchaser shall deliver to Seller a share certificate for
220,000 shares of the Common Stock of Purchaser which shall be "restricted
shares" under the Securities Act of 1933 (the "1933 Act") and shall be subject
to the restrictions on further transfer as set forth herein.
ARTICLE II
Closing, Closing Date and Closing Deliveries
--------------------------------------------
Section 2.1 Closing Date. The parties hereto agree that the closing (the
"Closing") of the transactions contemplated hereby shall take place at the
offices of Purchaser on a date mutually acceptable to the parties, but in all
events on or before January 1, 1998 (the "Closing Date").
Section 2.2 Closing Deliveries. On the Closing Date: (a) Purchaser shall
deliver to Seller cash in the amount of $125,000 U.S., a fully-executed copy of
the Promissory Note and a Certificate representing 220,000 shares of Purchaser's
Common Stock and (b) Seller shall deliver to Purchaser share certificates
representing the Shares being purchased by Purchaser (the "Share Certificates").
ARTICLE III
Representations and Warranties of Seller
----------------------------------------
Seller hereby represents and warrants to Purchaser as follows:
Section 3.1 Due Incorporation. The Company is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted.
Section 3.2 Capitalization; Title. The authorized capitalization of the
Company consists of 4,600 Shares, of which 2,300 Shares are issued and
outstanding and owned by Seller. The issued and outstanding shares of the
Company have been duly authorized and validly issued. The Shares owned by Seller
are free and clear of all claims, liens, security interests, pledges, options,
rights of first refusal, security agreements or other encumbrances of any nature
whatsoever and Seller has full right, power and authority to convey the Shares
to Purchaser in accordance with the provisions hereof free and clear of all
liens, charges, claims or other encumbrances of any nature whatsoever.
Section 3.3 Authority to Execute and Perform Agreements. This Agreement
has been duly authorized, executed and delivered by Seller, and constitutes the
valid and binding obligation of Seller, enforceable against Seller in accordance
with its terms, subject to applicable bankruptcy, insolvency and other similar
laws affecting the enforcement of creditors' rights generally, general equitable
principles and the discretion of courts in granting equitable remedies. The
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and the performance by Seller of this Agreement
in accordance with its terms and conditions will not, conflict with or result in
the breach or violation of any of the terms or conditions of, or constitute a
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default under, (a) the organizational documents of Seller or the Company or (b)
any statute or any regulation, order, judgment or decree of any court or
governmental or regulatory body.
Section 3.4 Tax Returns. All tax returns of the Company required by law to
be filed on or before the date of this Agreement, have been correctly and timely
filed. All liabilities for taxes, assessments and other governmental charges
upon the Company, or any of its properties, assets or income, if any, required
to be paid on or before the date hereof, have been duly paid and satisfied on or
before their respective due dates and none of said taxes, assessments or charges
is delinquent.
Section 3.5 Litigation. The Company is not a party to, and has not
received written notification of, any litigation or judicial, administrative or
arbitration proceeding. The Company is not subject to any outstanding order,
writ or decree of any court or other governmental authority.
Section 3.6 Compliance with Laws and Regulations. The Company is not in
violation in any material respect of any applicable law, ordinance, regulation,
order or decree, except for such violations in the aggregate which would not
have a material adverse effect on the assets, liabilities, results of operations
or financial condition of the Company taken as a whole.
Section 3.7 Acquisition of Purchaser's Common Stock for Investment. Seller
is acquiring the Common Stock of Purchaser for investment and solely for the
benefit of Seller's owners consisting of four persons, each of whom is fully
informed and knowledgeable with respect to the business and financial condition
of Purchaser and has been given the opportunity to ask questions of and receive
information from the officers and directors of Purchaser. Seller and each of
Seller's owners has such knowledge and experience in business and financial
matters that they are capable of evaluating the merits and risks of investment
in Purchaser's Common Stock. Without limiting the foregoing, Seller acknowledges
receipt of copies of filings made by Purchaser with the United States Securities
and Exchange Commission on Form 10-K for the fiscal year ended March 31, 1997,
on Forms 10-Q for each of the fiscal quarters ended June 30, 1997 and September
30, 1997, Purchaser's Definitive Proxy Statement for the fiscal year ended March
31, 1997 and Purchaser's Annual Report to Shareholders for the fiscal year ended
March 31, 1997. Seller acknowledges that the shares of Common Stock of Purchaser
have not been registered under the 1933 Act and may not be sold, pledged,
transferred or otherwise disposed of unless registered under the 1933 Act or
counsel satisfactory to Purchaser has rendered an opinion that the proposed
sale, transfer or other disposition can be made in the absence of registration.
Seller acknowledges that certificates evidencing shares of Purchaser's Common
Stock will bear a restrictive legend consistent with the foregoing and
substantially as set forth below:
RESTRICTIONS ON TRANSFER OF STOCK
The shares represented by this certificate have not been registered under
the Securities Act of 1933 and thus may not be transferred or
hypothecated unless registered under the Securities Act of 1933 or unless
an exemption from registration is available under the Securities Act of
1933.
Section 3.8 Payment of Taxes. Seller shall be solely responsible for and
shall timely pay all taxes due upon the sale of the Shares and shall indemnify
and hold harmless Purchaser in respect of any tax, penalty, interest, expense or
claim arising out of Seller's failure to pay all taxes when due.
This Agreement has been reviewed by counsel for Seller.
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ARTICLE IV
Representations and Warranties of Purchaser
-------------------------------------------
Purchaser hereby represents and warrants to Seller as follows:
Section 4.1 Authority to Execute and Perform Agreements. This Agreement
has been duly executed and delivered by Purchaser and constitutes the valid and
binding obligation of Purchaser enforceable against Purchaser in accordance with
its terms, subject to applicable bankruptcy, insolvency and other similar laws
affecting the enforcement of creditors' rights generally, general equitable
principles and the discretion of courts in granting equitable remedies. The
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and the performance by the Purchaser of this
Agreement in accordance with its terms and conditions will not, conflict with or
result in the breach or violation of, any of the terms or conditions of, or
constitute a default under, any statute or any regulation, order, judgment or
decree of any court or governmental or regulatory body.
Section 4.2 Purchase for Investment. Purchaser has been afforded complete
access to all information regarding the Company, including all material facts
and salient risk factors necessary for the Purchaser to make an informed
investment decision with respect to the purchase of the Shares contemplated
hereby. Purchaser has such knowledge and experience in financial and business
matters that the Purchaser is capable of evaluating the merits and risks of the
transactions contemplated by this Agreement. Purchaser is an "accredited
investor" within the meaning of Rule 501 of the 1933 Act. This Agreement has
been reviewed by counsel for Purchaser.
ARTICLE V
Covenants
---------
Section 5.1 Reasonable Efforts; Cooperation. Subject to the other
provisions of this Agreement, the parties hereto shall each use their
reasonable, good faith efforts to perform their obligations hereunder and to
take, or cause to be taken or do, or cause to be done, all things necessary,
proper and advisable under applicable law to obtain all approvals and satisfy
all conditions to the obligations of the parties under this Agreement and cause
the transactions contemplated hereby to be effected on or prior to the Closing
Date in accordance with the terms hereof and shall cooperate fully with each
other in connection with any steps required to be taken as part of their
respective obligations under this Agreement.
Section 5.2 Lease Agreement. On or prior to the Closing Date, Seller and
Purchaser shall cause the Company to take such corporate action as shall be
necessary to approve the Lease Agreement (the "Lease Agreement") in the form
attached hereto as Exhibit B, to be entered into between the Company and certain
principals of Seller, and the Company shall enter into such Lease Agreement on
the Closing Date.
Section 5.3 Employment Agreement. On or prior to the Closing Date, Seller
and Purchaser shall cause the Company to take such corporate action as shall be
necessary to approve the Employment Agreement (the "Employment Agreement") in
the form attached hereto as Exhibit C, to be entered into between the Company
and Xxxxx Xxxxxxx.
Section 5.4 Delivery of Financial Statements. Seller shall cause the
Company to deliver monthly financial statements of the Company as reasonably
requested by Purchaser prior to the Closing Date.
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ARTICLE VI
Conditions to Closing
---------------------
Section 6.1 Conditions to Obligations of Purchaser. The obligations of
Purchaser to effect the transactions contemplated hereby shall be subject to the
fulfillment on or prior to the Closing Date of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties set forth in Article III of this Agreement shall be true and correct
in all material respects as of the date of this Agreement and as of the Closing
Date as though made on and as of the Closing Date.
(b) Authorization of Acquisition Transactions. All corporate action
necessary by the Company to authorize the execution, delivery and performance of
the transactions contemplated hereby shall have been duly and validly taken.
(c) Performance of Obligations of Seller. Seller shall have
performed in all material respects all covenants and agreements required to be
performed by Seller under this Agreement.
(d) Consents. All consents, authorizations, orders and approvals of
(or filings or registrations with) any governmental commission, board or other
regulatory body or any other party required in connection with the execution,
delivery and performance of this Agreement shall have been obtained or made.
(e) Other Agreements. The Lease Agreement and Employment Agreement
shall have been duly executed and delivered by the Company.
(f) Certificate. Seller shall have furnished Purchaser with a
certificate of Seller as to compliance with the conditions set forth in Sections
6.1(a), (b), (c), (d) and (e).
Section 6.2 Conditions to Obligations of Seller. The obligations of Seller
to effect the transactions contemplated hereby shall be subject to the
fulfillment on or prior to the Closing Date of the following:
(a) Representations and Warranties. The representations and
warranties of Purchaser set forth in Article IV of this Agreement shall be true
and correct in all material respects as of the date of this Agreement and as of
the Closing Date as though made on and as of the Closing Date.
(b) Performance of Purchaser's Obligations. Purchaser shall have
performed in all material respects all covenants and agreements required to be
performed by them under this Agreement.
(c) Consents. All consents, authorizations, orders and approvals of
(or filings or registrations with) any governmental commission, board or other
regulatory body or any other party required in connection with the execution,
delivery and performance of this Agreement shall have been obtained or made.
(d) Other Agreements. The Lease Agreement and Employment Agreement
shall have been duly executed and delivered by the Company.
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(e) Certificate. Purchaser shall have furnished Seller with a
certificate of Purchaser as to compliance with the conditions set forth in
Sections 6.2(a), (b), (c) and (d).
ARTICLE VII
Miscellaneous
-------------
Section 7.1 Binding Effect. This Agreement shall inure to the benefit of
and shall be binding upon each of the parties hereto and their respective
representatives, heirs, beneficiaries, successors and assigns. Neither Purchaser
nor Seller shall have the right to assign rights or obligations under this
Agreement without obtaining the prior written consent of the other parties
hereto, except that Seller may, without the consent of Purchaser, distribute the
consideration for the Shares to the owners of Seller. Any of the terms or
provisions of this Agreement may be waived in writing at any time by the party
which is entitled to the benefits thereof. No waiver of any of the provisions of
this Agreement shall be deemed to, or shall, constitute a waiver of any other
provision hereof (whether or not similar).
Section 7.2 Governing Law. This Agreement shall be deemed to be made in,
and in all respects shall be interpreted, construed and governed by and in
accordance with, the laws of the State of Utah, U.S.A. Any changes or
modifications to this Agreement shall be in writing and shall be executed by
each of the parties hereto.
Section 7.3 Survival of Representations. The representations, warranties,
covenants and agreements made by each of the parties hereto under this Agreement
shall survive the consummation of the transactions contemplated hereby. The
parties hereto hereby agree to take all such action and deliver all such
documents from and after the Closing Date as shall be reasonably necessary or
appropriate to confirm and vest title to the Shares in Purchaser and to
otherwise effect the transactions and other matters contemplated hereunder in
accordance with the terms hereof.
Section 7.4 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.
Section 7.5 Attorneys' Fees. If a legal action or other proceeding is
brought for enforcement of this Agreement because of an alleged dispute, breach,
default, or misrepresentation in connection with any of the provisions of this
Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorney's fees and costs incurred, both before and after judgment,
in addition to any other relief to which they may be entitled.
Section 7.6 Notice. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given (i) when delivered
personally, (ii) when sent by telecopier (with receipt confirmed), provided that
a copy is mailed within three business days thereafter by registered or
certified mail, return receipt requested, (iii) when received by the addressee,
if sent by Express Mail, Federal Express or other express delivery service
(receipt requested), or (iv) five business days after being sent by registered
or certified mail, return receipt requested, in each case to the other party at
the following addresses and telecopier numbers (or to such other address or
telecopier number for a party as shall be specified by like notice; provided
that notices of a change of address or telecopier number shall be effective only
upon receipt thereof):
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if to Seller, to:
D.L.C. Trust Ltd.
27 00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxx 0, Xxxxxxxx of Ireland
Attention: Xxxxx Xxxxxxx
and
if to Purchaser, to:
EFI Electronics Corporation
0000 Xxxxx 0000 Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Section 7.7 Cooperation. Each party hereto agrees to execute and deliver
such additional documents and instruments and to perform such additional acts as
any party may reasonably request or as may be reasonably necessary or
appropriate to effectuate, consummate or perform any of the terms, provisions or
conditions of this Agreement.
Section 7.8 Successors/Non-Assignment. This Agreement shall inure to and
bind the heirs, devisees, executors, administrators, personal representatives,
successors and assigns of the respective parties hereto; provided, however, that
nothing herein shall be construed to permit the sale or assignment of any
party's interest and/or obligations hereunder to any third party, except in
compliance with the following provisions. None of the parties may sell, assign,
transfer, pledge or encumber any of such party's rights or delegate any of such
party's duties or obligations under the terms of this Agreement without the
prior written consent of the other parties hereto. Any attempt at such a
transfer, assignment, sale, pledge, encumbrance or delegation by any party,
without the prior written consent of the non-assigning parties, shall be void ab
initio.
Section 7.9 Severability. The provisions of this Agreement are severable
and should any provision hereof be void, voidable or unenforceable under any
applicable law, such void, voidable or unenforceable provision shall not affect
or invalidate any other provision of this Agreement, which shall continue to
govern the relative rights and duties of the parties as though the void,
voidable or unenforceable provision were not a part hereof. In addition, it is
the intention and agreement of the parties that all of the terms and conditions
hereof be enforced to the fullest extent permitted by law.
Section 7.10 Modification. This Agreement may not be modified except by a
written instrument signed by all the parties hereto.
Section 7.11 Exhibits. All Exhibits annexed to this Agreement are
expressly made a part of this Agreement as fully as though completely set forth
in it. All references to this Agreement shall be deemed to refer to and include
this Agreement and all such Exhibits.
Section 7.12 Headings. The headings of sections and subsections used in
this Agreement are for convenience only and are not part of its operative
language. They shall not be used to affect the construction of any provisions
hereof.
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Section 7.13 Construction. This Agreement shall be construed as though all
parties had drafted it.
Section 7.14 No Third Party Beneficiaries. The representations,
warranties, covenants and agreements of the parties set forth in this Agreement
are not intended for, nor shall they be for the benefit of or enforceable by,
any person not a party hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
SELLER:
D.L.C. TRUST LTD.
By: /s/ XXXXX XXXXXXX
-----------------------------------
Xxxxx Xxxxxxx, Trustee
(Attorney-in-Fact)
EFI ELECTRONICS CORPORATION
By: /s/ XXXXXXX X. XXXXXX
-----------------------------------
Xxxxxxx X. Xxxxxx, President
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
On this 21st day of November, 1997, personally appeared before me Xxxxxxx
X. Xxxxxx, who being by me duly sworn, did say that he is the President of EFI
Electronics Corporation, a Utah corporation, and that the foregoing instrument
was signed on behalf of said corporation by authority of its bylaws or a
resolution of its Board of Directors, and said officer acknowledged to me that
said corporation execution the same.
/s/ XXXXXXXX X. XXXX
-----------------------------------
NOTARY PUBLIC
My Commission expires: Residing at: Salt Lake City, Utah
-----------------------
February 13, 1999
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