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Exhibit 10.3
EXCHANGE AGREEMENT
This Exchange Agreement ("Agreement") is made as of December 17, 1996, by
and among Euronet Services Inc., a Delaware corporation (the "Holding
Company"), Euronet Holding N.V., a company limited by shares incorporated under
the laws of the Netherlands Antilles ("Euronet N.V."), and the stockholders and
optionholders of Euronet N.V. listed on Exhibits A and B hereto, respectively
(collectively, the "Stockholders" or "Optionholders" as the context dictates).
RECITALS
WHEREAS, the Stockholders are all of the stockholders in Euronet N.V. and
will, as of the Effective Time (as hereinafter defined), each hold the number
of shares of common stock of Euronet N.V. indicated on Exhibit A;
WHEREAS, the Stockholders and Euronet N.V. are parties to (i) a certain
Shareholders Agreement dated as of February 15, 1996 relating to the formation
of Euronet N.V., as amended by a First Amendment to Shareholders Agreement
dated as of October 14, 1996 (the "First Amendment") which confirmed, among
other things, the obligation of Euronet N.V. to issue certain "Milestone
Awards" of stock (as defined therein) in the event a public offering of the
shares of Euronet N.V. occurred and (ii) a Registration Rights Agreement dated
as of March 13, 1996 (the "Registration Rights Agreement") relating to
registration of stock of Euronet N.V.;
WHEREAS, the Optionholders listed on Exhibit B are all of the holders of
options to purchase shares of Euronet N.V., except certain optionholders whose
options are conditional upon the occurrence of a public offering of the shares
of Euronet N.V.;
WHEREAS, the Holding Company deems it in its best interest to acquire all
the shares of outstanding stock (the "Euronet Stock") of Euronet N.V. in
exchange for shares of common stock, par value $.01 per share, of the Holding
Company ("HC Common Stock");
WHEREAS, the Stockholders own and have the right to transfer and exchange
all of the Euronet Stock and desire to transfer and exchange such Euronet Stock
for HC Common Stock; and
WHEREAS, the Holding Company deems it in its best interest to grant the
Optionholders options to acquire shares of HC Common Stock (the "HC Options")
in exchange for all of the Optionholders' outstanding options to acquire
Euronet Stock (the "Euronet Options"); and
WHEREAS, the Optionholders own and have the right to transfer and exchange
all of the outstanding Euronet Options and desire to transfer and exchange all
such Euronet Options for HC Options.
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NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
Section 1. Effective Time of Transactions. The transactions contemplated
in this Agreement shall be conditional upon the fulfillment of the following
conditions: (i) a certain Underwriting Agreement (the "Underwriting Agreement")
among the Holding Company, certain Stockholders, Barings Brothers Limited (as
lead manager -- "Barings") the underwriters named therein in connection with a
public offering of common stock of the Holding Company on the Nasdaq national
market (the "Offering") of the HC Common Stock shall have been executed by the
Holding Company and Barings, and (ii) the Option Closing, as defined under a
certain Option Exercise Agreement executed as of the date of this Agreement,
shall have occurred. The transactions provided herein shall be effective as of
the time (the "Effective Time") of fulfillment of the last of these two
conditions. In the event that such conditions are not fulfilled on or before
May 31, 1997, this Agreement shall terminate and shall be of no further force
and effect.
Section 2. Exchange of Stock and Obligation to Issue Milestone Awards.
a) Exchange of Stock. Subject to the terms and conditions hereof, as of
the Effective Time, (i) each Stockholder shall transfer to the Holding Company
Euronet Stock as set forth on Exhibit A, solely in exchange for HC Common
Stock, and (ii) the Holding Company shall transfer to each Stockholder HC
Common Stock, also as set forth on Exhibit A, solely in exchange for Euronet
Stock. As provided on Exhibit A, each Stockholder shall exchange one share of
Euronet Stock for one share of HC Common Stock.
b) Milestone Awards of Stock. Subject to the terms and conditions hereof,
as of the Effective Time, the Holding Company shall issue to each Stockholder
listed on Exhibit C the number of its shares set forth on Exhibit C. Such
issuance of stock is acknowledged by the Parties to constitute an assumption by
the Holding Company of the obligation of Euronet N.V. under the Shareholders
Agreement (as amended by the First Amendment) to issue Milestone Awards.
Section 3. Exchange of Options. Subject to the terms and conditions
hereof, as of the Effective Time, (i) each Optionholder shall transfer to the
Holding Company all of its Euronet Options, solely in exchange for HC Options,
and shall release Euronet N.V. from any and all obligations under the Euronet
Options; and (ii) the Holding Company shall grant to each Optionholder HC
Options, in the same amount as the options transferred. Each Optionholder shall
exchange an option to acquire one share of Euronet Stock for an option to
acquire one share of HC Common Stock. The Holding Company has, as of the
Effective Time, adopted a Euronet Long Term Incentive Stock Option Plan that is
substantially the same (subject only to revisions deemed necessary in
contemplation of the Offering) as the Euronet Long Term Incentive Plan adopted
by Euronet N.V. The Holding Company and the Optionholders acknowledge that the
HC Options are granted on the same terms and conditions (including, without
limitation, as to vesting) as the Euronet Options, subject only to the revisions
referred to in the previous sentence, and adjustments in the number of shares
subject to such options and the Option Price to take into account a
seven-for-one split of stock of Euronet N.V. which shall take place after the
date hereof. Stock Option Agreements substantially in the form of those
applicable to the Euronet Options shall be entered into on or before the
Effective Time with respect to the HC Options.
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Section 4. Termination of Shareholders Agreement, Assumptions of
Registration Rights Agreement. As of the Effective Time, (i) the Shareholders
Agreement (as amended) shall be terminated and (ii) Euronet shall assign to the
Holding Company all rights and obligations under Registration Rights Agreement.
The Holding Company accepts and assumes all of Euronet N.V.'s obligations
therein as applicable to HC Common Stock.
Section 5. Representations and Warranties By the Stockholders and
Optionholders. The Stockholders and Optionholders severally represent and
warrant to the Holding Company as follows:
(a) Validity of Agreement. This Agreement constitutes the valid and
binding obligation of the Stockholders and Optionholders, enforceable in
accordance with its terms.
(b) Title to and Transfer of Euronet Stock. The Stockholders own all the
outstanding Euronet Stock beneficially and of record, free and clear of all
liens, restrictions, encumbrances, charges and adverse claims. The
Stockholders have the full power, capacity and authority to sell, assign,
transfer and deliver the Euronet Stock to the Holding Company hereunder and
such transfer vests in the Holding Company good and marketable title to such
Euronet Stock, free and clear of all liens, restrictions, encumbrances, charges
and adverse claims.
(c) Transfer of Euronet Options. The Optionholders own all the
outstanding Euronet Options free and clear of all liens, restrictions,
encumbrances, charges and adverse claims. The Optionholders have the full
power, capacity and authority to sell, assign, transfer and deliver the Euronet
Options to the Holding Company hereunder and such transfer vests in the Holding
Company good and marketable title to such Euronet Options, free and clear of
all liens, restrictions, encumbrances, charges and adverse claims.
Section 5. Representations and Warranties by the Holding Company. The
Holding Company represents and warrants to the Stockholders and Optionholders
individually as follows:
(a) Corporate. The Holding Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the corporate power to own its property and carry on its business as
and where it is now conducting business.
(b) Validity of Agreement. This Agreement constitutes the valid and
binding obligation of the Holding Company, enforceable in accordance with its
terms.
(c) Capital Structure. The Holding Company's authorized capital stock
consists of 30,000,000 shares of HC Common Stock, par value $.01 per share,
and 10,000,000 shares of preferred stock, par value $.01 per share.
(d) Corporate Authority. The execution and delivery of this Agreement,
and the issuance of HC Common Stock and HC Options required to be delivered
hereunder, have been duly authorized by all necessary corporate action and
neither the
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execution nor delivery of this Agreement nor the issuance of the HC Common Stock
and HC Options nor the performance, observance and compliance with the terms and
provisions of this Agreement will violate any provision of law, any order of any
court or other governmental agency, the certificate of incorporation or bylaws
of the Holding Company or any indenture, agreement or other instrument to which
the Holding Company is a party, or by which the Holding Company is bound or by
which any of its property is bound.
(e) Stock Nonassessable. The HC Common Stock issued hereunder is validly
issued, fully-paid and nonassessable.
Section 7. Miscellaneous.
(a) Governing Law. This Agreement shall be controlled, construed and
enforced in accordance with the laws of the State of Delaware without regard to
the provisions pertaining to conflicts of laws.
(b) Assignability. This Agreement shall not be assignable by any of the
parties hereto without prior written consent of all of the other parties.
(c) Headings not part of Agreement. All paragraph headings preceding the
text herein are inserted solely for convenience of reference and shall not
constitute a part of this Agreement.
(d) Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original.
(e) Entire Agreement. This Agreement sets forth the entire understanding
between the parties hereto, there being no terms, conditions, warranties, or
representations other than those contained herein. No amendments hereto shall
be valid unless made in writing and executed by the parties hereto.
(f) Benefit. This Agreement and all covenants and conditions contained
herein, shall be binding upon, and shall inure to the benefit of, the heirs,
executors, administrators, personal representatives, successors and assigns of
the Stockholders and Optionholders and upon the successors and assigns of the
Holding Company.
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IN WITNESS WHEREOF, the Stockholders, Optionholders and Euronet Service
Inc. have duly executed this Agreement as of the date above written.
EURONET SERVICES INC.
_________________________________
Xxxxxxx X. Xxxxx
Chief Executive Officer
STOCKHOLDERS:
ADVENT PRIVATE EQUITY FUND - ADVENT PARTNERS L.P.
CENTRAL EUROPE L.P.
___________________________________ ____________________________________
Xxxxx X. Xxxxxxxx, Vice-President, Xxxxx X. Xxxxxxxx, Vice-President,
Advent International Corp. for Advent Advent International Corp. for
Central Europe Management L.P. as Advent Central Europe Management L.P.
General Partner as General Partner
HUNGARIAN PRIVATE EQUITY FUND L.P. POLAND PARTNERS, L.P.
___________________________________ ____________________________________
Xxxxx X.Xxxxxxxx, Vice-President, Xxxxxx X. Xxxxxxx, President,
Advent International Corp. for Advent C.E.O. & P.P.M.C., Poland Partners
Central Europe Management L.P. as Management Co. for Poland Partners
General Partner Management L.P as General Partner
THE POLAND INVESTMENT FUND L.P. THE HUNGARIAN-AMERICAN ENTERPRISE FUND
___________________________________ ____________________________________
Xxxx X. Xxxxx, Director, Copernicus Xxxxxxxx X. Xxxxxxxxx, President
Ventures Limited as General Partner
EUROVENTURES HUNGARY B.V. DST SYSTEMS, INC.
___________________________________ ____________________________________
Andras Geszti, by proxy Xxxxxx X. XxXxxxxxx,
President and CEO
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_________________________________ ________________________________
Xxxxxxx X. Xxxxx Xxxxx Xxxxxx
_________________________________ ________________________________
Xxxx Xxxxxxxxx Xxxxxxxx Xxxxxxxx
_________________________________ ________________________________
Xxxxxxx X. Xxxxx, by proxy for Xxxxxxx X. Xxxxx, by proxy for
Xxxxxxx X. Xxxxx Xxxxxxx X. Xxxxx
_________________________________ ________________________________
Xxxxxxx X. Xxxxx, by proxy for Xxxxxxx X. Xxxxx, by proxy for
Xxxxx Xxxxxx Xxxxxx Xxxxxxxxx X. Xxxxx
_________________________________ ________________________________
Xxxx Xxxxxxxxx, by proxy for Xxxx Xxxxxxxxx, by proxy for
Xxxxxxx X. Xxxxxxxxx Xxxxxxxx X. Xxxxxxxxx
OPTIONHOLDERS:
_________________________________ ________________________________
Xxxxxxx X. Xxxxx Xxxxxx X. Xxxxx
_________________________________ ________________________________
Xxxxxx Xxxxxxxxxx Istvan Alpek
_________________________________ ________________________________
Xxxxx X. Xxxx Xxxxx Xxxxxxx
_________________________________ ________________________________
Antal (Xxxx) Xxxxxx Xxxxx Xxxxx
_________________________________ ________________________________
Xxxxxx Xxxxxx Xxxxxxxxx Xxxxxx
_________________________________ ________________________________
Xxx Xxxxx Xxxxxx Xxxxxx
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_________________________________ ________________________________
Xxxxxxxxx Xxxxxx Xxxxx Xxxxxxx
_________________________________ ________________________________
Xxxxxx Xxxx Xxxxxxx Xxxxxxx
_________________________________ ________________________________
Xxxxxxxxx Xxxxx Xxxxxxxx Xxxxxx
_________________________________ ________________________________
Xxxxxx Xxxx Xxxxxx Xxxxxx
______________________________
Xxxxxxx Xxxxxxxxxx
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EXHIBIT C
DST Systems, Inc. 258,300
Euroventures Hungary B.V. 180,810
Xx. Xxxxxxxxx 51,597
Xx. Xxxxxx 25,802
Xx. Xxxxxxxx 12,901
Hungarian-American Enterprise Fund 271,110
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EXHIBIT B
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxxxxx
Xxxxxx Alpek
Xxxxx X. Xxxx
Xxxxx X. Xxxxxxx
Xxxxx (Xxxx) Xxxxxx
Xxxxxx Xxxxxx
Xxx Xxxxx
Xxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxxxxxx Xxxxxx
Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxx
Xxxxxx Xxxx
Xxxxxxxxx Xxxxx
Xxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
Xxxxxxxx Xxxxxx
Xxxxxx Xxxx
Xxxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxx
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