EXHIBIT 2.1
SPA
Urkundenrolle Nr. 318/2003
Einseitig beschrieben
[GRAPHIC]
Share Purchase and Transfer Agreement
Recorded
at Berlin
on November 19/20, 2003
(November nineteen / twenty two thousand three)
Before me, the undersigned representative (Notarvertreter) of the Notary Xx.
Xxxxx Xxxxxxxx, Berlin,
Xx. Xxxxxx Xxxxxxx
Xx. Xxxxx Xxxxxxxx (or his representative) hereinafter referred to as "Notary"
with official residence at Xxxxxxxxxxxxxx 00, 00000 Xxxxxx
who recorded the following deed at XxxxxxxxxXx 00, 00000 Xxxxxx
appeared today:
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(1) Xx. Xxxxxx Xxxxxxxx Imbernon, born on June 30, 1966 with business address
in Xxxxxxxxxxxxxx. 0, 00000 Xxxxxx,
(2) Mr. Xx. Xxxxxxx Xxxxxx, born on May 12, 1967 with business address in
Xxxxxxxxx. 00, 00000 Xxxxxx,
The persons appearing identified themselves by their valid identity cards as
follows:
No 1: German ID No. 0000000000, issued by Kreisverwaltungsreferat Munchen
No 2: German ID No. 2401624414, issued by Landeseinwohneramt Berlin
The person appearing ad 1 declares that he is not acting in his own name but for
and on behalf of
.. Xx. Xxxxx Xxxxxxxx Xxxxxxxx, residing at Xxxxxxxxxxxxxx. 00, 00000
Xxxxxxxxxx, Xxxxxxx,
- hereinafter referred to as "Seller I" -
and
.. Xx. Xxxxxx Xxxxx, residing at XxxxxxxxxxxxXx 00, 00000 Xxxxxxxxx,
Xxxxxxx, hereinafter referred to as "Seller II"
- Seller I and Seller II together referred to as "Sellers" -
.. transact Elektronische Zahlungssysteme GmbH, FraunhoferstraBe 10,
82152 Martinsried
- hereinafter referred to as "Company"
The person appearing ad 1 has presented an original notarized power of attorney
of the Sellers and transact Elektronische Zahlungssysteme GmbH dated November
12, 2003 to the notary, a certified copy of which is attached hereto as Annex A,
which authorizes the person appearing under No. 1 to represent the Sellers and
the Company, authorizing the execution of the Share Purchase and Transfer
Agreement entered into in this deed.
The person appearing ad 2 declares that he is not acting in his own name but for
and on behalf of
Euronet Worldwide, Inc.,
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxx, 00000, XXX
- hereinafter referred to as "Euronet" -
The person appearing ad 2 has presented an original power of attorney of Euronet
to the notary, a certified copy of which is attached hereto as Annex B, which
authorizes the person appearing under No. 2. to represent Euronet, together with
a confirmation duly signed by Euronet's company secretary, a certified copy of
which is attached hereto as Annex C, to the effect (i) that the person
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having signed the power of attorney is the legal representative of Euronet and
(ii) that the board of directors of Euronet has passed a resolution on November
14, 2003, a certified copy of which is attached hereto as Annex D, authorizing
the execution of the Share Purchase and Transfer Agreement entered into in this
deed.
The person appearing ad 2 declares that he is not acting in his own name but for
and on behalf of
Delta Euronet GmbH
XxxxxxxxxxxxxXx 000,
00000 Xxxxxx, Xxxxxxx
- hereinafter referred to as "Buyer" -
The person appearing ad 2. has presented an original power of attorney of the
Buyer to the notary, a certified copy of which is attached hereto as Annex E,
which authorizes the person appearing ad 2. to represent the Buyer, authorizing
the execution of the Share Purchase and Transfer Agreement entered into in this
deed.
The notary representative hereby certifies according to his inspection of the
Commercial Register at the Local Court of Charlottenburg, Berlin, under HRB
90739 that the person having undersigned the power of attorney attached hereto
as Annex E, Xx. Xxxxx Xxxxx, is the sole managing director of the Buyer having
sole power of representation. He is exempted from the restrictions of Sec. 181
German Civil Code.
The person appearing ad 2 declares that he is not acting in his own name but for
and on behalf of
Eft Services Holding X.X.,
Xx Xxxxxxxxx 0 XXXXXXX X,
0000XX Amsterdam,
The Netherlands
- hereinafter referred to as "B.V." -
The person appearing ad 2. has presented an original power of attorney of the
B.V. to the notary, a certified copy of which is attached hereto as Annex F,
which authorizes the person appearing ad 2. to represent the B.V., authorizing
the execution of the Share Purchase and Transfer Agreement entered into in this
deed.
- Euronet, the Buyer, and B.V. hereinafter jointly referred to as
"Euronet Group" -
- the Sellers and the Euronet Group hereinafter jointly referred to as
"Parties" -
The acting notary advised the persons appearing on the incompatibility of the
notarial function of a legal adviser to one of the parties in the matter to be
notarized (Section 3 Para. 1. No. 7 of the German Act of Notarization). The
acting notary stated and the Parties to this deed confirmed that the acting
notary himself and his partners and further persons associated with him in the
meaning
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of said provisions have not been involved as legal advisers, auditors or tax
advisers in the matter at hand.
The Sellers recorded on this day to Role of deed No 317/2003 of the recording
notary a deed of reference (Bezugsurkunde) ("Deed of Reference"), the original
of which is known to the Parties and is hereby referred to pursuant to Sect. 13a
of the Notarization Act (Beurkundungsgesetz). The Parties renounce to have this
deed read out by the Notary and attached to this deed.
The persons appeared requested this notarial deed including its attachments,
where applicable, and the schedules and annexes thereto, where applicable, to be
recorded in the English and German language. The acting notary who is in a
sufficient command of the English language ascertained by way of conversation
that the persons appeared are also in sufficient command of the English
language. After having been instructed by the acting notary, the persons
appeared waived the right to obtain the assistance of a sworn interpreter and to
obtain a certified translation of this deed including the attachments, schedules
and annexes thereto. Now therefore, the persons appeared, acting as before said,
declared the following:
A. Share Purchase and Transfer Agreement
We enter into the following
Share Purchase and Transfer Agreement
Index of Definitions
In this share purchase and transfer agreement (the "Share Purchase Agreement" or
"SPA") the terms appearing below except where the context otherwise requires
shall have the meaning ascribed to them as defined below and as set out in the
table attached as Schedule Definitions. References to Sections and Schedules are
to Sections and Schedules of this SPA, if not explicitly otherwise stated.
Preamble
WHEREAS,
(A) The Sellers are the sole shareholders of transact Elektronische
Zahlungssysteme GmbH, a German limited liability company registered with
the Commercial Register of the Local Court in Munich with the registration
number HRB 114439 (the "Company"). The Company has its registered office at
XxxxxxxxxxxxxxXx 00, 00000 Xxxxxxxxxxx, Xxxxxxx.
(B) The registered share capital of the Company amounts to Euro 50,000.00
(fifty thousand), is as of Signing fully paid up, and consists of two
shares in the nominal amount of Euro 25,000.00 (twenty-five thousand) each.
Each of the Sellers holds one share in the Company in the nominal amount of
Euro 25,000.00 (twenty-five thousand) (the "Share I"" and the "Share II"
and together the "Shares"). A commercial register excerpt of the Company as
well as its articles of association, both reflecting the status as of the
date of the notarial recording of this SPA (the "Signing"), are attached as
Schedules (B) 1 and (B) 2 hereto.
(C) The Company's business operations (the "Business Operations") include the
operation of one or more data centers for various types of own or third
party electronic transactions. The Company sells, lets, leases and from
time to time provides free of charge hardware and software. The Company
also sells electronic virtual products, e.g. top up e-vouchers delivered to
the customers through above mentioned hardware and software. Further, the
Company offers its own services or the services of third parties in
connection with elec
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tronic virtual products and with all kinds of hardware and software, as
well as the assumption of claims (Forderungsubernahme). The Company's
products and services are marketed in relation to systems for top ups
(reloading of cash accounts) of prepaid mobile phone accounts of certain
mobile phone operators and hardware and software which permit such top ups
to be effected and in relation to hardware and software for electronic
payments and in relation to any other virtual products and services, e.g.
loyalty programs. The Company has business relationships with several
market participants, e.g., among others, with merchants such as
wholesalers, retailers, operators of points of sale, including filling
stations as well as tobacco and newspaper shops, with financial services
institutions such as banks, payment providers, with telecommunication
services institutions such as internet providers, mobile phone operators.
The Company is in the process of expanding its Business Operations from
Germany to markets outside Germany.
(D) Euronet is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware. The issued and
outstanding capital stock of Euronet consists of 26,951,000 shares of
common stock (Euronet Shares) as of October 31, 2003 each with a par value
U.S. $ 0.02 (the "Euronet Shares") and no shares of preferred stock each
with a par value of U.S.$ 0.02 (the "Preferred Stock"). Euronet has an
authorized capital of 60 million shares of common stock with a par value of
U.S.$ 0.02 per share and 10 million shares of preferred stock.
(E) Euronet provides secure electronic financial transaction solutions. It
provides financial payment middleware, financial network gateways,
outsourcing, and consulting services to financial institutions, retailers
and mobile phone operators. It processes transactions for a network of
automated teller machines (ATMs) across Europe (and until January 2002 in
the United States). Through its software subsidiary, Euronet USA, Inc., the
Buyer offers a suite of integrated electronic fund transfer (EFT) software
solutions for electronic payment and transaction delivery systems. It
further provides comprehensive electronic payment solutions consisting of
ATM network participation, outsourced ATM management solutions, electronic
recharge services (for prepaid mobile airtime) and integrated EFT software
solutions. Through its subsidiary, e-pay Ltd. it operates a network of
point-of-sale (POS) terminals providing electronic processing of prepaid
mobile phone airtime services in the UK and in Australia through e-pay's
wholly-owned subsidiary, e-pay Australia Pty Ltd. The Buyer's principal
customers are banks, mobile phone operators and retailers that require
electronic financial transaction processing services.
(F) Euronet is the sole shareholder of B.V. B.V. is a duly incorporated and
existing limited liability company under the laws of Netherlands,
registered with the Xxxxx van Koophandel Amsterdam, with the registration
number 34107367. The B.V. has its registered office at Amsterdam,
Netherlands. The issued share capital of the B.V. amounts to Euro
18,196.59, is as of Closing fully paid up.
(G) The B.V. is the sole shareholder of the Buyer, a German limited liability
company duly incorporated and registered with the Commercial Register of
the Local Court Charlottenburg, Berlin, with the registration number HRB
90.739. The GmbH has its registered office at XxxxxxxxxxxxxXx 000,
00000 Xxxxxx, Xxxxxxx. The registered share capital of the Buyer amounts to
Euro 25,000.00 (twenty-five thousand), is as of Closing fully paid up, and
consists of one share. The sole object of the company of the Buyer is to
acquire and hold and administer participations in other entities and
companies in its own and for its own account in particular in entities
engaged in electronic transactions.
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(H) The Euronet Group is interested and intends to acquire the Shares from the
Sellers. The Sellers are willing to sell and transfer the Shares to the
Buyer. The Parties expect that the Company will benefit from the synergy
effects of the combined businesses of the Company and the Buyer (including
the Euronet Groups' subsidiaries and affiliated companies) and that the
Company's Business Operations will therefore further develop and expand, in
particular in view of the Company's intention to increase its international
expansion and to build up international business relationships.
(I) The Sellers are the managing directors of the Company. The Parties intend
that the Sellers remain managing directors of the Company and remain
responsible for the management of the Business Operations of the Company in
accordance with the terms hereof.
The Parties therefore agree as follows:
1 Sale of Shares; Allocation of Profits; Acquisition and Assignment of
certain Shareholder Loans
1.1 Seller I hereby sells the Share I and Seller II hereby sells the Share II
for the Consideration set forth in Section 2 to the Buyer. The Buyer hereby
accepts the sale of the Shares.
1.2 In the relation between the Sellers and the Buyer, profits, which have been
earned by the Company up to Signing and have not been distributed to the
Company's shareholders are due to and belong to the Buyer subject to
Section 3.
1.3 Each Seller has entered into several individual loan agreements as borrower
with Sparkasse Starnberg as lender all of which are listed in Section 2 of
the Financing Agreement (collectively referred to as the "Founder Loan
Agreements"). The proceeds under each Founder Loan Agreement have been paid
directly to the Company such that every Founder Loan Agreement corresponds
to a shareholder loan and the Sellers thereby granted several shareholder
loans to the Company (collectively referred to as the "Shareholder Loans").
The granting of each Shareholder Loan between the Company and the
respective Seller and its terms were confirmed by the financing agreement
(the "Financing Agreement") between the Company and the Sellers dated
October 20, 2003, as amended on November 19, 2003 a copy of which is
attached hereto as Schedule 1.3. The Buyer herewith acquires from the
Sellers each Shareholder Loan. The Sellers hereby assign to the Buyer each
Shareholder Loan, subject to the condition precedent in each case that (i)
the condition precedent pursuant to Section 18.1.1 is met and (ii) the
Buyer has fully satisfied all of the Sellers' obligations vis-a-vis
Sparkasse Starnberg under the respective Founder Loan Agreement.
2 Consideration
2.1 The purchase price for the sale of the Shares and the Shareholder Loans
consists of the following Consideration:
(i) a fixed Cash Component according to the provisions of Section 3 (parts
of which shall be in lieu of performance fulfilled solely by the fixed
Share Component pursuant to 2.1(ii));
(ii) a fixed Share Component according to the provisions of Section 4;
(iii) further an additional payment according to the provisions of Section
5;
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(iv) two Certificates according to the provisions of Section 6 below and
the Schedules referred to herein.
(together the "Consideration").
2.2 Each Seller is entitled to half of the total Consideration, i.e. half of
the Cash Component, half of the Share Component, half of the additional
payment and one Certificate.
3 Cash Component
3.1 The consideration according to Section 2.1(i) was initially agreed between
the Parties to be a payment in the amount of Euro 22,000,000.00 (in words:
Euro twenty-two million). Euro 7,000,000.00 (Euro seven million) thereof
shall be settled in accordance with Section 4 in lieu of performance (an
Erfullungs Statt, according to Section 364 Para. 1 of the German Civil Code
- "BGB"). The remaining cash payment in the total amount of Euro
15,000,000.00 (Euro fifteen million) shall hereinafter be referred as "Cash
Component". The Cash Component shall under no circumstances be subject to
an adjustment.
3.2 The Cash Component shall be due and payable in Euro on or before November
24, 2003, or in the event of a Funding Notice (pursuant to Section 7.1) on
or before November 27, 2003, free of costs and charges in immediately
available irrevocable funds by wire transfer into the bank account as set
out in Schedule 3.2 (the "Cash Component Notary Account") of the Notary.
The Notary shall immediately inform the Parties via telefax of any funds
received on his account.
The payment of the Cash Component by the Buyer to the Notary shall be
deemed payment and performance of the obligation to pay, the Cash Component
to the Sellers at that point in time the Cash Component may be released by
the Notary pursuant to this SPA to the Sellers pursuant to Section 3.3.1
(Auszahlungsreife). The date on which the Notary receives the funds and not
the day on which the funds are forwarded is decisive for the timeliness of
payment of the Cash Component.
3.3 The Notary is hereby jointly instructed by the Sellers and the Buyer
3.3.1 to release the funds on the Cash Component Notary Account, including
accrued interest thereon to the Sellers subject to the stipulations in
Section 3.4, immediately after the conditions precedent set out in
Sections 18.1.1 and 18.1.3 through 18.1.6 are met;
3.3.2 if the condition precedent under Section 18.1.1 is not fulfilled and
this SPA is dissolved pursuant to Sections 7.1 or 7.2, to release any
funds which are on the Cash Component Notary Account to the Buyer, but
not prior to December 3, 2003.
3.4 Each Seller is entitled to half of the Cash Component and half of any
interests thereon. The Cash Component and any interest thereon shall be
released free of costs and charges in immediately available funds by wire
transfer into the bank accounts of the Sellers specified in Schedule 3.4
(the "Sellers' Bank Accounts") by the Notary.
3.5 In order to distribute the profit of the Company for the business year
2002, the Sellers have passed the shareholders' resolution set out in
Schedule 3.5. The Buyer undertakes not to adjust the amount of profit to be
distributed to the Sellers according to the shareholders' resolution.
3.6 In order to distribute parts of the profit of the Company for the time
between January 1, 2003 up to the Interim Accounts' Date (as defined in
Section 8) (the "Distributable Interim
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Profit 2003") the Sellers have passed the shareholders' resolution set out
in Schedule 3.6 prior to Signing. The Buyer undertakes not to adjust the
amount of profit to be distributed to the Sellers according to the
shareholders' resolution, unless provided for in the shareholders'
resolution. The shareholders' resolution shall be binding between the
Parties.
4 Share Component
4.1 The share component in lieu of performance according to Section 3.1 (the
"Share Component") consists of 643,048 (six hundred forty three thousand
and forty eight) Euronet Shares. The Share Component shall under no
circumstances be subject to an adjustment; in particular with respect to
its value.
4.2 The Buyer shall deliver half of the Share Component (i.e. 321,524 (three
hundred twenty one thousand five hundred twenty four) Euronet Shares) to
Seller I (the "Seller I Share Component") and the other half (i.e. 321,524
(three hundred twenty one thousand five hundred twenty four) Euronet
Shares) to Seller II (the "Seller II Share Component").
4.3 The Buyer herewith transfers sole ownership in the Seller I Share Component
to Seller I and the sole ownership in Seller II Share Component to Seller
II subject to fulfillment of the Conditions Precedent save for the
condition precedent under Section 18.1.2. Each Seller accepts such transfer
herewith.
4.4 Immediately after Signing but no later than on or before November 24, 2003,
or in the event of a Funding Notice November 27, 2003, the Buyer shall
transfer the sole possession of the Share Component by delivering the
respective share certificates to the escrow agent specified in Schedule 4.4
A (the "Share Escrow Agent"). Such delivery by the Buyer to the Share
Escrow Agent shall be deemed delivery of the Share Component to the Sellers
following fulfilment of the condition precedent that the Share Escrow Agent
is entitled and obliged to transfer possession of the Share Component to
the Sellers. The date on which the Share Escrow Agent receives the share
certificates for the Euronet Shares constituting the Share Component shall
be decisive for the timeliness of delivery of the Share Component. The
Share Escrow Agent shall immediately after receipt of the Share Component
(facsimile copies of the Euronet Shares are attached as Schedule 4.4 B)
confirm such receipt vis-a-vis the Parties and the Notary by facsimile.
4.5 The Sellers, the Buyer and the Share Escrow Agent have entered into an
agreement (the "Share Escrow Agent Agreement"), which is attached to this
deed as Schedule 4.5, whereby the Share Escrow Agent is jointly instructed
by the Sellers and the Buyer
4.5.1 to release and transfer the sole possession of Seller I Share
Component to Seller I and the sole possession of Seller II Share
Component to Seller II by way of courier delivery, immediately after
receipt of (i) a written request by the respective Seller and (ii) a
confirmation by the Notary that the SPA has not been dissolved
pursuant to Section 7.1 or 7.2 ; whereby the Parties hereby jointly
instruct the Notary to send such notice not prior to December 3, 2003,
or
4.5.2 to release and transfer the sole possession of the Share Component to
the Buyer by way of courier delivery, in case it receives confirmation
by the Notary that the SPA has been dissolved pursuant to Sections 7.1
or 7.2.
4.6 Registration Procedures and Expenses
Euronet shall
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4.6.1 subject to the receipt of necessary information from the Sellers,
prepare and file with the United States Securities and Exchange
Commission (the "SEC"), not later than 30 (thirty) days after Signing,
a registration statement on Form S3 (or, in the event Euronet is not
eligible to use Form S3, such other registration form as may be
utilized at such time by Euronet) (the "Registration Statement") to
enable the resale of the shares received by the Sellers comprising the
Share Component (the "Registrable Shares") (which term shall include
any securities into which or for which such shares may hereafter be
changed, converted or exchanged, and any other shares or securities
issued with respect to such shares to any Seller) by the Sellers from
time to time through the automated quotation system of the NASDAQ
National Market or in privately negotiated transactions;
4.6.2 use its commercially reasonable efforts, subject to the receipt of
necessary information from the Sellers, to cause the Registration
Statement to become effective as promptly as practicable, but in no
event later than 90 (ninety) days after Signing or, in the event the
Registration Statement is reviewed by the SEC, 120 days after Signing;
4.6.3 use its commercially reasonable efforts to prepare and file with the
SEC such amendments and supplements to the Registration Statement and
the prospectus used in connection therewith (the "Prospectus") as may
be necessary to keep the Registration Statement current (other than
during any Blackout Period (as defined below)) and effective for a
period not exceeding, with respect to each Seller's Registrable
Shares, the earlier of (i) the date on which each Seller may sell all
Registrable Shares then held by him without restriction by the volume
limitations of Rule 144(e) of the United States Securities Act of
1933, as amended (the "Securities Act"), or (ii) such time as all
Registrable Shares issued to each Seller have been sold pursuant to
the Registration Statement;
4.6.4 furnish to each Seller with respect to the Registrable Shares
registered under the Registration Statement such number of copies of
the Registration Statement, Prospectus and such other documents as
such Seller may reasonably request, in order to facilitate the public
sale or other disposition of all or any of the Registrable Shares by
such Seller; provided, however, that the obligation of Euronet to
deliver copies of the Prospectus to each Seller shall be subject to
the receipt by Euronet of reasonable assurances from such Seller that
he will comply with the applicable provisions of the Securities Act
and of such other securities or blue sky laws as may be applicable in
connection with any use of such Prospectus;
4.6.5 use its commercially reasonable efforts to (i) register or qualify
the Registrable Shares to be included in the Registration Statement
under such other securities laws or blue sky laws of such
jurisdictions in the United States as the Sellers shall reasonably
request, (ii) keep such registrations or qualifications in effect for
so long as the Registration Statement remains in effect and (iii) take
any and all such actions as may be reasonably necessary or advisable
to enable the Sellers to consummate the disposition in such
jurisdictions of such Registrable Shares; provided, however, that
Euronet shall not be required for any such purpose to (x) qualify
generally to do business as a foreign corporation in any jurisdiction
wherein it would not otherwise be required to qualify but for the
requirements of this Section 4.6.5, (y) subject itself to taxation in
any such jurisdiction or (z) consent to general service of process in
any such jurisdiction;
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4.6.6 promptly notify the Sellers and (if requested by any such Seller)
confirm such advice in writing when the Registration Statement, the
Prospectus or any Prospectus Supplement or post-effective amendment
has been filed, and, with respect to the Registration Statement or any
post effective amendment, when the same has become effective;
4.6.7 use its commercially reasonable efforts to list all such Registrable
Shares on each securities exchange and automated inter-dealer
quotation system on which such Registrable Shares are then listed or
admitted for trading;
4.6.8 use its commercially reasonable efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, audited financial
statements and
4.6.9 pay all expenses incident to Euronet's performance or compliance
herewith, including, without limitation, all SEC and any National
Association of Securities Dealers, Inc. registration and filing fees
and expenses, fees and expenses of compliance with securities and blue
sky laws, document preparation and printing expenses, messenger and
delivery expenses, fees and expenses of any escrow agent or custodian,
internal expenses (including, without limitation, all salaries and
expenses of Euronet's officers and employees performing legal or
accounting duties), fees and disbursements of counsel and independent
certified public accountants of Euronet (including the expenses of any
special audit or "comfort" letters required by or incident to such
performance and compliance), and fees and expenses of any other
persons, including special experts, retained by Euronet; provided,
however, that, notwithstanding the foregoing, the Sellers shall pay
all discounts or commissions to any underwriter or broker attributable
to the sale of Registrable Shares and the fees and disbursements of
any counsel, advisors or experts retained by any Seller.
4.6.10 With a view to making available to the Sellers the benefits of Rule
144 of the Securities Act (or its successor rule) (the "Rule 144") and
any other rule or regulation of the SEC that may at any time permit
the Sellers to sell Registrable Shares to the public without
registration, Euronet covenants and agrees to: (i) make and keep
public information available, as those terms are understood and
defined in Rule 144, until the earlier of (y) such date as all of the
Sellers' Registrable Shares may be resold pursuant to Rule 144(k) or
any other rule of similar effect or (z) such date as all of the
Sellers' Registrable Shares shall have been resold; and (ii) file with
the SEC in a timely manner all reports and other documents required of
Euronet under the Securities Act of 1954 as amended and under the
United States Securities Exchange Act of 1934, as amended (the
"Exchange Act").
4.6.11 It shall be a condition precedent to the obligations of Euronet to
take any action pursuant to this Section 4.6 that the Sellers shall
furnish to Euronet such information regarding itself, the Registrable
Shares to be sold by the Sellers, and the intended method of
disposition of such securities as shall be required to effect the
registration of the Registrable Shares.
4.7 Transfer of Shares After Registration; Suspensions; Blackouts
4.7.1 Each Seller agrees that he will not effect any sale or other transfer
of the Registrable Shares except as contemplated in the Registration
Statement referred to in Section 4.6 and as described below, and that
he will promptly notify Euronet of any
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changes in the information set forth in the Registration Statement
regarding each Seller or its respective plan of distribution.
4.7.2 Except in the event that Sections 4.7.3 or 4.7.4 below apply, Euronet
shall, if deemed necessary by Euronet, prepare and file from time to
time with the SEC a post-effective amendment to the Registration
Statement or a supplement to the related Prospectus or a supplement or
amendment to any document incorporated therein by reference or file
any other required document so that such Registration Statement will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and so that, as thereafter
delivered to purchasers of the Registrable Shares being sold there
under, such Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
4.7.3 Subject to Section 4.7.5 below, in the event: (i) of any request by
the SEC or any other federal or state governmental authority during
the period of effectiveness of the Registration Statement for
amendments or supplements to the Registration Statement or related
Prospectus or for additional information; (ii) of the issuance by the
SEC or any other federal or state governmental authority of any stop
order suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose; (iii) of the
receipt by Euronet of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the
Registrable Shares for sale in any jurisdiction or the initiation of
any proceeding for such purpose; or (iv) of any event or circumstance
which necessitates the making of any changes in the Registration
Statement or Prospectus, or any document incorporated or deemed to be
incorporated therein by reference, so that, in the case of the
Registration Statement, it will not contain any untrue statement of a
material fact or any omission to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or any omission to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; then Euronet shall deliver a
document in writing to each Seller (the "Suspension Notice") to the
effect of the foregoing and, upon receipt of such Suspension Notice,
each Seller will suspend offers and sales of Registrable Shares
pursuant to the Registration Statement (the "Suspension") until such
Seller's receipt of copies of a supplemented or amended Prospectus
prepared and filed by Euronet, or until he is advised in writing by
Euronet that the current Prospectus may be used, and has received
copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in any such Prospectus. In the
event of any Suspension, Euronet will use its commercially reasonable
efforts to cause the use of the Prospectus so suspended to be resumed
as soon as reasonably practicable after delivery of a Suspension
Notice to the Sellers.
4.7.4 Subject to Section 4.7.5 below, if at any time Euronet sends a
Suspension Notice to the Sellers Euronet also notifies the Sellers
that the event giving rise to such notice relates to a development
involving Euronet which occurred subsequent to the later of (i) the
effective date of the Registration Statement and (ii) the latest date
prior to such notice on which Euronet has amended or supplemented the
Xxxxxxxx-
00
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tion Statement, then Euronet shall not be required to use its
commercially reasonable efforts to make any changes to the
Registration Statement or Prospectus, or any document incorporated or
deemed to be incorporated therein by reference, during a period of up
to 45 (forty-five) consecutive days as specified in the notice
contemplated herein (the "Blackout Period"), and each Seller shall
suspend offers and sales of Registrable Shares pursuant to the
Registration Statement during each Blackout Period; provided, however,
that in any period of 365 consecutive days Euronet shall not be
entitled to avail itself of its rights under this Section 4.7.4 with
respect to more than two Blackout Periods, unless in the good faith
judgment of Euronet's Board of Directors, upon advice of counsel, the
offer and sale of Registrable Shares would be reasonably likely to
cause a violation of the Securities Act or the Exchange Act and result
in potential liability of Euronet.
4.7.5 Provided that a Suspension or a Blackout Period is not then in
effect, the Sellers may sell Registrable Shares under the Registration
Statement, provided that each such Seller arranges for delivery of a
current Prospectus to the transferee of such Registrable Shares. Upon
receipt of a request therefore, Euronet agrees to provide an adequate
number of current Prospectuses to each Seller and to supply copies to
any other parties requiring such Prospectuses.
4.7.6 In the event of a sale of Registrable Shares by a Seller, such Seller
shall also deliver to Euronet's transfer agent, with a copy to
Euronet, a notice of such sale so that the Registrable Shares may be
properly transferred. No notice to Euronet's transfer agent is
required unless the Sellers have received all information necessary to
inform Euronet's transfer agent.
4.8 Indemnification
4.8.1 Upon the registration of the Registrable Shares pursuant to Section
4.6, Euronet shall, and it hereby agrees to, indemnify and hold
harmless Sellers, the directors and officers and partners of such
Sellers and each other person, if any, who controls any Seller within
the meaning of the Securities Act, from and against any and all
losses, claims, damages or liabilities, joint or several, and expenses
(including reasonable fees of counsel and any amounts paid in any
settlement effected with the consent of Euronet which shall not be
unreasonably withheld) to which such Seller, such director, officer or
partner of such Seller or such controlling person may become subject
under the Securities Act, common law or otherwise, insofar as such
losses, claims, damages or liabilities or expenses (including all such
losses, claims, damages, liabilities and expenses arising out of any
actions or proceedings, whether commenced or threatened) arise out of
or are based upon (i) any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement or any
preliminary, final or summary Prospectus contained therein, or any
amendment or supplement thereto, or (ii) any omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statement therein not misleading;
provided, however, that Euronet shall not be liable to any such person
in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding, whether commenced or threatened,
in respect thereof) or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
omission made in such Registration Statement, or preliminary, final or
summary Prospectus, or amendment or supplement in reliance upon and in
conformity with written informa-
12
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tion furnished to Euronet by such person expressly for use in the
Registration Statement or preliminary, final or summary Prospectus,
amendment or supplement; and provided further, however, that Euronet
will not be liable in any case with respect to any untrue statement or
omission or alleged untrue statement or omission made in any
preliminary Prospectus or Prospectus, or in any amendment thereof or
supplement thereto, to the extent that any such loss, claim, damage or
liability (or action in respect thereof) resulted from the fact that
any Seller sold Registrable Shares to a person to whom there was not
sent or given, at or prior to the written confirmation of such sale, a
copy of the Prospectus as then amended or supplemented in any case
where such delivery is required by the Securities Act, if Euronet had
previously complied with the provisions of Section 4.6.4 and if the
untrue statement contained in or omission from such preliminary
Prospectus or Prospectus was corrected in the Prospectus as then
amended or supplemented. Such indemnification and reimbursement of
expenses shall remain in full force and effect regardless of any
investigation made by or on behalf of such Seller, such director,
officer or partner of such Seller or such controlling person and shall
survive the transfer of such Registrable Shares by such Seller.
4.8.2 Sellers hereby agree, jointly and severally, to indemnify and hold
harmless Euronet, each director and officer of Euronet within the
meaning of the Securities Act, from and against any and all losses,
claims, damages or liabilities, joint and several, and expenses
(including fees of counsel and any amounts paid in settlement effected
with the consent of the Sellers which shall not be unreasonably
withheld) to which Euronet, such director or officer or controlling
person may become subject under the Securities Act, common law or
otherwise, insofar as such losses, claims, damages or liabilities or
expenses (including all such losses, claims, damages, liabilities and
expenses arising out of any actions or proceedings, whether commenced
or threatened), arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact in or omission or
alleged omission to state a material fact required to be stated in the
Registration Statement, or any preliminary, final or summary
Prospectus contained therein, or any amendment or supplement thereto,
or necessary to make the statements therein not misleading, to the
extent, but only to the extent, such statement or alleged statement or
omission or alleged omission was made in reliance upon and in
conformity with written information furnished to Euronet by or on
behalf of such Seller expressly for use in the Registration Statement
or preliminary, final or summary Prospectus, amendment or supplement.
Such indemnification and reimbursement of expenses shall remain in
full force and effect regardless of any investigation made by or on
behalf of Euronet or any of its directors, officers or controlling
persons or any of the Sellers or their respective directors, officers,
partners and controlling persons and shall survive the transfer of
such Registrable Shares by such Seller.
4.8.3 Promptly after receipt by an indemnified party hereunder of written
notice of the commencement of any action or proceeding with respect to
which a claim for indemnification may be made pursuant to this Section
4.8, such indemnified party shall, if a claim in respect thereof is to
be made against an indemnifying party, give written notice to the
latter of the commencement of such action; provided, however, that the
failure of any indemnified party to give notice as provided herein
shall not relieve the indemnifying party of any obligations hereunder.
In case any such action is brought against an indemnified party, the
indemnifying party shall be entitled to
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participate in and to assume the defense thereof, jointly with any
other indemnifying party similarly notified, to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party,
and after such notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for
any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof unless the indemnifying party has
failed to assume the defense of such claim and to employ counsel
reasonably satisfactory to such indemnified person. An indemnifying
party who elects not to assume the defense of a claim shall not be
liable for the fees and expenses of more than one counsel in any
single jurisdiction for all parties indemnified by such indemnifying
party with respect to such claim, or with respect to claims separate
but similar or related in the same jurisdiction arising out of the
same general allegations. No indemnifying party shall consent to entry
of any judgment or enter into any settlement with respect to a claim
without the consent of the indemnified party, which consent shall not
be unreasonably withheld, or unless such judgment or settlement
includes as an unconditional term thereof the giving by the claimant
or plaintiff to such indemnified party of a release from all liability
in respect of such claim. No indemnified party shall consent to entry
of any judgment or enter into any settlement of any action the defense
of which has been assumed by an indemnifying party without the consent
of such indemnifying party, which consent shall not be unreasonably
withheld.
4.9 Contribution
4.9.1 If for any reason the indemnification provided for in Sections 4.8.1
or 4.8.2 is unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages or
liabilities specifically covered by the indemnification provisions set
forth in Sections 4.8.1 or 4.8.2, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a
result of such losses, claims, damages, liabilities or expenses in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified party as well as any other
relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by
reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact, has been made
by, or relates to information supplied by, such indemnifying party or
indemnified party, and the parties relative intent, knowledge, access
to information and opportunity to correct or prevent such action. The
amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 4.8.3, any
legal or other fees or expenses reasonably incurred by such party.
4.9.2 Euronet and the Sellers agree that it would not be just and equitable
if contribution pursuant to this Section 4.9 were determined by pro
rata allocation or by any other method of allocation which does not
take account of the equitable considerations referred to in Section
4.9.1. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
4.9.3 The contribution provided for in this Section 4.9 shall survive, with
respect to a Seller, the transfer of Registrable Shares by such
Seller, and, with respect to a
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SPA
Seller or Euronet, shall remain in full force and effect regardless of
any investigation made by or on behalf of any indemnified party.
4.9.4 Indemnification and contribution similar to that specified in
Sections 4.8.1 to 4.9 (with appropriate modifications) shall be given
by Euronet and each Seller with respect to any required registration
or other qualification of such Registrable Shares under any federal or
state law or regulation of a governmental authority other than the
Securities Act.
4.9.5 The indemnification required by this Section 4.8 shall be made by
periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or expense,
loss, damage or liability is incurred, subject to refund in the event
any such payments are determined not to have been due and owing
hereunder.
4.10 US-Securities Rules
4.10.1 Each Seller acknowledges that the Euronet Shares and the
Certificates have not been registered under the Securities Act and may
not be offered or sold within the United States or to, or for the
account or benefit of, US persons except in accordance with Regulation
S under the Securities Act ("Regulation S") or pursuant to an
exemption from the registration requirements of the Securities Act.
Each Seller represents and agrees that, with respect to offers and
sales outside the United States, he will offer and sell the Euronet
Shares and the Certificates only in accordance with Rule 903 under the
Securities Act. Each Seller agrees that he will not engage in hedging
transactions involving the Euronet Shares or the Certificates except
in compliance with the Securities Act and all applicable state and
foreign securities laws.
4.10.2 Until such time Euronet has fully registered the Euronet Shares
pursuant to Section 4.6 each Seller agrees that each of the Euronet
Shares will contain a legend substantially to the following effect:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT"), OR APPLICABLE STATE OR FOREIGN
SECURITIES LAWS. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IF
REGISTERED UNDER THE 1933 ACT AND APPLICABLE STATE AND FOREIGN
SECURITIES LAWS OR IF THE HOLDER PROVIDES THE COMPANY WITH AN
OPINION FROM COUNSEL ACCEPTABLE TO THE COMPANY STATING THAT AN
EXEMPTION FROM REGISTRATION IS AVAILABLE AT THE TIME OF SUCH
TRANSFER. HEDGING TRANSACTIONS INVOLVING THE SHARES REPRESENTED
BY THIS CERTIFICATE MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
WITH THE 1933 ACT AND ALL APPLICABLE STATE AND FOREIGN SECURITIES
LAWS.
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SPA
The Certificate I and Certificate II issued under this SPA will
contain a legend shown in the Certificates in Section 20 of each
Certificate to assure compliance with US security laws.
4.10.3 Notwithstanding the foregoing Section 4.10.2, Euronet agrees that
the legend contemplated thereby shall be removed, and Euronet shall
instruct its transfer agent to reissue certificates for such
securities without such legends, as applicable, in connection with a
transfer of such securities in accordance with the Registration
Statement or other transaction exempt from the registration
requirements of the Securities Act after which transaction such legend
is no longer required, in the reasonable opinion of counsel to
Euronet, to establish Euronet's compliance with any provision of the
Securities Act. In addition, from and after the effective date of the
Registration Statement, Euronet shall cause its transfer agent to
promptly reissue certificates for such securities without such legends
from time to time at the request of Sellers.
4.10.4 Notwithstanding any other provision of this SPA, if the aggregate
number of (i) Euronet Shares previously issued to the Sellers under
this Share Purchase Agreement and (ii) Election Shares (as defined in
the Certificate I and Certificate II) issuable to the Sellers of any
Subsequent Bearer under the Certificate I and Certificate II would
exceed 5 (five) % (1,403,561) of the total number of Euronet Shares
outstanding as of November 18, 2003 (Outstanding Euronet Shares
28,071,226) (the "5% Limit"), then the number of Election Shares that
exceed the 5% Limit shall not be issued until the requisite
stockholder approval is obtained pursuant to the Marketplace Rules of
The Nasdaq Stock Market, Inc. prior to their issuance. Nothing in this
Section shall affect the obligation of the Euronet Group (Issuers of
the Certificates) to make cash payments.
4.11 At the request of the Sellers, Euronet will assist the Sellers in
identifying a person or entity that is interested in buying all or a part
of the Share Component from the Sellers (the "Market Purchaser").
5 Earn-Out
As a further element of the Consideration, the Buyer shall make a cash
payment to the Sellers subject to the terms and conditions set out in this
Section 5 (the "Earn-Out"). The amount of the Earn-Out depends on the
EBITDA of the Company during the reference periods set out this Section 5.
The EBITDA may be influenced as a result of certain developments associated
with the service agreement contained in the Deed of Reference (the "Special
Customers Agreement") and possible future decisions of the other party of
the Special Customers Agreement (the "Special Customers").
5.1 EBITDA Q3/2003
EBITDA Q3/2003 has been determined by the Parties to be Euro 916,666.66
(Euro nine hundred sixteen thousand six hundred sixty six and sixty six
Eurocent). This figure is fixed and is not subject to any adjustments.
However, such determination shall not be binding on the Expert as Auditor
of the Interim Accounts.
5.2 EBITDA Q3/2004
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SPA
EBITDA Q3/2004 shall be the EBITDA of the Company in Euro for the 3rd
quarter, 2004 (July 1, 2004 to September 30, 2004) (the "Q3/2004"),
calculated on the basis of a profit and loss statement for the Company
covering Q3/2004 (the "Q3/2004 Accounts") pursuant to Sections 5.3 and 5.4.
5.3 Principles for the Calculation of EBITDA Q3/2004
The Q3/2004 Accounts shall be prepared and EBITDA Q3/2004 shall be
calculated in accordance with German GAAP (subject to the adjustments set
forth in Section 5.4), and, in particular, in compliance with the rule of
accounting and valuation consistency (Bilanzkontinuitat) in order to
provide a true and fair view of the profit situation of the Company in
Q3/2004. The Company's EBITDA (the "EBITDA" ) shall be composed of the
following items of the profit and loss statement of the Company pursuant to
Section 275 German Commercial Code (Handelsgesetzbuch - "HGB"):
5.3.1 The results from ordinary business operations (Ergebnis der
gewohnlichen Geschaftstatigkeit) pursuant to Section 275 Para. 2 No.
14 HGB,
5.3.2 plus extraordinary income (auBerordentliche Ertrage) pursuant to
Section 275 Para. 2 No. 15 HGB,
5.3.3 minus extraordinary expenses (auBerordentliche Aufwendungen)
pursuant to Section 275 Para. 2 No. 16 HGB,
5.3.4 minus interest and similar income (Zinsen und ahnliche Ertrage)
pursuant to Section 275 Para. 2 No. 11 HGB,
5.3.5 plus interest and similar expenses (Zinsen und ahnliche Aufwendungen)
pursuant to Section 275 Para. 2 No. 13 HGB, and
5.3.6 plus depreciation and amortization (Abschreibungen) pursuant to
Section 275 Para. 2 No. 7 HGB.
5.4 Exceptional Adjustments to EBITDA Q3/2004
EBITDA Q3/2004 as defined and calculated pursuant to Sections 5.2 and 5.3
shall be adjusted as follows:
5.4.1 Adjustments for Extraordinary Income / Expenses
Any (i) extraordinary income pursuant to Section 275 Para. 2 No. 15
HGB and (ii) any extraordinary expenses pursuant to Section 275 Para.
2 No. 16 HGB, will not be taken into account, unless (A) the amount
thereof remains within the usual range for any such item(s) in the
past, or (B) they are included as an item in the business plan
attached hereto as Schedule 5.4.1 (the "Business Plan").
5.4.2 Adjustments for Certain Agreements
(i) In the event any agreements are entered into or modified in a
fashion that adjusts commission or other compensation rates to an
extent greater than 20% of current rates, EBITDA Q3/2004 will be
adjusted to disregard the impact of the change in commission or
compensation rates exceeding 20%, except for those adjustments
related to the Special Customers Agreements pursuant to Sections
5.4.8 and 5.5.
(ii) In addition, the recognition of revenues from terminal or
hardware sales in the Q3/2004 Accounts other than those mentioned
under Section 5.4.2(iii)
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SPA
and 5.4.3 shall be limited to an amount equal to 15% more than
that included in the Business Plan.
(iii) Further, any revenues by the Company generated from the sale of
terminals to competitors of Euronet as reflected in Schedule
5.4.2(iii) shall be eliminated in the Q3/2004 Accounts for
purposes of calculating EBITDA Q3/2004, (a) unless the revenues
are based on relationships of the Company existing at Signing, or
(b) unless at least one member of the Euronet Group consented in
writing to such terminal sales or by way of shareholders'
resolution.
Any adjustment of the EBITDA Q3/2004 pursuant to Sections 5.4.2(ii)
and 5.4.2(iii) shall be made in such way that the EBITDA Q3/2004 shall
be calculated on the assumption that the respective terminal sales
have not taken place, thus not only the revenues shall be eliminated
but also any costs and expenses related to such terminal sales.
5.4.3 Adjustments for Intercompany Transactions
EBITDA Q3/2004 solely generated from terminal sales to Euronet Group
or companies affiliated to Euronet Group in the meaning of Section 15
et seq. German Act on Stock Corporations (Aktiengesetz - "AktG") (the
"Affiliated Company") shall be divided by the Multiple as defined in
Section 5.6.
5.4.4 Adjustments for certain Business Decisions of Euronet Group
Any negative impact on the EBITDA which occurs due to a decision or a
measure by the Euronet Group that is imposed on the Company and not
provided for in the Business Plan (such as, but not limited to, costs
and expenses related to internal controls, regular auditing on a
quarterly basis, finance director, IT Systems, financial push down
allocations etc.) will be eliminated in the calculation of EBITDA as
if such decision or measure would not have occurred. Only for the
EBITDA Q3/2004 but not for other EBITDA calculations under this SPA a
lump sum of Euro 15,000.00 (Euro fifteen thousand) will be deducted
from EBITDA for such measures.
5.4.5 Adjustments due to Competition
Any negative impact on the EBITDA of the Company which is based on a
competition by the Euronet Group or its affiliated companies in the
meaning of Section 15 AktG, to the Business Operations of the Company
in Germany or in countries other than Poland listed in the Business
Plan shall be eliminated in the Q3/2004 Accounts for the purpose of
calculating EBITDA Q3/2004.
5.4.6 Adjustments for changes in Accounting Policies
Any change in accounting policies applied by the Auditor (as defined
in Section 8) in connection with preparing the Audited Interim
Accounts that has a negative impact on the EBITDA shall be eliminated
in the Q3/2004 Accounts for the purpose of calculating EBITDA Q3/2004.
This provision shall not be deemed to cover any change in accounting
policies required in order to bring the Company into compliance with
German GAAP.
5.4.7 Adjustments for unusual Reduction of Expenses or unusual Increase of
Income
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Any (i) unusual shifting of expenses to other quarters than the third
quarter of 2004 or of income to the third quarter 2004 or (ii) unusual
reduction of expenses or unusual increase of income and (iii)
sacrificing long-term growth of the Company for an increase of the
short term results in Q3/2004 shall be adjusted to a usual expense or
income or eliminated in the Q3/2004 Accounts for the purpose of
calculating EBITDA Q3/2004.
5.4.8 Adjustments related to the Special Customers Agreement
If at any time before September 30, 2004 the Special Customers
Agreement is extended or replaced with a new agreement for a minimum
fixed term of up to December 31, 2006 (the "Extended Special Customers
Agreement"), EBITDA Q3/2004 shall be calculated on the assumption that
the terms and conditions of the Extended Special Customers Agreement
had been in effect for the entire Q3/2004.
5.4.9 Adjustments related to Certain Costs and Expenses
Costs and expenses of the Company in connection with the entering into
and the implementation of the SPA, including but not limited to costs
for the advisory boards or notarial fees, if any, shall be eliminated
in the Q3/2004 Accounts for the purpose of calculating EBITDA Q3/2004.
5.5 Reduced EBITDA Q3/2004
If Section 5.4.8 does not apply, EBITDA Q3/2004 may be reduced as set out
in this Section 5.5 as a result of certain developments associated with the
Special Customers Agreement and possible future decisions of the Special
Customers. The EBITDA Q3/2004 so reduced shall hereinafter be referred to
as the "Reduced EBITDA Q3/2004".
5.5.1 Reduction Scenario (1): In case of a notice by the Special Customers
on or before September 30, 2004 to the Company to terminate the
Special Customers Agreement, the EBITDA Q3/2004 shall be reduced by
the EBITDA which is generated through the Special Customers in Q3/2004
and for the determination of which Sections 5.3 and 5.4 shall apply
mutatis mutandis (the "Special Customers EBITDA Q3/2004").
5.5.2 Reduction Scenario (2): In all other cases than those described in
Section 5.4.8 and Section 5.5.1 the EBITDA Q3/2004 shall be subject to
the following adjustments:
(i) The Special Customers EBITDA Q3/2004 divided by the EBITDA
Q3/2004 (for the avoidance of doubt, including Special Customers
EBITDA Q3/2004) of the Company shall be the "Concentration
Factor".
(ii) If the Concentration Factor is
(a) greater than 0 but below or equal 0.35, the EBITDA Q3/2004
shall not be reduced,
(b) greater than 0.35 but below or equal 0.5, the EBITDA Q3/2004
shall be reduced by 25% (twenty five percent)
(c) greater than 0.50 but below or equal 0.55, the EBITDA
Q3/2004 shall be reduced by 35% (thirty five percent),
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SPA
(d) greater than 0.55 but below or equal 1, the EBITDA Q3/2004
shall be reduced by 50% (fifty percent).
5.6 Earn-Out Claims
5.6.1 The claims defined in Sections 5.6.2(i), 5.6.2(ii) and 5.6.2(iii) are
collectively referred to as "Earn-Out Claims". For the purpose of
calculating the Earn-Out Claims, the Multiple shall be 6 (six) (the
"Multiple").
5.6.2 Types of Earn-Out Claims
(i) Earn-Out Claim
The Earn-Out Claim shall be calculated based on the following
formula:
Earn-Out Claim = (EBITDA Q3/2004 - EBITDA Q3/2003) * 4 * Multiple
* 50%
(ii) Reduced Earn-Out Claim
The Reduced Earn-Out Claim shall be calculated based on the
following formula:
Reduced Earn-Out Claim = (Reduced EBITDA Q3/2004 - EBITDA
Q3/2003) * 4 * Multiple * 50%
(iii) Remaining Earn-Out Claim
The Remaining Earn-Out Claim shall be calculated based on the
following formula:
Remaining Earn-Out Claim = Earn-Out Claim - Reduced Earn-Out
Claim
5.6.3 In case there is no Reduced EBITDA Q3/2004, the Buyer is obliged to
make a cash payment to the Sellers in the amount of the Earn-Out Claim
subject to the terms and conditions set out in this Section 5.
5.6.4 In case there is a Reduced EBITDA Q3/2004, the Buyer is obliged to
make a cash payment in the amount of the Reduced Earn-Out Claim and in
addition in the amount of the Remaining Earn-Out Claim subject to the
terms and conditions set out in this Section 5.
5.6.5 For the avoidance of doubt, the Sellers are under no condition
obliged to make any payment to Buyer under this Section 5 in case, the
Earn-Out Claims are below 0 (zero).
5.7 Procedure for Determining Earn-Out Claims
The procedure of determining the Earn-Out Claims has two steps. In a first
step, the Earn-Out Claims will be preliminarily determined as set out in
Section 5.7.1 and will be referred to as the "Preliminary Earn-Out Claim",
the "Preliminary Reduced Earn-Out Claim", the "Preliminary Remaining
Earn-Out Claim", collectively referred to as "Preliminary Earn-Out Claims".
In a second step, the Earn-Out Claims will be finally determined as set out
in Section 5.7.2 and will be referred to as the "Final Earn-Out Claim", the
"Final Reduced Earn-Out Claim", the "Final Remaining Earn-Out Claim",
collectively referred to as "Final Earn-Out Claims".
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SPA
5.7.1 Determination of Preliminary Earn-Out Claims
(i) The EBITDA Q3/2004 and, if applicable, the Reduced EBITDA Q3/2004
will each be calculated by the Sellers based on the Q3/2004
Accounts to be prepared by the Sellers. Sellers will provide the
Buyer with the Q3/2004 Accounts. Sellers shall further notify
Buyer in writing, with copies to the Expert, the Notary, and the
Trustee, of the result of their calculation, stating the amount
of EBITDA Q3/2004 and, if applicable, the Reduced EBITDA Q3/2004,
the Preliminary Earn-Out Claim and, if applicable, the
Preliminary Reduced Earn-Out Claim and the Preliminary Remaining
Earn-Out Claim, on or before October 25, 2004 (the "Sellers'
Earn-Out Claims Notification"). Buyer will have the opportunity
to review the Q3/2004 Accounts.
(ii) Buyer is obliged vis-a-vis the Sellers to procure that the
Sellers, their successors or representatives will get full and
timely access by the Company or any legal successor of the
Company to the information required to establish the Preliminary
Earn-Out Claims.
(iii) Preliminary Agreement/Acceptance
(a) The Preliminary Earn-Out Claims are deemed to be determined
at the amount(s) reflected in the Sellers' Earn-Out Claims
Notification
(I) at such time as the Sellers receive a notice from Buyer
in writing with copies to the Expert, the Notary, and
the Trustee, confirming that it agrees with the
Preliminary Earn-Out Claim and, if applicable, the
Preliminary Reduced Earn-Out Claim and the Preliminary
Remaining Earn-Out Claim stated in the Sellers'
Earn-Out Claims Notification; or
(II) in case Buyer fails to furnish the Sellers with an
Objection Notice (as defined in Section 5.7.1(iv)(a)),
on or prior to the day on which the Objection Period
(as defined in Section 5.7.1(iv)(a)) expires. The
Sellers shall notify the Buyer, the Expert, the Notary,
and the Trustee, immediately after the lapse of the
Objection Period in writing in case the Sellers have
not received an Objection Notice in accordance with
Section 5.7.1(iv)(a).
(b) The Preliminary Earn-Out Claims are deemed to be determined
at such time as the Sellers and Buyer reach an agreement on
the Preliminary Earn-Out Claim and, if applicable, the
Preliminary Reduced Earn-Out Claim and the Preliminary
Remaining Earn-Out Claim (the "Preliminary Earn-Out Claims
Agreement") before the Preliminary Earn-Out Claims are
determined in accordance with Section 5.7.1(iv). Such
Preliminary Earn-Out Claims Agreement must be in writing and
must be signed by the Sellers and the Buyer. Buyer and the
Sellers must furnish the Notary and the Expert with a
certified copy of the Preliminary Earn-Out Claims Agreement
without undue delay, with copies to the Trustee.
(iv) Preliminary Expert Determination
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(a) In case Section 5.7.1(iii)(a)(I) or 5.7.1(iii)(b) do not
apply and Buyer disagrees with the Sellers' Earn-Out Claims
Notification, it shall notify the Sellers with copies to the
Expert, the Notary and the Trustee in writing thereof (the
"Objection Notice") within 15 (fifteen) Banking Days - days
on which banks are open for business in Frankfurt am Main -
(each a "Banking Day") after receipt of the Sellers'
Earn-Out Claims Notification by Buyer (the "Objection
Period"). In case the Buyer fails to furnish the Sellers
with an Objection Notice prior to the day the Objection
Period expires Section 5.7.1(iii)(a)(II) shall be
applicable. The Objection Notice must include the amount of
EBITDA Q3/2004 and, if applicable, the Reduced EBITDA
Q3/2004, the Preliminary Earn-Out Claim and, if applicable,
the Preliminary Reduced Earn-Out Claim and the Preliminary
Remaining Earn-Out Claim which Buyer deems correct.
(b) If the Sellers receive the Objection Notice in accordance
with Section 5.7.1(iv)(a), PricewaterhouseCoopers GmbH
Wirtschaftsprufungsgesellschaft with domicile in Frankfurt
am Main, branch Munich, acting as an expert (the "Expert")
(Schiedsgutachter), will preliminarily determine the
Preliminary Earn-Out Claim and, if applicable, the
Preliminary Reduced Earn-Out Claim and the Preliminary
Remaining Earn-Out Claim. The scope of review of the
Company's books, the Q3/2004 Accounts, etc. for such
preliminary determination by the Expert as well as all other
conditions of his involvement will be governed by the expert
agreement (Schiedsgutachtervertrag) attached hereto as
certified copy as Schedule 5.7.1 (the "Expert Agreement")
entered into between the Sellers, the Buyer and the Expert
on November 14 and November 19, 2003. The Sellers shall send
copies of the Objection Notice to the Expert, the Notary and
the Trustee.
(c) No later than on or before December 15, 2004 the Expert will
furnish Buyer, the Sellers, and the Notary, with copies to
the Trustee, with a preliminary written expert decision (the
"Preliminary Expert Decision ) including
(I) the preliminary EBITDA Q3/2004,
(II) if applicable, the preliminary Reduced EBITDA Q3/2004,
(III) the Preliminary Earn-Out Claim,
(IV) if applicable, the Preliminary Reduced Earn-Out Claim,
and
(V) if applicable, the Preliminary Remaining Earn-Out
Claim.
(d) The Preliminary Expert Decision does not have to include a
reasoning for the decision of the Expert.
(e) The Preliminary Earn-Out Claims are deemed to be determined
at such time as the Sellers and Buyer have received the
Preliminary Expert Decision. The Expert will inform in
writing each of the addressees of the Preliminary Expert
Decision when each of the other addressees has received the
Preliminary Expert Decision.
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5.7.2 Determination of Final Earn-Out Claims
(i) Agreement
The Final Earn-Out Claims are deemed to be determined at such
time as the Sellers and Buyer reach a final agreement on the
Final Earn-Out Claim and, if applicable, the Final Remaining
Earn-Out Claim and the Final Reduced Earn-Out Claim, and if
applicable the Earn-Out Shortfall and the Earn-Out Excess at any
point in time before these are determined in accordance with
Section 5.7.2(ii), however not prior to December 13, 2004. Such
an agreement (the "Final Earn-Out Claims Agreement") shall be
binding and final. In order to be binding and final such
agreement must be in writing and must be signed by the Sellers
and Buyer. Buyer and the Sellers must furnish the Notary and the
Expert with a certified copy of the Final Earn-Out Claims
Agreement without undue delay, with copies to the Trustee.
(ii) Expert Determination
(a) Immediately after the Preliminary Earn-Out Claims have been
determined in accordance with Section 5.7.1, the Expert,
acting on the terms of the Expert Agreement, shall audit the
Q3/2004 Accounts.
(b) On the basis of the Q3/2004 Accounts, the Expert shall
prepare an expert opinion, including a report on his audit
(the "Final Expert Opinion"), which must include
(I) the EBITDA Q3/2004,
(II) if applicable, the Reduced EBITDA Q3/2004,
(III) the Final Earn-Out Claim,
(IV) if applicable, the Final Reduced Earn-Out Claim,
(V) if applicable, the Final Remaining Earn-Out Claim,
(VI) the Earn-Out Shortfall (as defined in 5.7.2(ii)(h)),
(VII) the Earn-Out Excess (as defined 5.7.2(ii)(i)),
(c) In preparing the Final Expert Opinion the Expert shall give
the Sellers and the Buyer the opportunity to illustrate in
writing or to present verbally the basis of the
determination of EBITDA Q3/2004 or, if applicable, the
Reduced EBITDA Q3/2004 in the Sellers' Earn-Out Claims
Notification and the Objection Notice, respectively. The
Expert shall take into consideration their arguments and
exceptions within the professional discretion of a German
auditor applying German GAAP and shall explain his motives
for taking into account or rejecting such arguments and
exceptions in the Final Expert Opinion.
To the extent that in the course of determining EBITDA
Q3/2004 or, if applicable, the Reduced EBITDA Q3/2004 it is
not possible for the Expert to allocate with an appropriate
reasoning a position without doubt, the Expert shall be
authorized and obliged to make the allocation pursuant to
Section 317 Para. 1 BGB. In the Final Expert Opinion, he is
obliged to list the positions for which an allocation
without
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doubt was not possible and shall explain his motives for the
allocation pursuant to Section 317 Para. 1 BGB.
The Expert shall decide legal questions in connection with
the Final Expert Opinion.
(d) The Expert shall furnish Buyer, the Sellers and the Trustee
with his Final Expert Opinion by no later than January 31,
2005. The Expert will inform each of the addressees of the
Final Expert Opinion in writing when each of the other
addressees has received the Final Expert Opinion.
(e) Final Expert Decision
If and to the extent the Expert learns of any value
elucidative facts (wertaufhellende Tatsachen) pursuant to
Section 252 Xxxx. 0 Xx. 0 XXX (xxx "Adjustment Facts") on or
before March 31, 2005, he is entitled, at its sole
discretion, to adjust its Final Expert Opinion. Such
adjustment requires a written expert decision including a
report on his audit (the "Final Expert Decision"), which
determines
(I) the EBITDA Q3/2004,
(II) if applicable, the Reduced EBITDA Q3/2004,
(III) the Final Earn-Out Claim,
(IV) if applicable, the Final Reduced Earn-Out Claim,
(V) if applicable, the Final Remaining Earn-Out Claim,
(VI) the Earn-Out Shortfall (as defined in 5.7.2(ii)(h)),
(VII) the Earn-Out Excess (as defined 5.7.2(ii)(i)),
(VIII) the Adjustment Facts.
(f) Section 5.7.2(ii)(c) shall apply mutatis mutandis to any
influence the Adjustment Facts have on the determination of
EBITDA Q3/2004 or, if applicable, the Reduced EBITDA
Q3/2004.
(g) The Expert is obliged to furnish Buyer, the Sellers, the
Notary and the Trustee, with such Final Expert Decision no
later than on or before April 30, 2005. The Expert will
inform each of the addressees of the Final Expert Decision
in writing when each of the other addressees has received
the Final Expert Decision.
(h) The Earn-Out Shortfall is the amount, if any, by which the
Preliminary Earn-Out Claims fall short of the Final Earn-Out
Claims and which amount is owed by the Buyer to the Sellers
("Earn-Out Shortfall").
(i) The Earn-Out Excess is the amount, if any, by which the
Preliminary Earn-Out Claims exceed the Final Earn-Out Claims
and which amount shall be released from the Notary Account I
by the Notary to the Buyer and, to the extent such amount
exceeds the funds in No-
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tary Account I, is owed by the Sellers to the Buyer
("Earn-Out Excess").
(j) Subject to Section 5.7.2(ii)(k), the Final Earn-Out Claims
are deemed to be determined by the Final Expert Decision.
The Final Earn-Out Claims are deemed to be determined at
such time Buyer and the Sellers have received the Final
Expert Decision.
(k) In case the Expert does not furnish a Final Expert Decision
on or before April 30, 2005, to Buyer and the Sellers, the
Final Expert Opinion shall determine the Final Earn-Out
Claims and in such case the Final Earn-Out Claims are deemed
to be determined on May 1, 2005.
5.8 Payment of Earn-Out Claims
5.8.1 Earn-Out Claims Due Date
All claims under this Section 5 fall due on January 14, 2005 (the
"Earn-Out Claims Due Date"). For the avoidance of doubt, the Earn-Out
Claims Due Date determines the date as from which claims under this
Section will bear interest in accordance with Section 5.8.2 and not
the date on which such claims are necessarily payable.
5.8.2 Interest
Any funds which have to be paid pursuant to the Earn-Out Claims by
Buyer to the Sellers or to the Notary shall bear annual interest in
the amount of 5 (five) percentage points above the German base rate
according to Section 247 BGB, as amended from time to time, as of the
Earn-Out Claims Due Date (the "Buyer Earn-Out Interest"). Any funds,
which have to be paid by the Sellers to Buyer pursuant to the Earn-Out
Claims, shall bear annual interest in the amount of 5 (five)
percentage points above the German base rate according to Section 247
BGB as amended from time to time, as of the Earn-Out Claims Due Date
(the "Sellers' Earn-Out Interest"). Any funds the Notary receives
shall bear such annual interest that the Notary collects on the funds
received, until such time the funds are released (the "Escrow
Interest").
Any Buyer Earn-Out Interest and any Sellers' Earn-Out Interest shall
be payable at the point in time the respective principal claim
(Hauptforderung) is payable.
5.8.3 Payment of Preliminary Earn-Out Claims
Buyer shall pay at the later of (i) January 14, 2005, or (ii) 10 (ten)
Banking Days after the Preliminary Earn-Out Claims are determined in
accordance with Section 5.7.1
(i) to each Seller,
(a) 35 % of the Preliminary Earn-Out Claim and Buyer Earn-Out
Interest thereon,
or, as the case may be,
(b) 35% of the Preliminary Reduced Earn-Out Claim and Buyer
Earn-Out Interest thereon,
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SPA
(ii) to the Notary into the Notary Account I (as defined in Section
5.9.2)
(a) 30 % of the Preliminary Earn-Out Claim and Buyer Earn-Out
Interest thereon,
or, as the case may be,
(b) 30% of the Preliminary Reduced Earn-Out Claim and Buyer
Earn-Out Interest thereon,
(iii) to the Notary into the Notary Account II (as defined in Section
5.9.2)
100% of the Preliminary Remaining Earn-Out Claim if any, and
Buyer Earn-Out Interest thereon.
5.8.4 Payment of the Earn-Out Shortfall
(i) Earn-Out Shortfall, if any, is payable (zahlbar) at the earlier
of
(a) May 15, 2005, or alternatively
(b) 10 (ten) Banking Days after such time the Final Earn-Out
Claims are determined on the basis of the Final Expert
Decision in accordance with Section 5.7.2.
(ii) Buyer shall pay to the Sellers 100% of the Earn-Out Shortfall, if
any, and Buyer Earn-Out Interest thereon.
5.8.5 Payment of Earn-Out Excess not held in Notary Account I
If the Earn-Out Excess exceeds the amount to be released to Buyer
pursuant to Section 5.10.1(i)(a), the Seller who received the payments
under Section 5.8.3(i) shall pay to Buyer the amount of such excess 10
(ten) Banking Days after the Final Earn-Out Claims are determined in
accordance with Section 5.7.2.
5.9 Method of Earn-Out Payment
5.9.1 Payment to Sellers' Bank Accounts
Any payments by the Buyer to the Sellers under this Section 5 shall be
made free of costs and charges in immediately available irrevocable
funds by wire transfer into the Sellers' Bank Account of the
respective Seller unless the Buyer has received a written notification
by any of the Sellers not later than five Banking Days prior to the
day on which the respective payment is payable nominating a different
account for the respective Seller.
5.9.2 Notary Accounts
To the extent applicable, all payments to the Notary pursuant to
Section 5.8.3 will be made free of costs and charges in immediately
available irrevocable funds by wire transfer to the two bank accounts
specified in Schedule 5.9.2 (the "Notary Account I and II").
5.10 Release from the Notary Accounts
5.10.1 Release from the Notary Account I
(i) The Notary shall release within 10 (ten) Banking Days after the
Final Earn-Out Claims are determined in accordance with Section
5.7.2
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(a) to Buyer the Earn-Out Excess, if any, and Sellers' Earn-Out
Interest thereon,
(b) to the Sellers any amounts in the Notary Account I following
prior release to Buyer in accordance with Section
5.10.1(i)(a), if any, and Escrow Interest thereon, if any,
provided, that an amount of Euro 2,200,000.00 (two million
two hundred thousand) for the Sellers increased by an amount
of 10 (ten) % of the Final Earn-Out Claim or, if applicable,
the Reduced Earn Out Claim, (the "Minimum Escrow Amount")
remains in Notary Account I until such point in time
specified in Section 5.10.1(ii). The Minimum Escrow Amount
shall under no circumstances be higher than the amount of
the payment of the Issuers under Section 5.3.2 (ii) of the
Certificates to the respective Bearer and of the Buyer under
Section 5.8.3(ii) to the respective Seller and it can in
particular under no circumstances lead to an obligation of
each Seller to pay any amount into escrow as Minimum Escrow
Amount.
(ii) Release of Minimum Escrow Amount from Notary Account I
(a) The Parties herewith jointly and irrevocably instruct the
Notary, to immediately release the Minimum Escrow Amount to
the Sellers, if
(I) a joint written instruction to this effect by the
Sellers and the Buyer has been presented to the Notary,
or
(II) September 30, 2005 has lapsed and
the Notary has not received prior to September 30, 2005
a copy of the notification by the Buyer to the Sellers
delivered in accordance with Section 15.18.4 as well as
sufficient proof of such delivery,
or
the Buyer does not present to the Notary prior to
September 30, 2005 a court stamp confirming filing of
legal proceedings or any other confirmation by the
court which renders proof that the Buyer has initiated
legal proceedings which interrupt the limitation period
for claims under Sections 14 or 16;
or
(III) October 31, 2005 has lapsed
and the Notary has received prior to September 30, 2005
a copy of the notification by the Buyer to the Sellers
delivered in accordance with Section 15.18.4 as well as
sufficient proof of such delivery,
and
the Buyer has not presented to the Notary on or before
October 31, 2005 a court stamp confirming filing of
legal proceed-
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ings or any other confirmation by the court which
renders proof that the Buyer has initiated legal
proceedings which interrupt the limitation period for
claims under Sections 14 or 16.
(b) In case the Buyer has presented to the Notary any of the
notifications under Section 5.10.1(ii)(a)(II) or
5.10.1(ii)(a)(III) in time, the Notary is herewith jointly
and irrevocably instructed to immediately release the
Minimum Escrow Amount to the Sellers, if the Sellers
(I) deposit with the Notary an irrevocable and directly
enforceable (selbstschuldnerische) guarantee
(Burgschaft) regarding the Buyer's claims under Section
14 through 16 by a respected German (savings) bank in
the amount of the Minimum Escrow Amount and a duration
of at least three years, and
(II) irrevocably instruct the Notary to hand out said
guarantee to the Buyer immediately after release of the
Minimum Escrow Amount to the Sellers.
(c) The Buyer is obliged to return the aforementioned guarantee
to the Sellers or to the (savings) bank, in case no claims
under Sections 14 through 16 exist vis-a-vis the Sellers.
(iii) Each Seller shall receive one half of the amounts to be released
to the Sellers from Notary Account I.
5.10.2 Release from the Notary Account II
(i) The Notary shall release (a) to each Seller from Notary Account
II at such time the Base EBITDA and the Compound EBITDA are
finally determined in accordance with Sections 5.11.2 or 5.11.3
half of the amount calculated in accordance with Section 5.10.2
(the "Release Earn-Out Amount") and Escrow Interest thereon, and
(b) the remaining amount from Notary Account II, if any, to
Buyer. Section 5.9.1 shall apply mutatis mutandis.
(ii) The Release Earn-Out Amount shall be calculated as follows
Release Earn-Out Amount = (Remaining Earn-Out Claim) multiplied
by ([square root ([(Compound EBITDA minus Base EBITDA) divided by
Base EBITDA] plus 1) minus 1] divided by 0.33)
(a) Base EBITDA shall be the EBITDA of the Company in Euro for
the period October 1, 2003 to September 30, 2004 calculated
in accordance with Section 5.11 (the "Base EBITDA").
(b) Compound EBITDA shall be the EBITDA of the Company in Euro
for the period October 1, 2005 to September 30, 2006
calculated in accordance with Section 5.11 (the "Compound
EBITDA").
(iii) For the avoidance of doubt, the Release Earn-Out Amount defines
the portion of the Remaining Earn-Out Claim to be released to the
Sellers based on the ratio of (i) compound average growth rate
("CAGR") for a period of
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two years between Base EBITDA and Compound EBITDA and (ii) a CAGR
of 33%.
(iv) Irrespective of the amount of the Release Earn-Out Amount, the
Notary is not obliged to release to the Sellers more than the
Remaining Earn-Out Claim increased by Escrow Interest thereon.
5.10.3 Positive Escrow Balance
The Notary must release in full or in part any amount from Notary
Account I or Notary Account II, as long as such release does not cause
a negative balance on Notary Account I or Notary Account II.
5.11 Procedure for Determining Base EBITDA and Compound EBITDA
5.11.1 Sellers' Base EBITDA and Compound EBITDA Notification
The Seller(s) will initially calculate
(i) Base EBITDA based on the profit and loss statement for the
Company covering the period October 1, 2003 to September 30, 2004
to be prepared by the Sellers (the "04 Accounts") and according
to Sections 5.3, 5.4.1, 5.4.4, 5.4.5, 5.4.6 and 5.4.9 which shall
apply mutatis mutandis.
(ii) Compound EBITDA based on the profit and loss statement for the
Company covering the period October 1, 2005 to September 30, 2006
(the "06 Accounts") and in accordance with Sections 5.3, 5.4.1,
5.4.4, 5.4.5, 5.4.6 and 5.4.9 which shall apply mutatis mutandis.
The Sellers will provide the Buyer with the 04 Accounts and the 06
Accounts and notify the Buyer in writing of the result of their
calculation, stating the amount of Base EBITDA on or before October
25, 2004 (the "Sellers' Base Notification") and the Compound EBITDA on
or before October 25, 2006 (the "Sellers' Compound EBITDA
Notification"). Buyer will have the opportunity to review the Accounts
04 and the Accounts 06.
5.11.2 Agreement between Sellers and Buyer
At such time Sellers and Buyer reach a final and binding agreement on
the amount of Base EBITDA (the "Base EBITDA Agreement") and on the
amount of Compound EBITDA (the "Compound EBITDA Agreement") the Base
EBITDA and/or the Compound EBITDA shall be deemed finally determined.
In order to be binding and final, such agreement must be in writing
and must be signed by the Sellers and Buyer. Buyer and the Sellers
have to notify the Notary and the Expert thereof without undue delay
and furnish the Notary with a certified copy of the Base EBITDA
Agreement and/or the Compound EBITDA Agreement respectively, with
copies to the Trustee.
5.11.3 Expert Decisions
In case Buyer and Sellers reach no Base EBITDA Agreement or no
Compound EBITDA Agreement
(i) on or before November 14, 2004 regarding the Base EBITDA or
(ii) on or before November 14, 2006 regarding the Compound EBITDA
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the Expert will carry out an audit to determine Base EBITDA and
Compound EBITDA. The Expert Agreement will govern the terms and
conditions of his involvement. The Expert must complete his
review at the latest on or before January 31, 2005 regarding Base
EBITDA and on or before January 31, 2007 regarding the Compound
EBITDA. The Expert will furnish the Buyer, the Sellers and the
Notary and the Trustee, with a final written expert decision
regarding the final determination of Base EBITDA in no case later
than April 30, 2005 (the "Base Expert Decision") and regarding
the Compound EBITDA in no case later than April 30, 2007 (the
"Compound Expert Decision"). If and to the extent the Expert
learns of any value elucidative facts pursuant to Section 252
Para. 1 No. 4 HGB on or before March 31, 2005 relevant for the
Base Expert Decision or before March 31, 2007 relevant for the
Compound Expert Decision, he is entitled, at its sole discretion,
to adjust its Base Expert Decision or Compound Expert Decision,
respectively. Section 5.7.2(ii)(c) shall apply mutatis mutandis
to the Base Expert Decision and the Compound Expert Decision and
any adjustment thereof on the basis of elucidative facts pursuant
to Section 252 Para. 1 No. 4 HGB.
The Expert shall inform each of the addressees of the Base Expert
Decision in writing when each of the other addressees has
received the Base Expert Decision. The Expert will inform each of
the addressees of the Compound Expert Decision in writing when
each of the other addressees has received the Compound Expert
Decision. The Base EBITDA is deemed to be finally determined at
such time the Sellers and Buyer receive the Base Expert Decision.
The Compound EBITDA is deemed to be finally determined at such
time the Sellers and the Buyer receive the Compound Expert
Decision.
5.12 Access to Information
Section 6.9 shall apply mutatis mutandis for the purpose of determining the
Earn-Out Claims.
5.13 Information / Copies
For the avoidance of doubt, copies of any documentation in connection with
this Section 5, including but not limited to notifications, decisions,
opinions that are relevant for determining the Earn-Out Claims as well as
any confirmations that are relevant for the payment and release process,
have to be sent by the respective addressor to the Buyer, the Sellers, the
Notary, the Expert and the Trustee.
6 Certificates
6.1 Each of the Sellers shall receive from the Buyer and Euronet, the latter
acting on account of the Buyer, being jointly and severable one fully
executed and legally effective Certificate (the "Certificate I" and
"Certificate II", collectively the "Certificates") with identical terms and
conditions according to the specimen contained in Schedule 6.1.
6.2 The Buyer and Euronet herewith transfer sole ownership in Certificate I to
Seller I and the sole ownership in Certificate II to Seller II, in each
case by way of issuing the Certificates constituting a bond (Begebung einer
Schuldverschreibung) to the respective Seller, subject to fulfillment of
the Conditions Precedent save for Section 18.1.2. Each Seller accepts such
transfer herewith.
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SPA
6.3 At Signing, the Buyer and Euronet shall transfer the sole possession of
Certificate I and the sole possession of Certificate II to the Notary. Such
transfer by the Buyer and Euronet to the Notary shall be deemed transfer of
sole possession of the respective Certificates to the Sellers, subject to
the fulfillment of the Conditions Precedent save for Section 18.1.2.
6.4 The Notary is hereby jointly instructed by the Sellers, the Buyer and
Euronet to release and transfer the sole possession of Certificate I to
Seller I and the sole possession of Certificate II to Seller II by way of
courier delivery, immediately after the Conditions Precedent save for
Section 18.1.2 are met, unless Section 6.5 applies.
6.5 The Notary is hereby jointly instructed by the Sellers, the Buyer and
Euronet to release and transfer the sole possession of Certificate I and
the sole possession of Certificate II to the Buyer (also on behalf of
Euronet) by way of courier delivery, but not before December 3, 2003 in the
event this SPA has been dissolved pursuant to Section 7.1 or 7.2.
6.6 Euronet and the Buyer undertake vis-a-vis each Seller that they will
exercise their Election Rights (as defined in the Certificates), in the
same way under Certificate I and Certificate II, i.e. they will elect to
settle the Certificate Claims (as defined in the Certificates), if any, by
transferring the same number of Election Shares to each Seller under
Certificate I and Certificate II.
6.7 The Sellers undertake vis-a-vis the Buyer and Euronet that Sellers'
Certificate Claims Notifications under both Certificate I and Certificate
II and the Sellers' Earn-Out Claims Notification shall be identical with
respect to EBITDA Q3/2004 and, if applicable, Reduced EBITDA Q3/2004.
Euronet Group undertakes vis-a-vis the Sellers and in favor of any Bearer
as defined in the Certificates that the Buyers Objection Notice and the
Issuers Objection Notice under the Certificates shall be identical with
respect to EBITDA Q3/2004 and, if applicable, Reduced EBITDA Q3/2004.
6.8 Each Seller hereby assumes joint and several liability with any Subsequent
Bearer of a Certificate issued to the respective Seller (defined in the
Certificates) for payment to the Buyer of the Excess (defined in the
Certificates), but only provided that the ownership in and possession of
the respective Certificate has been transferred by a Seller to a Subsequent
Bearer after the payments under Section 5.3.2 (i) of the respective
Certificate have been made. Sellers will indemnify the Euronet Group and
hold it harmless from and against any cost, losses and damages arising from
any refusal of the Bearer to comply with the terms of the Certificate.
6.9 The Euronet Group is obliged vis-a-vis the Sellers and each Bearer (as
defined in the Certificates) of the Certificates to procure that the
Sellers their successors or their representatives will get full and timely
access by the Company or any legal successor of the Company to the
information required to establish the Certificate Claims under the
Certificates. The aforementioned sentence applies mutatis mutandis to each
Seller, as long as the respective Seller is a managing director of the
Company. If either the Euronet Group or both Sellers fail to comply with
the obligations set out in this Section 6.9, the Expert shall be entitled
upon written request of either the Sellers or the Buyer to finally
determine between the Sellers and the Buyer whether full access has been
granted by the Sellers or the Buyer and shall in such case also be entitled
to make assumptions based on equitable discretion on the account of the
contravening party (Section 317 Para. 1 BGB) and to make a binding
determination on the relevant Certificate Claims.
6.10 Seller I herewith irrevocably authorizes Seller II, and Seller II herewith
irrevocably authorizes Seller I, to represent him in relation to all its
rights and duties under this SPA, and in
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particular to the rights under Section 5 and under the Certificates, in
case Seller I or Seller II is deemed physically or mentally incapable of
fulfilling his rights and obligations under this SPA, and in particular
Section 5 and under the Certificates.
7 Dissolution of Agreement; Break-up Fee
7.1 The Parties enter into this SPA under the dissolving condition (auflosende
Bedingung) that on or before November 24, 2003 the condition precedent set
out in Section 18.1.1 has not been met. The Buyer is entitled to prevent
the dissolution of this SPA according to this Section 7.1 by delivering a
letter, duly signed by the person appearing ad 2 on behalf of the Buyer to
the Notary, which states that this SPA shall enter into full force and
effect ("Funding Notice"). The Funding Notice shall be received by the
Notary at the latest by November 24, 2003 (inclusive) by 6 pm CET. The
Notary shall immediately inform the Sellers of the receipt of the Funding
Notice. The Parties agree that in this case the SPA shall not be dissolved
and shall remain in full force and effect.
7.2 In the event (i) the Notary receives a Funding Notice within the time limit
set out in Section 7.1 and (ii) the closing condition pursuant to Section
18.1.1 is not fulfilled on or before November 27, 2003, then the Sellers
shall jointly be entitled to dissolve this SPA by delivering a letter, duly
signed by the person appearing ad 1 on behalf of the Sellers to the Notary
("Dissolution Notice"). This right may only be exercised jointly by the
Sellers through the person appearing ad 1 and at the latest on or before
December 2, 2003. The Dissolution Notice shall not result in a dissolution
of the SPA, if it is received by the Notary on the day on which the Cash
Component has been deposited on the Cash Component Notary Account or
thereafter. For the timeliness of the Funding Notice and the Dissolution
Notice, the day of receipt by the Notary shall be decisive and not the day
of forwarding. In order to be effective, the Funding Notice and the
Dissolution Notice under Section 7.1 and 7.2 may only be sent to the
Notary. The Notary shall immediately inform the Buyer of the receipt of the
Dissolution Notice.
7.3 In the event this SPA is dissolved pursuant to Sections 7.1 or 7.2 all
undertakings and obligations of the Parties hereunder shall cease to exist,
except for those set out in Sections 7, 21.2, 25, 27, and 29 and all
instructions to the Notary and the Share Escrow Agent. However, in the
event of a dissolution pursuant to Section 7.1 or 7.2, the Buyer shall pay
on December 5, 2003 to each Seller a lump sum break-up fee in the amount of
Euro 5,000.00 (Euro five thousand) in respect of the costs incurred by the
Sellers in connection with the notarization of this SPA. The break-up fee
is payable in Euro free of costs and charges in immediately available
irrevocable funds by wire transfer into the Sellers' Bank Accounts. For the
avoidance of doubt, in the event of a dissolution pursuant to Section 7.1
or 7.2, no party to the SPA shall be entitled to compensation for damages
or losses.
8 Interim Accounts
The Sellers have prepared the balance sheet, including an asset ledger
(Anlagespiegel) in the form stipulated by Section 268 Para. 2 HGB, and the
profit and loss statement for the Company covering the first ten months of
the financial year 2003 of the Company ending on October 31, 2003 (the
"Interim Accounts' Date", the "Interim Accounts") (an excerpt copy of the
balance sheet and the profit and loss statement of which is attached as
Schedule 8, and a full version of which was delivered to the Buyer at the
Signing). The Interim Accounts will be audited by the Expert after Closing
(the "Audited Interim Accounts"). The Expert shall furnish the Sellers and
the Buyer with a written audit report as soon as
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practical after Closing. Each Party shall confirm receipt of the written
audit report immediately afterwards vis-a-vis the other Party and the
Auditor.
Part II. Directors, Earn Out Protection, Release from Security
9 Status of the Sellers as Managing Directors
9.1 In case there is no Reduced EBITDA Q3/2004, the Sellers shall remain
managing directors of the Company at least for the period up to December
31, 2005 ("Protection Period I"); if there is a Reduced EBITDA Q3/2004 such
period will be extended until March 31, 2007 ("Protection Period II").
Protection Period I and Protection Period II, whichever applies, shall
hereinafter be referred as "Protection Period". During the Protection
Period, the Sellers will not resign from office. The rights to resign from
office or to recall the Sellers from their offices for cause (aus wichtigem
Xxxxx) remain unaffected. The Parties will undertake all necessary steps to
implement the limitation of the right to recall the Sellers as managing
directors in the articles of association of the Company.
9.2 During the Protection Period I the Buyer will appoint not more than one
additional managing director of the Company without the prior written
consent of the Sellers.
9.3 As of the Signing the existing service contracts between Sellers and the
Company shall be cancelled and be replaced by new service contracts (the
"Service Contracts") in the form attached in Schedule 9.3. There are no
outstanding claims under the existing service contracts up to the Interim
Accounts' Date and thereafter only regular monthly salary, expenses,
insurance premiums, etc. and no claims for bonuses according to Section 5
b) and c) of the existing service contracts. The existing service contracts
have not been amended since the Interim Accounts' Date.
9.4 Each Seller shall have for a period of three years (the "Observation after
Closing Period") the right to attend at its sole discretion all meetings of
the Euronet's Board of Directors (but not committees, sub-committees or
special committees of the Euronet's Board of Directors to the extent that
this is legally not permitted) in a non-voting observer capacity. This
right is not deemed to be exercised by the Sellers unless the respective
Seller notifies Euronet in writing about his intention to exercise such
right. During the Observation after Closing Period, Euronet shall give the
Seller who has exercised his right (the "Observer") copies of all notices,
minutes, consents, and other materials that it provides to its directors;
provided that:
9.4.1 The Observer shall agree to hold in confidence and trust and to act
in a fiduciary manner with respect to all information so provided, and
shall take proper steps to maintain the confidentiality of any price
sensitive information affecting Euronet's securities; and
9.4.2 Euronet reserves the right to withhold any information and to exclude
the Observer from any meeting or any part of any meeting if:
(i) access to such information or attendance at such meeting could
adversely affect the attorney-client privilege between the
Euronet and its counsel; or
(ii) the Observer becomes associated or affiliated with a competitor
of Euronet.
9.5 If it becomes possible, under the NASDAQ National Market rules, to appoint
an additional management shareholder to its Board, the Sellers are entitled
to request Euronet to nomi-
33
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nate for appointment one of the Sellers proposed by the Sellers in writing,
and Euronet shall recommend the respective Seller's election in writing to
its shareholders at the next annual meeting of its shareholders.
9.6 Euronet Group procures, that the corporate seat and business address of the
Company will not be moved from its current location without the written
consent of the Sellers.
10 Earn-Out Protection
10.1 Euronet Group acknowledges that the Sellers have an interest in realizing
the highest possible level of EBITDA in the third quarter of 2004. During
the Protection Period, provided no Negative Deviation, as defined below,
shall have occurred, the Sellers, in their capacity as managing directors
of the Company, shall be permitted to manage the business of the Company so
as to maximize such EBITDA, subject to the following principles:
10.1.1 The Sellers shall manage the business of the Company consistent with
past practice and in accordance with the Business Plan.
10.1.2 Euronet Group shall not cause the Company to deviate from the
Business Plan.
10.1.3 Buyer shall not take any action that could reasonably be expected to
have an adverse impact on the financial performance of the Company as
reflected in the Business Plan.
10.1.4 For purposes of this SPA, the term "Negative Deviation" shall mean a
negative deviation of the realized aggregate EBITDA of the Company for
the period from January 1, through April 30, 2004 ("Deviation Period
I") determined on May 15, 2004 ("Deviation Date I") or for the period
from May 1, through August 31, 2004, ("Deviation Period II")
determined on September 15, 2004 ("Deviation Date II") compared with
the planned aggregate EBITDA set out in the Business Plan for the
financial year 2004 resolved by the shareholders (the "Business Plan
EBITDA") for the respective Deviation Period on the respective
Deviation Date of more than 25 (twenty-five) percent. To the extent
any negative impact on the EBITDA of the Company is caused by a
business measure to which at least one member of the Euronet Group
consented, such negative impact shall be eliminated for the purpose of
determining a Negative Deviation.
10.1.5 Sellers acknowledge that, (i) as a subsidiary of Euronet (which is a
public company), certain administrative, financial, reporting and
management functions will be required from the Company, including
without limitation, (A) the maintenance of internal controls and
procedures regarding financial transactions and the disclosure of
material information that is required to be included in the Euronet's
United States Securities Exchange Commission (the "SEC") filings, and
(B) the review of the Company's accounts on a quarterly basis and
audit of the Company's accounts on an annual basis by the Company's
auditors; and (ii) the Company will be bound by the financing and
other agreements imposing those obligations on the entire group of
companies led by Euronet that are listed in Schedule 10.1.5. Euronet
shall be entitled to ensure compliance of the Company with such
functions and agreements. However, any negative impact on the EBITDA
of the Company or the EBITDA Q3/2004, the Base EBITDA or the Compound
EBITDA by any measures under this Section 10.1.5 shall be eliminated
for the purpose of calculating a Negative Deviation, EBITDA Q3/2004,
the Base EBITDA or the Compound EBITDA. Euronet may only request
administrative, financial, reporting and management functions from
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SPA
the Company (i) to the extent those functions apply to Euronet or
other subsidiaries of Euronet listed in Schedule 10.1.5 and (ii) to
the extent those functions comply with the Articles (as defined in
Section 10.2).
10.1.6 The articles of association of the Company to be amended by the
shareholders' resolution in accordance with Schedule 10.1.6 shall
contain a clause to the effect that Buyer's and/or its successors'
share(s) in the Company can be redeemed (Einziehung) by unanimous
resolution of all shareholders other than the Buyer and its successor,
against payment of a compensation if a proceeding is brought
voluntarily or involuntarily against the Buyer, its legal successor or
Euronet, and not dismissed within 3 (three) months, under Chapter VII
or Chapter XI of the U.S. Bankruptcy Code or a comparable German or
other legislation. The compensation payable shall be 80 (eighty)
percent of the fair market value of the share(s) to be redeemed. The
compensation for the share(s) to be redeemed shall be limited based on
the nominal value of the share(s) to be redeemed in relation to the
total nominal share capital of the Company in such way that the total
compensation can in no event be more than Euro 14,000,000.00 (Euro
fourteen million) for 100 (hundred) percent of the shares in the
Company. Such compensation will be payable in 4 (four) installments.
The first installment shall be due 6 (six) months after redemption of
the shares in the Company. The following installments shall be due 6
(six) months respectively after the previous installment has become
due and payable for payment.
10.2 The articles of association of the Company (the "Articles") will be amended
as shown in Schedule 10.1.6, and shall remain unchanged until that point in
time the Preliminary Earn-Out Claims have been paid to the Sellers and, if
any, to the Notary and the Preliminary Certificate Claims have been paid to
the Bearer, and, if any to the Notary (the "Core Protection Period"). As of
Closing, regardless of the entry of the amendments to the Articles into the
commercial register, and thereafter, the Articles including any related
documents to the Articles (e.g. rules of procedure for the advisory board)
shall be mutually binding to the Sellers and the Buyer. The Sellers and the
Buyer mutually undertake to use their best efforts to register the changes
by the Articles with the commercial register as soon as practicable after
Closing and will agree on such amendments which are necessary to register
the Articles, if and to the extent an entry is refused by the commercial
register. With respect to void provisions of the Articles, Section 28 shall
apply mutatis mutandis. The Parties shall without undue delay after Closing
exercise their right to appoint one advisory board member.
10.3 Sellers, the Buyer and Trumpet GmbH, Munich (the "Trustee") shall enter
into the trustee agreement attached hereto as Schedule 10.3 (the "Trust
Agreement").
10.4 The Parties will as soon as practical after Closing negotiate in good faith
a policy for coordination of the business operations of the Company and
Euronet Group its affiliated companies in the meaning of Section 15 AktG in
Poland.
11 Release from Security and Third Party Obligations in Relation to the
Company
11.1 The Euronet Group will reasonably endeavor to procure, with effect from the
Closing or as soon as practical thereafter, the release (freistellen) of
the Sellers or third parties from any securities, indemnities and
guarantees listed in Schedule 11.1 given or binding upon any Seller or
third parties in respect of any liability of the Company (i) included in
the Interim
35
SPA
Accounts or (ii) incurred in the ordinary course of business following the
Interims' Accounts Date or (iii) incurred after Closing with the consent of
Euronet Group.
11.2 Pending such release the Euronet Group shall be obliged to fulfill the
Sellers' and/or such third party's respective obligations vis-a-vis the
secured party or to reimburse the Sellers' and/or the third party's
expenses and/or damages occurred in case that the security has been
realized. To the extent the obligations of the Euronet Group under this
Section 11.2 relate to the relationship between the Sellers or the third
parties vis-a-vis the secured party (Aussenverhaltnis), such obligations
shall cease to exist on September 30, 2004. This time limitation does not
apply to the relationship between the Euronet Group and the Seller and the
Euronet Group will continue to be obliged vis-a-vis the Sellers
(Innenverhaltnis) under this Section 11.2.
11.3 Euronet Group and Seller will use all reasonable efforts to avoid any
termination of the Founder Loan Agreements by Sparkasse Starnberg. Euronet
Group undertakes vis-a-vis each Seller to release (freistellen) each Seller
from all payment obligations vis-a-vis Sparkasse Starnberg under the
Founder Loan Agreements. Until such time that all payment obligations of
the Sellers vis-a-vis Sparkasse Starnberg under each Founder Loan Agreement
are settled in full, the Sellers will continue to be entitled to seek
satisfaction from the respective Shareholder Loan. Each Seller may
terminate a Shareholder Loan within the notice period provided for in the
Financing Agreement under the condition that Sparkasse Starnberg terminates
the respective Founder Loan Agreement vis-a-vis the respective Seller.
Part III. Warranties of Buyer
12 Euronet Group's Warranties and Liability
12.1 Each member of the Euronet Group represents and warrants to each Seller by
way of a severable warranty undertaking (selbstandiges Garantieversprechen)
and subject to the stipulations of Section 13 below that the statements in
Sections 12.2 through 12.13 are true and correct as of Signing (except
where explicitly referred to a different point in time below).
12.2 The information in Sections (D), (E) (F) and (G) of the Preamble is
correct. Further, all the outstanding Euronet Shares have been duly and
validly authorized and issued and are fully paid and non-assessable. All
the Election Shares (as defined in the Certificates) payable under the
Certificates, if any, will be, at the Transfer Date (as defined in the
Certificate), duly and validly authorized and issued, fully paid and
non-assessable and free of pre-emptive or similar rights. From the Transfer
Date the Election Shares will be duly registered for trading on NASDAQ
National Market and the Sellers or any Subsequent Bearer (as defined in the
Certificates) will be free to transfer, assign, pledge and encumber all of
the Election Shares.
12.3 During the Protection Period the information concerning the structure of
the Euronet Group and the object of the business of the Euronet Group set
out in Sections (F) and (G) of the Preamble shall remain unchanged.
12.4 The Euronet Group has all requisite corporate power, authority and capacity
to execute and deliver this SPA and in addition, the Certificates, the
Articles, the Trust Agreement, the Expert Agreement, the Share Escrow
Agreement (collectively, the "Related Agreements"),
36
SPA
to perform its obligations hereunder and there under, and to consummate the
transactions contemplated by this SPA and the Related Agreements.
12.5 The execution, delivery and performance of this SPA and the related
Agreements by the Euronet Group and the transactions contemplated thereby
have been duly authorized and approved by the Euronet Group. This SPA and
the Related Agreements and the transactions contemplated thereby have been
duly and validly executed and delivered by the Euronet Group and
constitutes, and upon the execution and delivery of the Related Agreements,
the Related Agreements will constitute, legal, valid and binding
obligations of Euronet Group, enforceable against Euronet Group in
accordance with their terms, assuming valid authorization, execution and
delivery of this SPA and the Related Agreements by the other parties
thereto, except as enforceability may be limited by bankruptcy and similar
laws and general principles of equity.
12.6 The execution, delivery and performance by the Euronet Group of this SPA
and the Related Agreements and the consummation of the transactions
contemplated by this SPA and the Related Agreements does and will not (i)
conflict with or result in a violation or breach of any of the terms,
conditions or provisions of the Euronet Group's certificate of
incorporation or bylaws of the Euronet Group; (ii) conflict with or result
in a violation or breach of any term or provision of any law, regulation,
order or governmental regulation applicable to the Euronet Group or any of
its respective assets or properties, except for such conflict or breach
which could not be expected to have a material adverse effect on the
Euronet Group; or (iii) conflict with or result in a violation or breach
of, constitute (with or without notice or lapse of time or both) a default
under, require any member of the Euronet Group to obtain any consent,
approval or action of, make any filing with or give any notice to any
person as a result or under the terms of, result in or give to any person
any right of termination, cancellation, acceleration or modification in or
with respect to, result in or give to any person any additional rights or
entitlement to increased, additional, accelerated or guaranteed payments
under, or result in the creation or imposition of any lien upon any member
of the Euronet Group or any of its assets or properties under any contract,
license or other agreement to which a member of the Euronet Group is a
party or by which any of Euronet Group's members' assets or properties is
bound, except for such conflict, violation, breach or default which could
not be reasonably expected to have a material adverse effect on the Euronet
Group.
12.7 No consent, approval or action of, filing with or notice to any
governmental or regulatory authority on the part of any member of the
Euronet Group is required in connection with the execution, delivery and
performance of this SPA or any of the Related Agreements, except for such
consent, approval, action, filing or notice which could not reasonably be
expected to have a material adverse effect on Buyer or Euronet Group.
12.8 The Euronet Group does not have any reason for believing that it will not
be able to fulfill any of its obligations under this SPA or the Related
Agreements.
12.9 As of Signing and as of the Transfer Date (as defined in Certificates),
since January 1, 2002 (i) Euronet has made all filings required to be made
by the Securities Act and the Exchange Act, (ii) all filings by Euronet
with the SEC, at the time filed (in case of documents filed pursuant to the
Exchange Act) or when declared effective by the SEC (in the case of
registration statements filed under the Securities Act) complied in all
material respects with the applicable requirements of the Securities Act
and the Exchange Act, (iii) no such filing, at the time described above,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated in such filing in order to make the
state-
37
SPA
ments contained in such filing, in light of the circumstances under which
they were made, not misleading, and (iv) all financial statements contained
or incorporated by reference in such filings complied as to form when filed
in all material respects with the rules and regulations of the SEC, were
prepared in accordance with U.S. Generally Accepted Accounting Principles
except (a) as may be indicated in the notes in such filing or (b) in the
case of unaudited financial statements, as permitted by the rules and
regulations of the SEC, and fairly presented the financial condition and
results of operations of Euronet Group at and as of the respective dates
and the consolidated results of its operations and changes in cash flows
for the periods indicated (subject in the case of unaudited statements, to
normal yearend audit adjustments and any other adjustments described in
such financial statements). Euronet will continue to comply with its
obligation under this Section 12.9 until the Certificates fall due and
until they are, if applicable, fully settled by the Euronet Group.
12.10 The Euronet Group is in compliance in all material respects with all
applicable laws, except where failure to comply would not have a material
adverse effect on the financial condition of Euronet Group, and no notice,
citation, summons or order has been received, and, to the knowledge of
Euronet Group, no complaint has been filed, no penalty has been assessed
and no investigation or review is pending or threatened with respect to any
alleged violation by Euronet Group of any law.
12.11 The Euronet Group is not a party to any suit, action, arbitration or
legal, administrative, governmental or other proceeding or investigation
pending or, to its knowledge threatened, which reasonably could adversely
affect or restrict its ability to consummate the transactions contemplated
by this SPA, or to perform its obligations under this SPA or the Related
Agreements, or which could reasonably be expected to have a material
adverse effect on Euronet Group.
12.12 There is no judgment, order, writ, injunction or decree of any court,
arbitration tribunal or other governmental or regulatory authority,
domestic or foreign, to which Euronet Group is subject which might
adversely affect or restrict its ability to consummate the transactions
contemplated by this SPA and the Related Agreements, or to perform its
obligations under this SPA or the Related Agreements, or which could
reasonably be expected to have a material adverse effect on Euronet Group
or Euronet.
12.13 No warranty, or any information with respect to any member of the Euronet
Group contained in this SPA or the Related Agreement, and no Schedule,
document or Certificate delivered pursuant to the terms of this SPA, taken
as a whole, contains an untrue statement of a material fact, or omits to
state a material fact required to be stated or necessary to make the
statements made, in the context in which made, not misleading.
13 Remedies in Case of Buyer's Warranty Breach
13.1 If any of Euronet Groups warranties and representations - explicitly or
implied - in this SPA especially under Section 12 hereof are incorrect or,
to the extent completeness is guaranteed, incomplete, each Seller may
demand that Euronet Group remedies the breach of the representation or
warranty within a reasonable time limit that must not exceed 40 (forty)
Banking Days after receipt of the notice referred to in Section 13.5 by
putting the respective Seller in the situation it would be in had such
warranty/ies or representation(s) been correct or, to the extent
completeness is guaranteed, complete.
13.2 If Euronet Group fails to create such situation within such time limit or
if such situation cannot be created (Unmoglichkeit), each Seller may claim
payment of damage compensation
38
SPA
in cash from Euronet Group, subject to the limitations set out in this SPA.
If damage compensation is claimed, Euronet Group shall put the respective
Seller in such position, as it would be in had the respective statement of
the guarantee in question been correct or, to the extent completeness is
guaranteed, complete.
13.3 Each Seller shall procure pursuant to Section 254 BGB that all reasonable
steps are taken and all reasonable assistance is given to avoid or mitigate
any Sellers' Losses which in the absence of mitigation might give rise to a
liability in respect of any warranty claim under this SPA or any Related
Agreements.
13.4 If the matter or circumstance that may give rise to a warranty claim
against the Euronet Group under this SPA or any Related Agreements is a
result of or in connection with a claim by or liability to a third party
the following applies:
13.4.1 Each Seller shall take such action as Euronet Group may reasonably
request to avoid, dispute, deny, defend, resist, appeal, compromise or
contest such claim by third party;
13.4.2 Each Seller may admit, compromise, dispose of or settle such claim
by a third party, provided that the respective Seller has notified
Euronet Group of its intention to deal with such claim and has given
Euronet Group a period of 15 (fifteen) Banking Days to respond;
13.4.3 If Euronet Group makes any request pursuant to Section 13.4.1, each
Seller shall take all reasonable steps to procure that Euronet Group
is provided on reasonable notice with all material correspondence and
documentation relating to the claim by a third party as Euronet Group
may reasonably request;
13.4.4 Each Seller may request that Euronet Group advances such an amount,
which is reasonable and usually incurred by taking any of the actions
referred to in Section 13.4.1. The final allocation of costs to the
Sellers and/or Euronet Group shall be subject to settlement among
Sellers and Euronet Group or subject to decision by court on the basis
of whether the costs and expenses constitute Sellers' Losses pursuant
to Section 13.5 resulting from a breach of warranty or representation.
13.4.5 For the avoidance of doubt, nothing in this Section 13.4 shall
prevent the Sellers from exercising their rights under this Section 13
against Euronet Group, if the claim of the Sellers is a result of or
in connection with a claim by or liability to a third party. In
particular, the Sellers are not obliged to take an action requested by
Buyer pursuant to Section 13.4.1 before exercising their rights
against Euronet Group. However, any compensation or indemnification of
Sellers' Losses owed by Euronet Group for breaches of warranties under
this SPA or any Related Agreements shall not become due and payable
(fallig und zahlbar) until the liability towards a third party in
respect of which the warranty claim is made has become due and
payable.
13.5 The Euronet Group shall not be liable under this SPA or any Related
Agreements in respect of any claim unless a notice of the claim is given by
a Seller to Euronet Group including a summary of the factual basis of the
claim and, if practicable, an estimate of the amount of losses,
liabilities, costs, including without limitation legal costs and experts'
and consultants' fees, charges, expenses, actions, proceedings, claims and
demands (the "Sellers' Losses") which are, or are to be, the subject of the
claim (including any Sellers' Losses which are contingent on the occurrence
of any future event). Such estimate shall
39
SPA
not be binding for the Sellers or prejudice the Sellers' Losses with regard
to the amount of Sellers' Losses that may be claimed.
13.6 The Euronet Group shall not be liable under this SPA or any Related
Agreements in respect of any claim unless the aggregate amount of all
claims for which Euronet Group would otherwise be liable under this SPA or
any Related Agreements exceeds Euro 200,000.00 (Euro two hundred thousand).
Where the amount agreed or determined in respect of all claims referred to
in this Section 13.6 exceeds Euro 200,000.00 (Euro two hundred thousand),
Euronet Group shall be liable for the entire amount of the claim and not
just the excess over Euro 200,000.00 (Euro two hundred thousand).
13.7 The Euronet Group shall not be liable under this SPA or any Related
Agreements in respect of any Sellers' Losses which could reasonably not be
foreseen.
13.8 The Euronet Group shall not be liable under this SPA or any Related
Agreements in respect of any matter, act, omission or circumstance (or any
combination thereof), including the aggravation of a matter or circumstance
and any Sellers' Losses arising there from, to the extent that the same
would not have occurred but for (i) any matter or thing done or omitted to
be done pursuant to and in compliance with this SPA or any Related
Agreements or otherwise at the request in writing or with the approval in
writing of the Sellers, (ii) any act, omission or transaction of the
Sellers, agents or successors in title, after Signing, (iii) the passing
of, or any change in, after Signing of any law, rule, regulation or
administrative practice of any government, governmental department, agency
or regulatory body including (without prejudice to the generality of the
foregoing) any increase in the rates of taxation or any imposition of
taxation or any withdrawal of relief from taxation not actually (or
prospectively) in effect at Signing, or (iv) any change after Signing of
any generally accepted interpretation or application of any legislation.
13.9 The Euronet Group shall not be liable under this SPA or any Related
Agreements in respect of any claim to the extent that the Sellers' Losses
in respect of which such claim is made are covered by a policy of
insurance, by which Euronet Group is a party or would have been covered if
such policy of insurance had been maintained by Euronet Group beyond
Signing.
13.10 The Euronet Group shall not be liable under this SPA or any Related
Agreements to the extent of any Sellers' Losses suffered by the Sellers to
the extent of any corresponding savings by or net quantifiable financial
benefit to the Sellers' Losses or the facts giving rise to such Sellers'
Losses (for example, without limitation, where the amount (if any) by which
any taxation for which the Sellers would otherwise have been accountable or
liable to be assessed is actually reduced or extinguished as a result of
the matter giving rise to such liability).
13.11 If the Euronet Group has paid to the Sellers an amount in discharge of any
warranty claim under this SPA or any Related Agreements in respect of which
the Seller is entitled to recover (whether by payment, discount, credit,
relief, insurance or otherwise) from a third party a sum which indemnifies
or compensates the Sellers (in whole or in part) in respect of the loss or
liability which is the subject matter of the claim, Euronet Group shall be
subrogated to all rights that the respective Seller has or would otherwise
have in respect of the claim against the third party or, if subrogation is
not possible, the Sellers shall procure that all steps are taken as the
Euronet Group may reasonably require to enforce such recovery and shall pay
to the Euronet Group as soon as practicable after receipt an amount equal
to the lower of (i) any sum recovered from the third party, less any costs
and expenses in-
40
SPA
curred in obtaining such recovery, unless these have already been paid in
accordance with the following sentence, or (ii) the amount previously paid
by the Euronet Group to the Sellers. Each Seller may require the Euronet
Group to make an advance payment of such an amount that is reasonable and
usually incurred to enforce such recovery.
13.12 The Sellers shall not be entitled to recover from the Euronet Group under
this SPA or any Related Agreements more than once in respect of the same
Sellers' Losses suffered and, without prejudice to the generality of the
foregoing, the Euronet Group shall not be liable in respect of any warranty
breach of the SPA or any Related Agreements if and to the extent that the
Sellers' Losses resulting from or connected with such breach of warranty or
indemnity are or have been included in a claim under any other warranty or
indemnity under this SPA or any Related Agreements which already has been
satisfied.
13.13 The Euronet Group shall not be liable in respect of any warranty claim
under Section 13 of this SPA
13.13.1 to the extent that the risk giving rise to the relevant claim were
known by the Sellers or by any of its respective employees or agents
or financial, accounting or legal advisers involved in negotiating the
acquisition of the Company;
13.13.2 in relation to any risk which has been accurately disclosed by the
Euronet Group prior to Signing;
13.13.3 in relation to any risks which are contained or referred to in this
SPA, and the Related Agreements.
13.14 The Sellers herewith acknowledge and confirm that they are not aware of
any breaches of representations and warranties by the Euronet Group.
13.15 Instead of the statutory limitation periods, all of Sellers' claims under
Section 11 of this SPA and any claims in connection herewith vis-a-vis
Euronet Group shall be subject to the following limitation periods:
13.15.1 The limitation period for the warranties and representations given
in Sections 12.2 and 12.4 shall be ten years commencing at Closing.
13.15.2 The limitation period for all other claims under Section 12 shall
be September 30, 2005.
13.15.3 The limitation period pursuant to Section 13.15.2 will be
interrupted by a written notification of a specific warranty claim in
accordance with Section 13.5 by the Sellers to Euronet Group. Such
interruption of the limitation period terminates, if the Sellers do
not file a law suit with respect to such warranty claims within 1
(one) month after the respective limitation period for such warranty
claim would have terminated pursuant to Section 13.15.2.
Section 203 BGB shall not apply.
13.16 Given that no precedent court rulings exist as to the application and
interpretation of Section 444 BGB, the Parties mutually acknowledge that
Section 444 BGB shall not apply to the liability of Euronet Group under
Section 12 of this SPA and that the warranties and representations of
Euronet Group therein constitute severable warranty undertakings
(selbstandige Garantieversprechen) and are not construed to be guarantees
for the condition of goods within the meaning of Section 444 BGB.
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13.17 Any other remedy for breaches of Sellers' obligations of warranties and
hereto related obligations than those set out in this Section 13, including
but not limited to statutory warranties, remedying the defect
(Nachbesserung), damage claims (Schadensersatz), purchase price reduction
(Minderung), the right to rescind (Rucktritt), the right to terminate
(Kundigung) or any claims under Section 311 BGB or the right to challenge
the contract (Anfechtung) (other than the right to challenge the contract
pursuant to Section 123 BGB), are herewith excluded. None of the
limitations contained in this Section 13 shall apply for the benefit of
Euronet Group in case of fraudulent behavior by Euronet Group or
intentionally caused damage (vorsatzlich herbeigefuhrter Schaden) by the
member of Euronet Group.
Part IV. Sellers' Warranties and Liability
14 Sellers' Warranties
14.1 Each Seller represents and warrants to Buyer by way of a severable warranty
undertaking (selbstandiges Garantieversprechen) and subject to the
stipulations of Section 15 below that the statements in Sections 14.2
through 14.15 below are true and correct, or where completeness is
guaranteed, complete, at the time of this notarial recording (except where
explicitly referred to a different point in time).
Where the following warranties and representations are made subject to
Sellers' knowledge or best knowledge or to circumstances that Sellers are
aware of, all those facts and circumstances shall be deemed Sellers'
knowledge or best knowledge and Sellers shall be deemed aware of all those
facts and circumstance, of which either one or both Sellers have notice
(actual notice) or would have notice but for a grossly negligent failure to
exercise due skill and care (constructive notice).
14.2 Legal Structure of the Company
14.2.1 The Company is a limited liability company (Gesellschaft mit
beschrankter Haftung) duly incorporated pursuant to the laws of the
Federal Republic of Germany and validly existing under its articles of
association and memorandum of incorporation.
14.2.2 The share capital (Stammkapital) of the Company amounts to Euro
50,000.00 (Euro fifty thousand) and is divided into two Shares with a
nominal amount of Euro 25,000.00 (Euro twenty five thousand) each.
14.2.3 Other capital measures than the capital increase to Euro 50,000.00
(Euro fifty thousand) for the purpose for converting the Company's
share capital from DM to Euro, resolved in the shareholders'
resolution dated December 5, 2001 have not been taken.
14.2.4 Neither have shareholders' resolutions been passed to modify the
articles of association that remain to be registered with the
commercial register, except for shareholders' resolutions agreed
between the Parties in this SPA and the Related Agreements, nor do
ancillary agreements exist in relation to the structure and
organization of the Company, except for those ancillary agreements
agreed between the Parties in this SPA or any related agreements.
14.2.5 The information in Section (B) of the Preamble relating to the
Company and the Shares is correct. Since formation of the Company, the
Shares in the Company are being held by the Sellers, as described in
Section (B) of the Preamble of this SPA.
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14.2.6 Other than the Shares no shares exist in the Company. The Shares are
free of all encumbrances and other rights created in favor of any
third party. Sellers are entitled to freely dispose of the Shares
without requiring any third party's consent other than (i) the
Company's consent as provided for under Section 8 of the articles of
association of the Company and (ii) the consent by the Sellers'
spouses according to Section 1365 BGB, and no such disposal would
infringe any third party right or give rise to any right of first
refusal (Vorkaufsrecht) or pre-emptive right (Bezugsrecht) other than
the right of first refusal set out in Section 8 of the articles of
association of the Company.
14.2.7 There are no outstanding options, warrants, calls, subscriptions,
commitments or plans by the Company to issue any additional shares of
its capital stock or to pay any dividends on any Shares or to purchase
or redeem any Shares, nor are there outstanding any securities or
obligations convertible into or exchangeable for any Shares.
14.2.8 Since January 1, 2000 there have been no material shareholders'
resolutions other than in connection with appointing managing
directors, adopting (feststellen) annual accounts and contracts with
the Company's shareholders, except for those set out in Schedule
14.2.8.
14.2.9 The Shares are fully paid up. Hidden contributions in kind
(verdeckte Sacheinlagen) have not occurred. Repayments of
contributions to capital for shares have not occurred, whether openly
or concealed.
14.2.10 Except as set forth in Schedule 14.2.10, the Company holds no
shareholdings or interests in other business undertakings and is under
no obligation to acquire such shareholdings or interests. Schedule
14.2.10 also contains a list of those cooperation and other agreements
of the Company that reasonably may be interpreted to provide for the
formation of a joint venture in the form of a civil law partnership
(Gesellschaft burgerlichen Rechts).
14.2.11 Except as set forth in Schedule 11.1, neither any of the Sellers
nor any of the companies affiliated with any of the Sellers
(verbundene Unternehmen) (Sellers' Affiliated Companies) within the
meaning of Section 15 AktG nor any person closely associated with any
of the Sellers (nahestehende Person) within the meaning of Section 138
Para. 1 German Insolvency Code (Insolvenzordnung) (the "Sellers'
Closely Associated Persons") have granted security of any kind to
third parties for liabilities of the Company.
14.2.12 Except as set forth in Schedule 14.2.12, the Company has not
granted security of any kind to third parties for liabilities of
either Seller or any of the Seller's Affiliated Companies or Sellers'
Closely Associated Persons of any Seller.
14.2.13 Insolvency proceedings neither have been initiated against either
of Sellers or against the Company nor are the Sellers aware or, if
acting as prudent managing directors, should be aware of any
circumstances that would under the going concern principle justify or
require such proceedings being initiated in the near future.
14.3 Relations with Sellers, Sellers' Affiliated Companies and with Sellers'
Closely Associated Persons
14.3.1 Other than those set forth in Schedule 14.3.1 hereto, no contracts
exceeding an attributable value of Euro 5,000.00 (Euro five thousand)
per year exist between the
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Company on the one hand and any Seller and/or any Sellers' Affiliated
Companies and/or Sellers' Closely Associated Persons on the other
hand. Other than those set forth in Schedule 14.3.1 hereto, no
liabilities or obligations, in particular loan liabilities of the
Company to any Seller and/or Sellers' Affiliated Companies and/or
Sellers' Closely Associated Persons, or, vice versa, loan liabilities
of any Seller, and/or Sellers' Affiliated Companies and/or Sellers'
Closely Associated Persons vis-a-vis the Company, exist under such
contracts.
14.3.2 Section 2 of the Financing Agreement sets forth correctly the
amounts of principal and accrued interest not paid when due
(ausstehende Darlehenssummen und ruckstandige Zinsen) under each of
the Founder Loan Agreements as of September 30, 2003.
14.3.3 The Company is neither party to enterprise agreements
(Unternehmensvertrage) within the meaning of Sections 291 et. seq.
AktG nor to silent partnership agreements (stille
Gesellschaftsvertrage).
14.4 Business Operations and Business Assets
14.4.1 Except as set forth in Schedule 14.4.1 hereto, the Company as of the
Interim Accounts' Date is the legal or beneficial owner of all assets
(Anlagevermogen) shown in the asset ledger of the Interim Accounts
according to Section 266 Para. 2 A) II) No. 1 to 3 HGB (the "Fixed
Assets"). Except as set forth in Schedule 14.4.1, the Fixed Assets are
free of encumbrances and of other rights (e.g. pledges, liens,
charges) created in favor of any third party, other than statutory
liens and retention of title arrangements made in the ordinary course
of business. The Company's Fixed Assets shown in the Interim Accounts
and necessary for the operation of the data centre in Martinsried are
in good working and operating condition and repair, except for normal
wear and tear, and are sufficient for operation of the data centre in
Martinsried as presently conducted. Since the Interim Accounts' Date,
none of the Company's material Fixed Assets have been (i) materially
and adversely affected in any way as a result of any casualty, whether
or not covered by insurance, or (ii) operated or maintained other than
in a manner consistent with the Company's past practices.
14.4.2 The Company is the legal or beneficial owner of all current assets
(Umlaufvermogen) according to Section 266 Para. 2 B) I) No. 1 to 3 HGB
(the "Current Assets"). Except as set forth in Schedule 14.4.2 the
Current Assets are free of encumbrances and of other rights created in
favor of any third party, other than statutory liens and retention of
title arrangements made in the ordinary course of business. The
inventory of the Company does not include any material items shown in
the Interim Accounts with a book value of more than Euro 1 (Euro one)
that are below standard quality or of the quality or a quantity not
usable or saleable in the ordinary course of business, provided,
however, that such material item shall not be deemed below standard
quality, if the supplier remedies the lack of standard quality by
delivering standard quality items without extra charge to the Company
within three months after the date hereof. The inventory levels of the
Company have been maintained in such amounts as in the reasonable
opinion of the Sellers as managing directors of the Company are
required to perform on the Company's delivery obligations due at
Signing.
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14.4.3 All of the accounts payable pursuant to Section 266 Para. 3 C 4) and
5) HGB of the Company that arose after the Interim Account's Date have
been incurred by the Company in the ordinary course of the conduct of
its business.
14.4.4 All of the receivables pursuant to Section 266 Para. 2 B) II) 1)
No.1 HGB of the Company that arose after the Interim Account's Date
result from bona fide transactions in the ordinary course of the
conduct of the Company's business and to the Sellers' best knowledge
are not subject to any material set-off or counterclaim.
14.5 Annual Accounts and Accounting
14.5.1 The annual accounts (comprising balance sheet, profit and loss
statement and notes) and if required by law, the directors' reports
for the Company for the financial years 2000 (the "Annual Accounts
2000"), 2001 (the "Annual Accounts 2001") and 2002 (the "Annual
Accounts 2002") (hereinafter collectively the "Annual Accounts") have
been validly prepared and validly approved (wirksam aufgestellt und
festgestellt) in accordance with HGB and the Limited Liability Company
Act (Gesetz betreffend die Gesellschaften mit beschrankter Haftung -
"GmbHG"), except as set forth in Schedule 14.5.1, where appropriate
and applicable.
14.5.2 The Annual Accounts have been prepared in compliance with German
GAAP and with the rule of accounting and valuation consistency
according to German GAAP (Bilanzkontinuitat), except where deviation
there from is permitted by law and is disclosed in Schedule 14.5.2
with respect to deviations in the Annual Accounts 2002 to the Annual
Accounts 2001, and provide a true and fair view of the assets,
financial and profit situation of the Company.
14.5.3 As at December 31, 2002, the Company did not have any liabilities
pursuant to Section 266 Para. 3 C) HGB or contingent liabilities
pursuant to Section 251 HGB other than those, which are disclosed or
reserved against in the Annual Accounts 2002.
14.5.4 The financial projections for the Company included in the Business
Plan are a reflection of the Sellers' good faith estimate of the
future financial performance of the Company.
14.5.5 The Company's receivables pursuant to Section 266 Para. 2 B) II) 1)
No.1 and No.2 HGB reported in the Interim Accounts and still
outstanding will be collectible when due in their full amounts and
without requiring special collection measures, minus any individual or
general value adjustments contained in the Interim Accounts.
14.5.6 The Interim Accounts shall be prepared in accordance with HGB and
the GmbHG and shall be in compliance with the rule of accounting and
valuation consistency according to GAAP. The warranties under 14.5.2
through 14.5.3 above apply mutatis mutandis to the Interim Accounts,
provided that the Interim Accounts' Date shall be decisive instead of
December 31, 2002.
14.6 Intellectual Property and Intangible Assets
14.6.1 Except for the items listed in Schedule 14.6.2, Schedule 14.6.1 sets
out a correct and complete list of all patents, utility models,
trademarks, registered designs, copyrights and software rights as well
as know-how (meaning confidential and proprietary industrial and
commercial information) (together the "Intellectual Property
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Rights") material for the business of the Company that are (i) owned
by the Company or (ii) used in the Company's business operations based
on valid license agreements, the duration or termination notice
periods of which, where applicable, are specified in Schedule 14.6.1
or (iii) licensed by the Company to any third party, other than for
terminal, card xxxx and vending machine software, stating the term or
termination notice period of the respective license agreement, where
appropriate and applicable.
14.6.2 Except for the items listed in Schedule 14.6.1, Schedule 14.6.2 sets
out a correct list of all the Intellectual Property Rights that are to
the Sellers' best knowledge (i) owned by the Company or (ii) used in
the Company's business operations or (iii) licensed by the Company to
any third party, other than for terminal, card xxxx and vending
machine software and licensing agreements entered into in the ordinary
course of business.
14.6.3 With respect to Intellectual Property Rights, which are necessary
for the business operations of the Company, the Company has not
expressly or impliedly entered into agreements for the transfer of
ownership of such rights or for the granting of a license to use such
rights, to the extent the scope of such license exceeds the purpose of
the respective agreement.
14.6.4 No third party has attacked vis-a-vis the Sellers or the Company the
validity of the Intellectual Property Rights used by the Company. No
third party claims are pending (rechtshangig) in any court or to the
Sellers' knowledge threatened against the Company in relation to any
such infringement. The Company's activities and Business Operations
infringe no third party Intellectual Property Rights. To the best
knowledge of the Sellers the same applies to the Company's
Intellectual Property Rights.
14.7 Real Property and Leases
14.7.1 The Company does not own real property and has not entered into
contracts to acquire real property.
14.7.2 Schedule 14.7.2 hereto contains a complete and correct list of all
lease agreements concerning real property, including the date of each
lease agreement and of any amendments thereto. To the best knowledge
of Sellers, the lease agreements set forth in Schedule 14.7.2 hereto
are valid, in full force and effect and binding until the end of their
term. The Company enjoys undisturbed possession of all leased space
under all of its real property leases, to the extent not subleased, as
set forth in Section 14.7.2(i) below. The Company has paid all
advances and granted all security it is required to grant under such
leases when due. The Company is not in default of such leases and no
event has occurred which with the giving of notice or the passage of
time or both would constitute a default by the Company under any of
such leases. With respect to the real property leases set forth in
Schedule 14.7.2 hereto:
(i) Schedule 14.7.2(i) hereto contains a complete and correct list of
all sublease agreements, including the date of each sublease
agreement and of any amendments thereto. Other than under these
subleases, no third party is in possession of any of the real
property and there are no other contracts or agreements, granting
to any third party the right of use or occupancy of any portion
of the real property set forth in Schedule 14.7.2 hereto. To the
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extent the Company's respective landlord has not granted its
consent to these sublease agreements, the respective landlord
will not invoke any contractual or statutory rights under the
lease agreements based on the absence of consents for the
sublease agreements.
(ii) Except as set forth in Schedule 14.7.2, neither the Company nor
any of its employees or agents has engaged in or permitted any
operations or activities upon, or any use or occupancy of, the
real property set forth in Schedule 14.7.2, or any portion
thereof, or any real property now or previously owned or operated
by the Company, resulting in storage, emission, release,
discharge, dumping or disposal of hazardous material, on, under,
in or about such real property. The installment of the auxiliary
electric power device (Notstromaggregat) in the offices used by
the Company does not breach the terms of any of the lease
agreements to which the Company is a party.
14.7.3 Except for the sublease agreements in Schedule 14.7.2(i), the
Company is not a party to any lease agreement as landlord for real
property, including business premises and living accommodation.
14.8 Labor Law Status of the Company
14.8.1 Schedule 14.8.1 hereto contains a complete and correct list of all
managing directors and employees, whether active or dormant (ruhendes
Arbeitsverhaltnis), of the Company, in each case stating (i) the
remaining term or the notice period for termination of the service or
employment agreement as well as the applicable dismissal protection
provisions under the Disabled Employees Act (Schwerbehindertengesetz)
and Maternity Protection Act (Mutterschutzgesetz) and (ii) the total
fixed annual remuneration as well as any variable compensation of
whatever type, whether owed or discretionary, including based on mere
company practice (betrieblicher Ubung). To the extent an employee has
indicated to the Sellers his intention to terminate the employment
agreement, this is also noted in Schedule 14.8.1 hereto.
14.8.2 To the Sellers' best knowledge the employees of the Company are not
entitled to any claims under the Employees Inventions Act
(ArbeitnehmererfindungsGesetz). No employee orally or in writing has
raised any claim under the Employees Inventions Act vis-a-vis the
Company.
14.8.3 The Company has not granted any employee rights to participate, or
to acquire participations, in the Company through the acquisition of
shares in the Company or of sub-participations in the Company or
through any other commercially equivalent means
(Mitarbeiterbeteiligung).
14.8.4 There are no labor disputes other than those set forth in Schedule
14.8.4 hereto.
14.8.5 Schedule 14.8.5 hereto contains a complete list of all agreements
with advisors and freelancers the terms of which were disclosed in the
course of the Due Diligence (as defined in Section 14.15.3).
14.8.6 The Company is not party to any agreements or framework agreements
with agencies offering the services of temporary employees to the
Company which are not directly employed by the Company
(Leiharbeitnehmer).
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14.8.7 Except as set forth in Schedule 14.8.7 hereto, the Company has not
made any pension commitments or taken out policies for direct
insurance, accident insurance, life insurance or insurance against
inability to work (Berufsunfahigkeitsversicherung) for the benefit of
any current or former managing director or employee.
14.8.8 With respect to the employees listed in Schedule 14.8.1 the Company
has fulfilled all obligations for the payment and transmittal of
social security contributions (Sozialversicherungsbeitrage) when due.
In all other cases, the Company has fulfilled its aforementioned
obligations to the Sellers' best knowledge.
14.8.9 At none of the business locations of the Company a works council
(Betriebsrat) has been formed and there are no shop agreements
(Betriebsvereinbarungen) in force.
14.8.10 The Company is not bound by any collective bargaining agreements
(Tarifvertrage).
14.9 Material Contracts of the Company
14.9.1 Schedule 14.9.1 hereto contains a complete and correct list of all
bank accounts of the Company and of their respective authorized
signatories.
14.9.2 Schedule 14.9.2 hereto contains a complete and correct list of all
material powers of attorney, including all irrevocable powers of
attorney, to represent the Company (Handlungsvollmacht/Prokura)
granted by the Company and not shown in the commercial register.
14.9.3 Schedule 14.9.3 hereto contains a complete and correct list of all
insurance policies taken out by the Company and/or for the benefit of
the Company or any of its business locations (other than the insurance
policies for motor vehicles used in the business operations), in each
case stating the insurance company and the type of insurance. Such
insurance coverage is intact and in particular (without limitation)
not endangered by any default regarding premium payments or to the
Sellers' knowledge by any breach of any obligation to safeguard the
obliged party's own best interest (Obliegenheitsverletzungen). Those
insurance policies that will lapse upon acquisition of the Shares by
Buyer are noted. In the last five years no application by the Company
for an insurance agreement has been rejected by the insurer.
14.9.4 The Company has taken adequate organizational means which the
Sellers regard as sufficient to ensure that PIN numbers purchased by
the Company for technical reasons cannot be lost or, in the event of a
loss, cannot be recovered.
14.9.5 The terminals of the Company regarding all POS payment transaction
procedures (electronic cash, POZ, ELV, edc/Maestro, credit cards)
technically comply with the technical requirements stipulated in the
agreements between the Company and (i) merchants, (ii) POS network
providers and (iii) credit card acquirers and with the technical
standards set up by the ZKA (Zentraler Kreditausschuss) effective or
applicable at Signing.
14.9.6 Except as disclosed in the Due Diligence the Company (i) is not
bound by and is not obliged to enter into any explicit nondisclosure
agreement and (ii) is, to the Sellers' knowledge, not aware of any
explicit agreement or arrangement of the Company that materially and
explicitly restricts competition or the Business Operations as
conducted at Signing.
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14.9.7 The Sellers have entered into agreements with certain parties (the
"Special Customers") as set out in the Deed of Reference and they give
in this respect to Euronet Group the warranty in Schedule 14.9.7. The
Sellers warrant that the agreements with the Special Customers as set
out in the Deed of Reference are to the Sellers' best knowledge in
full force and effect, and not terminated and have not been
transferred to a third party. Except as stated in this Section 14.9.7
and in Section 14.10 no warranties or other representations under this
Section 14 shall apply in relation to the agreements with the
Customers as set out in the Deed of Reference and any other agreements
between the Sellers and the Special Customers.
14.9.8 Except as set forth on Schedule 14.9.8 (i) the execution and
delivery of this SPA by Sellers or (ii) the sale and transfer to Buyer
of the Shares or (iii) the consummation by the Sellers of the
agreements contemplated by this SPA will not constitute breach of,
require consent under, results in, by operation of law or the
respective agreement, the automatic termination of or entitle the
counterparty to terminate or unilaterally amend any contract or
agreement by which any of the Sellers or the Company are bound.
14.9.9 Schedule 14.9.9 hereto contains a complete and correct list of
certain important (written or oral) contracts of the Company, to the
extent such contracts are not reflected in the Annual Accounts 2002 or
the Interim Accounts (hereinafter referred to collectively as the
"Material Contracts"):
(i) All contracts with carriers or providers of wireless
telecommunications services (the "Telecom Carriers") that are
offered for resale or agency distribution by the Company;
(ii) All material contracts with persons or entities acting as
resellers of telecommunications services by which the Company has
purchased PINs for phone cards or other materialized
telecommunications time or services (the "PINs");
(iii) All contracts with the twenty largest customers, distributors,
retailers, agents, or subagents for PINs, based on the turnover
of these with the Company in the financial year 2003 up to
October 31, 2003;
(iv) All purchase agreements regarding the terminals for the
electronic sale of PINs distributed by the Company (the
"Terminals"), with an obligation of the Company to accept
Terminals (Abnahmeverpflichtung) for an amount exceeding Euro
200,000.00 (Euro two hundred thousand);
(v) All sale and delivery agreements, including but not limited to
agreements regarding the Terminals, with an annual payment
obligation of the counterparty exceeding Euro 200,000.00 (Euro
two hundred thousand);
(vi) All lease agreements regarding moveable property, with the
exception of lease agreements regarding the Terminals in respect
of which terminal leases the annual payment obligation of the
counterparty does not exceed Euro 15,000.00 (Euro fifteen
thousand);
(vii) All contracts for acquiring or disposing of fixed assets
including intangible assets, property reported to fixed assets
(other than real property and rights equivalent in nature to
title in real property) and financial assets with an individual
payment obligation of the Company or the counterparty exceeding
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Euro 25,000.00 (Euro twenty five thousand) or an annual payment
obligation of the Company or the counterparty exceeding Euro
50,000.00 (Euro fifty thousand);
(viii) All service agreements and maintenance agreements with an
annual payment obligation of the Company or the counterparty
exceeding Euro 50,000.00 (Euro fifty thousand);
(ix) All loans and borrowing arrangements and credit line arrangements
that the Company has made whether as lender or borrower, other
than extension of maturity dates for liabilities
(Zahlungszielvereinbarungen) granted in accordance with common
practice in the ordinary course of business;
(x) All guarantees and sureties (Garantien, Burgschaften),
arrangements to join as codebtor, and any other collateral that
the Company is bound by vis-a-vis or obliged to grant to a third
party, to secure an obligation of the Company or an obligation of
a third party, whereas the assumption by the Company of
settlement risks in electronic payment transactions and the
obligations under service level agreements shall not be
considered a guarantee or sureties;
(xi) All other contracts or commitments the resulting payment
obligations of the company under which are in excess of Euro
100,000.00 (Euro hundred thousand) individually or Euro
200,000.00 (Euro two hundred thousand) annually;
To the Sellers' knowledge each of the Material Contracts is in full force
and effect, is a legal, binding and enforceable obligation of the Company
and the other party to the Material Contract. The validity or
enforceability of such Material Contract has not been attacked vis-a-vis
the Company by any contractual party or any other party. No Material
Contract has been terminated, nor is to the Sellers' knowledge such
termination impending. To the Sellers' knowledge neither the Company nor
the respective other parties to the Material Contracts have breached their
terms or conditions, nor are any of them in default with any of their
material obligations, which could result in the acceleration of the
performance of any obligation there under. The Sellers have not entered
into a binding commitment to amend the material terms of the Material
Contracts.
14.10 Litigation Matters and Proceedings before Governmental Authorities
Schedule 14.10 hereto contains a complete and correct list of all pending
(rechtshangig) litigation matters and proceedings before courts and
governmental authorities as well as arbitration panels to which the Company
or employees of the Company (where such litigation matters or proceedings
may result in any liability on the part of the Company) are a party. The
Sellers are not aware of any circumstances that would make the initiation
of such litigation or proceedings likely.
14.11 Public Grants
Except as set forth in Schedule 14.11, the Company has not filed for,
received or used public grants (subsidies). The public grants listed in
Schedule 14.11 have been filed for, received or used only in accordance
with the applicable laws and in compliance with all orders and conditions
imposed by any governmental authority. Except as set forth in Schedule
14.11 the implementation of the terms or conditions hereof and the
circumstances present today will not result in any such grant becoming
repayable.
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14.12 Compliance with Public Law
14.12.1 To the Sellers' knowledge the Company holds all permits and
licenses required by the public laws of the jurisdictions in which the
Company conducts its Business Operations necessary for its present
Business Operations (the "Permits"). To the Sellers' knowledge neither
the revocation nor any restriction of any Permit is pending or, to the
Sellers' best knowledge, threatened. To the Sellers' knowledge all
Permits of the Company are in full force and effect. To the Sellers'
knowledge the Company is in compliance with all of the terms and
conditions of the Permits. To the Sellers' knowledge there are no
material restrictions in the Permits or to the Company's ability to
renew the Permits. To the Sellers' knowledge the execution or
consummation of this SPA or the Related Agreements will not conflict
with or violate the terms of, or result in default under, any Permit
or result in the termination or amendment of, or requires governmental
or other public law approval or other action pursuant to, any of the
Permits.
14.12.2 Neither the current Business Operations nor its products nor
existing agreements or services infringe any applicable public law or
orders imposed by any governmental authority except where such
noncompliance is inconsequential and could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on
the Company or the Business Operations or give rise to any future
material liability of the Company with respect to any applicable
public law. The Company has not received notice of any violation of
any applicable public law, or any potential material liability under
any applicable public law, nor is any Seller or the Company aware of
any such violation or potential liability.
14.12.3 To the Sellers' knowledge, no governmental consent is required to
be obtained, satisfied or made pursuant to the public laws of the
jurisdictions in which the Company conducts its Business Operations
necessary for its present Business Operations by which any of the
Sellers or the Company are bound, in connection with (i) the execution
and delivery of this SPA by any Seller or (ii) the sale and transfer
to Buyer of the Shares or the consummation by the Sellers of this SPA
or the Related Agreements.
14.13 Political Contributions and Other Payments
Neither the Company nor any Seller has, during the past five years,
(i) made any payment in violation of any applicable law to any
governmental official or other governmental employee or agent
(domestic or foreign) to induce the recipient or the recipient's
employer to do business with, grant favorable treatment to or
compromise or forego any claim against the Company or (ii) made any
significant payment or conferred any benefit which, under prevailing
business practices, the Company considers or reasonably should
consider to be a breach of Section 299 German Criminal Act
(Strafgesetzbuch).
14.14 Tax Status of the Company
14.14.1 The Company has fully performed all duties pursuant to tax laws as
to keeping and maintaining records and documents. The tax advisor
Xxxxx Hey, Starnberg, keeps the relevant records safely and will
deliver them to the Company at request at any time without any right
of retention, except for statutory or contractual retention rights.
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SPA
14.14.2 The Company has filed all forms, whether definitive or preliminary,
for all taxes, charges and other dues, when due, completely and
truthfully, including (but not limited to) all tax returns for the
2002 assessment period and all monthly preliminary returns up to the
date hereof.
14.14.3 No distributions of constructive dividends (verdeckte
Gewinnausschuttungen) have been made by the Company.
14.15 Due and Proper Conduct of Business Operations and Completeness of
Information Provided
14.15.1 Since the Interim Accounts' Date the Business Operations have been
carried on solely in the ordinary course of business, subject to
prudent business practice and no material detrimental changes have
occurred regarding the Business Operations and/or the assets,
financial and profit situation or concerning important assets or
contracts of the Company. For the avoidance of doubt, the Sellers are
not liable for the impact of any publicly known changes of the market.
Except as set forth in Schedule 14.15.1 and Schedule 3.6, since
December 31, 2002 no shareholders' resolutions have been passed for
any distributions of profits, including advance distributions
(Vorabausschuttung) of any projected profit for the financial year
2003, nor has any such distribution taken place, nor have any hidden
reserves been released or withdrawn other than in the ordinary course
of business.
14.15.2 Since the Interim Accounts' Date there has not been (i) any
material adverse change in the Company's financial condition and
results of operations or (ii) any sale or transfer of any assets or
properties with a value exceeding Euro 50,000.00 (Euro fifty
thousand), except in the ordinary course of business of the Company
with suitable replacements thereof or (iii) any expenditures by the
Company for the acquisition or improvement of Fixed Assets, which
extend the life or increase the productivity of assets (capital
expenditures), involving payment in the aggregate in excess of Euro
250,000.00 (Euro two hundred and fifty thousand).
14.15.3 All information provided to Euronet Group and to Euronet Groups'
advisors by Sellers in the documents listed in Schedule 14.15.3
provided to Euronet Group in connection with all investigations,
including interviews, by Buyer or by any of its directors, officers,
employees, agents or financial, accounting, legal or other advisers of
Euronet Group prior to the Signing, including but not limited to the
investigation carried out in the data room from September 3 (three) to
10 (ten), 2003 (the "Due Diligence") in relation to matters prior to
Signing (the "Historic Data") is in all material respects accurate and
correct. Such information is not misleading and does not conceal any
facts relating to the Shares, the Company and its Business Operations
that would be relevant for the specific item of information provided.
14.15.4 Statements of the Sellers or on behalf of the Sellers in connection
with the Due Diligence and/or the negotiations of this SPA regarding
future financial and operating results of the Company, benefits and
synergies of the combination of Euronet Group and Company, future
opportunities for the Company, discovery and development of products,
potential acquisitions, strategic alliances and Intellectual Property,
and any other statements about the Company's managements' future
expectations, beliefs, goals, plans or prospects constitute
forward-looking statements. Any statements of the Sellers or on behalf
of the Sellers that are not statements of historical fact, including
but not limited to statements containing the words "believes",
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"plans", "anticipates", "expects", "estimates", "preliminary",
"draft(ing)" and similar expressions in English or German language,
shall also be considered to be forward-looking statements. There are a
number of important factors that could cause actual results or events
to differ materially from those indicated by such forward-looking
statements. The Sellers in particular disclaim any obligation to
update any forward-looking statements. Euronet Group has not relied on
any forward-looking statements in entering into this SPA. This Section
14.15.4 does not exclude or limit the liability of the Sellers arising
out of the breach of this SPA or any Related Agreements for any
forward-looking statement contained in this SPA or any Related
Agreements if and to the extent it is expressly stated therein that
the Sellers are liable for such forward-looking statement.
15 Remedies in Case of Sellers' Breaches of SPA
15.1 If any of Sellers' warranties and representations in this SPA especially
under Section 14 hereof are incorrect or, to the extent completeness is
guaranteed, incomplete, the Buyer, or at the election of the Buyer, the
Company may demand that the Sellers, jointly and severally remedy the
breach of the representation or warranty within a reasonable time limit
that must not exceed 40 (forty) Banking Days after receipt of the notice
referred to in Section 15.6 by putting the Buyer, or at the election of the
Buyer, the Company in the situation it would be in had such warranty/ies or
representation(s) been correct or, to the extent completeness is
guaranteed, complete. For the avoidance of doubt this clause does not give
the Euronet Worldwide Inc. the right to rescind the SPA.
15.2 If Sellers fail to create such situation within such time limit or if such
situation cannot be created (Unmoglichkeit), the Buyer, or alternatively at
the election of the Buyer, the Company may claim payment of damage
compensation in cash from Sellers, subject to the limitations set out in
this SPA. If the Buyer claims damage compensation, the Sellers shall put
the Buyer in such position, as it would be in had the respective statement
of the guarantee in question been correct or, to the extent completeness is
guaranteed, complete. If the Company claims damage compensation, the
Sellers shall put the Company in such position, as it would be in had the
respective statement of the guarantee in question been correct or, to the
extent completeness is guaranteed, complete.
15.3 Where the Buyer or the Company claim damage compensation under Section 15.2
above, each Seller shall be severally liable (teilschuldnerisch) vis-a-vis
the Buyer or the Company, as the case may be, for half of the damage
compensation owed by the Sellers.
15.4 The Buyer and the Company shall procure pursuant to Section 254 BGB that
all reasonable steps are taken and all reasonable assistance is given to
avoid or mitigate any Euronet Group's Losses (as defined in Section 15.6)
which in the absence of mitigation might give rise to a liability in
respect of any claim under this SPA or any Related Agreement.
15.5 If the matter or circumstance that may give rise to a claim against the
Seller under this SPA or any Related Agreements is a result of or in
connection with a claim by or liability to a third party, the following
applies:
15.5.1 Buyer shall take and shall procure that the Company takes such
action as the Sellers may reasonably request to avoid, dispute, deny,
defend, resist, appeal, compromise or contest such claim by a third
party;
15.5.2 Buyer may admit, compromise, dispose of or settle such claim by a
third party, provided that Buyer or the Company has notified the
Sellers of its intention to deal with
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SPA
such claim and has given the Sellers a period of 15 (fifteen) Banking
Days to agree to such measure, which shall not be unreasonably
withheld.
15.5.3 If the Sellers make any request pursuant to Section 15.5.1, Buyer
shall take and shall procure that the Company takes all reasonable
steps to procure that both Sellers are provided on reasonable notice
with all material correspondence and documentation relating to the
claim by a third party as the Sellers may reasonably request.
15.5.4 The Buyer may request that the Sellers advance such an amount, which
is reasonable and usually incurred by taking any of the actions
referred to in Section 15.5.1. The final allocation of costs to the
Sellers and/or the Buyer and/or the Company shall be subject to
settlement among Sellers, Buyer and/or Company or subject to decision
by court on the basis of whether the costs and expenses constitute
Euronet Group's Losses pursuant to Section 15.6 resulting from a
breach of warranty or representation.
For the avoidance of doubt, nothing in this Section 15.5 shall prevent the
Euronet Group from exercising its rights under this Section 15 against the
Sellers, if the claim of the Euronet Group is a result of or in connection
with a claim by or liability to a third party. In particular, the Euronet
Group is not obliged to take an action requested by Sellers pursuant to
Section 15.5.1 before exercising its rights against the Sellers. However,
any compensation or indemnification of Euronet Group's Losses owed by the
Sellers for breaches of warranties under this SPA or any Related Agreements
shall not become due and payable (fallig und zahlbar) until the liability
towards a third party in respect of which the claim is made has become due
and payable.
15.6 No Seller shall be liable under this SPA or any Related Agreements in
respect of any claim unless a notice of the claim is given by Euronet Group
to the Seller including a summary of the factual basis of the claim and, if
practicable, an estimate of the amount of losses (Schaden), liabilities,
costs, including without limitation legal costs and experts' and
consultants' fees, charges, expenses, actions, proceedings, claims and
demands (the "Euronet Group's Losses") which are, or are to be, the subject
of the claim (including any Euronet Group's Losses which are contingent on
the occurrence of any future event). Such estimate shall not be binding for
Euronet Group or prejudice Euronet Group with regard to the amount of
Euronet Group's Losses that may be claimed.
15.7 No Seller shall be liable under this SPA or any Related Agreements in
respect of any claim unless the amount of all claims for which each Seller
would otherwise be liable under this SPA or any agreement in connection
herewith exceeds Euro 150,000.00 (Euro hundred fifty thousand). Where the
amount agreed or determined in respect of all claims referred to in this
Section 15.7 exceeds such Euro 150,000.00 (Euro hundred fifty thousand),
the respective Seller shall be liable for the entire amount of the claims
and not just the excess over Euro 150,000.00 (Euro hundred fifty thousand).
15.8 The aggregate liability of the Sellers in respect of all claims under this
SPA or any Related Agreements shall not exceed the total of (i) the amount
of the Final Certificate Claims (as defined in the Certificates) under the
Certificates if any and (ii) the amount of the Final Earn-Out Claims, if
any, subject to the conditions set out in this Section 15.8. For purposes
of such aggregate liability, the amounts of any Remaining Earn-Out Claim
and any Remaining Certificate Claim shall be included unless such amounts
are not ultimately paid to the Sellers.
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SPA
15.8.1 The liability of each Seller to settle any claim of Euronet Group in
respect of claims under this SPA or any Related Agreements by way of
cash payment is limited to the cash amounts payable by Euronet Group
to the respective Seller or Bearer to settle (i) the Final Certificate
Claim and (ii) the Final Earn-Out Claim.
15.8.2 In the event Euronet Group has settled all or part of the
Certificate Claims by way of transferring Election Shares to the
Bearer, each Seller shall be entitled to settle any claim under this
SPA or any Related Agreements in cash or by way of transferring
Euronet Shares to Euronet Group or to any third person appointed by
Euronet Group vis-a-vis the Sellers in writing (the "Settlement
Transfer"), subject to the limitation that the maximum number of
Euronet Shares transferred by way of Settlement Transfer does not
exceed the number of Election Shares received by the Sellers or the
Bearer (as defined in the Certificates) and to the limitations in
Section 15.8.3. To the extent the respective Seller elects to settle
any such claim by way of Settlement Transfer, each Euronet Share
transferred to the Euronet Group shall be valued for this purpose at
the Average Stock Price (as defined in Section 3.1 (iv) of the
Certificates). For the purpose of converting U.S. $ into Euro the
reference rate published by the European Central Bank on December 10,
2004 shall be applied.
15.8.3 The first Euro 1,000,000.00 (Euro one million) in claims shall be
settled by each Seller in cash, if and to the extent that the cash
payment to the respective Seller exceeds Euro 1,000,000.00 (Euro one
million). After settling claims in the amount of Euro 1,000,000.00
(Euro one million), in cash, each Seller is entitled, at its sole
discretion, to settle claims up to the following Euro 2,000,000.00
(Euro two million) by way of Settlement Transfer or in cash. Up to
half of any claims in excess of Euro 6,000,000.00 (Euro six million)
in the aggregate may be settled by way of Settlement Transfer. In case
each cash payment to the Seller does not exceed Euro 1,000,000.00
(Euro one million), each Seller is entitled, at its sole discretion,
to settle up to half of the claim by way of Settlement Transfer.
15.8.4 Any claim by the Euronet Group against each Seller must first be
settled pursuant to Section 15.8.3 by releasing the funds which are on
the Notary Account I pursuant to this SPA according to Section
5.8.3(ii), 5.9.2, 5.10.1(ii) and on the Notary Account Certificate I.
As long as there are funds on the Notary Account I and on the Notary
Account Certificate I such funds have to be released in the same
proportion. If there are Election Shares according to Section 5.4 of
the respective Certificate on the Notary Account Certificate I, then
these shall be released to the extent the Sellers are entitled to and
choose to settle claims by way of Settlement Transfer. Thereafter any
funds on the Notary Account I and the Notary Account Certificate I
shall, for the purpose of settlement of claims of the Euronet Group,
be released in equal parts from the Notary Account I and the Notary
Account Certificate I. In case the cash payment to the Sellers does
not exceed Euro 1,000,000.00 (Euro one million), each Seller is
entitled, at its sole discretion, to settle up to half of the claim by
way of Settlement Transfer and to release such amounts from the Notary
Account I and the Notary Account Certificate I under each Certificate.
15.8.5 Euronet Group and Sellers are mutually obliged to give joint written
instructions to the Notary to effect the payments which are required
to fulfill their respective obligations under this Section 15.8. Such
notifications to the Notary have to be signed by the Sellers and the
Euronet Group within 10 (ten) Banking Days after receipt of
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SPA
a written request of the other Party. If there are no claims of the
Euronet Group or the Company or a third party under Sections 14, 15
and 16 the Buyer and Euronet are obliged vis-a-vis the Sellers and the
Bearer to grant consent in writing to release the funds which are on
the Notary Account I or the Notary Account Certificate I, but in no
event before they come due and payable under this SPA or the
respective Certificate.
15.9 No Seller shall be liable under this SPA or any Related Agreements (i) for
any Euronet Group's Losses which could reasonably not be foreseen, (ii) for
any Euronet Group's Losses which are related to a lower valuation of the
Euronet Group by virtue of which the stock price of Euronet Shares falls or
costs and expenses for financing measures increase, and (iii) in respect of
any claim if and to the extent that proper allowance, provision or reserve
is made in the Annual Accounts or the Interim Accounts for the matter
giving rise to the claim.
15.10 No Seller shall be liable for any claim under this SPA or any Related
Agreements in respect of any matter, act, omission or circumstance (or any
combination thereof), including the aggravation of a matter or circumstance
and any Euronet Group's Losses arising there from, to the extent that the
same would not have occurred but for (i) any matter or thing done or
omitted to be done pursuant to and in compliance with this SPA or any
Related Agreements or otherwise at the request in writing or with the
approval in writing of Euronet Group, (ii) any act, omission or transaction
of Euronet Group or any of its subsidiaries except for the Company, or
their respective directors, officers, employees or agents or successors in
title, after Signing, (iii) the passing of, or any change in, after Signing
any law, rule, regulation or administrative practice of any government,
governmental department, agency or regulatory body including (without
prejudice to the generality of the foregoing) any increase in the rates of
taxation or any imposition of taxation or any withdrawal of relief from
taxation not actually (or prospectively) in effect at Signing, or (iv) any
change after Signing of any generally accepted interpretation or
application of any legislation, or (v) any change in accounting or taxation
policy, bases or practice of Euronet Group or any of its subsidiaries
introduced or having effect after the Signing.
15.11 No Seller shall be liable under this SPA or any Related Agreements in
respect of any claim to the extent that the Euronet Group's Losses in
respect of which such claim is made are covered by a policy of insurance
held by the Company or would have been covered if such policy of insurance
had been maintained beyond the Closing, the latter only applies in case the
Sellers have informed the Buyer prior to a termination about the potential
consequence of such termination, in case the Sellers were informed about
the intention to terminate by the Buyer.
15.12 No Seller shall be liable in respect of any claims under this SPA or any
Related Agreements to the extent of any Euronet Group's Losses suffered by
the Buyer or any of its subsidiaries to the extent of any corresponding
savings by or net quantifiable financial benefit to Euronet Group or any of
its subsidiaries arising from such Euronet Group's Losses or the facts
giving rise to such Euronet Group's Losses (for example, without
limitation, where the amount (if any) by which any taxation for which
Euronet Group or any of its subsidiaries would otherwise have been
accountable or liable to be assessed is actually reduced or extinguished as
a result of the matter giving rise to such liability).
15.13 If any Seller has paid an amount in discharge of any claim under this SPA
or any Related Agreements in respect of which the Company is entitled to
recover (whether by payment, discount, credit, relief, insurance or
otherwise) from a third party a sum which indemnifies
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SPA
or compensates Euronet Group or Company (in whole or in part) in respect of
the loss or liability which is the subject matter of the claim, the Seller
shall be subrogated to all rights that Euronet Group has or would otherwise
have in respect of the claim against the third party or, if subrogation is
not possible, Euronet Group shall procure that all steps are taken as the
Seller may reasonably require to enforce such recovery and shall, or shall
procure that the Company shall pay to the Seller as soon as practicable
after receipt an amount equal to the lower of (i) any sum recovered from
the third party, less any costs and expenses incurred in obtaining such
recovery, unless these have already been paid in accordance with the
following sentence, or (ii) the amount previously paid by the Seller to
Euronet Group and/or the Company. The Euronet Group may require the Sellers
to make an advance payment of such an amount that is reasonable and usually
incurred to enforce such recovery.
15.14 Euronet Group shall not be entitled to recover from any Seller under this
SPA or any Related Agreements more than once in respect of the same Euronet
Group's Losses suffered and, without prejudice to the generality of the
foregoing, no Seller shall be liable in respect of any breach of
obligations under the SPA or any Related Agreements (i) if and to the
extent that Euronet Group's Losses resulting from or connected with such
breach are or have been included in a claim under any other warranty or
indemnity under this SPA or any Related Agreements which already has been
satisfied, and (ii) if and to the extent that the Euronet Group's Losses
suffered from the breach have been recovered by virtue of a decrease in the
Earn-Out Claims or the Certificate Claims due to a decrease in EBITDA
Q3/2004, Base EBITDA or Compound EBITDA.
15.15 No Seller shall be liable in respect of any claim of this SPA
15.15.1 to the extent that the liability or the risk giving rise to the
relevant claims was known by any member of the Euronet Group or by any
of its respective directors, officers, employees or agents or
financial, accounting or legal advisers involved in negotiating the
acquisition of the Company;
15.15.2 in relation to any liability or risk which has been accurately
disclosed by the Sellers and any of the Company's respective
directors, officers, employees or any of the Sellers' or the Company's
agents or financial, accounting, legal or other advisers involved in
negotiating the acquisition of the Company prior to Signing;
15.15.3 in relation to any liability or risk which is contained or referred
to (i) in this SPA, including the Related Agreements, (ii) the
Schedules to this SPA including its annexes or (iii) in any of the
documents listed in Schedule 14.15.3 which have been made available to
the Buyer in the course of the Due Diligence.
15.16 The Euronet Group herewith acknowledges and confirms that it is not aware
of any breaches of representations and warranties by the Sellers. The
Euronet Group acknowledges and confirms that it has investigated and
analyzed the Company independently in all respects and its decision to
acquire the Shares is exclusively based (i) on the Euronet Group's own
investigation and analysis or professional advice rendered by, for example,
its financial, accounting or legal advisers and (ii) on the provisions of
the SPA and Related Agreements, in particular on the representations and
warranties made by the Sellers therein and it has not relied on any
statements of the Sellers made prior to Signing.
15.17 References in the Schedules to Section numbers shall be to the Sections to
which the disclosure is most likely to relate. Such references are given
for convenience only and shall
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not limit the effect of any of the disclosures, all of which are made
against the Sellers' warranties as a whole.
15.18 Instead of the statutory limitation periods, all claims under Section 14,
15 and 16 and any claims in connection herewith vis-a-vis the Sellers shall
be subject to the following limitation periods:
15.18.1 The limitation period for the warranties and representations given
in Sections 14.2.1 to 14.2.4, 14.2.6 and 14.2.7 shall be ten years
commencing on the Closing. The limitation period for the warranties
and representations given in Section 14.2, to the extent not addressed
in the previous sentence, hereof shall be five years commencing on the
Closing.
15.18.2 The limitation period for claims of Euronet Group in connection
with Sections 14.14 and 16.2 shall be six (6) months beginning with
the existence of a final and unappealable tax assessment
(Steuerbescheid) for the respective taxes in the respective assessment
period (Veranlagungszeitraum). This limitation period shall not apply
for the claims of Euronet Group in connection with Sections 14.14 and
16.2 in the event of willful or grossly negligent tax evasion
(Steuerhinterziehung).
15.18.3 The limitation period for all other claims under Sections 14 and 16
of this SPA shall lapse on September 30, 2005.
15.18.4 The limitation periods pursuant to Section 15.18.3 will be
interrupted by a written notification of a specific claim in
accordance with Section 15.6 by Euronet Group to the Sellers. Such
interruption of the limitation period terminates, if Euronet Group
does not file a lawsuit with respect to such claim with the court
within 1 (one) month after the respective limitation period for such
claim would have terminated pursuant to Section 15.18.3, as the case
may be, but for the notification.
15.18.5 Section 203 BGB does not apply.
15.19 Given that no precedent court rulings exist as to the application and
interpretation of Section 444 BGB, the Parties mutually acknowledge that
Section 444 BGB shall not apply to the liability of the Sellers under
Section 14 of this SPA and that the warranties and representations of
Sellers therein constitute severable warranty undertakings (selbstandige
Garantieversprechen) and are not construed to be guarantees for the
condition of goods within the meaning of Section 444 BGB.
15.20 Any other remedies for breaches of Sellers' obligations set forth in this
SPA or related to this SPA than those set out in this Section 15, including
but not limited to statutory warranties, remedying the defect
(Nachbesserung), damage claims (Schadensersatz), purchase price reduction
(Minderung), the right to rescind (Rucktritt), the right to terminate
(Kundigung) or any claims under Section 311 BGB, or the right to challenge
the contract (Anfechtung) (other than the right to challenge the contract
pursuant to Section 123 BGB), are herewith excluded. None of the
limitations contained in this Section 15 shall apply for the benefit of the
respective Seller in case of fraudulent behavior by the respective Seller
or intentionally caused damage (vorsatzlich herbeigefuhrter Schaden) by the
respective Seller.
16 Tax Indemnities
16.1 Taxes as used in this Section 16 shall mean taxes and ancillary payment
duties pursuant to Section 3 German Taxation Act (Abgabenordnung) and other
public-law dues ("Taxes").
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SPA
16.2 Sellers shall indemnify the Company against and hold them harmless from all
Taxes to be borne by the Company for the time up to (and including) the
Interim Accounts' Date if and to the extent such Taxes have not been paid
until the Interim Accounts' Date or have been provided for in the Interim
Accounts. Such indemnity shall apply regardless of whether or not on the
Interim Accounts' Date Sellers had knowledge of such obligation to pay
Taxes.
16.3 After the Closing Buyer shall procure that the Company gives Sellers and
their advisors bound by professional confidentiality duties the opportunity
to participate in all tax audits having directly or indirectly an impact on
the obligations of the Sellers to compensate Euronet Group or the Company
according to Sections 14.14 and 16.2 at the least for all tax audits for
the time up to December 31, 2004. The Euronet Group shall procure that the
Company will notify Sellers without undue delay of the prior announcement
and/or the commencement of any such audit and will ensure that the Company
will give access to all information which can reasonably be required to
participate in the tax audits. Section 15.5 shall apply mutatis mutandis.
16.4 In relation to the above indemnity obligations, the terms and conditions of
Section 15 shall apply mutatis mutandis.
Part V. Assignment of Company's Shares/Closing
17 Transfer and Assignment of the Shares, Closing
Seller I hereby assigns and transfers the Share I to the Buyer. Seller II
hereby assigns and transfers the Share II to the Buyer. The transfers are
subject to fulfillment of the Conditions Precedent (as defined in Section
18.1). The Buyer accepts such assignment and transfer. The day on which the
Buyer holds the Shares shall be the "Closing".
18 Conditions Precedent
18.1 The transfer of the Shares shall be subject to the conditions precedent
(aufschiebende Bedingungen) set forth in this Section 18.1 (the "Conditions
Precedent"):
18.1.1 The Buyer shall pay the entire Cash Component as defined in Section
3.1 Sentence 3 pursuant to Section 3.2.
18.1.2 The Notary shall receive a letter from the Share Escrow Agent
confirming receipt of the Share Component pursuant to Section 4.2 and
4.4.
18.1.3 The Sellers, the Buyer and the Trustee shall have entered into the
Trust Agreement.
18.1.4 The Sellers, the Buyer and Euronet shall have entered into the
Expert Agreement according to Section 5.7.1(iv)(b) which is hereby
confirmed by Buyer, Euronet and Sellers.
18.1.5 The Company and the Sellers, in their capacity as managing directors
of the Company, shall enter into the Service Contracts.
18.1.6 The Sellers shall pass the shareholders' resolutions set out in Part
[B].
18.2 Each of the Parties undertakes to take any further action and to execute
and deliver any additional documents as may be required and reasonably
requested by the other Party to effect the consummation of this SPA and the
Related Agreements.
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SPA
18.3 The Notary is herewith instructed by the Sellers and the Buyer to confirm
in writing vis-a-vis the Parties and the Share Escrow Agent fulfillment of
the Conditions Precedent immediately thereafter and further to make notice
to the Commercial Register and other Public Authorities that the transfer
of the Shares from the Sellers to the Buyer has occurred.
Part VI. Miscellaneous
19 Default in Payment
In case any Party is in default with its payment obligations, such
outstanding claim will bear annual interest in the amount of 6.5 (six point
five) percentage points above the German base rate according to Section 247
BGB as amended from time to time. There shall be no interest payments on
interest. Any other claims for damages are hereby not precluded.
20 Non-competition Covenant
20.1 Each of the Sellers undertake for a period of two years following Closing
to forego any activity constituting, directly or indirectly, competition
with the business activity of the Company in Germany and those parts of
Europe where the Company engages in business activities at Signing. In
particular, each Seller will not, directly or indirectly, establish,
acquire, (continue to) participate in or work for any enterprise, which
competes with the business activity of the Company. The restrictions in
Section 20.1 shall not prohibit any Seller or any of the Sellers'
Affiliated Companies from carrying on or being engaged in or being
economically interested in any business which is of the same or similar
type to the business carried on by the Company after such time as Euronet,
its legal successor or companies affiliated with Euronet within the meaning
of Section 15 AktG (the "Euronet's Affiliated Companies") cease to carry on
or be engaged in or economically interested in the business activity of the
Company.
20.2 The restriction of competition set forth in Section 20.1 above does not
apply to the acquisition of shares for the purpose of capital investment in
particular up to an amount of 5 percent of the issued share capital in
publicly listed companies, except for any shareholding in Euronet, its
successors and affiliates.
20.3 Each Seller undertakes to ensure that the restriction of competition set
forth in Section 20.1 will also be observed by each of the Sellers'
Affiliated Companies.
20.4 Each Seller undertakes for a period of two years following Closing not to
solicit any employees of the Company for an employment or other paid
activity for the respective Seller or for any of the Sellers' Affiliated
Companies, in particular not to offer key employees of the Company
employment, consultancy or service agreements or any benefit for the
termination of their respective agreements with the Company.
20.5 If a Seller violates the restriction of competition set forth in Sections
20.1, 20.3 and 20.4 above and continues such violation despite a request by
Buyer to discontinue such violation, the respective Seller shall pay a
contractual penalty in the amount of Euro 15,000.00 (Euro fifteen thousand)
for each instance of violation. Where the violation continues the
contractual penalty is owed anew for every month, during which thes
violation continues. The respective Seller may not plead that the continued
violation constitutes only one instance of violation (Ausschluss der
Einwendung des Fortsetzungszusammenhangs). The Buyer's right to claim
damage compensation or discontinuance of the violation remains
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SPA
unaffected. The contractual penalty/ies owed under this Section 20 will be
offset against any damage compensation claimed and/or awarded.
21 Confidentiality; Press Releases; Ad-Hoc Notice
21.1 The Parties shall keep the contents of this SPA and Related Agreements
confidential to the extent legally possible.
21.2 The Parties shall mutually agree upon the language and the timing of any
press release or other public notice to be given with respect to this SPA
or the transactions contemplated herein after Signing or any business
measures which may have an impact on the performance of duties under this
SPA. The Parties' consent must not be unreasonably withheld. No press
releases shall be given to the public prior to the receipt of the Funding
Notice by the Notary pursuant to Section 7.1.
21.3 Notwithstanding the above, each party hereto may without the other Parties'
consent disclose only such information as is mandatory by law and publish
notices with the statutory minimum content. Euronet will notify Sellers in
writing and in due time prior to any public notice to be given by Euronet
after Signing pursuant to German and United States securities trading laws,
stock exchange laws or other applicable laws, stock exchange rules or
practices. Further, Sellers acknowledge that Euronet will be required to
disclose the transactions contemplated in this Agreement in accordance with
U.S. Securities laws, including filing form 8K. Euronet will give Sellers
an opportunity to review and comment upon such filings. Euronet Group will
take all appropriate measures to ensure confidential treatment of the
relationship of the Company with the Special Customers and in particular
nondisclosure of the Deed of Reference. Further, Euronet Group undertakes
vis-a-vis the Sellers to ensure that factual Schedules will not be
disclosed to the public, including Schedules setting out personal
information of employees (e.g. 14.8.1 14.8.5).
22 Waiver of Pre-emptive Rights, Consents
22.1 Seller I and Seller II hereby each waive their respective right of first
refusal (Vorkaufsrecht) under Section 8 of the articles of association of
the Company with regard to the Share II and Share I, respectively.
22.2 By way of a shareholders' resolution dated November 7, 2003 which is
attached as Schedule 22.2 the shareholders' meeting of the Company granted
its consent to a sale and transfer of the Shares under this SPA as provided
for in the articles of association of the Company.
22.3 By written statements dated November 4 and 6, 2003 and which are attached
as Schedule 22.3 the Sellers' spouses consented to the sale and transfer of
the Shares and the transaction contemplated under this SPA pursuant to
Section 1365 BGB.
23 Assignment of Rights, Power of Attorney
23.1 The Parties shall not be entitled to assign any rights or obligations
arising under this SPA, or any Related Agreements, to any third party
without the other Party's consent. The consent of the Sellers to a transfer
by Euronet Group of its rights hereunder to any of Euronet Group's
Affiliated Companies shall not be unreasonably withheld. If any of the
Sellers deceases, the rights and obligations under this SPA and related
agreements will pass to their respective legal successor. In case both
Sellers decease, Xxxxxx Xxxxxxxx acting for Seller I
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SPA
and Xxxxxx Xxxxx acting for Seller II, shall herewith post mortem be
irrevocably authorized to carry out the respective Seller's rights and
obligations under this SPA, and in particular the Certificates on the
respective Seller's behalf.
23.2 Section 23.1 shall not apply to any rights of the Sellers with respect to
the Certificates and in particular not restrict the transfer of the
Certificates.
24 Liability of Euronet Group/Guarantee Euronet
24.1 All members of the Euronet Group shall (i) be jointly and severally liable
vis-a-vis the Sellers for any obligations under this SPA and the Related
Agreements, and (ii) shall herewith authorize each other to receive any
statements hereunder on the other member's behalf.
24.2 Euronet hereby unconditionally and irrevocably guarantees to the Sellers
due and punctual performance and observance by each of the members of
Euronet Group of all their obligations, commitments, undertakings,
warranties and indemnities under or pursuant to this SPA or any of the
Related Agreements (the "Guaranteed Obligations") to the extent of any
limit on the liability of Euronet and the members of Euronet Group in the
SPA and/or the Related Agreements.
24.3 If and whenever any of the members of Euronet Group defaults for any reason
whatsoever in the performance of any of the Guaranteed Obligations, Euronet
shall forthwith upon demand unconditionally perform (or procure performance
of) and satisfy (or procure the satisfaction of) Guaranteed Obligations in
regard to which such default has been made in the manner prescribed by this
SPA and/or the Related Agreements and so that the same benefits shall be
conferred on the Sellers as they would have received if Guaranteed
Obligations had been duly performed and satisfied.
24.4 This guarantee is to be a continuing guarantee and accordingly is to remain
in force until all Guaranteed Obligations shall have been performed or
satisfied. This guarantee is in addition to and without prejudice to and
not in substitution for any rights or security which the Sellers may now or
hereafter have or hold for the performance and observance of the Guaranteed
Obligations.
24.5 As a separate and independent obligation Euronet agrees that any of the
Guaranteed Obligations (including, without limitation, any moneys payable)
which may not be enforceable against or recoverable from any of the members
of the Euronet Group by reason of any legal limitation, disability or
incapacity on or of any of the members of the Euronet Group or of any other
fact or circumstances (other than any limitation imposed by this SPA or any
Related Agreements) shall nevertheless be enforceable against and
recoverable from Euronet as though the same had been incurred by Euronet
and Euronet were the sole or principal obligor in respect thereof and shall
be performed or paid by Euronet on demand.
24.6 The liability of Euronet under this Section 24:
24.6.1 shall not be released or diminished by any variation of the
Guaranteed Obligations or any forbearance, neglect or delay in seeking
performance of the Guaranteed Obligations or any granting of time for
such performance; and
24.6.2 shall not be affected or impaired by reason of any other fact or
event which in the absence of this provision would or might constitute
or afford a legal or equitable discharge or release or a defense to a
guarantor.
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25 Transaction Costs
25.1 Buyer shall bear the notary's fees incurred in the recording hereof and in
the transactions contemplated herein, including for the avoidance of doubt,
the notary's fees incurred in the recording of the shareholders' resolution
set out in Schedule 10.1.6, of the Trust Agreement and the Certificates.
Each Party hereto shall bear its own costs and taxes incurred in relation
to this SPA and to its implementation, including the costs of its own
lawyers and the costs of any of their advisors, subject to the stipulations
in the Related Agreements.
25.2 Euronet Group shall bear all costs and fees related to the Notary Cash
Component Account and the Notary Account I and II, and the Notary Account
Certificate I and Notary Account Certificate II for both Certificates. The
Sellers will reimburse immediately after the Buyer has received the
respective statement of fees of the Notary and has sent a copy of those
statements to the Sellers a lump sum of Euro 12,000 (Euro twelve thousand)
plus VAT to the Buyer.
25.3 Euronet Group and the Sellers shall bear half of the fees and half of the
costs incurred by the Advisory Board of the Company.
25.4 The Parties shall bear the costs and fees of the Expert for the Preliminary
Expert Decision, the Final Expert Opinion and the Final Expert Decision, as
the case may be, as determined by the Expert in accordance with Section 91
a Para. 1 Civil Procedures Act (Zivilprozessordnung). Euronet Group and the
Sellers shall each bear half of any fees and half of any costs incurred by
the Expert other than those described in this Section 25.4, first sentence,
especially the fees and costs of the audit of the Interim Accounts.
25.5 The Parties mutually acknowledge that they expect the transactions
contemplated herein to be exempt from value added tax pursuant to Section 4
No. 8 (f) German Value Added Tax Act (Umsatzsteuergesetz). If contrary to
expectation the matters contemplated herein are subject to value added tax,
then the Consideration shall be construed as inclusive of value added tax
at the statutory rate.
25.6 The Parties mutually acknowledge that they expect the transactions
contemplated herein not to be subject to land transfer tax
(Grunderwerbsteuer). If contrary to expectation land transfer tax becomes
payable, then such tax shall be borne by Sellers.
25.7 The Sellers shall indemnify Euronet Group from all costs and penalties
related to the consideration according the Certificate according to Section
10.1 which are imposed on Euronet Group by German fiscal authorities.
26 Complete Agreement and Written Form
26.1 This SPA and the Related Agreements constitute the whole agreement between
the Parties relating to the matters contemplated herein at Signing. The
Schedules to this SPA and the Related Agreements form an integral part of
the agreement; this applies especially to the Schedule 6.1and all its
provisions in relation to the determination of EBITDA Q3/2004, Base EBITDA
and Compound EBITDA.
26.2 Any amendment, including any amendment to this clause, shall require
observance of the written form or any stricter form mandatory by law.
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SPA
27 Notices and Communications
27.1 Subject to any conflicting provisions of this SPA, any notices and other
communication in relation to this SPA shall be in writing delivered by
hand, fax, registered post or by courier using an internationally
recognized courier company. It shall be effective upon receipt, unless
otherwise provided for in this SPA.
27.2 Any notices and other communication to Sellers, Euronet, B.V., Buyer, the
Notary, Share Escrow Agent, Trustee shall be sent to the addresses as shown
in Schedule 27.2.
27.3 The Parties may appoint any other person provided that such appointment of
such representative shall take effect at receipt of the appointment notice
by the other party hereto sent by registered mail. Up to the appointment of
such new representative, the power to receive service of notices and
communications granted to the previous representative shall continue to
exist. Any change of address or contact details must be communicated in
accordance with Section 27.1.
28 Severability
If any term or condition of this SPA or Related Agreements is or becomes
invalid or unenforceable or if there has been an inadvertent omission
herein, then this shall not affect the validity and enforceability of the
remaining terms and conditions. Such invalid or unenforceable term or
condition shall be replaced by that valid and enforceable term or condition
that is in accordance with the commercial goal and purpose of the invalid
or unenforceable term or condition. In the event of any inadvertent
omission, the term or condition shall be agreed that is in accordance with
that which in view of the commercial goal and purpose of this SPA or
Related Agreements would reasonably have been agreed if the matter had been
thought of at the outset.
29 Choice of Law
29.1 This SPA shall be governed by the laws of the Federal Republic of Germany.
29.2 Each Party hereto consents to the exclusive jurisdiction of the courts in
Munich, Germany. The right of the Sellers to file claims in Kansas City,
Missouri, United States of America remains unaffected.
Part VII. Instructions to Notary
The Parties herewith authorize and instruct the Notary to notify after Closing
(i) the commercial register, and (ii) the financial authorities by making
available a shortened certified version of this SPA containing only the
provisions regarding the transfer of the Shares and the Parties of this SPA.
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SPA
Inhaltsverzeichnis
1 Sale of Shares; Allocation of Profits; Acquisition and Assignment of certain Shareholder Loans....6
2 Consideration.....................................................................................6
3 Cash Component....................................................................................7
4 Share Component...................................................................................8
5 Earn-Out.........................................................................................16
6 Certificates.....................................................................................30
7 Dissolution of Agreement; Break-up Fee...........................................................32
8 Interim Accounts.................................................................................32
9 Status of the Sellers as Managing Directors......................................................33
10 Earn-Out Protection..............................................................................34
11 Release from Security and Third Party Obligations in Relation to the Company.....................35
12 Euronet Group's Warranties and Liability.........................................................36
13 Remedies in Case of Buyer's Warranty Breach......................................................38
14 Sellers' Warranties..............................................................................42
15 Remedies in Case of Sellers' Breaches of SPA.....................................................53
16 Tax Indemnities..................................................................................58
17 Transfer and Assignment of the Shares, Closing...................................................59
18 Conditions Precedent.............................................................................59
19 Default in Payment...............................................................................60
20 Non-competition Covenant.........................................................................60
21 Confidentiality; Press Releases; Ad-Hoc Notice...................................................61
22 Waiver of Pre-emptive Rights, Consents...........................................................61
23 Assignment of Rights, Power of Attorney..........................................................61
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SPA
24 Liability of Euronet Group/Guarantee Euronet.....................................................62
25 Transaction Costs................................................................................63
26 Complete Agreement and Written Form..............................................................63
27 Notices and Communications.......................................................................64
28 Severability.....................................................................................64
29 Choice of Law....................................................................................64
66
SPA
Part B Shareholders' Resolution of the Company
Shareholders' Resolution of the Company
Waiving all formalities and notice periods with regard to the convening and
holding of a shareholders' meeting, the Sellers with consent of Euronet Group
hereby hold a shareholders' meeting of the Company and pass the following
resolutions.
The articles of association of the Company shall be amended in their entirety as
shown in Schedule 10.1.6 to the share and transfer agreement recorded as Part A
of this notarial recording.
Subject to the notification to the Company by Euronet Group that all Shares have
been transferred to Euronet Group consent is given to the amendment of the
Service Contracts (as defined in the share purchase and transfer agreement) of
the Sellers as shown in Schedule 9.3.
Consent is granted for the rules and procedures of the advisory board.
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SPA
This notarial recording, including the Schedule, except for the Schedules
[ ] to [ ] which will not be read aloud in accordance with Section 14
----- -----
German Notarization Act with the consent if all Parties but will be initialed,
has been read to the persons appeared and the persons appeared herewith consent
and sign personally as follows.
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SPA
Schedule Definitions
04 Accounts as defined in Section 5.11.1(i)
06 Accounts as defined in Section 5.11.1(ii)
5% Limit as defined in Section 4.10.4
Adjustment Facts as defined in Section 5.7.2(ii)(e)
Affiliated Company as defined in Section 5.4.3
AktG as defined in Section 5.4.3
Annual Accounts as defined in Section 14.5.1
Annual Accounts 2000 as defined in Section 14.5.1
Annual Accounts 2001 as defined in Section 14.5.1
Annual Accounts 2002 as defined in Section 14.5.1
Articles as defined in Section 10.2
Audited Interim Accounts as defined in 8
BGB as defined in Section 3.1
Banking Days as defined in Section 5.7.1(iv)(a)
Base EBITDA as defined in Section 5.10.2(ii)(a)
Base EBITDA Agreement as defined in Section 5.11.2
Base Expert Decision as defined in 5.11.3
Blackout Period as defined in Section 4.7.4
Business Operations as defined in Section (C)
Business Plan as defined in Section 5.4.1
Business Plan EBITDA as defined in Section 10.1.4
Buyer Delta Euronet GmbH
Buyer Earn-Out Interest as defined in Section 5.8.2
Buyer's Representative as defined in Schedule 27.2
B.V. Eft Services Holding B.V.
B.V.'s Representative as defined in Schedule 27.2
CAGR as defined in Section 5.10.2(iii)
Cash Component as defined in Section 3.1
Cash Component Notary Account as defined in Section 3.2
Certificate I as defined in Section 6.1
Certificate II as defined in Section 6.1
Certificates as defined in Section 6.1
Closing as defined in Section 17
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SPA
Company as defined in Section (A)
Compound EBITDA as defined in Section 5.10.2(ii)(b)
Compound EBITDA Agreement as defined in Section 5.11.2
Compound Expert Decision as defined in Section 5.11.3
Concentration Factor as defined in Section 5.5.2(i)
Conditions Precedent as defined in Section 18.1
Consideration as defined in Section 2.1
Core Protection Period as defined in Section 10.2
Current Assets as defined in Section 14.4.2
Deed of Reference (Bezugsurkunde) Role of deed No /2003 of the
--------
notary Xx. Xxxxx Xxxxxxxx, Berlin
Deviation Dates as defined in Section 10.1.4
Deviation Period I as defined in Section 10.1.4
Deviation Period II as defined in Section 10.1.4
Deviation Period III as defined in Section 10.1.4
Dissolution Waiver as defined in Section 7.1
Distributable Interim Profit 2003 as defined in Section 3.6
Due Diligence as defined in Section 14.15.3
Earn-Out as defined in Section 5
Earn-Out Claims as defined in Section 5.6.1
Earn-Out Claims Due Date as defined in Section 5.8.1
Earn-Out Shortfall as defined in Section 5.7.2(ii)(h)
Earn-Out Excess as defined in Section 5.7.2(ii)(h)
EBITDA as defined in Section 5.3
EBITDA Q3/2004 as defined in Section 5.1
Euronet Euronet Worldwide, Inc.
Euronet Group Buyer, B.V. and Euronet collectively
Euronet Group's Losses as defined in Section 15.6
Euronet's Affiliated Companies as defined in Section 20.1
Euronet's Representative as defined in Schedule 27.2
Euronet Shares as defined in Section (D)
Escrow Interest as defined in Section 5.8.2
Exchange Act as defined in Section 4.6.10
Expert as defined in Section 5.7.1(iv)(b)
Expert Agreement as defined in Section 5.7.1(iv)(b)
2
SPA
Extended Special Customers Agreement as defined in Section 5.4.8
Final Earn-Out Claim as defined in Section 5.7
Final Earn-Out Claims as defined in Section 5.7
Final Earn-Out Claims Agreement as defined in Section 5.7.2(i)
Final Expert Decision as defined in Section 5.7.2(ii)(e)
Final Expert Opinion as defined in Section 5.7.2(ii)(b)
Final Reduced Earn-Out Claim as defined in Section 5.7
Final Remaining Earn-Out Claim as defined in Section 5.7
Financing Agreement as defined in Section 1.3
Fixed Assets as defined in Section 14.4.1
Founder Loan Agreements as defined in Section 1.3
Funding Notice as defined in Section 7.1
German GAAP means the generally accepted accounting
principles, standards and practices in
Germany (Grundsatze ordnungsgemaBer
Buchfuhrung) under the German Commercial
Code (Handelsgesetzbuch - HGB)
GmbHG as defined in Section 14.5.1
Guaranteed Obligations as defined in Section 24.2
HGB as defined in Section 8
Historic Data as defined in Section 14.15.3
Intellectual Property Rights as defined in Section 14.6.1
Interim Accounts as defined in Section 8
Interim Accounts' Date as defined in Section 8
Market Purchaser as defined in Section 4.11
Material Contracts as defined in Section 14.9.9
Minimum Escrow Amount as defined in Section 5.10.1(i)(b)
Multiple as defined in Section 5.6.1
Negative Deviation as defined in Section 10.1.4
Notary as defined in Section 3.2
Notary Account I and II as defined in Section 5.9.2
Objection Notice as defined in Section 5.7.1(iv)(a)
Objection Period as defined in Section 5.7.1(iv)(a)
Observation after Closing Period as defined in Section 9.4
Observer as defined in Section 9.4
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SPA
Parties Sellers and Euronet Group, collectively
Permits as defined in Section 14.12.1
PINs as defined in Section 14.9.9(ii)
Preferred Stock as defined in Section (D)
Preliminary Earn-Out Claim as defined in Section 5.7
Preliminary Earn-Out Claims as defined in Section 5.7
Preliminary Earn-Out Claims Agreement as defined in Section 5.7.1(iii)(b)
Preliminary Expert Decision as defined in Section 5.7.1(iv)(c)
Preliminary Reduced Earn-Out Claim as defined in Section 5.7
Preliminary Remaining Earn-Out Claim as defined in Section 5.7
Prospectus as defined in Section 4.6.3
Protection Period as defined in Section 9.1
Protection Period I as defined in Section 9.1
Protection Period II as defined in Section 9.1
Q3/2004 as defined in Section 5.2
Q3/2004 Accounts as defined in Section 5.2
Reduced EBITDA Q3/2004 as defined in Section 5.5
Reduction Scenario (1) as defined in Section 5.5.1
Reduction Scenario (2) as defined in Section 5.5.2
Registrable Shares as defined in Section 4.6.1
Registration Statement as defined in Section 4.6.1
Regulation S as defined in Section 4.10.1
Related Agreements as defined in Section 12.4
Release Earn-Out Amount as defined in Section 5.10.2(i)
Rule 144 as defined in Section 4.6.10
Sales Agreement as defined in Section 14.9.7
SEC as defined in Section 4.6.1
Securities Act as defined in Section 4.6.3
Seller I Xx. Xxxxx Xxxxxxxx Xxxxxxxx
Seller I Share Component as defined in Section 4.2
Seller II Xx. Xxxxxx Xxxxx
Seller II Share Component as defined in Section 4.2
Sellers Seller I and Seller II collectively
Sellers' Affiliated Companies as defined in Section 14.2.11
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SPA
Sellers' Bank Accounts as defined in Section 3.4
Sellers' Base Notification as defined in Section 5.11.1
Sellers' Closely Associated Persons as defined in Section 14.2.11
Sellers' Compound EBITDA Notification as defined in Section 5.11.1
Sellers' Earn-Out Interest as defined in Section 5.8.2
Sellers' Earn-Out Claims Notification as defined in Section 5.7.1(i)
Sellers' Losses as defined in Section 13.5
Sellers' Representative as defined in Schedule 27.2
Service Contracts as defined in Section 9.3
Settlement Transfer as defined in Section 15.8.2
Share Component as defined in Section 4.1
Shares as defined in Section (B)
Share I as defined in Section (B)
Share II as defined in Section (B)
Share Escrow Agent as defined in Section 4.4
Share Escrow Agent Agreement as defined in Section 4.5
Share Purchase Agreement or SPA as defined in Section A
Shareholder Loans as defined in Section 1.3
Signing as defined in Section (B)
Special Customers as defined in Section 5
Special Customers Agreement as defined in Section 5
Special Customers as defined in Section 5
Suspension as defined in Section 4.7.3
Suspension Notice as defined in Section 4.7.3
Telecom Carriers as defined in Section 14.9.9(i)
Terminals as defined in Section 14.9.9(iv)
Trust Agreement as defined in Section 10.3
Trustee shall mean heptus 22. GmbH (in the
future named Trumpet GmbH) as defined
in Section 10.3
5
