Exhibit 2.1
DATED FEBRUARY 4, 2005
BETWEEN
VASCO DATA SECURITY INTERNATIONAL, INC.
(as Purchaser)
AOS HOLDING B.V.
(as Seller)
FILIPAN BEHEER B.V.
(as Guarantor)
MR. MLADEN FILIPAN
(as Surety)
PIJNENBURG BEHEER N.V.
(as Guarantor)
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SHARE SALE AND PURCHASE AGREEMENT
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Baker & McKenzie Amsterdam N.V.
1017 PS Leidseplein
Amsterdam, The Netherlands
Tel: +31-20-5517555
Fax: +31-20-6267949
THIS SHARE SALE AND PURCHASE AGREEMENT is made on this 4th day of February 2005
(the "AGREEMENT")
Between:
(1) VASCO DATA SECURITY INTERNATIONAL, INC., a Delaware corporation, United
States of America with its principal place of business at 1901 South
Meyers Road, Oakbrook Terrace, Illinois 60181, United States of America
(the "PURCHASER");
(2) A.O.S. HOLDING B.V., a private limited liability company organized and
existing under the laws of The Netherlands with its registered office
in `s Hertogenbosch and its principal place of business at De Tweeling
20A, (5215 MC) `s Hertogenbosch, The Netherlands (the "SELLER");
(3) FILIPAN BEHEER B.V., a private limited liability company organized and
existing under the laws of the Netherlands with its registered office
at (5492 BK) Emmausstraat 11, Sint Oedenrode, The Netherlands ("FILIPAN
BEHEER");
(4) MR. MLADEN FILIPAN, a private individual residing at (5492 BK)
Emmausstraat 11, Sint Oedenrode, The Netherlands, being the ultimate
beneficial owner of Art of Security B.V. ("FILIPAN"); and
(5) PIJNENBURG BEHEER N.V., a private limited liability company organized
and existing under the laws of The Netherlands with its registered
office at (5261 NE) Boxtelseweg 70, Vught, being the sole shareholder
of C.P.S. International B.V. ("PIJNENBURG BEHEER NV").
WHEREAS:
(A) The Seller is the legal and beneficial owner of the entire issued share
capital of A.O.S. Hagenuk B.V., a private limited liability company
organized and existing under the laws of The Netherlands with its
registered office at `s Hertogenbosch, The Netherlands and its
principal place of business at (5215 MC) De Tweeling 20A, `s
Hertogenbosch, The Netherlands ("COMPANY").
(B) The Company is in the business of the development and marketing of
authentication, verification and IT security software and applications
therefor, including smart card activities;
(C) The Purchaser designs, develops, markets and supports patented
"Identity Authentication" products for e-business and e-commerce;
(D) The Seller and the Purchaser have agreed that the Seller shall sell and
transfer to the Purchaser and the Purchaser shall purchase and acquire
from Seller 100% of the total issued share capital of the Company,
consisting of 180 shares, nominal value EUR 100 per share, numbered 1
to 180 (collectively: "SHARES") for the Consideration and on the terms
and subject to the conditions contained in this Agreement;
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THEREFORE IT IS HEREBY AGREED AS FOLLOWS:
ARTICLE 1 - DEFINITIONS AND INTERPRETATION
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1.1 DEFINITIONS. In this Agreement, unless the context otherwise requires
the words and expressions used in this Agreement shall have the
meanings set out in SCHEDULE 1.
1.2 HEADINGS. Headings are inserted for convenience only and shall not
affect the construction of this Agreement.
ARTICLE 2 - SALE AND PURCHASE OF THE SHARES
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2.1 SALE AND PURCHASE. The Seller hereby, subject to the terms and
conditions of the Agreement, sells ("VERKOOPT") the Shares to the
Purchaser, and the Purchaser hereby, subject to the terms and
conditions of this Agreement, purchases ("KOOPT") the Shares from the
Seller.
2.2 TRANSFERS. At Closing, the Seller agrees to transfer ("LEVEREN") to
Purchaser the Shares and the Purchaser agrees to accept the transfer of
the Shares from the Seller.
ARTICLE 3 - CONSIDERATION AND ADJUSTMENT
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3.1 CONSIDERATION. The consideration for the Shares payable by the
Purchaser to the Seller ("CONSIDERATION") shall consist of:
(i) the payment of a cash amount of EUR 3,750,000 (Three million
seven hundred and fifty thousand Euros) adjusted to (a) add or
subtract the amounts required to settle any outstanding
balances due from or due to Related Parties as of the Closing
Date and (b) add or subtract the amount by which the Company's
tangible net equity (defined to be total net equity less net
intangible assets) as of January 31, 2005 as reflected in the
Financial Statements as defined in EXHIBIT 4 is less
respectively more than EUR 85,000 (the net result of all the
foregoing, the "CONSIDERATION CASH");
(ii) the issuance to Seller of shares of common stock, par value
$.001 per share, of the Purchaser ("CONSIDERATION SHARES"),
calculated in accordance with Articles 3.3 and 3.4 below; and
(iii) a variable amount related to the gross profits collected on
sales of POS equipment to VISA for the Latin/South America
markets for a period of two years after Closing ("GROSS
PROFITS") ("EARN OUT CONSIDERATION"), calculated in accordance
with Article 5.
3.2 CLOSING CONSIDERATION. The consideration payable at Closing ("CLOSING
CONSIDERATION"), which shall consist of the Consideration Cash and the
Closing Consideration Shares, shall at Closing be EUR 5,000,0000 (five
million Euros) adjusted as set forth in Article 3.1.(i), if any.
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3.3 CLOSING CONSIDERATION SHARES. The number of Consideration Shares issued
to Seller on the Closing Date ("CLOSING CONSIDERATION SHARES") will be
equal to EUR 1,250,000 divided by the Initial Value. The Initial Value
will be measured five (5) business days prior to the Closing Date
("MEASUREMENT DATE") and be equal to the average closing price of
Purchaser common stock on the Nasdaq SmallCap Market during a period of
thirty (30) trading days prior to the Measurement Date, less five
percent (5%) (the "INITIAL VALUE"). The Closing Consideration Shares
will be held in escrow for the benefit of the Seller in accordance with
the terms and conditions of the Escrow Agreement attached as SCHEDULE 9
(the "ESCROW AGREEMENT").
3.4 ADJUSTMENT OF CLOSING CONSIDERATION SHARES. Twelve months after the
Closing Date and five days prior to the expiration of the Escrow
Agreement (the "RE-MEASUREMENT DATE") the value of the Closing
Consideration Shares will be re-measured as of the Re-measurement Date
by reference to the average closing price of the Purchaser common stock
on the Nasdaq SmallCap Market during a period of thirty (30) trading
days prior to the Re-measurement Date, less five percent (5%) (the
"FINAL VALUE"). If:
(a) the Final Value is 90% of the Initial Value or greater, then
there shall be no adjustment of the amount of Closing
Consideration Shares;
(b) the Final Value is 80% or greater but less than 90% of the
Initial Value then the amount of Consideration Shares shall be
increased to the number of Consideration Shares multiplied by
a fraction consisting of the Initial Value divided by the
Final Value;
(c) the Final Value is less than 80% of the Initial Value then the
amount of Consideration Shares shall be increased to the
number of Closing Shares multiplied by 1.25.
Twelve months after the Closing the Consideration Shares shall be
transferred to Seller in accordance with the terms and conditions of
the Escrow Agreement, except for those Consideration Shares retained by
the escrow agent as additional recourse for indemnity claims made under
Article 7 below or those Consideration Shares released pursuant to
Article 3.7 below.
3.5 REGISTRATION RIGHTS. The Purchaser will use commercially best efforts
to register the Consideration Shares for resale and have such
registration declared effective by the Securities and Exchange
Commission of the United States ("SEC") within six (6) months of the
Closing Date, in accordance with the terms and conditions of the
Registration Rights Agreement attached as SCHEDULE 8 ("REGISTRATION
RIGHTS AGREEMENT").
3.6 SURVIVAL OF ESCROW. If the registration for resale has not been
declared effective by the SEC prior to the release of the Consideration
Shares from escrow, the adjustment obligation of the Purchaser pursuant
to Article 3.4 will survive until the earliest date that those shares
can be transferred by Seller as a result of valid registration for
resale or qualification under other rules and regulations of the SEC.
3.7 RELEASE OF ESCROW SHARES. Six months after Closing the Seller will have
the right to pay an amount of EUR 1,250,000 into the escrow account
against release by the Purchaser of the
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Consideration Shares, regardless of the value of those shares at that
time and without prejudice to the obligations of the Seller as set out
in the Registration Rights Agreement. In such an event the Seller and
the Purchaser shall jointly issue written instructions to the escrow
agent appointed under the Escrow Agreement.
ARTICLE 4 - CLOSING
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4.1 PLACE OF CLOSING AND CONDITIONS PRECEDENT. Closing shall take place at
the offices of Baker & McKenzie, Leidseplein 29, 1017 PS Amsterdam, The
Netherlands within five business days after all of the following
conditions precedent (the "CONDITIONS PRECEDENT") have been either
fulfilled or waived by the Purchaser, or at such other place and time
as shall be mutually agreed between the Parties:
(a) Completion of a legal, financial, tax, actuarial,
environmental and commercial pre-acquisition review over the
business and records of the Company and the results of such
review being satisfactory to the Purchaser in its sole and
absolute discretion;
(b) The Seller Warranties and the Additional Seller Warranties
remaining in all material respects true and accurate and not
misleading at Closing as if repeated at Closing and Seller
having complied in all material respects with all of the
obligations herein required to be performed by it prior to
Closing and Seller having delivered to Purchaser at Closing a
certificate, dated the Closing Date, to the foregoing effect;
(c) Receipt of audited financial statements in accordance with
U.S. Generally Accepted Accounting Principles for the years
2004, 2003 and 2002 for the Company, the results of such
audits to be consistent with the financial statements
previously provided to the Purchaser, except as a result of a
difference in accounting principles;
(d) Receipt of the consent of the AOS's auditors for the Purchaser
to use their opinion on the audited financial statements noted
in 4.1(c) in any filings to be made with the U.S. Securities
and Exchange Commission;
(e) The delivery of un-audited balance sheet, income statement and
cash flow ("Interim Financial Statements") for the month ended
just prior to the Closing Date prepared on a basis consistent
with the audited financial statements noted in 4.1(c). If
closing is on January 31, 2005, Seller will cooperate fully
with Purchaser in the preparation of such Interim Financial
Statements as soon as practicable following closing and
reimburse Purchaser promptly if the tangible net equity is
less than 85,000 Euros.
(f) The execution of an employment agreement, including
non-compete provisions, with Mr. M. Filipan, and letters of
intent confirming the willingness to stay employed with the
Company for each of the individuals referred to in Article
4.1.(a) and (b) below, effective upon the Closing Date, for
the following periods:
a. M. Filipan, P. Romein and A. Derks for a three-year
period, and
b. H. Braams, B. Hennink, F. Cornelis, H. Bourguignon,
M. Selten and M. Langejans for a two-year period;
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(g) The Company having operated its business in the ordinary
course thereof, consistent with past practices, from December
31, 2004 through the Closing Date;
(h) The Purchaser having reviewed and accepted all significant
commitments, agreements or transactions executed prior to the
Closing Date, including material contracts with suppliers
and/or customers, future employees and contracts out of the
ordinary course of business;
(i) Approval by the board of directors of the Purchaser of this
Agreement and all transactions contemplated hereby.
4.2 WAIVER OF CONDITIONS AND TERMINATION. The Purchaser and seller shall
each have the right (but not the obligation) to waive any or more of
the Conditions Precedent as it may deem fit. If by four weeks after the
signing of this Agreement the Conditions Precedent have not been either
fulfilled or waived then each of the Seller and the Purchaser shall
have the right to terminate this Agreement forthwith, in which event no
Party shall liable to any other Party for damages.
4.3 CONDUCT OF BUSINESS PRIOR TO CLOSING. The Seller and the Purchaser
shall use their reasonable best efforts so as to cause the Conditions
Precedent to be fulfilled as soon as reasonably possible after the date
of this Agreement. Except as expressly contemplated by this Agreement,
the Seller will between the date hereof and the Closing Date cause the
Company to conduct its operations in the ordinary and usual course of
business and consistent with past practice, and the Company shall, and
the Seller shall cause the Company to use its best efforts, to preserve
intact its business organization, to keep available the services of its
officers and employees and to maintain satisfactory relationships with
persons and entities having business dealings or business relationships
with them. Without limiting the generality of the foregoing, and except
as otherwise expressly provided in or contemplated by this Agreement,
between the date hereof and Closing Date the Company will not, without
the prior written consent of the Purchaser (which consent shall not be
unreasonably withheld):
(j) amend its articles of association;
(ii) issue, sell, or dispose of any shares in its capital, any
options, warrants or rights of any kind to acquire any shares
in their capital or any securities which are convertible into
or exchangeable for any shares in its capital;
(iii) split, combine or reclassify any shares in its capital,
declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination
thereof) in respect of any shares in its capital, or redeem or
otherwise acquire any shares in its capital;
(iv) create, incur, or guarantee long-term indebtedness for
borrowed money or short-term indebtedness for borrowed money
which in the aggregate exceeds EUR 25,000 or issue or sell any
debt securities;
(v) adopt, enter into or amend any bonus, profit sharing,
compensation, stock option, warrant, pension, retirement,
deferred compensation, employment, severance, termination or
other employee benefit plan, agreement or arrangement for the
benefit or welfare of any officer, director or employee or
except as reasonably called for pursuant to formulas contained
in existing employee benefit plans or arrangements or
otherwise in the ordinary course of business and consistent
with past practice (none of which shall be unreasonable or
unusual), agree to any increase in the compensation
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payable or to become payable to any officer, director or
employee;
(vi) purchase or otherwise acquire, by merger, consolidation,
acquisition of securities or assets or otherwise, (i) any
corporation, partnership, association or other business
organization or division thereof or (ii) any assets or
properties which would be material, in the aggregate, to the
Group taken as a whole;
(vii) sell, lease, or otherwise dispose of any of its assets or
properties which are material to the Company, other than in
the ordinary course of business;
(viii) mortgage or encumber any of its assets or properties which are
material to the Company taken as a whole;
(ix) make any capital expenditures or commitments for capital
expenditures which, in the aggregate, exceed EUR 25,000;
(x) pay or discharge any material claim or liability other than in
the ordinary course of business or pursuant to binding
contractual obligations of the Company or set forth herein;
(xi) enter into any material contract other than in the ordinary
course of business consistent with past practice or amend any
Material Contract (as such term is defined in SCHEDULE 4);
(xii) take any action which would cause any Warranty not to be true
and correct as of the Closing Date; or (xiii) agree, whether
in writing or otherwise, to do any of the foregoing.
4.4 SELLER'S CLOSING OBLIGATIONS. At Closing, the Seller shall:
(a) deliver or cause to be delivered to the Purchaser:
(i) the original shareholders registers of the Company;
(b) execute:
(i) the Notarial Transfer Deed;
(ii) the Escrow Agreement;
(iii) the Registration Rights Agreement.
(c) cause:
(i) the Company to execute the Notarial Transfer Deed;
(ii) Messrs. M. Filipan, P. Romein, A. Derks, H. Braams,
B. Hennink, F. Cornelis, H. Bourguignon, M. Selten
and M. Langejans to execute the employment agreements
substantially in form set forth as Schedule 10
hereto.
(d) authorize the civil law notary executing the Notarial Transfer
Deed to make the relevant entries in the shareholders
registers of the Companies.
4.5 PURCHASER'S CLOSING OBLIGATIONS. At Closing, and upon the delivery of
the items set out in Article 4.2 above, the Purchaser shall:
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(a) execute the Notarial Transfer Deed;
(b) execute the Escrow Agreement;
(c) execute the Registration Rights Agreement.
(d) instruct the civil law notary of Baker & McKenzie (who, prior
to Closing, shall have received from the Purchaser an amount
equal to the Consideration Cash into its trust account) to pay
the Consideration Cash to a bank account designated by the
Seller in writing, and Seller's receipt thereof shall be an
absolute discharge therefore;
(e) issue the Closing Consideration Shares to the Escrow Agent.
4.6 NON-COMPLIANCE. If the Seller or Purchaser fails to perform any action
required from it under Article 4.4 or 4.5, the other Party may, at its
option and without prejudice to any of its other rights and claims
(including, also if this Agreement is terminated, any right to payment
of damages):
(a) demand that the defaulting Party performs the relevant actions
on a day and at a time to be determined by the non-defaulting
Party; or
(b) terminate this Agreement by written notice (without any
liability towards the defaulting Party).
ARTICLE 5 - EARN OUT CONSIDERATION
5.1 EARN OUT CONSIDERATION. The Purchaser shall pay to the Seller the Earn
Out Consideration as defined and calculated in more detail in SCHEDULE
7.
5.2 SET-OFF. The Purchaser shall have the right to set off any amount of
the Earn Out Consideration against the amount of any Claim.
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES
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6.1 WARRANTIES OF THE SELLER. The Seller represents, warrants and
undertakes ("VERKLAART, STAAT ER VOOR IN EN GARANDEERT") to the
Purchaser that each of the warranties forth on SCHEDULE 4 (the "SELLER
WARRANTIES") is at the date of this Agreement and on the Closing Date
(if different) true, accurate and not misleading. The Seller and the
Purchaser explicitly agree that the Seller Warranties shall constitute
an allocation of risks between the Purchaser and the Seller to the
extent that adverse consequences from incorrect and/or incomplete
Seller Warranties shall at all times be for the full account and
liability of the Seller (even if the Purchaser knew or could have been
aware of such incorrectness and/or incompleteness at the time of this
Agreement or at the time of Closing).
6.2 ADDITIONAL WARRANTIES OF THE SELLER, FILIPAN BEHEER, FILIPAN AND
PIJNENBURG BEHEER NV. Each of the Seller, Filipan Beheer, Filipan and
Pijnenburg Beheer NV represents, warrants and
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undertakes ("VERKLAART, STAAT ER VOOR IN EN GARANDEERT") to and with
the Purchaser that each of the warranties of such person as set forth
on SCHEDULE 5 ("ADDITIONAL SELLER WARRANTIES") hereto is at the date of
this Agreement and as of the Closing Date (if different) true, accurate
and not misleading. Each of the Seller, Filipan, Pijnenburg Beheer NV
and the Purchaser explicitly agrees that the Additional Seller
Warranties shall constitute an allocation of risks among the Purchaser,
Filipan, Pijnenburg Beheer N.V. and the Seller to the extent that
adverse consequences from incorrect and/or incomplete Additional Seller
Warranties shall at all times be for the full account and liability of
the Seller, Filipan and Pijnenburg Beheer NV (even if the Purchaser
knew or could have been aware of such incorrectness and/or
incompleteness at the time of this Agreement or at the time of
Closing).
6.3 WARRANTIES OF THE PURCHASER. The Purchaser represents, warrants and
undertakes ("VERKLAART, STAAT ER VOOR IN EN GARANDEERT") to the Seller
that each of the warranties set forth in SCHEDULE 6 (the "PURCHASER
WARRANTIES") is at the date of this Agreement and as of the Closing
Date (if different) true, accurate and not misleading.
6.4 DISCLOSURE LETTER. The Seller Warranties and Additional Seller
Warranties are given subject to matters fully and specifically
disclosed in the Disclosure Letter but no other information relating to
the Company of which the Purchaser has knowledge (actual or
constructive) and no investigation by or on behalf of the Purchaser
shall prejudice any claim made by the Purchaser under the Seller
Warranties or Additional Seller Warranties or operate to reduce any
amount recoverable, and liability in respect thereof shall not be
confined to breaches discovered before Closing. No letter, document or
other communication shall be deemed to constitute a disclosure for the
purposes of this Agreement unless the same is expressly referred to in
the Disclosure Letter.
6.5 QUALIFICATIONS. Where any statement in the Seller Warranties or
Additional Seller Warranties or any confirmation or certificate given
by the Seller hereunder or pursuant hereto is qualified by the
expression "so far as the Seller is aware" or "to the best of the
Seller's knowledge and belief" or any similar expression, that
statement shall be deemed to include an additional statement that it
has been made after due and careful enquiry.
ARTICLE 7 - REMEDIES FOR BREACHES
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7.1 BREACHES AND INFRINGEMENTS. In the event of a breach of any of the
Seller Warranties or Additional Seller Warranties or covenants given by
the Seller ("BREACH"), the Seller shall reimburse and hold harmless
("SCHADELOOS STELLEN") either the Purchaser or the Company (at the
option of the Purchaser) for all damages, losses, reasonable costs and
expenses ("DAMAGES") suffered by the Purchaser or the Company as a
result of the Breach, without prejudice to other statutory rights of the
Purchaser. The Parties agree that the Damages shall include the amount
necessary to put the Purchaser - or at the option of the Purchaser, the
Company - in a position similar to the position the Purchaser or the
Company would have been in without the relevant Breach.
7.2 CLAIM ON BEHALF OF THE COMPANY. It is expressly understood that if and
to the extent an event gives rise to a Claim under more than one
Warranty, the Purchaser shall be entitled to file a Claim under any such
breached Warranty as it may deem fit, on its own behalf and/or on behalf
of the Company as third party beneficiary of the right to be reimbursed
and held
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harmless pursuant to this Article 7, provided, however, that it cannot
claim reimbursement of the same Damages twice. Also, for the avoidance
of doubt it is expressly confirmed and understood that where this
Article 7 refers to "Damages suffered by the Purchaser or the Company",
such damages shall not be deemed to have been doubly incurred by both
the Purchaser and the Company, which means that any Damages suffered
for which the Company is reimbursed cannot be claimed twice by the
Purchaser, and vice versa.
7.3 ADDITIONAL INDEMNITY. In addition, and without prejudice to Article
7.1, the Seller shall indemnify and hold the Purchaser, its respective
representatives, stockholders, controlling persons and affiliates, and
the Company harmless from any and all Damages arising out of or in
connection with:
(a) all liability of the Company for Taxes attributable to tax
periods ending on or before the Closing Date to the extent not
reserved against in the Balance Sheet;
(b) all liability associated with predecessors to the Company,
including but not limited to liabilities for profit sharing
payments;
it being understood and agreed that the limitation of liability as set
forth in Article 7.4 through 7.6 shall not apply.
7.4 SURVIVAL. Subject to Article 7.6, all Seller Warranties and Additional
Seller Warranties shall survive the Closing Date for the period set
forth in Article 7.5, provided, however, that the Seller Warranties set
forth in Schedule 4, Section 22 (Taxation) shall survive the Closing
Date until the relevant statute of limitations with respect to Taxes,
including the term during which additional assessments can be levied
("NAVORDERINGSTERMIJN or NAHEFFINGSTERMIJN", as referred to in Section
16 and 20 of the "Algemene wet inzake Rijksbelastingen"), shall have
expired. All such Seller Warranties and Additional Seller Warranties
shall expire on such dates, except for Claims asserted by the Purchaser
prior to such dates.
7.5 THRESHOLD AND LIMITATIONS FOR INDEMNIFICATION.
(i) The Purchaser shall not be entitled to seek
indemnification for any Claim for Breach unless the
total amount of Damages arising from such Breach
exceeds EUR 5,000. Individual Breaches of a similar
nature which are each less than EUR 5,000 shall be
accumulated for purposes of determining whether this
EUR 5,000 threshold is reached.
(ii) Subject to Article 7.6, the Purchaser agrees not to
enforce any Claim until the aggregate amount of all
indemnifiable Claims exceeds EUR 25,000 and then the
Purchaser shall be entitled to recover all Claims
from the first Euro.
(iii) The maximum liability of the Seller shall be EUR
2,500,000, which maximum liability shall decrease to
zero as of 4 February 2007.
7.6 QUALIFICATIONS TO LIMITATIONS. If in any case a Claim has arisen by
reason of:
(i) fraud or willful concealment or dishonesty or deliberate
non-disclosure on the part of the Seller prior to the date of
this Agreement; or
(ii) the Seller not having good and unencumbered title to any of
the Shares;
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then in any such case none of the limitations set forth in Articles 7.4
and 7.5 shall apply.
7.7 EVENTS AFTER CLOSING. No Claim by Purchaser for any Breach shall arise
to the extent that the Claim arises as a result of (i) any change in
the accounting principles applied by the Company subsequent to Closing,
or of (ii) any changes in applicable laws or regulations after Closing
or of (iii) a new interpretation of existing laws by a court or other
public authority in a judgment or decision published after Closing.
7.8 PAYMENTS RECEIVED. If the Seller has made a payment for Damages and the
Purchaser or the Company simultaneously therewith or subsequently
thereto receives any benefit other than from the Seller which would not
have been received but for the circumstance giving rise to the Claim in
respect of which the payment for Damages was made by the Seller, the
Purchaser shall, once it or the Company has received the benefit,
forthwith repay to the Seller an amount equal to the lesser of the
amount of such benefit and the amount paid by the Seller.
7.9 CLAIM PROCEDURE.
(a) The Purchaser shall give the Seller written notice (the
"INDEMNIFICATION NOTICE") of any facts and the circumstances
giving rise to a Claim within 30 days of the Purchaser's
becoming aware of the facts and circumstances giving rise to
such Claim. However, failure of the Purchaser to give such
notice within such 30-day period shall not relieve the Seller
of its liability with respect to such Claim except to the
extent that Purchaser's failure to give notice within such
period causes damages to Seller.
(b) If the Claim relates to a claim or the commencement of an
action or proceeding by a Third Party against the Company
and/or the Purchaser, then the Seller shall have, upon request
within sixty (60) days after receipt of the Indemnification
Notice (but not in any event after the settlement or
compromise of such Claim), the right to defend, at its own
expense and by its own counsel, any such matter involving the
asserted liability of the Company and/or the Purchaser;
provided, however, that if the Company and/or the Purchaser
determines that there is a reasonable probability that a Claim
may materially and adversely affect it, it shall at its own
discretion have the right to defend (with the participation of
the Seller, if the Seller so elects), compromise or settle
such claim or suit, provided however the Seller has been
timely informed of settlement negotiations. The Seller shall
make reasonable endeavours to strike a fair balance between
the interests of the Seller in keeping the compensation as low
as possible and the interests of the Purchaser and any of the
Company to maintain good business relations with the Third
Party concerned. If the Seller shall decide that it will not
defend, at its own expense and by its own counsel, any such
matter involving the asserted liability of the Company and/or
the Purchaser and the Company and/or the Purchaser shall incur
costs directly or indirectly relating to this decision of the
Seller, the Purchaser shall have full recourse against the
Seller as to the costs incurred.
(c) If the Claim does not relate to a claim or the commencement of
an action or proceeding by a Third Party, the Seller shall
have thirty (30) days after receipt of the Indemnification
Notice during which it shall have the right to object to the
subject matter and the amount of the Claim set forth in the
Indemnification Notice by
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delivering written notice thereof to the Purchaser. If the
Seller does not so object within such thirty-day period, it
shall be conclusively deemed to have agreed that it is
obligated to indemnify Purchaser for the matters set forth in
the Indemnification Notice. If the Seller sends notice to the
Purchaser objecting to the matters set forth in the
Indemnification Notice, the Seller and the Purchaser shall use
their best efforts to settle the Claim. If the Seller and the
Purchaser are unable to settle the Claim, the matter shall be
resolved in the manner set forth in Article 13.2 of this
Agreement.
7.9 NO KNOWLEDGE. Purchaser is not currently aware of any facts or
circumstances that could give rise for a Breach or an indemnifiable
event as defined in Article 7.3.
ARTICLE 8 - RESTRICTIVE COVENANTS
---------------------------------
8.1 RESTRICTIONS. The Seller and Purchaser recognize and acknowledge that
the Company has unique proprietary know how, technology and goodwill,
the value of which constitute a significant portion of the
Consideration. Accordingly in order to preserve this know how,
technology and goodwill the Seller and Guarantors undertake on a
several but not joint basis ("INDIVIDUEEL NIET HOOFDELIJK"), that,
except with the prior written consent of the Purchaser and except as
provided for in this Agreement:
(a) for the period of three years after Closing they will not,
within any country in which the Company has carried on
business during the year preceding Closing either on their own
account or in conjunction with or on behalf of any person,
firm or company carry on or be engaged, concerned or
interested, directly or indirectly, whether as shareholder,
director, employee, partner, agent or otherwise carry on the
business of the Company (other than as permitted by this
Agreement or as a holder of not more than 5 per cent of the
issued shares or debentures of any company listed on a stock
exchange);
(b) for the period of five years after Closing they will not
either on their own account or in conjunction with or on
behalf of any other person, firm or company solicit or entice
away or attempt to solicit or entice away from the Company the
custom of any person, firm, company or organisation who shall
at any time within the year preceding Closing have been a
customer, identified prospective customer, representative,
agent or distributor of the Company or in the habit of
regularly dealing with the Company;
(c) for the period of five years after Closing they will not
either on their own account or in conjunction with or on
behalf of any other person, firm or company employ, solicit,
entice away or attempt to employ, solicit or entice away from
the Company any person who at Closing is, or within the year
preceding such employment, solicitation, enticement or attempt
shall have been, a manager, consultant, agent or employee of
the Company whether or not such person would commit a breach
of contract by reason of leaving such employment;
(d) they will not at any time hereafter make use of or disclose or
divulge to any person (other than to employees or directors of
the Company whose province it is to know the same) and will
keep confidential any information that is confidential by
nature or
12
expressly labeled as confidential (other than any information
properly available to the public or disclosed or divulged
pursuant to an order of a court of competent jurisdiction)
relating to the Company, the identity of their customers and
suppliers, their products, finance, contractual arrangements,
business or methods of business.
8.2 CONTINUED EFFECTIVENESS. While the restrictions contained in Article
8.1 are considered by the Parties to be reasonable in all the
circumstances, it is recognized that restrictions of the nature in
question may fail for technical reasons and accordingly it is hereby
agreed and declared that if any of such restrictions shall be adjudged
to be void as going beyond what is reasonable in all the circumstances
for the protection of the interests of the Purchaser, but would be
valid if part of the wording thereof were deleted or the periods
thereof reduced or the range of activities or area dealt with thereby
reduced in scope the said restriction shall apply with such
modifications as may be necessary to make it valid and effective.
8.3 CONTINUED ASSISTANCE. The Seller and its Related Parties will continue
to render such services to the Company as may reasonably be required by
the Purchaser at such terms and conditions as may further be agreed by
the Parties.
ARTICLE 9 - MISCELLANEOUS
-------------------------
9.1 PARTIES' COSTS. Each Party to this Agreement shall pay its own costs
and disbursements of and incidental to this Agreement and the sale and
purchase of the Shares, provided that all costs associated with the
Notarial Transfer Deed shall be borne by the Purchaser. The Company
shall not pay any fees or other costs of outside advisors in connection
with the transactions contemplated hereby.
9.2 NOTICES. Each notice, demand or other communication given or made under
this Agreement shall be in writing and delivered or sent to the
relevant Party at its address or fax number set out below (or such
other address or fax number as the addressee has by five (5) days'
prior written notice specified to the other Parties):
To the Purchaser: VASCO Data Security International, Inc.
1901 South Meyers Road
Oakbrook Terrace, Illinois 60181
United States of America
Telephone No.: +1 630 932-8844
Facsimile No.: +1 630 932-8852
Attention: Cliff Bown
With a copy to: Baker & McKenzie, Attorneys at Law
Postbus 2720
1000 CS Amsterdam
Telephone No: +31 20 55 17 555
Fascimile No: +31 20 626 79 49
Attention: Jeroen O. Hoekstra
Peter Roos
13
To the Seller: AOS Holding B.V.
De Tweeling 20A,
5215 MC `s Hertogenbosch
The Netherlands
Telephone No: +31 73 691 88 88
Fascimile No: +31 73 691 88 99
Attention: Mr. M. Filipan
With a copy to: Holsteijn Timmermans Advocaten
Mr J.F. Holsteijn
Rapenburg 35, 2311 GG Leiden
The Netherlands
Telephone No. 00 31 71 5160060
Fascimile No. 00 31 71 5160066
Any notice, demand or other communication so addressed to the relevant
Party shall be deemed to have been delivered (a) if given or made by
letter, when actually delivered to the relevant address; and (b) if
given or made by fax, when dispatched.
9.3 WAIVER. No failure or delay by the Purchaser in exercising any right,
power or remedy under this Agreement shall operate as a waiver thereof,
nor shall any single or partial exercise of the same preclude any
further exercise thereof or the exercise of any other right, power or
remedy. Without limiting the foregoing, no waiver by the Purchaser of
any breach by the Seller of any provision hereof shall be deemed to be
a waiver of any subsequent breach of that or any other provision
hereof.
9.4 ASSIGNMENT. This Agreement and the rights and obligations hereunder
shall be assignable only by the Purchaser without the prior written
consent of the Seller being required. None of Seller, Filipan and
Pijnenburg shall assign this Agreement or any of their respective
rights or obligations hereunder without the prior written consent of
the Purchaser. Any assignments without the prior written consent of the
Purchaser shall be null and void.
9.5 ENTIRE AGREEMENT. This Agreement (together with the Schedules, Exhibits
and Annexes hereto and any documents referred to herein or executed
contemporaneously or at Closing by the Parties in connection herewith)
constitutes the whole agreement between the Parties and supersedes any
previous agreements or arrangements between them relating to the
subject matter of this Agreement, including but not limited to the
confidentiality agreement dated November 22, 2004 and it is expressly
declared that no variations of this Agreement shall be effective unless
made in writing and executed by the Parties.
9.6 CONTINUITY OF OBLIGATIONS. All the provisions of this Agreement shall
remain in full force and effect notwithstanding Closing (except insofar
as they set out obligations that have been fully performed at Closing).
9.7 SEVERABILITY. If any provision or part of a provision of this Agreement
shall be, or be found by any authority or court of competent
jurisdiction to be, invalid or unenforceable, such invalidity or
unenforceability shall not affect the other provisions or parts of such
provisions of this Agreement, all of which shall remain in full force
and effect.
9.8 OTHER RIGHTS AND REMEDIES. Any right of termination conferred upon the
Purchaser hereby shall
14
be in addition to and without prejudice to all other rights and
remedies available to it (and, without prejudice to the generality of
the foregoing, shall not extinguish any right to damages to which the
Purchaser may be entitled in respect of the breach of this Agreement)
and no exercise or failure to exercise such a right of termination
shall constitute a waiver by the Purchaser of any such other right or
remedy.
9.9 FURTHER ACTS. Upon and after Closing the Seller and the Purchaser shall
do and execute or cause to be done and executed all such further acts,
deeds, documents and things as may be necessary to give effect to the
terms of this Agreement.
9.10 INTERPRETATION. This Agreement shall constitute an allocation of risks
between the Seller and the Purchaser. The Parties deem the security
they may derive from the provisions of this Agreement essential.
ARTICLE 10 - RESTRICTION ON ANNOUNCEMENTS
-----------------------------------------
Each of the Parties hereto undertake that prior to Closing and
thereafter it will not (save as required by law) make any announcement
in connection with this Agreement, unless the other Party hereto shall
have given its written consent to such announcement (which consent may
not be unreasonably withheld and may be given either generally or in a
specific case or cases and may be subject to conditions). The Parties
acknowledge that the Purchaser will be required to issue a press
release regarding this transaction and make appropriate filings with
the SEC regarding this transaction. Seller agrees to use its best
efforts to supply material required to be filed with the SEC and
finalize a press release that is mutually acceptable to both parties as
soon as practicable following the Closing Date.
ARTICLE 11 - CONFIDENTIAL INFORMATION
-------------------------------------
11.1 NON-DISCLOSURE. The Parties undertake that they shall treat as strictly
confidential all Confidential Information received or obtained by them
or their employees, agents or advisers as a result of entering into or
performing this Agreement including information relating to the
provisions of this Agreement, the negotiations leading up to this
Agreement, the subject matter of this Agreement or the business or
affairs of each of the Parties or any member of their group and subject
to the provisions of Article 11.2 that they will not at any time
hereafter make use of or disclose or divulge to any person any such
Confidential Information and shall use their best endeavours to prevent
the publication or disclosure of any such information.
11.2 EXCEPTIONS. The restrictions contained in Article 11.1 shall not apply
so as to prevent the Parties from making any disclosure required by law
or by any securities exchange or supervisory or regulatory or
governmental body pursuant to rules to which the relevant Party is
subject or from making any disclosure to any professional adviser for
the purposes of obtaining advice (provided always that the provisions
of this Article shall apply to and the Parties shall procure that they
apply to, and are observed in relation to, the use or disclosure by
such professional adviser of the information provided to him) nor shall
the restrictions apply in respect of any information which comes into
the public domain otherwise than by a breach of this Article by the
Parties.
15
ARTICLE 12 - GUARANTORS
-----------------------
12.1 Filipan Beheer and Pijnenburg Beheer NV hereby irrevocably and
unconditionally guarantee for the benefit of the Purchaser and the
Company for to keep the Seller funded to a level sufficient for (i) the
due performance by the Seller of its respective obligations under, and
compliance by the Seller with the terms of, this Agreement, (ii) the
full and prompt payment when due of all obligations and liabilities of
the Seller to the Purchaser under this Agreement,which guarantee shall
be limited for the period and to the amounts set out under (iii) in
Art. 7.5 of this Agreement. In the event the Seller turns out to be
insufficiently funded to meet all of foregoing obligations then Filipan
Beheer and Pijnenburg Beheer N.V. shall each be 50% liable for the
extent of the obligations the Seller cannot meet. In the event Filipan
Beheer turns out to be unable to meet all of foregoing obligations then
Filipan shall personally assume all obligations of Filipan Beheer
hereunder, as a surety ("BORG").
12.2 The Company shall have the right to set off any amount due from Filipan
Beheer or Filipan under Article 12.1 or any other Article of this
Agreement, against any amount payable by the Company under Filipan's
employment agreement.
ARTICLE 13 - GOVERNING LAW AND JURISDICTION
-------------------------------------------
13.1 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of The Netherlands.
13.2 JURISDICTION. All disputes arising in connection with this Agreement,
or further agreements or contracts resulting thereof, shall be
submitted to the competent court in Amsterdam (subject to appeal as
provided by law).
13.3 MEDIATION. The parties to this Agreement will make a best effort to
solve a dispute before an NMI certified mediator before bringing a case
to court, without prejudice to the jurisdiction of the summary
proceedings judge ("voorlopige voorzieningen rechter").
[REST OF PAGE INTENTIONALLY LEFT BLANK]
16
IN WITNESS WHEREOF this Agreement has been executed on the day and year first
above written.
VASCO DATA SECURITY INTERNATIONAL, INC.
- ------------------------
By: [ __________ ]
Title: [ __________ ]
AOS HOLDING B.V.
- -----------------------
By: Mr. Mladen Filipan
Title: Director ("bestuurder")
FILIPAN BEHEER B.V.
- -----------------------
By: Mr. Mladen Filipan
Title: Director ("bestuurder")
MR. MLADEN FILIPAN
- ------------------------
PIJNENBURG BEHEER NV
- ------------------------
By: MR. COR PIJNENBURG
Director: ("bestuurder")
17
I, [name spouse Filipan], hereby acknowledge that I am aware that my husband has
assumed certain joint liabilities under this Agreement. With a view to Article
1:88 of the First Book of the Dutch Civil Code I hereby consent to my husband
entering into such joint liability commitments.
[name spouse]
18
SCHEDULE 1
----------
DEFINITIONS
-----------
"Additional Seller Warranties" Has the meaning ascribed to it in
Article 6.2;
"Agreement" Means this share sale and purchase
agreement;
"Balance Sheet" Means the balance sheet that are
part of the 2004 financial statements of
the Company, attached as Annex 4(b) to
Schedule 4;
"Balance Sheet Date" Has the meaning ascribed to it in
Section 4(b) of Schedule 4;
"Benefit Plans" Has the meaning ascribed to it in
Section 21 of Schedule 4;
"Breach" Has the meaning ascribed to it in
Article 7.1;
"Business Day" Means any day on which the banks are not
required or authorized to be closed for
business in The Netherlands, excluding
Saturdays and Sundays;
"Claim" Means a claim for a Breach, a Third
Party claim or an Indemnification Claim
under Article 7.3, relating to the
conduct of the business of the Company
prior to the Closing Date;
"Closing" Means completion of the sale and
purchase of the Shares as specified in
Article 4;
"Closing Consideration" Has the meaning ascribed to it in
Article3.1;
"Closing Consideration Shares" Has the meaning ascribed to it in
Article 3.3;
"Closing Date" Means the date on which the Closing
occurs;
"Closing Documents" Has the meaning ascribed to it in
Section 3 of Schedule 4;
"Closing" Means the fulfillment of the Parties'
obligations as set out in Article 4;
"Company" Has the meaning ascribed to it in the
Recitals;
19
"Company Real Property" Has the meaning ascribed to it in
Section 8(d) of Schedule 4;
"Conditions Precedent" Has the meaning ascribed to it in
Article 4.1;
"Confidential Information" Means any and all data and
information relating to the Company
and/or to the business and affairs of a
Party that may be provided, orally, in
writing or digitally, to the other Party
that is marked or expressly stated as
being "confidential";
"Consideration" Has the meaning ascribed to it in
Article 3.1;
"Consideration Cash" Has the meaning ascribed to it in
Article 3.1(i);
"Consideration Shares" Has the meaning ascribed to it in
Article 3.1;
"Damages" Has the meaning ascribed to it in
Article 7.1;
"Disclosure Letter" Means the disclosure from the
Seller to the Purchaser, in the form set
out in SCHEDULE 2 disclosing information
constituting exceptions to the Seller
Warranties;
"Earn Out Consideration" Has the meaning ascribed to it in
Article 3.1;
"Encumbrance" Means any mortgage, assignment of
receivables, debenture, lien, charge,
pledge, title retention, right to
acquire, security interest, option,
right of first refusal, usufruct
("VRUCHTGEBRUIK") or limited right
(BEPERKT RECHT) and any other
encumbrance, attachment ("BESLAG") or
condition whatsoever;
"Environmental Laws" Means all environmental, health, safety,
occupational safety and zoning, laws,
statutes, ordinances, regulations,
orders, directives, zoning plans,
decrees and requirements concerning
those activities and properties,
handling of any materials, discharges to
the air, ground, ground water, surface
water, and storage treatment or disposal
of any waste at or connected with any
activity at such properties, applicable
to the Group and its operations having
been and being in force at any time on
or before the Closing Date;
"Environmental Permits" Means all conditions and requirements of
all permits, licenses or similar
approvals, necessary to operate in
compliance with Environmental Laws;
"Escrow Agent" Means the escrow agent appointed in the
Escrow Agreement;
"Escrow Agreement" Means the escrow agreement attached
hereto as Schedule 9;
20
"EUR" or "Euro" Means Euro, the lawful currency of
certain participating States members of
the European Union;
"Filipan" Has the meaning ascribed to it in the
Recitals;
"Filipan Beheer" Has the meaning ascribed to it in the
Recitals;
"Final Gross Profits" Has the meaning ascribed to it in
Article 5.2;
"Final Value" Has the meaning ascribed to it in
Article 3.4;
"Gross Profits" Means the gross profits
collected by the Company on sales of POS
equipment to VISA for the Latin/South
America markets for a period of two (2)
years after Closing;
"Indemnification Notice" Has the meaning ascribed to it in
Article 7.10;
"Initial Value" Has the meaning ascribed to it in
Article 3.3;
"Intellectual Property Rights" Has the meaning ascribed to it in
Section 11b of Schedule 4;
"Material Adverse Effect" Means material adverse effect on the
condition (financial or otherwise),
results of operations, assets,
properties or prospects of the Group;
"Material Contracts" Has the meaning ascribed to it in
Section 13 of SCHEDULE 4;
"Measurement Date" Has the meaning ascribed to it in
paragraph 3.3;
"Notarial Transfer Means the notarial deed pursuant to
Deed" which the Shares will be transferred
from the Seller to the Purchaser,
attached hereto as SCHEDULE 3;
"Parties" Means the Seller, the Purchaser, Filipan
Beheer, Filipan and Pijnenburg Beheer;
"Person" Means any existing or future, legal or
natural person;
"Proposed Gross Profits" Has the meaning ascribed to it in
Article 5.1;
"Purchaser" Has the meaning assigned to it in the
introduction to the Agreement;
"Purchaser Warranties" Has the meaning ascribed to it in
Article 6.3;
"Recitals" Means the recitals A through D;
"Re-measurement Date" Has the meaning ascribed to it in
Article 3.4;
21
"Registration Rights Has the meaning ascribed to it in
Agreement" Article 3.5;
"Seller" Has the meaning assigned to it in the
introduction to the Agreement;
"Seller Warranties" Has the meaning ascribed to it in
Article 6.1;
"Shares" Has the meaning assigned to it in the
Recitals;
"Taxes" or "Taxation" Means all forms of taxation, including
all national or local taxation, past,
present and deferred (including, without
limitation, income tax (including net
income and gross income), corporate,
value added, occupation, real and
personal property, social security,
gross receipts, sales, use, ad valorem,
franchise, profits, license,
withholding, payroll, employment,
excise, severance, occupation, premium
or windfall profit taxes, estate duty,
customs and other import or export
duties, or charges of any kind
whatsoever, estimated and other taxes,
together with any interest and levies
and all penalties, charges, costs and
additions to tax, payable by or due from
the Group, or any additional amounts
imposed by any Governmental
Instrumentality or any revenue
authority, upon the Group;
"Tax Return" means any report, return or other
information required to be supplied to a
governmental authority in connection
with any Taxes;
"The Netherlands" Means that portion of the kingdom of The
Netherlands in Europe;
"Third Party" Any person which is not a Party;
"Seller Warranties" Means the representations, warranties
and undertakings of the Seller set out
in Article 6 and in SCHEDULE 4, and
"Seller Warranty" means any of the
Seller Warranties.
22
SCHEDULE 2
----------
DISCLOSURE LETTER
-----------------
23
SCHEDULE 3
----------
NOTARIAL TRANSFER DEED
----------------------
[separate document]
24
SCHEDULE 4
----------
SELLER WARRANTIES
-----------------
25
SCHEDULE 5
----------
ADDITIONAL SELLER WARRANTIES
----------------------------
26
SCHEDULE 6
----------
PURCHASER WARRANTIES
--------------------
27
SCHEDULE 7
----------
EARN-OUT CONSIDERATION
----------------------
28
SCHEDULE 8
----------
REGISTRATION RIGHTS AGREEMENT
-----------------------------
29
SCHEDULE 9
----------
ESCROW AGREEMENT
----------------
30
SCHEDULE 10
-----------
EMPLOYMENT AGREEMENTS
---------------------
[intentionally left blank]
31