provided that, the placing of any general advertisement which is not specifically directed at any employee, the
employment or engagement of an employee who approaches the relevant Founder on an unsolicited basis, or the recruitment of any employee through an employment agency where such agency has not been specifically instructed to solicit any employee,
shall not constitute a breach of Section 7.1(c).
(xxii) References to a repayment of Tax shall include any interest or any additional amount
payable by a Tax Authority in respect of it.
(xxiii) Any reference to something occurring in the ordinary course of business shall not include:
(A) anything that involves, or leads directly or indirectly to, any liability of the Company
Group Member to Tax that is (or but for an election would have been) the primary liability of, or properly attributable to, or due from another person (other than a member of the Buyer’s Tax Group);
(B) anything that relates to or involves the acquisition or disposal (or deemed acquisition or
disposal) of an asset or the supply of services (including the lending of money, or the hiring or licensing of tangible or intangible property) in a transaction that is not entered into on arm’s length terms;
(C) anything that relates to or involves the making of a distribution or deemed distribution
for Tax purposes, the creation, cancellation or reorganisation of share or loan capital, the creation, cancellation or repayment of any intra-group debt or the Company Group Member becoming or ceasing to be, or being treated as ceasing to be, a
member of a group of companies (including, without limitation, a fiscal unity or tax consolidation), or becoming or ceasing to be associated or connected with any other company for any Tax purposes;
(D) anything that relates to any scheme, transaction or arrangement that gives rise, or may
give rise, to a Liability for Tax under any anti-avoidance legislation, that is designed partly or wholly (or contains steps or stages designed partly or wholly) to avoid, reduce or defer a Liability for Tax, or that gives rise to a duty to
notify a Tax Authority under any legislation introduced to counter tax avoidance;
(E) anything that gives rise to a Liability for Tax on deemed (as opposed to actual) profits
or if and to the extent that it gives rise to a Liability for Tax on an amount of profits greater than the difference between the sale proceeds of an asset and the amount attributable to that asset in the Balance Sheet as of the Balance Sheet
Date or, in the case of an asset acquired since the Balance Sheet Date, the cost of that asset;
(F) anything that involves, or leads directly or indirectly to, a change of residence of the
Company Group Member for Tax purposes; or
(G) any liability arising as a result of the failure to properly deduct or account for Tax, or
to comply with the provisions of any Tax legislation or subordinate legislation (including regulations) and any act, omission or transaction that gives rise to any fine, penalty, surcharge, interest or other imposition relating to any Tax.
(xxiv) Unless the contrary intention appears, words and expressions defined in this Agreement have
the same meaning in this Section 8.3 and any provisions in this Agreement concerning matters of construction or interpretation also apply in this Section 8.3.
(xxv) Any stamp duty charged on any document (or in the case of a document that is outside a
jurisdiction, any stamp duty that would be charged on the document if it were brought into that jurisdiction) that is necessary to establish the title of the Company Group Member to any asset, and any interest, fine or penalty relating to the
stamp duty, shall be deemed to be a liability of the Company Group Member to make an actual payment of Tax as a result of an Event occurring on the last day on which it would have been necessary to pay the stamp duty to avoid any liability to
interest or penalties arising on it. References in this Section 8.3(a)(xxv) to stamp duty include any transfer duty or equivalent Tax.
(xxvi) References to the due date for payment of any Tax shall mean the last day on which that
Tax may, by law, be paid without incurring any penalty, fine, surcharge, interest, charges or other similar imposition (after taking into account any postponement of the date that was obtained for the payment of that Tax).
(xxvii) References to any law of the United Kingdom, Belgium, the United States of America and
India shall be read and construed as also meaning any law of any other jurisdiction that has an equivalent purpose or that most nearly approximates to that UK, Belgian, US and Indian law.
(xxviii) For the avoidance of doubt, references to any Liability for Tax that results from any
gross receipts, income, profits or gains earned, accrued or received on or before Completion or any Event occurring on or before Completion include a reference to any Liability for Tax arising as a result of Completion or of entering into this
Agreement, or of the satisfaction of any condition in this Agreement, or as a result of forming the intention, or of entering into arrangements, to enter into this Agreement (including any liability as the result of any company ceasing to be,
or ceasing to be treated as, a member of a tax consolidation, fiscal unity or other group of companies for the purpose of any Tax).
(xxix) For the avoidance of doubt, references to any Liability for Tax resulting from, in respect
of or by reference to an Event which occurred on or before Completion shall include a reference to any Liability for Tax resulting from the sale of the Shares under this Agreement.
(b) Covenant.
Subject to the provisions of this Section 8.3, the Founders, jointly and severally, covenant to pay to the Buyer an amount equal to any:
(i) Liability for Tax resulting from, or by reference to, any Event occurring on or before
Completion or in respect of any gross receipts, income, profits or gains earned, accrued or received by the Company Group Member on or before Completion, whether or not that liability was discharged on or before Completion;
(ii) Liability for Tax, including liability for payments in respect of Tax, due to the
relationship for Tax purposes before Completion of the Company Group Member with any person other than a member of the Buyer’s Tax Group, whether arising before, on or after Completion;
(iii) Liability for Tax that is a liability of the Company Group Member to account for
employment taxes or social security contributions, whether arising before, on or after Completion, in respect of the grant, exercise, surrender, exchange or other disposal of an option or other right to acquire securities, or in respect of any
acquisition, holding, variation or disposal of securities where the acquisition of the security or the grant of the option, or other right to acquire the security occurred on or before Completion;
(iv) Liability for Tax being a liability for inheritance tax (or its equivalent in any local
jurisdiction) that:
(A) is a liability to Inheritance Tax of the Company Group Member and arises because of a
transfer of value occurring (or being deemed to occur) on or before Completion (whether or not in conjunction with the death of any person whenever it happens);
(B) gives rise at Completion to a charge on, or a power to sell, mortgage or charge, any of
the Shares or assets of the Company Group Member; or
(C) gives rise after Completion to a charge on, or a power to sell, mortgage or charge, any of
the Shares or assets of the Company Group Member because of the death of any person within three (3) years of a transfer of value that occurred before Completion;
and in determining for the purposes of this Section 8.3(b)(iv) whether a charge on, or power to sell, mortgage or charge any of the shares or assets of the Company Group Member exists at any time, the fact that the inheritance tax is not yet payable, or may be
paid by instalments, shall be disregarded, and the inheritance tax shall be treated as becoming due, and a charge or power to sell, mortgage or charge as arising, on the date of the transfer of value or other date or event on or in respect of
which it becomes payable or arises, and the provisions of section 213 of the IHTA (or its equivalent in any local jurisdiction) shall not apply; and
(v) costs and expenses (including legal costs on a full indemnity basis), properly incurred by
the Company Group Member and the Buyer or any other member of the Buyer’s Tax Group in connection with (A) any Liability for Tax or other liability in respect of which the Founders are liable to make a payment under this Section 8.3, or under a Tax Claim; or (B) taking or defending any successful action under this Section 8.3.
(c) Payment Date and Interest.
(i) Payment by the Founders in respect of any Liability under this Section 8.3 must be made in cleared and immediately available funds on:
(A) in the case of a Liability for Tax that involves an actual payment of or in respect of
Tax, the later of seven (7) Business Days before the due date for payment of that Tax and seven (7) Business Days after the date on which the Buyer serves notice on the Founders requesting payment;
(B) in the case of the Loss of a right to repayment of Tax or a Liability under Section 8.3(b)(iv), seven (7) Business Days following the date on which the Buyer serves notice on the Founders requesting payment;
(C) in a case that involves the Loss of a Relief (other than a right to repayment of Tax),
the later of seven (7) Business Days after the date on which the Buyer serves notice on the Founders requesting payment and the last date on which the Tax is or would have been required to be paid to the relevant Tax Authority in respect of the
earlier of: (1) the period in which the Loss of the Relief gives rise to an actual liability to pay Tax; or (2) the period in which the Loss of the Relief occurs (assuming for this purpose that the Company Group Member had sufficient profits or
was otherwise in a position to use the Relief); and
(D) in a case that falls within subsection (a)(vii)(C) of the definition of Liability for Tax, the date on which the Tax saved by the Company Group Member is or would have been required to be paid to the relevant Tax Authority.
(ii) Any dispute about the amount stated in any notice served on the Founders under Section 8.3(c)(i)(B) to Section 8.3(c)(i)(D) shall be determined by the
auditors of the Company or the relevant Subsidiary for the time being, acting as experts and not as arbitrators (the Founders and the Buyer sharing equally the costs of that determination).
(iii) If any amount due from the Founders under this Section is not paid on the date specified
in Section 8.3(c)(i)(A), then, except if and to the extent that the Founders’ liability under Section 8.3(b) includes interest and penalties to compensate the Buyer for the late payment, the amount due shall bear interest (to accrue on a daily basis and before as well as after any judgment) at the rate of 4%
a year over the base rate from time to time of Barclays Bank PLC or (in the absence of that) at any similar rate as the Buyer shall select from the day following the due date up to, and including, the day of actual payment of those sums, any
interest to be compounded quarterly.
(d) Exclusions.
(i) The covenant contained in Section 8.3(b) above shall not cover any Liability for Tax or other liability and no claim shall be made under the Tax Warranties if and to the extent that:
(A) the Liability for Tax or other liability in question was paid on or before Closing or
provided in the Closing Balance Sheet;
(B) it is a Liability for Tax (other than, for the avoidance of doubt, one which falls within
Section 8.3(a)(xxvi) which arises as a result of a transaction occurring in the ordinary course of business of the Company Group Member between the Balance
Sheet Date and Closing;
(C) it arises or is increased only as a result of any change in the Law or rates of Tax (other
than a change targeted specifically at countering a tax avoidance scheme) announced and coming into force after Closing (whether or not the change is retrospective in whole or in part);
(D) it would not have arisen but for a change in accounting policies (including a change in
accounting reference date) or the accounting bases on which the Company Group Member values its assets (other than a change made to comply with Accounting Standards applicable at Closing and where the original treatment was not already in
compliance) after Closing;
(E) the Buyer is compensated for the Liability for Tax or other liability in question under
any other provision of this Agreement;
(F) it would not have arisen but for a failure by the Buyer or a Company Group Member to make
a claim, election or do any other thing that was assumed would be made or done and which was taken into account in the provision for Tax in the Closing Balance Sheet;
(G) the Liability for Tax would not have arisen, or would have been reduced or eliminated, but
for any claim, disclaimer or election made after Completion by the Buyer or a Company Group Member;
(H) the income profits or gains in respect of which the Liability for Tax arises were actually
earned accrued or received by a Company Group Member and have been retained at Completion;
(I) the Liability for Tax would not have arisen or is increased due to a failure or delay by
the Buyer in giving notice by the time required in Section 8.3(h)(ii);
(J) it would not have arisen but for, or is increased by, the failure by the Buyer or
a Company Group Member to make prompt payment of any Tax or other liability where the Shareholders have made payment to the Buyer under this Agreement;
(K) a Relief other than a Buyer’s Relief is available, or made available by the Shareholders,
to the Company Group Member to reduce (or eliminate) that Liability for Tax; or
(L) it would not have arisen but for a voluntary act, transaction or omission of the Company
Group Member or the Buyer or any other member of the Buyer’s Tax Group occurring outside the ordinary course of business after Closing and which the Buyer was aware would give rise to the Liability for Tax or other liability in question.
(ii) For the purposes of Section 8.3(d)(i)(B), an act will not be regarded as voluntary if undertaken under a legally binding obligation entered into by the Company Group Member on or before Closing or imposed on the Company Group Member or
the Buyer or any other member of the Buyer’s Tax Group by any legislation whether coming into force before, on or after Closing, or to avoid or mitigate a penalty imposable by any legislation, or if carried out at the request of, or with the
consent of, the Shareholders.
(iii) The provisions of Sections 8.3(d)(i)(A), (i)(B), (i)(C), (i)(F) and Section 8.3(d) shall not apply to any Liability for Tax falling
within Section 8.3(b)(ii) or Section 8.3(b)(iv).
(e) Limitations. The
Liability of the Founders under Section 8.3(b) will terminate sixty (60) days following the applicable statute of limitations, except for any bona fide claim
under Section 8.3(b) of which written notice is given to the Founders before that relevant date containing, if and to the extent reasonably practicable, a
description of that claim and the estimated total amount of the claim.
(f) Recovery from Third Parties.
(i) Where the Founders have paid an amount under Section 8.3(b) in respect of any Liability for Tax, or in respect of any other liability, and, on or before the seventh anniversary of Completion, the Buyer or any Company Group Member is, or
becomes, entitled to recover from some other person that is not the Company Group Member or the Buyer or any other company in the Buyer’s Tax Group, any amount in respect of any such Liability for Tax, or such other liability, the Buyer shall
or shall procure that the Company Group Member or the relevant Subsidiary shall:
(A) notify the Founders of its entitlement as soon as reasonably practicable; and
(B) if required by the Founders and, subject to the Buyer and the relevant Company Group
Member being indemnified (to the reasonable satisfaction of the Buyer) by the Founders against any Tax that may be suffered on receipt of that amount and any losses, liabilities, damages, costs and expenses incurred in recovering that amount,
take, or procure that the relevant Company Group member takes, all steps reasonably requested by the Founders to enforce that recovery against the person in question (keeping the Founders fully informed of the progress of any action taken)
provided that the Buyer shall not be required to take any action (or to procure that any action is taken) under this Section 8.3(f) (other than an action
against (1) a Tax Authority, or (2) any Person in respect of any Tax advice given by that Person to the relevant Company Group Member on or before Completion, that in the Buyer’s reasonable opinion, is likely to harm its or the relevant Company
Group Member’s material and actual commercial or employment relationship with that Person.
(ii) If on or before the seventh anniversary of Completion, the Buyer, the relevant Company
Group Member or the relevant Subsidiary recovers any amount referred to in Section 8.3(h)(i), the Buyer shall account to the Founders for the lesser of:
(iii) any amount recovered (including any related interest or related additional payment made
by any Tax Authority) less any Tax suffered in respect of that amount and any losses, liabilities, damages, costs and expenses incurred in recovering that amount (except if and to the extent that amount has already been made good by the
Founders under Section 8.3(h)(ii)); and
(iv) the amount paid by the Founders under Section 8.3(b) in respect of the Liability for Tax in question.
(g) Tax Returns.
(i) Subject to this Section 8.3(g), the Buyer will have exclusive conduct of all Tax affairs of each Company Group Member after Completion.
(ii) The Buyer will procure that the relevant Company Group Member keeps the Shareholder
Representative fully informed of the Tax affairs of each Company Group Member for any period ended on or before Completion and for any period which starts before and ends after Completion, for which final agreement with the relevant Tax
Authority of the amount of Tax due from the Company Group Member has not been reached. The Buyer will not submit any substantive correspondence to, or submit (or agree) any return or computation for any such period to (or with) any Tax
Authority, without giving the Founders a reasonable opportunity to comment and taking account of the Founders’ reasonable representations.
(iii) The Buyer will procure that no Company Group Member amends or withdraws any return or
computation or any claim, election, surrender or consent made by it for any period ended on or before Completion without giving the Founders a reasonable opportunity to comment and taking account of the Founders’ reasonable representations.
(iv) For the avoidance of doubt:
(A) where any matter gives rise to a Tax Claim, the provisions of Section 8.3(h) shall take precedence over the provisions of this Section 8.3(g); and
(B) the provisions of this Section 8.3(g) shall not prejudice the rights of the Buyer to make a claim under this Section 8.3(g)For any Liability for Tax.
(h) Conduct of Tax Claims.
(i) Subject to Section
8.3(h)(ii), if the Buyer or any Company Group Member becomes aware of a Tax Claim, the Buyer shall give or procure that notice in writing of the Tax Claim is given to the Shareholder Representative as soon as reasonably practicable,
provided that giving that notice shall not be a condition precedent to the Founders’ liability under this Section, except to the extent that the Founders have been materially prejudiced by Buyer’s failure or delay to give such notice.
(ii) If the Founders becomes aware of a Tax Claim, it shall notify the Buyer in writing of the
Tax Claim as soon as reasonably practicable, and, on receipt of the notice, the Buyer shall be deemed to have given the Founders notice of the Tax Claim in accordance with the provisions of Section 8.3(h)(i).
(iii) Subject to Section8.3(h)(iv),
if the Founders indemnify the Buyer and the relevant Company Group to the Buyer's reasonable satisfaction against all losses, liabilities, damages, costs or expenses that may be incurred (including any additional Liability for Tax), Buyer shall
take and shall procure that the relevant Company Group Member shall take any action that the Founders may reasonably request by notice in writing given to the Buyer to avoid, dispute, defend, resist, appeal or request an internal review by the
relevant Tax Authority, or compromise any Tax Claim.
(iv) Neither the Buyer nor the relevant Company Group Member shall be obliged to appeal or
procure an appeal against any assessment to Tax (or other document issued, or action taken, by or on behalf of any Tax Authority against which there is a right of appeal) if the Buyer, having given the Founders written notice of that assessment
or other document, does not receive written instructions to do so from the Founders within ten Business Days of that notice having been given.
(v) Without prejudice to the liability of the Founders under this Section, the Buyer shall not
be obliged to take, or procure the taking of, any action under Section 8.3(h)(iii) in respect of any Tax Claim:
(A) if the Founders do not request the Buyer to take any action under Section 8.3(h)(iii) considering the nature of the Tax Claim and the existence of any time limit for avoiding, disputing, defending, resisting, appealing, seeking a
review of or compromising that Tax Claim, and that period will not, in any event, exceed ten Business Days after the giving of that notice to the Founders;
(B) where the Founders (or the Company or any Subsidiary before Completion) has been engaged
in fraudulent conduct or deliberate default relating to the Liability for Tax that is the subject matter of the Dispute; or
(C) if the Dispute is, or involves, an appeal to any tribunal or any court, unless the
Founders have obtained the opinion of Tax counsel (being an advocate specializing in Tax) of at least five years’ standing who is acceptable to the Buyer (acting reasonably) that the appeal has a reasonable prospect of success.
(vi) If Section
8.3(h)(iii) does not apply by virtue of any provision of Section 8.3(h)(v), the Buyer or the relevant Company Group Member shall have the absolute
conduct of the Dispute (without prejudice to the rights under this Section 8.3 of any of the Buyer and the relevant Company Group Member) and shall be free to
pay or settle the Tax Claim on any terms that the Buyer or the relevant Company Group Member, acting always in good faith, considers fit.
(vii) By agreement in writing between the Buyer and the Founders and on such terms as they may
agree from time to time, the conduct of a Dispute may be delegated to the Founders, provided that, unless the Buyer and the Shareholders specifically agree otherwise in writing, the Founders shall:
(A) promptly inform the Buyer of all matters relating to the Dispute and shall provide the
Buyer with copies of all correspondence and notes, or other written records of telephone conversations or meetings relating to the Dispute;
(B) obtain the Buyer’s written approval (not to be unreasonably withheld or delayed) before
appointing solicitors or other professional advisers in relation to the Dispute;
(C) submit to the Buyer for prior written approval (not to be unreasonably withheld or
delayed) all material written communications relating to the Dispute to be transmitted to the relevant Tax Authority and shall make any amendments the Buyer reasonably requests; and
(D) not settle or compromise the Dispute or agree any matter relating to it without the
Buyer’s prior written approval (not to be unreasonably withheld or delayed).
(viii) The Buyer shall provide and shall procure that the Company or the relevant Company Group
Member provides to the Founders and the Founders’ professional advisers reasonable access to premises and personnel, and to any relevant assets, documents and records in their power, possession or control to investigate the matter and enable
the Founders to take any action referred to in this Section 8.3(h).
(ix) Neither the Buyer nor any Company Group Member shall be liable to the Founders for
non-compliance with any of the provisions of this Section 8.3(h) if the Buyer or the relevant Company Group Member has acted in good faith in accordance with
the instructions of the Founders.
(i) Grossing Up.
(i) All amounts due under this Section 8.3 from the Founders to the Buyer shall be paid in full, without any set-off, counterclaim, deduction or withholding (other than any deduction or withholding of tax required by law). If any deductions or
withholdings are required by law to be made from any of the sums payable under this Section 8.3, the Founders shall provide any evidence of the relevant
withholding as the Buyer may reasonably require and shall pay to the Buyer any sum as will, after the deduction or withholding is made, leave the Buyer with the same amount as it would have been entitled to receive without that deduction or
withholding.
(ii) If any sum payable by the Founders to the Buyer under this Agreement is subject to Tax in
the hands of the Buyer, the Founders shall pay any additional amount required to ensure that the net amount received by the Buyer shall be the amount that the Buyer would have received if the payment was not subject to Tax and taking account of
any credit against or deduction from Tax that may be available for any deduction or withholding made under Section 8.3(i)(i).
(iii) If the Buyer would, but for the availability of a Buyer’s Relief (other than an exemption
from Tax), incur a Tax liability falling within Section 8.3(i)(ii), it shall be deemed for the purposes of that Section 8.3(i)(ii) to have incurred and paid that liability.
(iv) If the Buyer assigns all, or part of, the benefit of this Section 8.3 or this agreement, the Founders shall not be liable under Section 8.3(i)(i) or Section 8.3(i)(ii), except if and to the extent that the Founders would have been so liable had that assignment not occurred.
(v) Section
8.3(i)(i) and Section 8.3(i)(ii) shall not apply to any interest chargeable under Section 8.3(c)(iii).
(j) Overprovisions and Savings
(i) If requested in writing by the Founders within seven years of Completion, the Buyer shall
instruct (at the Founders’ expense and provided the Founders indemnify the Buyer to its reasonable satisfaction for costs and expenses), the auditors of the Company Group Member in question to determine in writing if in their opinion there
exists an Overprovision or a Saving has arisen.
(ii) If those auditors determine that an Overprovision or a Saving has arisen, an amount equal
to the value (so determined in writing) of the Overprovision or Saving shall be set off:
(A) against any amount then due from the Founders under this Section 8.3; and
(B) to the extent there is an excess not set-off under Section 8.3(j)(A), against any payment(s) already made or subsequently due from the Founders under this Section 8.3
in chronological order until exhausted, provided that to the extent such Overprovision or Saving is set off against any payment already made by the Founders (and not previously refunded under this Section 8.3(j)(B)), it shall promptly be repaid to the Founders.
(iii) For the purposes of this Section 8.3(j), the auditors shall act as experts and not as arbitrators.
(k) Buyer’s Covenant
(i) The Buyer covenants with the Founders to pay to the Founders an amount equal to any Tax
for which the Founders are liable as a result of non-payment by a Company Group Member of a Tax liability that is primarily chargeable against any Company Group Member.
(ii) The covenant contained in Section 8.3(k)(i) shall not apply to any Tax if, but only to the extent that:
(A) the Buyer could claim payment in respect of that Tax under Section 8.3(b); or
(B) such Tax has been recovered by the Founders under any relevant statutory provision.
(l) General.
(i) All payments made by the Founders to the Buyer or by the Buyer to the Founders in
accordance with this Section 8.3 will be treated, to the extent possible, as an adjustment to the portion of the Purchase Price received by the Founders in
respect of the Shares owned by such Founders.
(ii) The Buyer shall in its absolute discretion decide whether to make a claim under this Tax
Covenant or the Tax Warranties, but not both.
8.4 Reserved.
8.5 Access and Preservation of
Records. From and after the Closing Date, to the extent relating to the Business prior to the Closing and in connection with any reasonable business purpose, including the preparation of Tax Returns and the defense of any third
party claim, upon reasonable prior notice, and except as determined by the Buyer in good faith to be necessary to (a) ensure compliance with any applicable Law, (b) preserve any applicable privilege (including the attorney-client privilege), or
(c) comply with any contractual confidentiality obligations (provided that the Buyer uses its commercially reasonable efforts to obtain, or cause to be obtained, a waiver of such confidentiality obligations), the Buyer shall, and shall cause
each of its Affiliates (including the Company Group Members following the Closing) and their Representatives to afford the Representatives of the Shareholders reasonable access, during normal business hours, to the properties, books and records
of the Company Group Members in respect of the Business as such existed as of the Closing Date; provided, however, that such access shall not unreasonably interfere with the business or operations of the Company Group Members; provided,
further, that the auditors and accountants of the Buyer or its Affiliates (including the Company Group Members following the Closing) shall not be obligated to make any work papers available to any Person except in accordance with such
auditors’ and accountants’ normal disclosure procedures and then only after such Person has signed a customary agreement relating to such access to work papers in form and substance reasonably acceptable to such auditors or accountants. The
Buyer shall use commercially reasonable efforts to preserve and keep, or cause to be preserved and kept, all original material books and records in respect of the Business, as such existed as of the Closing Date and were delivered to Buyer in
connection with the Closing, for a period of six years from the Closing Date.
9. SURVIVAL
OF REPRESENTATIONS; INDEMNIFICATION.
9.1 Survival of Representations;
Limitations on Liability.
(a) Except as set forth in Section 9.1(b) of this Agreement, the representations and warranties of the Parties contained in this Agreement or in any certificate delivered pursuant to this Agreement shall survive the purchase and sale of the
Shares pursuant to this Agreement for a period of eighteen (18) months after the Closing Date.
(b) The representations and warranties contained in (i) the first two sentences of Section 4.2 (Existence) and Sections 4.3 (Authority and Enforceability), 4.4 (Insolvency), 4.7(a) (Capitalization), 4.9(a), 4.9(b) and 4.9(f) (The Company), 4.32 (Brokers’ or Finders’ Fees), 5.1 (Existence and Good Standing of Buyer; Power and Authority), 5.3 (Brokers’ or Finders’ Fees), 6.1 (Power and Authority), 6.2 (Title to Shares), 6.3 (Brokers’ or Finders’ Fees), and 6.5 (Insolvency) (collectively, the “Key Representations”) shall survive for a period of seven (7) years after the Closing Date; Section 4.18 (Intellectual Property) (other than Section 4.18(m)) (the “Key IP Representations”) shall survive for a period of five (5) years after the Closing Date; and (iii) Section 4.7(b) (Capitalization) (the “Simultaneous Transaction Representation”) 4.14 (Taxes) (the “Tax Representation”), 4.26 (Compliance with Laws), 4.30 (Labor and Employment) and 4.31
(Employee Benefit Plans) shall survive until sixty (60) days after the expiration of the applicable statute of limitations period (after giving effect to any waivers and extensions thereof). As used in this Agreement, the terms “Key
Representations”, “Key IP Representations” “Simultaneous Transaction Representation” and the “Tax Representation” shall mean, collectively, the “Fundamental
Representations”.
(c) Any representation or warranty in respect of which indemnity may be sought under Section 9.2, and the indemnity with respect thereto, shall survive the time at which it would otherwise terminate pursuant to Section 9.1(a) or Section 9.1(b) if notice of a Certificate (as defined below) setting forth the inaccuracy or
breach, or potential inaccuracy or breach, thereof giving rise to such right or alleged right of indemnity shall have been given pursuant to Section 9.3(a) to
the party against whom such indemnity may be sought prior to such time, but shall only survive for purposes of the resolution of the matter covered by such Certificate.
(d) Except with respect to breaches of the Fundamental Representations, the Founders shall not
be required to indemnify, defend or hold harmless the Buyer Indemnitees (as defined below) pursuant to Section 9.2(a)(i) until the aggregate amount of the
Buyer Indemnitees’ Losses exceeds $250,000 (the “Deductible”), it being understood that if such Losses exceed the Deductible, the Buyer Indemnitees will only be
entitled to recover for the Losses in excess of the Deductible.
(e) Notwithstanding anything in this Agreement to the contrary, except with respect to
breaches of the Fundamental Representations or in the case of fraud, in no event shall (i) the cumulative indemnification obligations of the Founders pursuant to Section
9.2(a)(i) exceed, in the aggregate, $1,250,000, (ii) the cumulative indemnification obligations of Bogaerde under Section 9.2(a)(i) exceed the amount
of the Purchase Price received by Bogaerde, and (iii) the cumulative indemnification obligations of any Shareholder under Section 9.2(b)(i) exceed the amount
of the Purchase Price received by such Shareholder (including any funds from the Escrow Account).
(f) In respect of the Fundamental Representations, except in the case of fraud, (i) the
cumulative indemnification obligations which the Founders shall be liable pursuant to Section 9.2(a)(i), shall be limited to the aggregate Purchase Price
received by the Founders, (ii) the cumulative indemnification obligations of Bogaerde under Section 9.2(a)(i) shall not exceed the amount of the Purchase Price
received by Bogaerde, and (iii) the cumulative indemnification obligations of any Shareholder under Section 9.2(b)(i) shall not exceed the amount of
the Purchase Price received by such Shareholder.
(g) No Indemnified Party shall be entitled to recover from an Indemnifying Party more than once
with respect to Losses resulting from a single claim or series of related claims. Any Liability for indemnification hereunder shall be determined without duplication of recovery by reason of the state of facts giving rise to such Liability
constituting a breach of more than one representation, warranty, covenant or agreement.
(h) Reserved.
(i) Payments by the Shareholders pursuant to Section 9.2 in respect of any Loss shall be reduced by an amount equal to any Tax benefit realized or reasonably expected to be realized as a result of such Loss by such Buyer Indemnitee.
(j) In no event shall the Shareholders be liable to Buyer Indemnitees for any punitive
damages based on any type of multiple except to the extent paid or payable to a third party.
(k) Buyer shall take, and cause the Buyer Indemnitees to take, all commercially reasonable
steps to mitigate any Loss upon becoming aware of any event or circumstance that would be reasonably expected to, or does, give rise thereto (but only to the extent required by Law), provided, however, that the failure to mitigate if required
hereby shall not result in the loss of any indemnification rights but the amount of otherwise indemnifiable Losses resulting from such matter will be reduced by the amount thereof that would have been prevented had such mitigation occurred.
(l) Reserved.
(m) Following the Closing, the indemnification provisions of Section 9.2 and Section 8.3 shall be the sole and exclusive remedies of any Buyer Indemnitee or
Shareholder Indemnitee for any Losses (other than Losses arising from or relating to claims based on fraud) that it may at any time suffer or incur, or become subject to, as a result of, or in connection with, any claims arising under this
Agreement; provided, however, that this exclusive remedy for Losses does not preclude a party from pursuing claims in connection Section 3.3 in accordance with
the terms thereof or bringing an action for specific performance or other equitable remedy to require a party to perform its obligations under this Agreement or any Ancillary Document, including for the avoidance of doubt, the covenants set
forth in Sections 7 and 8 hereof. Without limiting the generality of the
foregoing, the Parties hereto hereby irrevocably waive any right of rescission they may otherwise have or to which they may become entitled.
9.2 Indemnification.
(a) By the Founders.
Each of the Founders agrees to, jointly and severally, indemnify and hold harmless Buyer, and each of its Affiliates, Representatives, directors, officers, employees and agents (each a “Buyer Indemnitee”), from and against any damages, losses, liabilities, penalties, obligations, claims of any kind, interest or expenses (including reasonable attorneys’ fees and expenses) (collectively, “Losses”), suffered, incurred, or paid, directly or indirectly, as a result of, in connection with or arising out of any of the following:
(i) the failure of any representation or warranty made by the Founders in Article 4 of this Agreement to be true and correct as of the Closing Date;
(ii) any Indebtedness or Transaction Expenses (other than the Transaction Bonus Amount) of the
Company Group that remains unpaid immediately following the Closing; and
(iii) any of the matters set forth on Schedule 9.2(a)(iii).
(b) By the Shareholders.
Each Shareholder agrees to, severally and not jointly, indemnify and hold harmless the Buyer Indemnitees from and against any Losses suffered, incurred, or paid, directly or indirectly, as a result of, in connection with or arising out of:
(i) the failure of any representation or warranty made by such Shareholder in Article 6 of this Agreement to be true and correct as of the Closing Date; and
(ii) any breach by such Shareholder of any of its covenants or agreements contained in this
Agreement or in any other agreement, certificate, document, writing, or instrument delivered by such Shareholder pursuant to this Agreement.
Notwithstanding anything herein to the contrary, each of the Shareholders acknowledges and agrees that if any indemnification claim
is made or asserted by a Buyer Indemnitee against any or all of the Founders under Section 9.2(a)(i) in connection with an alleged breach of the representations
and warranties set forth in Section 4.3 in respect of such Shareholder, then such Shareholder shall (x) at such Shareholder’s sole expense, provide all
reasonable assistance and cooperation requested by such Founder(s) and its counsel or other Representatives in connection with defending such claim and (y) indemnify and hold harmless such Founder(s) in respect of any such Agreed Claims paid by
the Founders to the Buyer Indemnitee as if the representations and warranties made by such Shareholder under Section 6.1 and Section 6.2 had been made directly to the Founders against whom such claim by the Buyer Indemnitee has been asserted; provided however, that (1) the Founder(s) shall not settle any such claims
with such Buyer Indemnitee without the prior consent of such Shareholder, (2) the Shareholder’s limitations of liability set forth in Section 9.1 shall apply in
respect of such claim made by the Founder(s) against such Shareholder, and (3) the provisions of Section 9.3 shall apply to such claim as if such Shareholder was
the Indemnifying Party and such Founder(s) were the Indemnified Party.
(c) By Buyer. Buyer
agrees to indemnify and hold harmless the Shareholders, and each of their respective Affiliates, Representatives, directors, officers, employees and agents (each a “Shareholder
Indemnitee”) from and against any Losses suffered, incurred, or paid, directly or indirectly, as a result of, in connection with or arising out of:
(i) the failure of any representation or warranty made by Buyer in this Agreement (whether or
not contained in Article 5) or in any Schedule, Exhibit or other agreement or certificate delivered pursuant to this Agreement to be true and correct in all
material respects as of the Closing Date; and
(ii) any breach by Buyer of any of its covenants or agreements contained in this Agreement or
in any other agreement, certificate, document, writing, or instrument delivered to a Party pursuant to this Agreement.
(d) The obligations to indemnify and hold harmless pursuant to Section 9.2(a), Section 9.2(b)(i) and Section 9.2(c)(i) shall survive the consummation of the Transactions
for the time periods set forth in Section 9.1, except for claims for indemnification asserted prior to the end of such periods, which claims shall survive
until final resolution thereof. All covenants and agreements of the parties contained herein shall survive the Closing indefinitely or for the period explicitly specified therein.
(e) Any Material Adverse Effect, Material Adverse Change, materiality, or other similar
qualifications in the representations and warranties contained in Articles 4, 5 and
6 shall be disregarded for purposes of determining a breach of, and calculating the amount of Losses resulting from a breach of, any such representation or
warranty; provided, however, that such qualification shall not be read out of the following defined terms: Material Contract or Material Interest, and not apply to the first sentence of Section 4.13.
(f) Notwithstanding any provision in this Article 9 or elsewhere in this Agreement to the contrary, only the Shareholder Representative shall have the right, power and authority to commence any action, suit or proceeding after the
Closing, by and on behalf of any or all Shareholders, against Buyer, any Company Group Member or any other Indemnifying Party in connection with this Agreement and the Ancillary Documents and the transactions contemplated hereby and thereby,
and in no event shall any Shareholder himself, herself or itself have the right to commence any action, suit or proceeding against Buyer, any Company Group Member, or any other Indemnifying Party in such connection (other than (i) any action,
suit or proceeding arising out of or relating to any Ancillary Documents solely between a particular Shareholder and a third party, or (ii) any defense or counterclaim against the Buyer, any Company Group Member or any other Indemnifying Party
in response to a claim made by such Person against such Shareholder arising out of or relating to this Agreement, in each case, for which such Shareholder will retain all rights and obligations). Each Shareholder hereby waives, and shall be
deemed to have waived, such Shareholder’s right to exercise or assert (or attempt to exercise or assert) any right of contribution, right of indemnity or other right or remedy against Buyer, any Company Group Member or any other Indemnifying
Party in connection with any indemnification obligation or any other liability to which he, she or it may become subject under or in connection with this Agreement or the related facts and circumstances underlying any such indemnification
obligation or other liability other than exercising such Shareholder’s right or remedy by or through the Shareholder Representative.
(g) Buyer shall have the right to withhold and set off against any amount otherwise due to be
paid to any Founder pursuant to this Agreement, any Ancillary Document or any other agreement between the Buyer or any Company Group Member and such Founder by the amount, subject to any applicable limitations set forth in Article 9, of any Losses for Agreed Claims to which any Buyer Indemnitee may be entitled under Article 9 of this Agreement; provided, that Buyer has provided such Founder with written notice of its intent to setoff such amounts at least five (5) Business Days in advance of the date Buyer intends to setoff
such amounts and such Founder shall have failed to satisfy in full such claim by payment of cash in immediately available funds. Notwithstanding the foregoing, nothing in this Section 9.2(g) shall permit Buyer to withhold and set off against any payment of base salary, base wages or other base compensation payable to any Founder.
9.3 Indemnification Procedure.
(a) Promptly after the incurrence of any Losses by any Person entitled to indemnification
pursuant to Section 9.2 hereof (an “Indemnified Party”), including any
claim by a third party described in Section 9.4 that might give rise to indemnification under this Agreement, the Indemnified Party shall deliver to the Party
from which indemnification is sought (the “Indemnifying Party”) a certificate (the “Certificate”)
which shall:
(i) state that the Indemnified Party has paid or properly accrued Losses or anticipates that
it will incur Liability for Losses for which such Indemnified Party is entitled to indemnification pursuant to this Agreement; and
(ii) specify in reasonable detail each individual item of Loss included in the amount so stated,
the date such item was paid or properly accrued, the basis for any anticipated Liability and the nature of the misrepresentation, breach of warranty, breach of covenant or claim to which each such item is related and the computation of the
amount to which such Indemnified Party claims to be entitled under this Agreement.
The Indemnified Party’s failure to promptly deliver the Certificate shall not, however, relieve the Indemnifying
Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure or is otherwise actually and materially prejudiced thereby.
(b) If the Indemnifying Party objects to the indemnification of an Indemnified Party in
respect of any claim or claims specified in any Certificate, the Indemnifying Party shall, within twenty (20) days after receipt by the Indemnifying Party of such Certificate, deliver to the Indemnified Party a notice to such effect and the
Indemnifying Party and the Indemnified Party shall, within the thirty (30)-day period beginning on the date of receipt by the Indemnified Party of such objection, attempt in good faith to agree upon the obligations and rights of the respective
Parties with respect to each of such claims to which the Indemnifying Party shall have so objected. If the Indemnified Party and the Indemnifying Party shall succeed in reaching agreement on their obligations and rights with respect to any of
such claims, the Indemnified Party and the Indemnifying Party shall promptly prepare and sign a memorandum setting forth such agreement. Should the Indemnified Party and the Indemnifying Party be unable to agree as to any particular item or
amount, then the Indemnified Party and the Indemnifying Party shall submit such dispute to a court of competent jurisdiction. The Party that receives a final judgment in such dispute in such Party’s favor shall be indemnified and held harmless
for all of its reasonable and documented dispute-related reasonable attorney’s and consultant’s fees or expenses by the other Party.
(c) “Agreed
Claims” are: (i) claims for Losses specified in any Certificate to which an Indemnifying Party shall not object in writing within twenty (20) days of receipt of such Certificate; (ii) claims for Losses covered by a memorandum of
agreement of the nature described in Section 9.3(b); (iii) claims for Losses the validity and amount of which have been the subject of judicial determination
as described in Section 9.3(b); and (iv) claims for Losses the validity and amount of which shall have been the subject of a final judicial determination, or
shall have been settled with the consent of the Indemnifying Party, as described in Section 9.4. Within fifteen (15) days of the determination of the amount
of any Agreed Claim, the Indemnifying Party shall pay to the Indemnified Party an amount equal to the Agreed Claim by wire transfer in immediately available funds to the bank account or accounts designated by the Indemnified Party in a notice
to the Indemnifying Party not less than two (2) Business Days prior to such payment; provided however, that with respect to any claims for indemnification under Section
9.2(a), all Losses for Agreed Claims shall first be paid from the Escrow Account (to the extent funds remain therein) before a Buyer Indemnitee may seek indemnification from any Founder personally, and the Shareholder Representative
and the Buyer shall, within five (5) Business Days following the date on which such claim becomes an Agreed Claim, execute and deliver joint written instructions to the Escrow Agent, authorizing the Escrow Agent to release the amount of the
such Agreed Claims to the Buyer.
9.4 Third-Party Claims.
(a) If a claim by a third party is made against any Indemnified Party, and if such Indemnified
Party intends to seek indemnity with respect thereto under this Section 9, such Indemnified Party shall promptly notify the Indemnifying Party of such claims;
provided, however, that the failure to so notify shall not relieve the Indemnifying Party of its obligations under this Agreement, except to the extent that the Indemnifying Party is actually and materially prejudiced thereby.
(b) The Indemnifying Party shall have thirty (30) days after receipt of such notice to assume
the conduct and control, through counsel reasonably acceptable to the Indemnified Party at the expense of the Indemnifying Party, of the settlement or defense thereof and the Indemnified Party shall cooperate with it in connection therewith;
provided, however, that:
(i) it is reasonably anticipated by the Indemnified Party that the Indemnifying Party shall
permit the Indemnified Party to participate in such settlement or defense through counsel chosen by such Indemnified Party; provided, however, that the fees and expenses of such counsel shall be borne by such Indemnified Party, and
(ii) the Indemnifying Party shall promptly be entitled to assume the defense of such action only
to the extent the Indemnifying Party acknowledges its indemnity obligation and assumes and holds such Indemnified Party harmless from and against any Losses resulting therefrom (subject to the limitations set forth in this Section 9); provided, however, that the Indemnifying Party shall not be entitled to assume control of such defense and shall pay the fees and expenses of counsel
retained by the Indemnified Party if:
(A) the claim for indemnification relates to or arises in connection with any criminal
Proceeding, action, indictment, allegation or investigation against the Indemnified Party;
(B) the claim seeks an injunction or equitable relief against the Indemnified Party which
would have a material adverse effect on the Indemnified Party;
(C) the Indemnified Party has been advised in writing by counsel that a reasonable likelihood
exists of a material conflict of interest between the Indemnifying Party and the Indemnified Party; or
(D) upon petition by the Indemnified Party, the appropriate court rules that the Indemnifying
Party failed or is failing to vigorously prosecute or defend such claim.
(c) Any Indemnified Party shall have the right to employ separate counsel in any such action
or claim and to participate in the defense thereof, but the fees and expenses of such counsel shall not be at the expense of the Indemnifying Party unless:
(i) the Indemnifying Party shall have failed, within a reasonable time after having been
notified by the Indemnified Party of the existence of such claim as provided in the preceding sentence, to assume the defense of such claim, or
(ii) the employment of such counsel has been specifically authorized in writing by the
Indemnifying Party, or the named parties to any such action (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party and such Indemnified Party shall have been advised in writing by such counsel that
there may be one or more legal defenses available to the Indemnified Party which are not available to the Indemnifying Party, or available to the Indemnifying Party the assertion of which would be adverse to the interests of the Indemnified
Party.
(d) So long as the Indemnifying Party is reasonably contesting any such claim in good faith,
the Indemnified Party shall not pay or settle any such claim. Notwithstanding the foregoing, the Indemnified Party shall have the right to pay or settle any such claim; provided, however, that in such event it shall waive any right to
indemnity therefor by the Indemnifying Party for such claim unless the Indemnifying Party shall have consented to such payment or settlement. If the Indemnifying Party does not notify the Indemnified Party within thirty (30) days after the
receipt of the Indemnified Party’s notice of a claim of indemnity under this Agreement that it elects to undertake the defense thereof or contest such claim for indemnification in accordance with Article 9, the Indemnified Party shall have the right to contest, settle, or compromise the claim, but shall not thereby waive any right to indemnity therefor pursuant to this Agreement. The
Indemnifying Party shall not, except with the consent of the Indemnified Party which shall not be unreasonably withheld, enter into any settlement that is not entirely indemnifiable by the Indemnifying Party pursuant to this Article 9 and does not include as an unconditional term thereof the giving by the Person or Persons asserting such claim to all Indemnified Parties of an
unconditional release from all liability with respect to such claim or consent to entry of any judgment. The Indemnifying Party and the Indemnified Party shall cooperate with each other in all reasonable respects in connection with the defense
of any claim, including making available records relating to such claim and furnishing, without expense to the Indemnifying Party or its counsel, such employees of the Indemnified Party as may be reasonably necessary for the preparation of the
defense of any such claim or for testimony as witnesses in any Proceeding relating to such claim.
9.5 Recoveries.
(a) The amount of Losses recoverable by any Indemnified Party in connection with an indemnity
claim pursuant to this Article 9 shall be reduced by (or, if such Losses have already been paid, refunded to the extent of) any proceeds actually received by
such Indemnified Party from any insurance carrier with respect to the Losses to which such indemnity claim relates, less reasonable attorney’s fees and other reasonable out-of-pocket expenses incurred in connection with such recovery (including
any directly related increase in premiums, deductible or retention). For the avoidance of doubt, no Indemnified Party shall have any obligation to pursue any claim against any insurance policy prior to pursuing a claim of indemnification
against the Indemnifying Party.
(b) A Party shall have no liability and shall be subject to no claim with respect to any
inaccuracy in or incompleteness of or any breach of any representation, warranty, covenant or agreement contained in this Agreement unless notice of such inaccuracy, incompleteness or breach is given on or before the expiration of the time
periods specified in Section 9.1.
10. POST
CLOSING MATTERS.
10.1 UK Stamp Duties.
Within 30 days of Closing, the Buyer shall pay all UK stamp duties applicable to any document to which it is a party and which arise as a result of or in consequence of this Agreement.
10.2 Transaction Bonus Amounts.
Following the Closing, Buyer shall cause the applicable Company Group Member to pay from the Transaction Bonus Amount to each Transaction Bonus Recipient the gross amount set forth opposite such Transaction Bonus Recipient’s name on Exhibit B, on the next regular payroll period following the Closing and to withhold from such gross amount any applicable Taxes, deductions or other required
withholdings (which shall be remitted the appropriate Tax Authority in the ordinary course of business).
10.3 Vlaio Grant. The
Belgian Subsidiary has applied for a grant through the Fund for Innovation and Entrepreneurship for work performed through calendar year 2022 under case number HBC.2022.0029 (the “Vlaio Grant”), for which the Company Group received 215,000 euro on June 27, 2022 and expects to receive 91,658 euro around August 2023. The Company Group has submitted the final report for the Vlaio Grant, but
receipt of the grant is not expected to occur until after the Closing. Upon the request of the Shareholder Representative, Buyer shall cause the Company Group Members to work in good faith and use their commercially reasonable efforts, at the
Shareholders’ sole cost and expense, to take any action reasonably requested by the Shareholder Representative to obtain the Vlaio Grant to which the Shareholders are entitled pursuant to this Section 10.3. If Buyer or any Company Group Member receives such Vlaio Grant by actual receipt of such amounts, it will deliver the amounts to the Paying Agent (or, if the Paying Agent is unable
or unwilling to act as paying agent following the Closing, to an alternative paying agent designated by the Shareholder Representative), for further distribution to the Shareholders, pro rata, based on the percentages set forth in the Funds
Flow, within ten (10) days after its receipt thereof; provided, however, the amount of such payment to the Shareholders pursuant to this Section 10.3 shall be
reduced by the amount of any reasonable and documented out-of-pocket costs and expenses incurred by Buyer, Buyer’s Affiliates, or any Company Group Member following the Closing in connection with collecting the Vlaio Grant, including but not
limited to any Taxes incurred by such relevant party following the Closing directly attributable to the Vlaio Grant or any fee payable to Leyton in respect of the Vlaio Grant (to the extent not satisfied at or prior to the Closing or otherwise
included as a current liability in Closing Working Capital).
10.4 O&O Tax Credit.
The Belgian Subsidiary previously applied for and was granted a recuperation of government corporate employee taxes for research and development projects (the “O&O
Tax Credit”). The Belgian Subsidiary has applied for such recuperation for calendar year 2022 under case number HBC.2022.0029, and it expects to receive Tax benefits in the amount of 28,205 euro in respect of calendar year 2022 but
such amounts are only paid out at fiscal year end. Notwithstanding anything in Section 8.3 to the contrary, the Shareholders are entitled to all refunds (and
the amount of any Tax credits in lieu of refunds), if any, that are received or claimed by the Buyer or any Company Group Member following the Closing and that are directly attributable to O&O Tax Credit for calendar year 2022. If Buyer or
any Company Group Member receives such O&O Tax Credit by actual receipt of a cash Tax refund (or a credit in lieu of a refund), it will deliver the refund or an amount equal to the credit to the Paying Agent (or, if the Paying Agent is
unable or unwilling to act as paying agent following the Closing, to an alternative paying agent designated by the Shareholder Representative), for further distribution to the Shareholders, pro rata, based on the percentages set forth in the
Funds Flow, within ten (10) days after its receipt thereof or within thirty (30) days following the filing of any Tax Return reflecting application of the O&O Tax Credit in the form of a Tax credit, provided, however, notwithstanding the
foregoing: (a) to the extent the O&O Tax Credit is made available in the form of a Tax credit in lieu of a refund, the value of such credit shall be equal to the actual amount of reduction of Tax realized by the Belgian Subsidiary following
application of the Tax credit, determined based on the with-and-without method; and (b) the amount payable to the Shareholders pursuant to this Section 10.4 shall
be reduced by the amount of any reasonable and documented out-of-pocket costs and expenses incurred by Buyer, Buyer’s Affiliates, or any Company Group Member following the Closing in connection with such Tax refund or credit, including but not
limited to Taxes incurred by such relevant party following the Closing directly attributable to such refund or credit or any fee payable to Leyton in respect of the O&O Tax Credit (to the extent not satisfied at or prior to the Closing or
otherwise included as a current liability in Closing Working Capital), provided that any costs or expenses offset against the amounts due to the Shareholders pursuant to Section 10.3 shall not be double-counted as an offset against the amounts due to the Shareholders pursuant to this Section 10.4, and vice
versa. Upon the request of the Shareholder Representative, Buyer shall cause the Company Group Members to work in good faith and use their commercially reasonable efforts, at the Shareholders’ sole cost and expense, to take any action
reasonably requested by the Shareholder Representative to obtain the O&O Tax Credit to which the Shareholders are entitled pursuant to this Section 10.4
and the Buyer shall cause the Company Group Members to elect to receive the O&O Tax Credit in the form of a Tax refund rather than a Tax credit, if such option is permissible.
11.
MISCELLANEOUS.
11.1 Expenses.
The Parties shall pay all of their own expenses relating to the Transactions, including the fees and expenses of their counsel and financial advisers.
11.2 Governing
Law. The interpretation and construction of this Agreement, and all matters relating hereto, shall be governed, enforced, and construed in accordance with the Laws of the State of Delaware without regard to the conflicts of
laws principles thereof.
11.3 Arbitration.
Any dispute arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the London Court of International
Arbitration Rules 2020 (the “Rules”), which Rules are deemed to be incorporated by reference into this Section 11.3. The number of arbitrators shall be three. The seat, or legal place, of arbitration shall be the City of London, United Kingdom. The language to be used
in the arbitral proceedings shall be English. The governing law of the contract shall be the substantive law of the State of Delaware.
11.4 Notices.
Any notice or other communication required or permitted under this Agreement shall be deemed to have been duly given (a) five (5) Business Days following deposit in the mails if sent by registered or certified mail, postage prepaid, return
receipt requested; (b) when sent, if sent by email transmission, if receipt thereof is confirmed by response email to the sender, provided that an automatic “read receipt” out of office message or similar automated message will not constitute
confirmation of receipt; (c) when delivered, if delivered personally to the intended recipient or sent with a nationally recognized overnight courier service, in each case addressed as follows:
if to Buyer, to:
Logility, Inc., 470 East Paces Ferry Road, N.E., Atlanta, GA 30305, Telephone: +1-404-261-4381, Attn: General Counsel, Email: notice@amsoftware.com
with copy to (which shall not constitute notice):
(i) Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., 165 Madison Ave., Suite 2000, Memphis, TN 38103, Telephone:
+1-901-577-2148, Attn: Drew Yonchak, Email: dyonchak@bakerdonelson.com; (ii) Elegis, Mechelsesteenweg 64, B-2018 Antwerp,
Belgium, Telephone: +32 (0)3 244 15 60, Attn: Christoph Hanssen, Email: chanssen@elegis.com; and (iii)
Stevens & Bolton LLP, Wey House, Farnham Road, Guildford, Surrey GU1 4YD, Telephone: +44 (0)1483 302264, Attn: Oscar Horwich, Email: Oscar.Horwich@stevens-bolton.com
and Andrew.Carter@stevens-bolton.com.
And
if to the Shareholder Representative, to:
2018 Antwerp, Lange Lozanastraat 46, Belgium
with copy to (which shall not constitute notice):
Dentons UK and Middle East LLP, One Fleet Place, London, EC4M 7WS, United Kingdom, Attn: Joseph Collingwood, Email:
joseph.collingwood@dentons.com and Dentons Cohen and Grigsby LLP, EQT Plaza, 625 Liberty Ave, Pittsburgh, PA 15222, United States, Attn: Matthew Clark, Email: matthew.clark@dentons.com
And
if to a Shareholder, to such Shareholder’s address set forth below its signature on the signature pages hereto
with copy to (which shall not constitute notice):
Dentons UK and Middle East LLP, One Fleet Place, London, EC4M 7WS, United Kingdom, Attn: Joseph Collingwood, Email:
joseph.collingwood@dentons.com and Dentons Cohen and Grigsby LLP, EQT Plaza, 625 Liberty Ave, Pittsburgh, PA 15222, United States, Attn: Matthew Clark, Email: matthew.clark@dentons.com
or such other address or number as shall be furnished in writing by any such Party in a notice delivered in accordance with this Section 11.4.
11.5 Confidentiality.
Prior to Closing, no Party shall announce or disclose to any third party (other than those employees, agents, advisors or representatives who have a need to know in order to effectuate the Transactions, and/or the spouses or domestic partners
of the Shareholders) the existence or the terms of this Agreement or the Transactions, without the prior consent of the counter-Party (which consent shall not be unreasonably withheld), except as disclosure may be required by (a) applicable
Law, (b) the rules or any order of any court, tribunal or agency of competent jurisdiction, (c) any securities exchange, recognised investment exchange, regulatory or governmental body, which has jurisdiction over it or to which it normally
submits (whether or not a direction from that body has the force of Law) or (d) to a relevant Tax Authority to the extent required for the proper management of the taxation affairs of that party, any of its holding companies or any subsidiary
of it or any of its holding companies.
11.6 Assignment;
Parties in Interest. This Agreement may not be transferred, assigned, pledged or hypothecated by any Party without the express written consent of the other Parties, other than by operation of law; provided, however, that Buyer
may assign its rights, interests, and obligations under this Agreement (i) to any direct or indirect wholly owned Subsidiary of American Software, Inc. and (ii) in connection with the transfer by Buyer of all or substantially all of its
capital stock and/or assets; provided, further, that if Buyer makes any assignment referred to in (i) above, Buyer shall remain liable under this Agreement. This Agreement shall be binding upon and shall inure to the benefit of the Parties
and their heirs, executors, administrators, successors and permitted assigns. Any purported assignment in violation of the above shall be void and of no effect to transfer any right under this Agreement.
11.7 Counterparts.
This Agreement may be executed in two or more counterparts, all of which taken together shall constitute one instrument.
11.8 Entire
Agreement. This Agreement, including the other documents referred to herein which form a part hereof, contains the entire understanding of the Parties with respect to the subject matter contained herein and therein. This
Agreement supersedes all prior agreements and understandings between the Parties with respect to such subject matter.
11.9 Amendments.
This Agreement may not be changed, and any of the terms, covenants, representations, warranties and conditions cannot be waived, except pursuant to an instrument in writing signed by each of the Buyer, the Shareholder Representative,
Superseed and Bosch, other than in the case of a waiver, by the Buyer (if it is the Party waiving compliance) or any Shareholder (if such Shareholder is waiving compliance on behalf of itself), as applicable; provided, however, that the
Shareholder Representative shall be permitted to consent to any amendment to this Agreement on behalf of Superseed and Bosch provided that such Amendment (a) does not expand or otherwise add to any covenants, restrictions or undertakings of
the Shareholders, (b) is limited to curing any ambiguity or correcting or supplementing any provision contained in this Agreement which may be defective or inconsistent with any other provisions contained herein, or (c) does not materially
adversely affect the interests of the Shareholders.
11.10 Severability.
If any term, provision, agreement, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, agreements, covenants
and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the Transactions is not affected in any manner materially adverse
to any Party. Upon such a determination, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a reasonably acceptable manner in order that the
Transactions may be consummated as originally contemplated to the fullest extent possible.
11.11 Third-Party
Beneficiaries. Each Party intends that this Agreement shall not benefit or create any right or cause of action in or on behalf of any Person other than the Parties.
11.12 No Strict
Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted
jointly by all Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement.
11.13 Electronic
Delivery. This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments hereto or thereto, to the extent delivered by means of electronic mail or similar electronic
means (any such delivery, an “Electronic Delivery”), shall be treated in all manner and respects as an original agreement or instrument and
shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any Party hereto or to any such agreement or instrument, each other Party hereto or thereto
shall re-execute original forms thereof and deliver them to all other parties. No Party shall raise (a) the use of Electronic Delivery to deliver a signature or (b) the fact that any signature or agreement or instrument was transmitted or
communicated through the use of Electronic Delivery, as a defense to the formation of a contract, and each Party forever waives any such defense, except to the extent such defense related to lack of authenticity.
11.14 Schedules.
Nothing in any Schedule attached hereto shall be adequate to disclose an exception to a representation or warranty made in this Agreement unless such Schedule reasonably identifies the exception.
11.15 Construction.
In this Agreement, unless the context otherwise requires:
(a) any reference in this Agreement to “writing” or comparable expressions includes a reference to electronic transmission or comparable means of communication;
(b) words expressed in the singular number shall include the plural and vice versa, words
expressed in the masculine shall include the feminine and neuter gender and vice versa;
(c) references to Sections, Exhibits, Schedules, and Recitals are references to sections,
exhibits, schedules, and recitals of this Agreement;
(d) reference to “day” or “days” are to calendar days;
(e) this Agreement or any other agreement or document shall be construed as a reference to
this Agreement or, as the case may be, such other agreement or document as the same may have been, or may from time to time be, amended, varied, novated, or supplemented; and
(f) “include,” “includes,” and “including” are deemed to be followed by “without limitation”
whether or not they are in fact followed by such words or words of similar import.
11.16 Schedules
and Exhibits. The Schedules and Exhibits to this Agreement are incorporated into and form an integral part of this Agreement. If an Exhibit is a form of agreement, such agreement, when executed and delivered by the parties
thereto, shall constitute a document independent of this Agreement.
11.17 Shareholder
Representative.
(a) Each Shareholder, for itself or himself and for its or his successors and assigns,
hereby irrevocably makes, constitutes and appoints Piet Buyck, in his capacity as Shareholder Representative, as the sole and exclusive agent, attorney-in-fact and representative of such Shareholder, to act for and on behalf of such
Shareholder with respect to the matters set forth in this Section 11.17, and the Shareholder Representative hereby accepts such
appointment. Each Shareholder acknowledges that the appointment of the Shareholder Representative is coupled with an interest and may not be revoked. Any such actions taken, exercises of rights, power or authority, and any decision or
determination made by the Shareholder Representative consistent with this Section 11.17, shall be absolutely and irrevocably binding on each
Shareholder as if such Shareholder personally had taken such action, exercised such rights, power or authority or made such decision or determination.
(b) In furtherance of the appointment of the Shareholder Representative, each Shareholder,
fully and without restriction (in each case, other than in the case of any Ancillary Documents solely between a particular Shareholder and a third party, for which such Shareholder will retain all rights and obligations, including notice),
(i) agrees to be bound by all notices given and received and agreements and determinations made by and documents executed and delivered by the Shareholder Representative under or in connection with this Agreement, the Ancillary Documents or
any of the transactions contemplated thereby, and (ii) authorizes the Shareholder Representative to (A) execute, deliver and receive deliveries of all agreements, certificates, statements, notices, certificates, approvals, extensions,
waivers, undertakings, amendments, and other documents required or permitted to be given in connection with Section 2.2, Section 3.3 and Section 7.3 and to waive
any closing deliverables of the Buyer or approve any press releases or public announcements in connection therewith, (B) deliver to Buyer any agreements, certificates, statements, notices, certificates, approvals, extensions, waivers,
undertakings, amendments, and other documents required or permitted to be given pursuant to this Agreement and have been executed by Shareholders and deposited with the Shareholder Representative for purpose of such delivery, (C) on behalf of
the applicable Shareholders, dispute or refrain from disputing any claim made by Buyer under this Agreement or the Escrow Agreement, and negotiate and compromise any dispute which may arise under Section 3.3 or Section 9.2(a) of this Agreement or the Escrow Agreement, (D)
sign any releases or other documents with respect to any such dispute or remedy described in subsection (C), (E) subject to any additional consents required pursuant to Section 11.9, negotiate, execute, and deliver any amendments to this Agreement, (F) petition the Escrow Agent for the release of any or all funds due to the Founders or the Shareholders under Section 3.3 and Section 3.1 of this
Agreement, respectively, and the Escrow Agreement and, subject to the Shareholder Representative’s other responsibilities under this subsection, pay to each Founder or other Shareholder, as applicable, such Founder’s or other Shareholder’s
Pro Rata Share of such funds, (G) pay out of the Reserve Account or funds otherwise payable to Shareholders by Buyer or the Escrow Agent all fees and expenses of Shareholders (and of the Shareholder Representative acting in such capacity)
incurred in connection with the transactions contemplated by this Agreement and the Ancillary Documents, including without limitation the fees and expenses of the Paying Agent, counsel, accountants, investment bankers and other professional
advisors retained by or on behalf of Shareholder Representative in connection with such transactions, and (H) bring or refrain from bringing any action, suit or proceeding after the Closing, by and on behalf of any or all Shareholders,
against Buyer, any Company Group Member or any other Indemnifying Party in connection with this Agreement and the Ancillary Documents and the transactions contemplated hereby and thereby pursuant to Section 9.2(f). Except for any obligations for which Shareholders are severally, but not jointly, liable, payments made by the Shareholder Representative under subsection (G) above
will be considered to be paid by all Shareholders in accordance with their respective Pro Rata Shares. Any amounts remaining in the Reserve Account following the final resolution of the Closing Working Capital and Closing Cash under Section 3.3 shall be promptly paid to the Shareholders in accordance with their respective Pro Rata Shares.
(c) If any Shareholder Representative resigns, ceases to be a legal entity, dies or becomes
incapacitated, its or his successor will be appointed within 15 days of such event by the Shareholders owning a majority of the Shares held by all of the Shareholders immediately prior to the Closing, including each of the Founders. The
decisions and actions of any successor Shareholder Representative will be, for all purposes, those of the Shareholder Representative as if originally named herein. The death or incapacity of any Shareholder will not terminate the authority
and agency of the Shareholder Representative. Any successor Shareholder Representative will provide Buyer with prompt written notice of its or his appointment.
(d) Buyer will be entitled to rely exclusively upon any communication given or other action
taken by the Shareholder Representative in accordance with this Agreement and will not be liable to Shareholders or any other Person for any action taken or not taken in reliance upon the Shareholder Representative. Buyer will not be
obligated to inquire as to the authority of the Shareholder Representative with respect to the taking of any action set forth in Section 11.17(b)
that the Shareholder Representative takes on behalf of Shareholders.
(e) Each Shareholder agrees that the Shareholder Representative shall not be liable for any
actions taken or omitted to be taken under or in connection with this Agreement or the Escrow Agreement or the transactions contemplated hereby or thereby, except to the extent such actions or omissions shall have been determined by a court
of competent jurisdiction to have constituted willful misconduct or intentional fraud.
(f) As
used herein, “Pro Rata Share” means each Shareholder’s pro rata share of the issued, outstanding and vested Shares held by all of the
Shareholders or such group of Shareholders, as the case may be, determined as of the Closing Date.
[SIGNATURES APPEAR ON NEXT PAGE]
IN WITNESS WHEREOF, Buyer has caused its name to be hereunto subscribed by its officer thereunto duly
authorized, all as of the day and year first above written.
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BUYER: |
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LOGILITY, INC.
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By:
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/s/ H. Allan Dow
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Name:
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H. Allan Dow
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Title:
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President
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[Signature Page to Stock Purchase Agreement]
IN WITNESS WHEREOF, each Founder has caused its name to be hereunto subscribed by its officer thereunto duly
authorized, all as of the day and year first above written.
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FOUNDERS:
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/s/ Piet Buyck
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PIET BUYCK
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/s/ Anupam Aishwarya
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ANUPAM AISHWARYA
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/s/ Ranjith Narayanan
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RANJITH NARAYANAN
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/s/ Geert Jan Van Den Bogaerde
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GEERT JAN VAN DEN BOGAERDE
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[Signature Page to Stock Purchase Agreement]
IN WITNESS WHEREOF, each Shareholder (other than the Founders), has caused its name to be hereunto subscribed
by its officer thereunto duly authorized, all as of the day and year first above written.
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[Signature Page to Stock Purchase Agreement]
ANNEX A
Definitions
When used in this Agreement, the following terms shall have the respective meanings specified below.
(a) “Accounting Standards” shall mean the International Financial Reporting Standards, or, for a period of account of a Company Group Member which
ended before the Closing Date, any alternative generally accepted accounting principles and/or practice applicable to and validly adopted by that Company Group Member.
(b) “Adjustment Collar” means Thirty-Six Thousand Seven Hundred Eighty-One Pounds Sterling (£36,781).
(c) “Adjustment Escrow Amount” means One Hundred Twenty Thousand Dollars ($120,000).
(d) “Adjustment Escrow Fund” means the Adjustment Escrow Amount together with all earnings, if any, thereon.
(e) “Affiliate” means with respect to any Person, any other Person, whether or not existing on the date hereof, controlling, controlled by or under common control with such first Person.
(f) “Ancillary Documents” means the Escrow Agreement, the Founder Agreements, and all filings, certificates, agreements and other documents prepared or delivered in connection with the consummation of the transactions
contemplated hereunder and thereunder.
(g) “Anti-Corruption Laws” means (i) the U.S. Foreign Corrupt Practices Act of 1977, as amended; (ii) the UK Bribery Act 2010; (iii) anti-bribery legislation promulgated by the European Union and implemented by its member states;
(iv) legislation adopted in furtherance of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions; and (v) any other Law or similar legislation applicable to the Company Group or the
Shareholders relating to anti-corruption, bribery or other similar matters.
(h) “Balance Sheet Date” shall mean December 31, 2022.
(i) “Bosch” means Robert Bosch Venture Capital GmbH.
(j) “Business” means the development, commercialization and sale of any one or more supply chain planning or logistics software.
(k) “Business Day” shall mean any day, other than a Saturday, Sunday or a day on which banks located in London, United Kingdom; Brussels, Belgium; and Atlanta, Georgia, shall be authorized or required by law to close.
(l) “CA 2006” shall mean the United Kingdom (UK) Companies Act, 2006
(m) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and the rulings issued thereunder. Section references to the Code are to the Code as in effect at the date of
this Agreement and any subsequent provisions of the Code, amendatory thereof, supplemental thereto or substituted therefor.
(n) “control” (including “controlling,” “controlled by,” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise, and shall be construed as such term is used in the rules promulgated under the Securities Act of 1933,
as amended.
(o) “Closing Balance Sheet” means the balance sheet of the Company Group as of the Closing, prepared in accordance with the Accounting Standards except as specifically adjusted for in the sample calculation of Closing Working
Capital as set forth in Exhibit E.
(p) “Closing Cash” means, with respect to the Company Group, the amount of any cash on hand, cash in bank or other accounts (including checks and credit card payments received, whether or not such funds are available but
excluding uncleared checks and credit payments not yet received), readily marketable securities, and other cash-equivalent liquid assets of any nature as of such date, determined in accordance with the Accounting Standards determined as of
the Closing.
(q) “Closing Indebtedness Certificate” means a certificate executed by an authorized officer of the Company certifying on behalf of the Company Group an itemized list of all outstanding Indebtedness of the Company Group as of
immediately prior to the Closing and the Persons to whom such outstanding Indebtedness is owed and an aggregate total of such outstanding Indebtedness.
(r) “Closing Transaction Expenses Certificate” means a certificate executed by an authorized officer of the Company certifying on behalf of the Company Group an itemized list of all unpaid Transaction Expenses of the Company
Group as of immediately prior to the Closing and the Persons to whom such outstanding Transaction Expenses are owed and an aggregate total of such outstanding Transaction Expenses.
(s) “Closing Working Capital” means the Working Capital as of the Closing Date.
(t) “Data Protection Authority” means any body responsible for enforcing Data Protection Legislation;
(u) “Data Protection Legislation” means applicable Laws, rules, and regulations pertaining to data protection, data privacy, data security, data breach, anti-spam, consumer protection, and cybersecurity, including, in particular,
the following regulations: (i) national Laws implementing the Directive on Privacy and Electronic Communications (2002/58/EC); (ii) the General Data Protection Regulation (2016/679) and any national Law issued under that regulation; (iii)
data protection legislation (as defined in the UK Data Protection Act 2018) and the Privacy and Electronic Communications (EC Directive) Regulations 2003, any laws and regulations implementing or made pursuant to EU Directive 2002/58/EC (as
amended by 2009/136/EC) and the General Data Protection Regulation (2016/679) as it forms part of the European Union (Withdrawal) Act 2018; (iv) the California Consumer Privacy Act; (v) Lei General de Protecao de Dados; (vi) the Personal
Information Protection and Electronic Documents Act; (vii) Serbian Law on Personal Data Protection (ZZPL); and all equivalent applicable Laws of any other jurisdiction;
(v) “Data Room” means the virtual data room available at https://collaborate.bakerdonelson.com/bakerdonelson/dashboard.action?activityTab=ACTIVITY.
(w) “Disclosure Letter” means the Schedules attached to this Agreement.
(x) “Environmental Law” shall mean any Law, Order, or other requirement of law applicable to the Company Group, including any principle of common law, relating to the protection of human health or the environment, or to the
manufacture, use, transport, treatment, storage, disposal, release, or threatened release of petroleum products, asbestos, urea formaldehyde insulation, polychlorinated biphenyls or any substance listed, classified or regulated as hazardous
or toxic, or any similar term, under such Environmental Law.
(y) “Escrow Amount” means the sum of the Adjustment Escrow Amount and the Indemnity Escrow Amount.
(z) “Estimated Closing Cash” means the Founder’s good faith estimate of the Closing Cash as set forth on the Statement of Estimated Adjustments, determined in accordance with the Accounting Standards.
(aa) “Estimated Closing Balance Sheet” means an estimated balance sheet of the Company Group as of the Closing, prepared in accordance with the Accounting Standards except as specifically adjusted for in the sample calculation of
Closing Working Capital as set forth in Exhibit E.
(bb) “Estimated Closing Working Capital Deficit” means the amount, if any, determined as of the Closing Date, by which the Target Working Capital exceeds the Estimated Closing Working Capital.
(cc) “Estimated Closing Working Capital Surplus” means the amount, if any, determined as of the Closing Date, by which the Estimated Closing Working Capital exceeds the Target Working Capital.
(dd) “Estimated Closing Working Capital” means the Founders’ good faith estimate of the Closing Working Capital as set forth on the Statement of Estimated Adjustments, determined in accordance with the Accounting Standards, except
as specifically adjusted for in the sample calculation of Closing Working Capital as set forth in Exhibit E.
(ee) “Ex-Im Laws” means all Laws applicable to the Company Group relating to export, re-export, transfer, and import controls, including the U.S. Export Administration Regulations, the customs and import Laws administered by U.S.
Customs and Border Protection, and the EU Dual Use Regulation.
(ff) “Family” means, with respect to an individual, (i) individual’s spouse; and (ii) any other natural person who is related to the individual or the individual’s spouse within the first degree and who resides with such
individual.
(gg) “Founder Agreements” means the amendments to each of the Founders’ employment or consulting agreement with the Company Group, in substantially the forms attached hereto as Exhibit D.
(hh) “Governmental or Regulatory Authority” shall mean any instrumentality, subdivision, court, administrative agency, commission, official or other authority of the United States or any other country in which the Company Group
operates or any state, federal, province, multinational, prefect, municipality, locality, county, or other government or political subdivision thereof, or any quasi-governmental or private body exercising any regulatory, taxing, importing,
or other governmental or quasi-governmental authority in any such country.
(ii) “HMRC” means the UK HM Revenue & Customs.
(jj) “Indebtedness” of any Person shall mean and include: (i) indebtedness for borrowed money or indebtedness issued or incurred in substitution or exchange for indebtedness for borrowed money; (ii) amounts owing as
deferred purchase price for property or services, including all Company Group notes and “earn-out” payments; (iii) indebtedness evidenced by any note, bond, debenture, mortgage, or other debt instrument or debt security; (iv) commitments or
obligations by which such Person insures a creditor against loss (including contingent reimbursement obligations with respect to letters of credit); (v) indebtedness secured by a Lien on assets or properties of such Person; (vi) obligations
or commitments to repay deposits or other amounts advanced by and owing to third parties; (vii) any obligation to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property,
which such obligation is required to be treated as a capitalized lease under the Accounting Standards; (viii) obligations in respect of capitalized leases (calculated in accordance with the Accounting Standards); (ix) obligations under any
existing interest rate, commodity or other swap, hedge or financial derivative agreement entered into by the Company Group prior to Closing; or (x) all accrued and unpaid Taxes attributable to the Tax period determined as if the current
taxable period of the Company Group was treated as ending on the Closing Date; or (xi) guarantees or other contingent liabilities (including so called take-or-pay or keep-well agreements) with respect to any indebtedness, obligation, claim,
or liability of any other Person of a type described in clauses (i) through (vii) above. Indebtedness shall not, however, include accounts payable to trade creditors and accrued expenses arising in the Ordinary Course of Business
consistent with past practice and shall not include the endorsement of negotiable instruments for collection in the Ordinary Course of Business.
(kk) “Indemnity Escrow Amount” means Eight Hundred Thousand Dollars ($800,000).
(ll) “Indemnity Escrow Fund” means the Indemnity Escrow Amount together with all earnings, if any, thereon.
(mm) “Indirect Tax” shall mean: (i) in the United Kingdom and any member state of the European Union, value added tax; (ii) in a territory outside the United Kingdom and the European Union, any similar or equivalent Tax to value
added tax chargeable in the United Kingdom and the European Union and which is chargeable on supplies of goods and services.
(nn) “Insolvency Act 1986” shall mean the United Kingdom (UK) Insolvency Act 1986.
(oo) “Intellectual Property” shall mean any of the following: (i) U.S. and non-U.S. patents, and with respect to either, applications and statutory invention registrations, including reissues, divisions, continuations,
continuations in part, extensions, and reexaminations thereof; (ii) registered trademarks, service marks, and other indicia of origin, pending trademark and service mark registration applications, and intent-to-use registrations or similar
reservations of marks; (iii) registered copyrights and mask works, and applications for registration of either; (iv) Sites; (v) Software, and all derivatives, improvements and refinements thereof, howsoever recorded, or unrecorded; and (vi)
any goodwill associated with any of the foregoing.
(pp) “Knowledge of the Founders” or “Founders’ Knowledge” or any other similar knowledge qualification, means that one or more of
the Founders, (a) has actual knowledge of the fact or other matter at issue or (b) should have had actual knowledge of such fact or other matter after reasonable due inquiry.
(qq) “Law” shall mean any constitution, common law, decree, code, judgment, ruling, statute, law, ordinance, rule or regulation of any Governmental or Regulatory Authority.
(rr) “Legal Requirement” shall mean any federal, state, local, municipal, foreign, or other law (including common law), statute, code, ordinance,
regulation, rule, regulatory, or administrative ruling or guidance, directive, Order, constitution, treaty, or other restriction, requirement, or rule of law of any Governmental or Regulatory Authority.
(ss) “Liability” shall mean, with respect to any Person, any claim, liability or obligation of such Person of any kind, character or description,
whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined,
determinable or otherwise, and whether or not the same is required to be accrued on the financial statements of such Person.
(tt) “Liens” shall mean liens, security interests, options, rights of first refusal, claims, easements, mortgages, charges, indentures, deeds of
trust, rights of way, restrictions on the use of real property, encroachments, licenses to third parties other than Software licenses in the Ordinary Course of Business, licenses for Open Source Code, leases to third parties, security
agreements, or any other encumbrances and other restrictions or limitations on use of real or personal property or irregularities in title thereto.
(uu) “Material Adverse Change” or “Material Adverse Effect” shall mean when used with respect to the Company Group, any
materially adverse change in or effect on the business, assets, liabilities, results of operation, condition (financial or otherwise) or prospects of the Company Group; provided however, that “Material Adverse Change” and “Material Adverse Effect” shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to:
(i) general economic or political conditions; (ii) conditions generally affecting the industries in which the Company Group operates; (iii) any changes in financial, banking or securities markets in general, including any disruption thereof
and any decline in the price of any security or any market index or any change in prevailing interest rates; (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof; (v) any action
taken (or omitted to be taken) with the written consent of or at the written request of Buyer; (vi) any changes in applicable Laws, Accounting Standards or the enforcement, implementation or interpretation thereof; (vii) any natural or
man-made disaster or acts of God; (viii) any epidemics, pandemics, disease outbreaks, or other public health emergencies; or (ix) any failure by the Company Group to meet any internal or published projections, forecasts or revenue or
earnings predictions (provided that the underlying causes of such failures (subject to the other provisions of this definition) shall not be excluded), in each case that do not disproportionately affect the Company Group.
(vv) “Material Interest” means direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of voting securities or other voting interests representing at least ten
percent (10%) of the outstanding voting power of a Person or equity securities or other equity interests representing at least ten percent (10%) of the outstanding equity securities or equity interests in a Person.
(ww) “Non-Customized Software” shall mean non-customized off-the-shelf Software that: (1) is so licensed solely in executable or object code form pursuant to a nonexclusive, internal use Software license; (2) is not incorporated
into, or used directly in the development, manufacturing or distribution of, the products or services of the Company Group; and (3) is generally available on standard terms for less than $10,000.
(xx) “Order” shall mean any judgment, order, injunction, decree or writ of any Governmental or Regulatory Authority or any arbitrator.
(yy) “Ordinary Course of Business” shall mean actions taken by a Person if such actions are consistent in nature, scope, and magnitude with the past practices of such Person and are taken in the ordinary course of the normal,
day-to-day operations of such Person.
(zz) “Paying Agent” shall mean Law Debenture Corporate Services Limited.
(aaa) “Permitted Liens” shall mean (i) Liens consisting of zoning or planning restrictions or regulations, easements, Permits, restrictive covenants, encroachments and other restrictions or limitations on the use of real property
or irregularities in, or exceptions to, title thereto which, individually or in the aggregate, do not materially detract from the value of, or impair the use of, such property by the Company Group; (ii) Liens for current Taxes, assessments,
or governmental charges or levies not yet due and payable; (iii) mechanic’s, materialmen’s, and similar liens; (iv) Liens arising under worker’s compensation, unemployment insurance, social security, retirement, and similar legislation; (v)
Liens on goods in transit incurred pursuant to documentary letters of credit; and (vi) in the case of Intellectual Property, non-exclusive licenses to the Company Group’s customers granted in the Ordinary Course of Business; provided that,
in the case of clauses (iii)-(v), such Liens arise in the Ordinary Course of Business of the Company Group and are not material to the Company Group.
(bbb) “Person” shall mean and include an individual, a partnership, a joint venture, a corporation, a limited liability company, a limited liability partnership, a trust, an incorporated organization, any other form of legal
entity, and a Governmental or Regulatory Authority.
(ccc) “Personal Data” means any information or data relating to a natural person who is or can reasonably be identified, directly or indirectly, by
that information or data, including by reference to an identifier such as a name, an identification number, location data, an online identifier, financial information, credit or payment card information, or to one or more factors specific
to the physical, physiological, genetic, mental, economic, cultural or social identity of that person, and when referring to Data Protection Legislation, has the same meaning as the similar or equivalent term defined thereunder;
(ddd) “Proceeding” shall mean any action, arbitration, audit, hearing, investigation, litigation, or suit (whether civil, criminal, administrative, judicial, or investigative, whether formal or informal, whether public or private)
commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental or Regulatory Authority.
(eee) “Representative” with respect to any Person means any officer, director, principal, attorney, agent, employee or other representative of such Person.
(fff) “Related Person” shall mean (i) with respect to a particular individual: (1) each other member of such individual’s Family; (2) any Person that is directly or indirectly controlled by any one or more members of such
individual’s Family; and (3) any Person with respect to which one or more members of such individual’s Family serves as a director, officer, partner, executor, or trustee (or in a similar capacity); and (ii) with respect to a specified
Person other than an individual: (1) any Person that directly or indirectly controls, is directly or indirectly controlled by or is directly or indirectly under common control with such specified Person; (2) any Person that holds a
Material Interest in such specified Person; (3) each Person that serves as a director, officer, partner, executor, or trustee of such specified Person (or in a similar capacity); (4) any Person in which such specified Person holds a
Material Interest; and (5) any Person with respect to which such specified Person serves as a general partner or a trustee (or in a similar capacity).
(ggg) “Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (for example, Crimea, Cuba, Iran, North Korea and Syria).
(hhh) “Sanctioned Person” means, at any time, any Person (i) listed on any Sanctions-related list of designated or blocked Persons, (ii) the government of, resident in, or organized under the Laws of a country or
territory that is the subject of comprehensive restrictive Sanctions from time to time (which includes, as of the date of this Agreement, Cuba, Iran, North Korea, Syria, and the Crimea region), or (iii) majority-owned or controlled by any
of the foregoing.
(iii) “Sanctions” means those trade, economic and financial sanctions Laws, regulations, embargoes, and restrictive measures administered or enforced by (i) the United States (including, without limitation, the U.S.
Treasury Office of Foreign Assets Control), (ii) the European Union and enforced by its member states, (iii) the United Nations, (iv) the UK’s Office of Foreign Sanctions Implementation (OFSI), or (v) any other similar Governmental or
Regulatory Authority with jurisdiction over the Company Group from time to time.
(jjj) “Security Breach” means a breach of security leading to the unauthorized access to or acquisition of Personal Data, including ransomware attack or malware intrusion.
(kkk) “Shareholders’ Agreement” means the shareholders’ agreement in relation to the Company dated 29 September 2022 as amended and varied from time to time.
(lll) “Sites” shall mean Internet domain names, applications, and reservations therefor, uniform resource locators and the corresponding Internet sites.
(mmm) “Software” means any computer program, operating system, applications system, firmware, or software of any nature, whether operational, under development or inactive, including all object code, source code, technical manuals,
user manuals and other documentation therefor, whether in machine-readable form, programming language, or any other language or symbols, and whether stored, encoded, recorded, or written on disk, tape, film, memory device, paper, or other
media of any nature.
(nnn) “Statement of Estimated Adjustments” means a schedule setting forth the Estimated Closing Working Capital and Estimated Closing Cash, in all cases prepared in accordance with the Accounting Standards, except as
specifically adjusted for in the sample calculation of Closing Working Capital as set forth in Exhibit E.
(ooo) “Statement of Adjustments” means a schedule setting forth the Closing Working Capital and Closing Cash, in all cases prepared in accordance with the Accounting Standards, except as specifically adjusted for in
the sample calculation of Closing Working Capital as set forth in Exhibit E and the Buyer’s calculation of the final Purchase
Price.
(ppp) “Subsidiary” shall mean, with respect to any Person, (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors
of such corporation (irrespective of whether at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is owned by such Person directly or indirectly
through one or more Subsidiaries of such Person and (ii) any partnership, association, joint venture, or other entity in which such Person directly or indirectly through one or more Subsidiaries of such Person has more than a 50% equity
interest.
(qqq) “Superseed” means SuperSeed II LP.
(rrr) “Target Working Capital” shall mean Working Capital as of the Closing Date, which targeted amount is equal to negative One Hundred Seventy-Six Thousand Pounds Sterling (-£176,000).
(sss) “Tax Return” means any report, return, election, document, estimated tax filing, declaration or other filing provided to any Tax Authority with respect to Taxes (including any attached schedules), including any
information return, claim for refund, amended return or declaration of estimated Taxes, including any amendments thereto.
(ttt) “Threatened” means, with respect to any claim, proceeding, dispute, action, or other matter, that any demand or statement has been made (orally, in writing, or by any electronic or other means) or notice has been
given (orally, in writing, or by any electronic or other means), or any other event has occurred or any other circumstance exists, that a Party is aware of and if known to exist would lead a prudent person to conclude that a reasonable
chance exists that such a claim, proceeding, dispute, action, or other matter will be asserted, commenced, taken, or otherwise pursued in the future.
(uuu) “Transaction Bonus Amount” means the aggregate gross amount payable to the Transaction Bonus Recipients in amounts set forth on Exhibit B, which shall be inclusive of any applicable Taxes, deductions or other required withholdings. Notwithstanding anything in the Agreement to the contrary and for the avoidance of doubt, the
employer portion of payroll Taxes and any other employer withholdings or deductions in respect of such transaction bonus payments are included within the Transaction Bonus Amounts, and such employer portion of payroll Taxes and any other
employer withholdings or deductions in respect of such transaction bonus payments shall not be considered Transaction Expenses (except for the Transaction Bonus Amount itself), Indebtedness or a current liability in the calculation of
Closing Working Capital.
(vvv) “Transaction Bonus Recipient” means each of the employee, consultants and other service providers of the Company Group set forth on Exhibit B.
(www “Transaction Expenses” shall mean any and all (i) legal, accounting, tax, financial advisory, environmental consultants, and other professional or transaction related costs, fees and expenses incurred by the
Company Group in connection with this Agreement or in investigating, pursuing or completing the Transactions (including any amounts owed to any consultants, auditors, accountants, attorneys, brokers or investment bankers); (ii) payments,
bonuses or severance which become due or are otherwise required to be made as a result of or in connection with the Closing or as a result of any change of control or other similar provisions (including the Transaction Bonus Amount and any
payments required under any Employee Benefit Plan with respect to any of the foregoing); and (iii) payroll, employment or other Taxes, if any, required to be paid by Buyer (on behalf of the Company Group) with respect to the amounts payable
pursuant to this Agreement, the amounts described in clause (i) and (ii), or the forgiveness of any loans or other obligations owed by any Company Group Member or employees in connection with the Transactions. For the avoidance of doubt,
the term “Transaction Expenses” shall include half of any fees payable to the Escrow Agent and the Paying Agent, and (1) the reasonable fees and documented legal fees and expenses of Goodwin Procter LLP, in its capacity as counsel to
Superseed, in an amount not to exceed, in the aggregate, $62,335 and (2) the reasonable and documented legal fees and expenses of Dentons, in its capacity counsel to the Company and the Founders, shall be deemed Transaction Expenses under
this Agreement.
(xxx) “Transactions” shall mean the transactions contemplated by this Agreement and the other agreements contemplated hereby.
(yyy) “VAT” means value added tax.
(zzz) “Working Capital” shall mean the current assets of the Company Group, less the current liabilities of the Company Group, determined in accordance with the Accounting Standards and in a manner consistent with the
policies and principles used by the Company Group in connection with the preparation of its financial statements, including its balance sheet. Current assets shall consist of accounts receivable, prepaid expenses and other prepaid items,
Inventory and other current assets (other than cash and cash equivalents). Current liabilities shall include accounts payable, adjusted deferred revenue and other current liabilities, but excluding Indebtedness.
In addition to the terms defined above, the following terms shall have the respective meanings assigned
thereto in the sections indicated below.
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Defined Term
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Section
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Affiliate Share Buyer
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Recitals
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Affiliate Shares
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Recitals
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Agreed Claims
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Section 9.3(c)
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Agreement
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Preamble
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Balance Sheet
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Section 4.11(a)(i)
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Base Purchase Price
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Section 1.2
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Benefit Arrangement(s)
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Section 4.31(d)
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Buyer
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Preamble
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Buyer Indemnitee
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Section 9.2(a)
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CARES Funds
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Section 4.26(e)
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Certificate
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Section 9.3(a)
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Closing
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Section 2.1
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Closing Date
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Section 2.1
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Closing Date Payment
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Section 1.2
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Company Group Intellectual Property
|
Section 4.18(a)
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Company Group Software
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Section 4.18(i)
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Competing Business
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Section 7.1(b)
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Confidential Information
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Section 7.1(d)
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Contract
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Section 4.5(a)
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Disputed Items
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Section 3.3(c)
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Electronic Delivery
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Section 11.13
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Employee Benefit Plans
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Section 4.31(a)
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Enforceability Exceptions
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Section 4.3
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ERISA
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Section 4.31(a)(i)
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Escrow Account
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Section 3.1(a)
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Escrow Agent
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Section 3.1(a)
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Escrow Agreement
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Section 2.2(a)(iii)
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Financial Statements
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Section 4.9
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|
Funds Flow
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Section 1.3
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Government Relief Funds
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Section 4.26(e)
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Indemnified Party
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Section 9.3(a)
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Indemnifying Party
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Section 9.3(a)
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Independent Accountant
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Section 3.3(d)
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Leased Real Property
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Section 4.24(a)
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Losses
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Section 9.2(a)
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Material Contract
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Section 4.16(a)
|
|
Open Source Code
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Section 4.18(j)
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|
Shareholder or Shareholders
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Preamble
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|
Party
|
Preamble
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Defined Term
|
Section
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|
Permit
|
Section 4.28
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Pre-Closing Tax Periods
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Section 4.14(b)
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Purchase Price
|
Section 1.2
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Shareholder Indemnitee
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Section 9.2(b)
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Simultaneous Transaction
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Recitals
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|
Simultaneous Transaction Representation
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Section 9.1(b)
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Stimulus Funds
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Section 4.26(e)
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Territory
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Section 7.1(b)
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VAR
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Section 4.20(b)
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VEBAs
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Section 4.31(a)(ii)
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WARN
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Section 4.30(j)
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Warranty Claims
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Section 4.22
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