UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: July 16, 1996
(Date of the earliest event reported)
SYKES ENTERPRISES, INCORPORATED
(Exact name of Registrant as specified in its charter)
Florida 0-28274 56-1383460
(State or other juris- (Commission (I.R.S. Employer
diction of incorporation) File Number) Identification Number)
100 North Tampa Street, Suite 3900
Tampa, Florida 33602-5089
(Address of principal executive offices) (Zip Code)
813/274-1000
Registrant's telephone number, including area code
<PAGE>
Item 2. Acquisition or Disposition of Assets
On July 16, 1996, pursuant to a Stock Purchase Agreement dated as of
July 1, 1996 (the "Agreement"), Sykes Enterprises, Incorporated ("SEi" or
"Company") acquired all of the issued and outstanding stock of Datasvar
Support AB ("Datasvar") from Johan Holm, Arne Weinz and Norhold Invest AB
in exchange for 164,547 shares of SEi common stock (246,819 shares as
adjusted to reflect a three-for-two stock split in the form of a stock
dividend effected on July 28, 1996 to shareholders of record on July 18,
1996). The Acquisition will be accounted for using the pooling-of-
interests method of accounting.
Datasvar, a corporation organized and existing under the laws of Sweden,
operates two information technology call centers located in Sweg and
Jarsvo, Sweden. Through its two facilities, Datasvar provides technical
assistance to end users of computer hardware and software products, and
furnishes help desk services to the employees of various companies
throughout the Scandinavian region. Each call center has the ability to
process approximately 728,000 calls per year. For the five month period
ended May 31, 1996 and the year ended December 31, 1995, Datasvar had
revenues and net income approximating $2.8 million and $472,000, and $5.5
million and $996,000, respectively, based on the unaudited internally
prepared financial information.
Johan Holm and Arne Weinz will remain with Datasvar to proceed in building
the Company's presence in Scandinavia and the remainder of Europe, and
will continue to apply their management and marketing expertise. Johan
Holm will continue to serve as Chairman of Datasvar and Arne Weinz will
continue to serve as its Managing Director. Pursuant to the Agreement,
both individuals entered into employment agreements with Datasvar
effective through December 31, 1999, unless terminated earlier in
accordance with the terms of the agreements. Also pursuant to the
Agreement, both individuals are precluded from competing against Datasvar
or the Company for two years subsequent to their termination.
Pursuant to the Agreement, Norhold Invest AB will have no further interest
or activity with Datasvar, excluding the leasing to Datasvar of one of
Datasvar's technical call centers. Also pursuant to the Agreement,
Norhold is precluded from engaging directly or indirectly in any business
that competes with the services Datasvar conducts as of the date of the
Agreement.
Neither Johan Holm, Arne Weinz or Norhold Invest AB owned any shares of
SEi common stock as of the date of the Agreement. None of the directors
and executive officers of SEi owned any Datasvar stock as of the date of
the Agreement. The former Datasvar shareholders have been granted certain
registration rights for the SEi common stock they received in the
Acquisition.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
(a) Financial Statements of the Business Acquired.
It is impractical to provide the required financial statements for
Datasvar at the date of the filing of this Form 8-K. The required
financial statements will be provided as soon as practicable but not later
than sixty days after the date on which this Form 8-K must be filed.
(b) Pro Forma Financial Information.
It is impractical to provide the required pro forma financial
information at the date of the filing of this Form 8-K. The required pro
forma financial information will be provided as soon as practicable but
not later than sixty days after the date on which this Form 8-K must be
filed.
(c) Exhibits
2.1 Stock Purchase Agreement among Johan Holm, Arne Weinz,
Norhold Invest AB and Sykes Enterprises, Incorporated,
dated as of July 1, 1996 (without schedules or
exhibits).(1)
99.1 News Release dated July 2, 1996.
99.2 Registration Rights Agreement among Johan Holm, Arne
Weinz, Norhold Invest AB and Sykes Enterprises,
Incorporated, dated as of July 16, 1996.
________________
(1) Sykes Enterprises, Incorporated agrees to supplementally furnish
a copy of any omitted schedule or exhibit to the Securities and
Exchange Commission upon request.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
SYKES ENTERPRISES, INCORPORATED
By: /s/ Scott J. Bendert
Scott J. Bendert
Vice President Finance and
Treasurer
Dated: July 31, 1996
<PAGE>
EXHIBIT INDEX
2.1 Stock Purchase Agreement among Johan Holm, Arne Weinz,
Norhold Invest AB and Sykes Enterprises, Incorporated,
dated as of July 1, 1996 (without schedules or
exhibits).(1)
99.1 News Release dated July 2, 1996.
99.2 Registration Rights Agreement among Johan Holm, Arne
Weinz, Norhold Invest AB and Sykes Enterprises,
Incorporated, dated as of July 16, 1996.
______________
(1) Sykes Enterprises, Incorporated agrees to supplementally furnish
a copy of any omitted schedule or exhibit to the Securities and
Exchange Commission upon request.
STOCK PURCHASE AGREEMENT
AMONG
JOHAN HOLM,
ARNE WEINZ,
NORHOLD INVEST AB
AND
SYKES ENTERPRISES, INCORPORATED
July 1, 1996
<PAGE>
TABLE OF CONTENTS
ARTICLE I DEFINITIONS 1
ARTICLE II PURCHASE AND SALE OF SHARES 3
ARTICLE III DELIVERY OF PURCHASE PRICE SHARES 4
Section 3.1. Delivery of Purchase Price Shares. 4
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLERS 4
Section 4.1. Corporate Organization. 4
Section 4.2. Capitalization of Datasvar. 4
Section 4.3. Authority. 4
Section 4.4. Ownership of Shares; Title. 5
Section 4.5. Sellers' Consents and Approvals; No Violations. 5
Section 4.6. Datasvar's Consents and Approvals; No Violations. 5
Section 4.7. Financial Statements. 6
Section 4.8. Undisclosed Liabilities. 6
Section 4.9. Taxes. 6
Section 4.10. Title to Properties. 6
Section 4.11. Absence of Changes. 7
Section 4.12. Patents, Trademarks, Trade Names. 8
Section 4.13. Leases. 9
Section 4.14. Bank Accounts; Investments. 9
Section 4.15. Material Contracts and Customers. 9
Section 4.16. Related Transactions. 11
Section 4.17. Insurance. 11
Section 4.18. Labor Matters. 11
Section 4.19. Employee Benefit Plans. 12
Section 4.20. Litigation. 12
Section 4.21. Compliance with Laws. 12
Section 4.22. Books and Records. 13
Section 4.23. Disclosures. 13
Section 4.24. Adequacy of Assets. 13
Section 4.25. Governmental Grants. 13
Section 4.26. Accounts Receivable. 13
Section 4.27. Brokers and Finders. 14
Section 4.28. Investment Intent; Information Disclosures. 14
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SEI 15
Section 5.1. Corporate Organization. 15
Section 5.2. Capitalization of SEi. 15
Section 5.3. Authority. 15
Section 5.4. SEi Consents and Approvals; No Violations. 16
Section 5.5. Litigation. 16
Section 5.6. Brokers and Finders. 16
Section 5.7. SEi Information. 16
Section 5.8. No Material Adverse Change. 16
Section 5.9. Undisclosed Liabilities. 17
Section 5.10. Compliance with Laws. 17
ARTICLE VI FURTHER COVENANTS AND AGREEMENTS 17
Section 6.1. Covenants of Sellers Pending the Closing. 17
Section 6.2. Covenants of SEi Pending the Closing. 18
Section 6.3. Filings. 19
Section 6.4. Effective Time of Closing and Transfer. 19
Section 6.5. Announcements. 19
Section 6.6. Costs and Expenses. 19
Section 6.7. Further Assurances. 19
Section 6.8. Certain Agreements. 20
Section 6.9. Non-Disclosure; Covenant Not to Compete. 20
Section 6.10. Pooling of Interests 21
Section 6.11. Assumptions of Nutek Guarantee. 22
ARTICLE VII TERMINATION 22
Section 7.1. Termination. 22
Section 7.2. Procedure and Effect of Termination. 22
ARTICLE VIII CONDITIONS TO SEI'S OBLIGATIONS 23
Section 8.1. Sellers' Closing Deliveries. 23
Section 8.2. Representations and Warranties True. 24
Section 8.3. Performance. 24
Section 8.4. Legal Opinion. 24
Section 8.5. Governmental Consents and Approvals. 24
Section 8.6. No Injunction or Proceeding. 24
ARTICLE IX CONDITIONS TO SELLERS' OBLIGATIONS 24
Section 9.1. Delivery of Purchase Price Shares. 25
Section 9.2. SEi's Closing Deliveries. 25
Section 9.3. Representations and Warranties True. 25
Section 9.4. Performance. 25
Section 9.5. Legal Opinion. 26
Section 9.6. Governmental Consents and Approvals. 26
Section 9.7. No Injunction or Proceeding. 26
ARTICLE X INDEMNIFICATION 26
Section 10.1. Indemnification by Sellers. 26
Section 10.2. Indemnification by SEi . 26
Section 10.3. Survival of Representations. 27
Section 10.4. Indemnification Claims Procedures. 27
Section 10.5. Right of Set-Off. 28
Section 10.6. Limitations on Liability. 28
ARTICLE XI MISCELLANEOUS 29
Section 11.1. Dispute Resolution; Jurisdiction. 29
Section 11.2. Entire Understanding, Waiver, Etc. 29
Section 11.3. Severability. 29
Section 11.4. Captions. 29
Section 11.5. Notices. 29
Section 11.6. Successors and Assigns. 30
Section 11.7. Parties in Interest. 30
Section 11.8. Counterparts. 31
Section 11.9. Construction of Terms. 31
Section 11.10. Governing Law. 31
EXHIBITS
Exhibit A Share Holdings of Sellers
Exhibit B Form of Registration Rights and Stockholders Agreement
Exhibit C Form of Employment Agreement
Exhibit D Form of Employment Agreement
Exhibit E Form of Non-Competition Agreement
Exhibit F Form of Opinion of Counsel for Sellers
Exhibit G Form of Opinion of Counsel for SEi
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made and entered into as of July 1,
1996, by and among JOHAN HOLM and ARNE WEINZ, each an individual residing
in Sweden (collectively, the "Individual Sellers"), NORHOLD INVEST AB, a
corporation organized and existing under the laws of Sweden (the
"Institutional Seller" and collectively with the Individual Sellers, the
"Sellers"), and SYKES ENTERPRISES, INCORPORATED, a corporation organized
and existing under the laws of Florida ("SEi").
RECITALS
WHEREAS, Sellers own all of the issued and outstanding shares of
capital stock (the "Shares") of DATASVAR SUPPORT AB, a corporation
organized and existing under the laws of Sweden, Registration No. 556437-
7439 ("Datasvar"); and
WHEREAS, Sellers desire to sell the Shares to SEi, and SEi desires to
purchase the Shares from Sellers, on the terms and subject to the
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements hereinafter set
forth and for other good and valuable considerations, the receipt and
sufficiency of which are hereby expressly acknowledged by Sellers and SEi,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The terms defined in this Article shall have the following respective
meanings for all purposes of this Agreement:
Section 1.1. "Business" means the business conducted as of the
date of this Agreement or as of the Closing Date, as the context permits
or implies, by Datasvar and/or Subsidiary including, without limitation,
as a third party provider of computer support services.
Section 1.2. "Business Day" means any day on which banks are
open for business in New York, New York.
Section 1.3. "Closing" means the consummation and effectuation
of the transactions contemplated herein pursuant to the terms and
conditions of this Agreement, which shall be held on the 16th day of July
1996, at 10:00 AM in the offices of Advokatfirman Foyen & Co HB in
Stockholm, Sweden or on such other date or at such other time or place as
is mutually agreed by the parties hereto.
Section 1.4. "Closing Date" means the date on which the
Closing actually occurs.
Section 1.5. "Conversion Rate" means the most current New York
foreign exchange selling rate for the sale of Swedish krona for United
States dollars (applicable to trading among banks in amounts of $1 million
or more) reported under the heading "U.S. $ equiv." in the Exchange Rates
table in the edition of the Wall Street Journal published in the United
States and dated as of the Business Day next preceding the date hereof.
Section 1.6. "Customers" shall have the meaning set forth in
Section 4.15.
Section 1.7. "Disclosure Schedule" means the disclosure
schedule document executed by Sellers, and SEi as of the date hereof and
previously delivered to such parties, without any amendment thereto
subsequent to the date hereof.
Section 1.8. "Employee Benefit Plan" means any pension,
retirement, profit sharing, savings, thrift, stock bonus, stock option,
stock purchase, restricted stock purchase, stock ownership, stock
appreciation right, phantom stock, deferred compensation, supplemental
retirement, deferred bonus, severance, change of control, parachute,
health, medical, dental, vision, prescription drugs, fitness, dependent
care, educational assistance, group legal services, life insurance,
accidental death, accidental dismemberment, sick pay, short-term or long-
term disability, supplemental unemployment income, training,
apprenticeship, scholarship, tuition reimbursement, employee assistance,
employee discount, subsidized cafeteria, fringe benefit, vacation,
holiday, employer-sponsored recreational facility, or other employee
pension benefit or welfare benefit plan, policy, contract, or arrangement,
or other similar fringe or employee benefit plan, program, policy,
contract, or arrangement, written or oral, qualified or nonqualified,
funded or unfunded, foreign or domestic.
Section 1.9. "Financial Statements" has the meaning set forth
in Section 4.7.
Section 1.10. "Form 10-Q Balance Sheet" means the unaudited
balance sheet dated March 31, 1996 (and any related notes thereto), found
in Form 10-Q filed with the Securities and Exchange Commission for the
quarterly period ended March 31, 1996, a copy of which is included as part
of the SEi Filings.
Section 1.11. "Grants" means the governmental grants, subsidies
and/or loans provided to or for the benefit of Datasvar and described in
Section 4.25 of the Disclosure Schedule.
Section 1.12. "Interim Balance Sheet" means the unaudited
balance sheet dated May 31, 1996 (and any related notes thereto), a copy
of which is included as part of the Financial Statements.
Section 1.13. "Material Adverse Effect" means, with respect to
any Person, a material adverse effect on the financial condition, results
of operations or business prospects of such Person.
Section 1.14. "Person" means an individual, partnership,
corporation, trust, unincorporated organization, association or joint
venture or a government, agency, political subdivision or instrumentality
thereof.
Section 1.15. "Purchase Price Shares" means a number of shares
of SEi Stock equal to the result obtained by dividing (a) the product of
49,171,000 multiplied by the Conversion Rate by (b) the SEi Closing Price,
rounded downward to the nearest whole share.
Section 1.16. "Related Agreements" means the agreements
described in Section 6.8.
Section 1.17. "SEi Closing Price" means the average closing
price of SEi Stock on the ten Business Days preceding the date hereof , as
reported on NASDAQ.
Section 1.18. "SEi Filings" means SEi's Registration Statement
on Form S-1 as amended, filed with the Securities and Exchange Commission
on April 24, 1996, and SEi's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 1996.
Section 1.19. "SEi Stock" means SEi's common stock, $.01 par
value.
Section 1.20. "SGAAP" means generally accepted accounting
principles as in effect in Sweden on December 31, 1995.
Section 1.21. "Subsidiary" means Twinpoint AB, a corporation
organized under the laws of Sweden and a wholly-owned subsidiary of
Datasvar.
Section 1.22. "Taxes" means all taxes, assessments, and charges
imposed by any federal, state, local, or foreign taxing authority,
including social security, insurance and other state-sponsored pension
funds and all interest, penalties and additions thereto.
Section 1.23. "US GAAP" means generally accepted accounting
principles as in effect in the United States on March 31, 1996.
ARTICLE II
PURCHASE AND SALE OF SHARES
Upon the terms and subject to the conditions hereof, at the Closing,
each of the Sellers shall sell, assign, transfer and convey to SEi and SEi
shall purchase and accept from each of the Sellers, all of Sellers'
right, title and interest in and to the Shares in consideration for the
delivery of the Purchase Price Shares as provided in Article III below.
ARTICLE III
DELIVERY OF PURCHASE PRICE SHARES
Section 3.1. Delivery of Purchase Price Shares. On the
Closing Date, SEi shall deliver to each of the Sellers a certificate
issued in such Seller's name and evidencing a number of shares of SEi
Stock equal to the Purchase Price Shares multiplied by such Seller's
percentage ownership interest in Datasvar as set forth opposite the name
of such Seller on Exhibit A attached hereto, rounded down to the nearest
whole share.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby represent and warrant to SEi as follows, the
representations and warranties in Sections 4.3 through 4.5 being made
severally by the Sellers and all other representations and warranties in
this Article IV being made jointly and severally by the Sellers:
Section 4.1. Corporate Organization. Each of Datasvar and
Subsidiary is a corporation duly organized and validly existing under the
laws of Sweden and has the full corporate right, power and authority to
own, lease and operate all of its properties and assets and to carry out
its business as it is presently conducted. Datasvar is duly licensed or
qualified to do business in each jurisdiction in which the ownership of
property or the conduct of its business requires such qualification or
license. Subsidiary is a wholly owned subsidiary of Datasvar and, except
as set forth in Section 4.1 of the Disclosure Schedule, conducts no
business and has no employees, assets or liabilities (accrued, contingent
or otherwise). Except for Subsidiary, and except as set forth in Section
4.1 of the Disclosure Schedule, there are no corporations, joint ventures,
partnerships or other entities or arrangements in which Datasvar, directly
or indirectly, owns any capital stock or any equity interest.
Section 4.2. Capitalization of Datasvar. The share capital of
Datasvar is SEK 1 200 000, consisting of 12 000 issued and outstanding
shares of voting capital stock with a nominal value of SEK 100. There is
only a single class of authorized shares. All issued and outstanding
shares of capital stock of Datasvar have been duly authorized and validly
issued, are fully paid and nonassessable, were issued without violation of
any preemptive rights and can be transferred to SEi as provided herein
free of any preemptive rights. Except for this Agreement and as set forth
in Section 4.2 of the Disclosure Schedule, there are no options, warrants
or other rights, nor any agreements, commitments or arrangements of any
kind, relating to the subscription for or the issuance, voting,
acquisition, sale, repurchase, transfer or disposition of (i) any capital
stock of Datasvar or securities convertible into or exchangeable for
capital stock of Datasvar, or (ii) any options, warrants or subscription
rights relating to any such capital stock or securities of Datasvar.
Section 4.3. Authority. Sellers have all requisite right,
power and authority to execute, deliver and perform this Agreement and the
Related Agreements to which Sellers are parties. Institutional Seller is
a corporation duly organized, validly existing and in good standing under
the laws of Sweden and has full corporate right, power and authority to
own, lease and operate all of its properties and assets and to carry out
its business as it is presently conducted. The execution, delivery and
performance by the Institutional Seller of this Agreement and the Related
Agreements to which it is a party have been duly and validly authorized
and approved by all necessary action (corporate or otherwise). All
authorizations, approvals and consents of, or any notices to, any person,
and all filings and registrations with, and consents, approvals and
authorizations of, or any notices to, any domestic or foreign governmental
agency or body, necessary for the execution and delivery by the Sellers of
this Agreement, and/or the sale of the Shares by the Sellers hereunder
have been duly obtained, effected or given and are in full force and
effect. This Agreement and the Related Agreements to which Sellers are
parties have been duly and validly executed and delivered by Sellers and
constitute the legal, valid and binding obligations of Sellers,
enforceable against each of the Individual Sellers and the Institutional
Seller in accordance with their respective terms.
Section 4.4. Ownership of Shares; Title. Each of the Sellers
owns of record and beneficially the number and type of shares set forth
beside such Seller's name in Exhibit A attached hereto . Each of the
Sellers has and will have, on the Closing Date, good, marketable and valid
title to the Shares to be sold by Seller hereunder, free and clear of all
liens, pledges, encumbrances, claims, security interests, charges, voting
trusts, voting agreements, other agreements, rights, options, warrants or
other restrictions of any kind, nature or description. The delivery of
the certificates for the Shares by the Sellers to SEi, duly endorsed for
transfer, will convey to SEi good title to the Shares free and clear of
all claims, liens, encumbrances, security interests, charges or
restrictions on transfer of any nature whatsoever, except as created by
SEi. No Seller is involved in any proceedings by or against such Seller
under any bankruptcy laws or under any other insolvency or debtor's relief
act.
Section 4.5. Sellers' Consents and Approvals; No Violations.
Except as set forth on Section 4.5 of the Disclosure Schedule, the
execution, delivery and performance by each of the Sellers of this
Agreement and the Related Agreements to which he, she or it is a party
will not (with or without the giving of notice or the passage of time, or
both) (i) violate any applicable provision of law or any rule or
regulation of any federal, state or local administrative agency or
governmental authorityapplicable to Sellers, or any order, writ,
injunction, judgment or decree of any court, administrative agency or
governmental authority applicable to Sellers, (ii) violate the Articles of
Incorporation of Institutional Seller, (iii) require any consent under or
constitute a default under any material agreement, indenture, mortgage,
deed of trust, lease, license, or other instrument to which Sellers are
party or by which any of them is bound, or any material license, permit or
certificate held by any of them, (iv) require any material consent or
approval by, notice to or registration with any governmental authority
which is applicable to Seller or (v) result in the creation of any lien,
claim, encumbrance or charge upon any of the Shares.
Section 4.6. Datasvar's Consents and Approvals; No Violations.
Except as set forth on Section 4.6 of the Disclosure Schedule, the
execution, delivery and performance by each of the Sellers of this
Agreement and the Related Agreements to which he, she or it is a party
will not (with or without the giving of notice or the passage of time, or
both) (i) violate any applicable provision of law or any rule or
regulation of any federal, state or local administrative agency or
governmental authority applicable to Datasvar or Subsidiary, or any order,
writ, injunction, judgment or decree of any court, administrative agency
or governmental authority applicable to Datasvar or Subsidiary, (ii)
violate the Articles of Incorporation of Datasvar or Subsidiary, (iii)
require any consent under or constitute a default under any material
agreement, indenture, mortgage, deed of trust, lease, license, or other
instrument to which Datasvar or Subsidiary is a party or by which any of
them is bound, or any material license, permit or certificate held by any
of them or (iv) result in the creation of any lien, claim, encumbrance or
charge upon any property or assets of Datasvar or Subsidiary.
Section 4.7. Financial Statements. Section 4.7 of the
Disclosure Schedule contains (i) the audited balance sheet and the related
audited income statement (including any related notes thereto) of Datasvar
and Subsidiary as of and for the fiscal year ended December 31, 1995, and
(ii) the Interim Balance Sheet and the related unaudited income statement
for the five month period ending May 31, 1996 (including any related notes
thereto) (collectively, the "Financial Statements"). Except as set forth
on Section 4.7 of the Disclosure Schedule, the Financial Statements (i)
are true, correct and complete in all material respects; (ii) are in
accordance with the books and records of Datasvar; (iii) have been
prepared in accordance with SGAAP applied on a consistent basis throughout
the periods involved; and (iv) fairly present, in the case of the audited
balance sheet and the Interim Balance Sheet, the consolidated financial
position of Datasvar and Subsidiary as of the respective dates thereof
and, in the case of the related audited and unaudited interim income
statements,the consolidated results of operations and earnings,
respectively, of Datasvar and Subsidiary for the respective periods
indicated.
Section 4.8. Undisclosed Liabilities. Except as set forth on
Section 4.8 of the Disclosure Schedule, Datasvar and Subsidiary have no
liabilities (absolute, accrued, contingent or otherwise) required by SGAAP
to be reflected or reserved against in the consolidated statement of
assets and liabilities of Datasvar and Subsidiary except (i) liabilities
reflected or reserved against in the Interim Balance Sheet, and (ii)
liabilities incurred since May 31, 1996 in the ordinary course of
business, and which, in the aggregate, do not have a Material Adverse
Effect.
Section 4.9. Taxes. Except as set forth in Section 4.9 of the
Disclosure Schedule, each of Datasvar and Subsidiary has timely filed all
material returns, declarations, reports, information returns and
statements required to be filed by it (the"Returns") in respect of any
Taxes and has paid all Taxes currently due and payable by any of them.
Except as set forth in Section 4.9 of the Disclosure Schedule, the Returns
accurately and completely reflect the facts regarding the income,
properties, operations and status of any entity required to be shown
thereon, no notice of any material proposed deficiency, assessment or levy
in respect of Taxes has been received by Datasvar or Subsidiary, neither
Datasvar nor Subsidiary is currently the subject of an audit or in receipt
of a notice that it is being or will be audited by a relevant taxing
authority or has agreed to any extension of time of any applicable statute
of limitations period, and each of Datasvar and Subsidiary has duly
withheld from each payment from which such withholding is required by law,
the amount of all Taxes required to be withheld therefrom and has paid the
same (to the extent due) together with the employer's share of the same,
if any, to the proper tax receiving officers. Neither Datasvar nor
Subsidiary has ever conducted business in the United States, has ever had
any assets, employees or shareholders located or resident in the United
States, or has ever made any election with the United States Internal
Revenue Service regarding Taxes in the United States.
Section 4.10. Title to Properties. Except for the leasehold
interests listed in Section 4.13 of the Disclosure Schedule, Datasvar and
Subsidiary do not own any interest in real property. Except for and as set
forth in Section 4.10 of the Disclosure Schedule, each of Datasvar and
Subsidiary has good and marketable title to all the personal property and
assets (tangible and intangible) reflected as owned by it on the Interim
Balance Sheet or acquired since May 31, 1996 (except for properties and
assets disposed of since such date in the ordinary course of business and
consistent with past practice), free and clear of all liens, charges,
security interests or other encumbrances of any nature whatsoever. All
such assets are now in the possession of Datasvar and Subsidiary, and no
other person has a right to possession or claims possession of all or any
part of such assets.
Section 4.11. Absence of Changes. Except as set forth in
Section 4.11 of the Disclosure Schedule, since December 31, 1995 there has
not been:
(i) any change or changes in the business, financial
condition, properties, results of operations or assets or liabilities of
Datasvar and Subsidiary, or any development or event involving a
prospective change, other than changes in the ordinary course of the
Business and other changes which singularly or in the aggregate, have not
had and will not have a Material Adverse Effect;
(ii) any damage or destruction, loss or other
casualty, however arising and whether or not covered by insurance, which,
singularly or in the aggregate, have had or will have a Material Adverse
Effect;
(iii) any labor dispute or any other event or
condition of any character which, singularly or in the aggregate, have had
or will have a Material Adverse Effect;
(iv) any indebtedness incurred by Datasvar or
Subsidiary for borrowed money (except by endorsement for collection or for
deposit of negotiable instruments received in the ordinary course of the
Business), or any agreement to incur any such indebtedness;
(v) any change in the accounting methods or
material change in the practices of Datasvar or Subsidiary or any change
in depreciation or amortization policies or rates theretofore adopted;
(vi) any amendment or termination of any material
contract, agreement, lease, franchise or license to which Datasvar is or
was a party;
(vii) any amendment of the Bylaws of Datasvar or
Subsidiary;
(viii) any mortgage, pledge or other encumbering of
any material property or assets of Datasvar;
(ix) any material liability or obligation incurred
by Datasvar, except current liabilities incurred in the ordinary course of
the Business, or any cancellation or compromise by Datasvar of any
material debt or claim, or any waiver or release by Datasvar of any right
of substantial value to the Business;
(x) any sale, transfer, lease, abandonment or other
disposal of any machinery, equipment or real property with a fair market
value in excess of US$25,000 or, except in the ordinary course of the
Business, any sale, transfer, lease, abandonment or other disposal of any
material portion of any other properties or assets of Datasvar (real,
personal or mixed, tangible or intangible).
(xi) any transfer, disposal or grant of any rights
under any patent, trademark, trade name, copyright, copyright
registration, service mark, invention or license owned by Datasvar, or any
disposal of or disclosure to any Person other than representatives of SEi
of any material trade secret, formula, process or know-how owned by
Datasvar not theretofore a matter of public knowledge; except, in each
case, in the ordinary course of the Business;
(xii) any agreement by Datasvar to an increase in
the compensation of its officers, employees or directors; or any agreement
by Datasvar entered into with any officer, employee or director; except,
in each case, in the ordinary course of the Business and consistent with
past practice;
(xiii) any single capital expenditure made, or any
commitment to make any capital expenditure, in excess of US$25,000 for any
tangible or intangible capital assets, additions or improvements, except
in the ordinary course of the Business;
(xiv) any declaration, payment or reservation for
payment of any dividend or other distribution in respect of the capital
stock or other securities of Datasvar or Subsidiary, or any redemption,
purchase or other acquisition, directly or indirectly, of any shares of
capital stock or other securities of Datasvar or Subsidiary;
(xv) except in the ordinary course of the Business
and consistent with past practice, any grant or extension of any
power-of-attorney or guaranty in respect of the obligation of any Person;
or
(xvi) any entry by Datasvar or Subsidiary into any
binding agreement, whether in writing or otherwise, to take any action
described in this Section 4.11.
Section 4.12. Patents, Trademarks, Trade Names. Section 4.12
of the Disclosure Schedule lists and indicates the ownership of all
material patents and patent applications owned by Datasvar and Subsidiary
and all material copyrights, copyright registration, trademarks, trade
names, and service marks for which registrations have been obtained or
applications therefor filed for Datasvar or Subsidiary (collectively, the
"Intangible Property"). Except as set forth in Section 4.12 of the
Disclosure Schedule, (i) no Person other than Datasvar or Subsidiary has
the right to use any of the Intangible Property, and Datasvar and
Subsidiary have all right, title and interest to all Intangible Property,
without any conflict known to Sellers with the rights of others, and (ii)
documentation for the continuance of registration and applications for
registration has been timely filed with the appropriate authorities for
the patents, trademarks, trade names, and service marks included in the
Intangible Property. Except as set forth in Section 4.12 of the
Disclosure Schedule, Sellers, Datasvar and Subsidiary have not received
any written notice that (a) any operation of Datasvar or Subsidiary
infringes on the asserted rights of others or requires payment for the use
of or infringes or otherwise interferes with any patent, trade name,
trademark, or service mark of another, or any such right which might be so
infringed has been applied for by another, or (b) any of the Intangible
Property has been legally declared invalid or is the subject of a pending
or threatened action for opposition or cancellation or a declaration of
invalidity, or is infringed by the activities of another. Datasvar owns
or has obtained, from a Person not an affiliate of Datasvar or Subsidiary,
the right to use all of the intellectual property which it is presently
using in the Business.
Section 4.13. Leases. Section 4.13 of the Disclosure Schedule
contains an accurate and complete list of all leases pursuant to which
Datasvar leases real or personal property. Except as set forth in Section
4.13 of the Disclosure Schedule, all such leases are in full force and
effect and are valid, binding and enforceable in accordance with their
terms; there are no existing defaults or events which, with the giving of
notice or the lapse of time or both, would constitute a default thereunder
by Datasvar or, to the best knowledge of the Sellers, any other parties
thereto.
Section 4.14. Bank Accounts; Investments.
(a) Section 4.14 (a) of the Disclosure Schedule sets
forth the names and locations of all banks, trust companies, savings and
loan associations and other financial institutions at which Datasvar or
Subsidiary maintains safe deposit boxes or accounts of any nature and the
names (and limits, if any.) of all persons authorized to draw thereon,
make withdrawals therefrom or have access thereto.
(b) Section 4.14 (b) of the Disclosure Schedule sets forth
a description of all funds, securities and other instruments in which
Datasvar excess cash was invested as of May 31, 1996 (including interest
rates, etc.). (the "Investments"). All such Investments are investment
grade and can be liquidated within one business day without being
discounted.
Section 4.15. Material Contracts and Customers.
(a) Section 4.15 of the Disclosure Schedule contains a
true and correct list of all material contracts, agreements or other
understandings or arrangements, written or oral, or commitments therefor,
relating to Datasvar, Subsidiary, the Business or the assets or
liabilities of either of them (collectively, the "Contracts"). Except as
set forth in Section 4.15 of the Disclosure Schedule, neither Datasvar nor
Subsidiary is party to, or otherwise bound by, any material written or
oral, formal or informal:
(i) purchase orders and other contracts for the sale of
goods or services in excess of US$25,000;
(ii) contracts, agreements or commitments for the purchase
of materials or services which are not required by Datasvar or Subsidiary
in the current operation of the Business in the ordinary course, or any
agreements or commitments for the sale of goods or services which are
inadequate to recover current costs of Datasvar or Subsidiary;
(iii) contracts involving the expenditure of more than
US$25,000 in any instance for the purchase of material, supplies,
equipment or services;
(iv) contracts involving the expenditure of more than
US$25,000 which are not cancelable within thirty (30) days;
(v) contracts relating to the leasing (as lessor or
lessee) or the conditional purchase or sale by Datasvar or Subsidiary of
any property, whether real, personal or mixed;
(vi) contracts to which Datasvar or Subsidiary is a party
or by which any of its assets are bound that require consent by any other
Person in connection with the transaction contemplated hereby, either to
prevent a breach or continue the effectiveness thereof;
(vii) contracts or arrangements with any governmental
body, agency or authority;
(viii) indentures, mortgages, promissory notes, loan
agreements, capital leases, security agreements or other agreements or
commitments for the borrowing of money, or the deferred purchase price of
assets, or which create a lien or encumbrance on any assets of Datasvar or
Subsidiary;
(ix) guarantees of the obligations of third parties or
agreements to indemnify third parties (other than indemnification
provisions provided in the ordinary course to or for the benefit of
Datasvar s customers);
(x) agreements which restrict Datasvar or Subsidiary from
doing business in any geographic location;
(xi) policies of insurance in force and effect with respect
to Datasvar, Subsidiary, the Business or their assets;
(xii) contracts or agreements with any of the Sellers
or their affiliates;
(xiii) license agreements (as licensee or licensor) with
third parties;
(xiv) employment or consulting agreements;
(xv) distributor, dealer, sales, advertising, agency,
manufacturer's representative, franchise or similar contracts or any
contract relating to the payment of a commission;
(xvi) collective bargaining or other agreements with
labor unions; or
(xvii) other Contracts outside the ordinary course of
the Business not otherwise described in this Subsection.
(b) True and complete copies of each of the Contracts have been
made available to SEi by Sellers. Except as set forth on Section 4.15 of
the Disclosure Schedule, each of the Contracts is in full force and effect
and there exists no default or event which, with the giving of notice or
lapse of time or both, would constitute a default thereunder by Datasvar
or Subsidiary, or to the best knowledge of the Sellers, by any other party
thereto. Except as set forth in Section 4.15 of the Disclosure Schedule,
no written notice of termination or nonrenewal has been given under any
Contract. The dollar amounts set forth in this Section 4.15 with respect
to the Contracts shall not be deemed to represent any standard of
"materiality" with respect to the Contracts or otherwise for any other
purpose and shall have no application to any other Section of this
Agreement.
(c) Section 4.15 of the Disclosure Schedule identifies the name
and location of the five (5) largest customers (the "Customers") and the
five (5) largest suppliers, in each case measured by volume of Swedish
krona generated or paid, of the Business as of May 31, 1996. The
relationship of Datasvar with the Customers is good, and Sellers are not
aware of any intention of any such Customers or suppliers to terminate or
modify any of such relationships. Datasvar is not generally required to
provide bonding or any other security arrangements in connection with any
transactions with its customers or suppliers.
Section 4.16. Related Transactions.
(a) Except as set forth in Section 4.16 of the Disclosure
Schedule, neither Datasvar nor Subsidiary has any contractual relationship
with, or any obligation or liability owed to, Sellers. All such
contractual relationships are on terms that are no less favourable to
Datasvar or Subsidiary than would be the case with a non affilated party.
(b) Except as set forth in Section 4.16 of the Disclosure
Schedule, neither the Sellers nor any director or officer of Datasvar or
Subsidiary has any material interests, direct or indirect, in any Person
which (i) is a material competitor, customer, subcontractor of supplier of
Datasvar or Subsidiary, or (ii) has an existing material relationship
with, or a material interest in, Datasvar or Subsidiary, including but not
limited to lessors of real or personal property and Persons against which
rights or options are exercisable by Datasvar or Subsidiary.
Section 4.17. Insurance. Section 4.17 of the Disclosure
Schedule contains an accurate and complete list of all policies of
insurance presently maintained with respect to Datasvar and Subsidiary,
including, without limitation, "key man" insurance with respect to any
employee. Such list includes a description of coverage, the amount of
coverage and the name of the insurer or an indication that Datasvar or
Subsidiary has self-insured any particular aspect of the Business. All
such policies are in full force and effect and no notice of cancellation
or termination has been received with respect to any such policy and there
is, and has been, no material default by Datasvar or Subsidiary with
respect to its obligations under any such policy. Except as set forth in
Section 4.17 of the Disclosure Schedule, Sellers, Datasvar and Subsidiary
have not received during the past two (2) years any written notice or
other written communication from any insurance company declining to write
insurance with respect to the Business, or canceling or materially
amending any of Datasvar's or Subsidiary's insurance policies or proposing
to do so.
Section 4.18. Labor Matters.
(a) Except to the extent set forth in Section 4.18(a) of
the Disclosure Schedule and except where it would not have a Material
Adverse Effect, (a) there is no unfair labor practice charge or complaint
against Datasvar or Subsidiary pending before or any labor grievance
board, authority or tribunal, nor, to the best knowledge of Sellers and
management of Datasvar and Subsidiary, has any such charge or complaint
been threatened against Datasvar or Subsidiary; (b) there is no labor
strike, dispute, slowdown, or stoppage pending against or affecting
Datasvar or Subsidiary; and (c) there are no other controversies pending
between Datasvar or Subsidiary and any of its employees, including,
without limitation, claims arising under any labor laws, which
controversies have had or may have a Material Adverse Effect.
(b) Section 4.18(b) of the Disclosure Schedule sets forth
the names of all employees, consultants, officers and directors of
Datasvar and Subsidiary, including length of employment, date of birth,
compensation level and other terms of employment (including identification
of any collective bargaining agreement governing such terms). Sellers have
delivered to SEi copies of its model agreement as well as copies of all
employment agreements to which Datasvar or Subsidiary is a party with any
of its employees, the terms of which vary from those of the Model
Agreement.
Section 4.19. Employee Benefit Plans.
(a) Set forth in Section 4.19 of the Disclosure Schedule
is an accurate and complete list of each material Employee Benefit Plan
maintained or contributed to by Datasvar or Subsidiary.
(b) Except as set forth in Section 4.19 of the Disclosure
Schedule, to the extent material, all amounts that Datasvar and Subsidiary
are required to have contributed to any Employee Benefit Plan have been
contributed within the time prescribed by applicable law and all benefits,
expenses, and other amounts due and payable and all transfers or payments
required to be made with respect to any Employee Benefit Plan have been
paid within the time prescribed by the applicable documents and governing
law.
(c) Except as set forth in Section 4.19 of the Disclosure
Schedule, there are no material claims (other than routine claims for
benefits) or lawsuits pending with respect to any Employee Benefit Plan.
(d) Except as set forth in Section 4.19 of the Disclosure
Schedule, Sellers have previously delivered or made available to SEi true
and complete copies of the plan documents for each Employee Benefit Plan
identified in Section 4.19 of the Disclosure Schedule.
Section 4.20. Litigation. Except as set forth in Section 4.20
of the Disclosure Schedule, there are no material claims, actions, suits,
or proceedings pending or, to the best knowledge of Sellers, threatened,
against Datasvar or Subsidiary relating to this Agreement or the
transactions contemplated hereby or to the business or property of
Datasvar or Subsidiary, at law or in equity or before or by any federal,
state, local, or foreign court or other governmental department,
commission, board, agency, instrumentality or authority, nor any
arbitration proceeding, in each case including, without limitation, any
claims relating to environmental matters. Neither Datasvar nor Subsidiary
is subject to any adverse judgment, order, writ, injunction or decree of
any court or governmental body.
Section 4.21. Compliance with Laws. Except as set forth in
Section 4.21 of the Disclosure Schedule, ,Datasvar and Subsidiary have
conducted the Business so as to comply with, and are not in violation of,
nor have they received any written notice claiming they are in violation
of any order, law, ordinance, statute, rule or regulation applicable to
it, or to the Business or any of the property or assets of Datasvar and
Subsidiary, including, without limitations, any environmental or worker
safety and protection laws and regulations, except to the extent that such
non-compliance would not have a Material Adverse Effect. Datasvar and
Subsidiary have all material licenses, permits, certificates of occupancy
and authorizations necessary to conduct the Business.
Section 4.22. Books and Records. The books, accounts and
records of Datasvar and Subsidiary (i) are located at Datasvar s
headquarter at Vasagatan 36, Stockholm Sweden, (ii) are correct and
complete in all material respects, (iii) have been maintained in
accordance with good business practice and (iv) constitute all the books,
accounts and records necessary to carry on the Business in the manner in
which it is currently being conducted and has over the preceding twelve
(12) months been carried on. Copies of the Articles of Incorporation and
all amendments thereto and of the minutes of all shareholder and director
meetings of Datasvar and Subsidiary hereto delivered by Sellers to SEi,
are complete and correct.
Section 4.23. Disclosures. None of the representations or
warranties by Sellers herein and no statement contained in any
certificate, Schedule or other writing furnished by Sellers to SEi in
connection herewith contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary in
order to make the statements contained herein or therein not misleading.
Section 4.24. Adequacy of Assets. Except as set forth in
Section 4.24 of the Disclosure Schedule, the assets of Datasvar and the
facilities, assets and services to which Datasvar has a contractual right
of use include all rights, properties, assets, facilities and services
necessary for the carrying on of the Business in a manner in which it is
currently being and has over the immediately preceding twelve (12) months
been carried on, and Datasvar does not depend in any material respect upon
the use of assets owned by, or facilities or services provided by, Sellers
or any affiliate of Sellers.
Section 4.25. Governmental Grants. Section 4.25 of the
Disclosure Schedule sets forth a true, correct and complete description of
all Grants received by Datasvar during the past five years, including,
with respect to the employment development and relocation Grans, (i) all
amounts paid to Datasvar to date, (ii) all amounts to be received by
Datasvar during the next five years, and (iii) all conditions to the
receipt of payments by Datasvar with respect to such Grants. The
consummation of the transactions contemplated hereby will not affect
Datasvar's right to retain the Grants on a going forward basis. Except as
set forth in Section 4.25 of the Disclosure Schedule, Sellers are not
aware of any facts or circumstances that could, directly or indirectly,
(i) cause or contribute to the failure of Datasvar to remain eligible to
receive the Grants, (ii) cause or contribute to the revocation of any of
the Grants, (iii) cause or contribute to an obligation by Datasvar to
repay any Grants or (iv) otherwise cause or contribute to the failure of
Datasvar to receive the full amounts of the Grants.
Section 4.26. Accounts Receivable. Section 4.26 of the
Disclosure Schedule sets forth a true and correct in all material respects
list and aging of all unpaid accounts receivable owing to Datasvar as of
May 31, 1996. The accounts receivable of Datasvar, including, without
limitation, those reflected in Section 4.26 of the Disclosure Schedule,
constitute or will constitute as of the respective dates thereof, legal,
valid, binding and enforceable claims arising from bona fide transactions
in the ordinary course of the Business and, except to the extent reserved
against on the Interim Balance Sheet, are or will be as of the respective
dates thereof collectible in the ordinary course of the Business and are
not subject to any known counterclaims or set-offs. The reserves for
doubtful accounts and allowances with respect to the accounts receivables
generated after May 31, 1996 and prior to the Closing will be established
on the basis of evaluation of specific accounts and age classifications in
accordance with SGAAP.
Section 4.27. Brokers and Finders. No agent, broker,
investment banker, person or firm acting on behalf of Datasvar,
Subsidiary, the Sellers or any firm or entity affiliated with any of them
is or will be entitled to any brokers' or finders' fee or any other
commission or similar fee directly or indirectly from any of the parties
hereto in connection with the transactions contemplated hereby.
Section 4.28. Investment Intent; Information Disclosures.
(a) Each of the Sellers acknowledge that the SEi Stock to
be received by such Seller will be acquired for such Seller's own account
and without any view to the distribution of any part thereof without
registration under applicable federal and state securities laws. Each
Seller represents that such Seller does not have any agreements or
arrangements to sell, transfer or grant participations with respect to the
Purchase Price Shares.
(b) Each Seller understands that the SEi Stock
constituting the Purchase Price Shares are not registered under the United
States federal or state securities laws on the ground that the
transactions contemplated hereby are exempt from registration under the
Securities Act of 1933 (the "1933 Act") pursuant to Section 4(2) thereof,
and that SEi's and SEi's reliance on such exemption is predicated on each
Seller's representations set forth herein.
(c) Each Seller represents that such Seller has such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of its investment in the
Purchase Price Shares, and has the ability to bear the economic risks of
such investment. Each Seller further represents that such Seller has had
(i) access, prior to the Closing Date, to the SEi Filings (ii) the
opportunity to ask questions of, and receive answers from, SEi concerning
SEi and the Purchase Price Shares and (iii) the opportunity to obtain
additional information (to the extent SEi possessed such information or
could acquire it without unreasonable expense) necessary to verify the
accuracy of any information received or to which such Seller had access.
(d) Each Seller understands and agrees that the Purchase
Price Shares may not be sold, transferred or otherwise disposed of without
registration under the 1933 Act and applicable state laws, unless
exemptions from registration requirements are available, and that in the
absence of an effective registration statement covering the Purchase Price
Shares or an available exemption from applicable registration
requirements, the Purchase Price Shares must be held indefinitely. In
particular, the Purchase Price Shares may not be sold pursuant to Rule 144
promulgated under the 1933 Act unless all of the conditions of such rule
are met.
(e) Each Seller agrees that such Seller will not offer,
sell, mortgage, pledge or otherwise dispose of any of the Purchase Price
Shares (other than pursuant to an effective registration statement under
the 1933 Act) unless and until such Seller delivers an opinion of counsel
satisfactory to SEi that registration under applicable federal or state
securities laws is not required.
(f) Each Seller agrees that all certificates for Purchase
Price Shares shall bear the following legend:
These securities have not been registered, qualified, recommended,
approved or disapproved under United States federal securities law or
state securities laws. The shares represented by this certificate may not
be sold, transferred or otherwise disposed of by an investor without (i)
registration under federal and state securities laws, or (ii) delivery of
an opinion of counsel satisfactory to the corporation that neither the
sale nor the proposed transfer constitutes a violation of any United
States federal or state securities law.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SEI
SEi hereby represents and warrants to Sellers as follows:
Section 5.1. Corporate Organization. SEi is a corporation
duly organized, validly existing and in good standing under the laws of
the Florida and has the full corporate right, power and authority to own,
lease and operate all of its properties and assets and to carry out its
business as it is presently conducted.
Section 5.2. Capitalization of SEi. All issued and
outstanding shares of SEi Stock have been, and upon issuance the Purchase
Price Shares, will be duly authorized and validly issued, fully paid and
nonassessable. The issuance of the Purchase Price Shares is not subject to
any preemptive right or right of first refusal that has not or will not
be satisfied or waived.
Section 5.3. Authority. SEi has all requisite corporate right,
power and authority to execute, deliver and perform this Agreement. The
execution, delivery and performance of this Agreement and the Related
Agreements by SEi have been duly and validly authorized and approved by
all necessary corporate action. All authorizations, approvals and consents
of, or any notices to, any person, and all filings and registrations with,
and consents, approvals and authorizations of, or any notices to, any
domestic or foreign governmental agency or body, necessary for the
execution and delivery by SEi of this Agreement, and/or the purchase of
the Shares by SEi hereunder have been duly obtained, effected or given
and are in full force and effect. This Agreement and the Related
Agreements to which SEi is party have been duly and validly executed and
delivered by SEi and constitute the legal, valid and binding obligations
ofSEi , enforceable against SEi in accordance with their respective
terms.This Agreement has been duly and validly executed and delivered by
SEi and, assuming this Agreement has been duly authorized, executed and
delivered by Sellers, constitutes the legal, valid and binding obligation
of SEi enforceable against it in accordance with its terms.
Section 5.4. SEi's Consents and Approvals; No Violations.
Except as set forth in Section 5.4 of the Disclosure Schedule, the
execution, delivery and performance of this Agreement by SEi will not
(with or without the giving of notice or the passage of time, or both),
(i) violate any applicable provision of law or any rule or regulation of
any administrative agency or governmental authority applicable to SEi, or
any order, writ, injunction, judgment or decree of any court,
administrative agency or governmental authority applicable to SEi, (ii)
violate the Articles of Incorporation or Bylaws of SEi, (iii) require any
consent under or constitute a default under any material agreement,
indenture, mortgage, deed of trust, lease, license, or other instrument to
which SEi is a party or by which SEi is bound, or any material license,
permit or certificate held by SEi (other than any consents which will have
been obtained on or prior to the Closing Date), or (iv) require any
material consent or approval by, notice to or registration with any
governmental authority.
Section 5.5. Litigation. Except as set forth in Section 5.5
of the Disclosure Schedule, there are no claims, actions, suits, or
proceedings pending or, to the best knowledge of SEi, threatened, against
SEi relating to this Agreement or the transactions contemplated hereby or
to the business or property of SEi, at law or in equity or before or by
any federal, state, local, or foreign court or other governmental
department, commission, board, agency, instrumentality or authority, or
any arbitration proceeding, in each case which are likely to have a
Material Adverse Effect. SEi is not subject to any judgment, order, writ,
injunction or decree of any court or governmental body.
Section 5.6. Brokers and Finders. No agent, broker,
investment banker, Person or firm acting on behalf of SEi or any entity
affiliated with SEi is or will be entitled to any brokers' or finders' fee
or any other commission or similar fee directly or indirectly from any of
the parties hereto in connection with the transactions contemplated
hereby.
Section 5.7. SEi Information. SEi has delivered to Sellers
true and complete copies of the SEi Filings. SEi will deliver to Sellers
true and complete copies of any and all other documents filed by SEi with
the United States Securities and Exchange Commission (the "SEC") on or
prior to the Closing Date (other than exhibits, which SEi will make
available upon request). At the date hereof, the SEi Filings, taken as a
whole, do not contain any untrue statement of a material fact or omit any
material fact necessary to make the statements contained herein, in light
of the circumstances in which they were made, not misleading. At the date
of filing with the SEC of any such other filed document and at the Closing
Date, such document, taken as a whole and considered in the context of
other SEi Filings, will not contain any untrue statement of a material
fact or omit any material fact necessary to make the statements contained
therein, in light of the circumstances in which they were made, not
misleading.
Section 5.8 No Material Adverse Change. Since March 31, 1996,
there has been no material adverse change, nor any development or event
involving a prospective material adverse change in the business, financial
conditions or results of operations of SEi and its subsidiaries, taken as
a whole.
Section 5.9. Undisclosed Liablities. Except as set forth on
Section 5.9 of the Disclosure Schedule, SEi has no liabilities (absolute,
accrued, contingent or otherwise) required by US GAAP to be reflected or
reserved against in the consolidated statement of assets and liabilities
of SEi except (i) liabilities reflected or reserved against in the Form
10-Q Balance Sheet, and (ii) liabilities incurred since March 31, 1996 in
the ordinary course of business, and which, in the aggregate, do not have
a Material Adverse Effect.
Section 5.10. Compliance with Laws. Except as set forth in
Section 5.10 of the Disclosure Schedule, SEi has conducted its business so
as to comply with, and are not in violation of, nor have they received any
written notice claiming they are in violation of, any order, law,
ordinance, statute, rule or regulation applicable to it, or to its
business or any of the property or assets of SEi, including, without
limitations, any environmental or worker safety and protection laws and
regulations, except to the extent that such non-compliance would not have
a Material Adverse Effect. SEi has all material licenses, permits,
certificates of occupancy and authorizations necessary to conduct its
business.
ARTICLE VI
FURTHER COVENANTS AND AGREEMENTS
Section 6.1. Covenants of Sellers Pending the Closing.
Sellers covenant and agree that, pending the Closing and prior to the
termination of this Agreement, and except as otherwise agreed to in
writing by SEi, Sellers shall or, as appropriate shall cause Datasvar to:
(a) conduct the Business solely in the ordinary course and
consistent with the past practices of Datasvar;
(b) not take or intentionally omit to take any action
which would result in a breach of any of Sellers' representations and
warranties hereunder in any material respect;
(c) continue to maintain and service the physical assets
used by Datasvar in the conduct of the Business consistent with past
practices;
(d) use its and their reasonable efforts to preserve the
businesses and organization of Datasvar, to keep available the services of
Datasvar's present employees and agents and to maintain the relations and
goodwill with the suppliers, customers (including the Customers),
distributors and any others having business relations with Datasvar in
connection with the Business;
(e) use its and their reasonable efforts to cause all of
the conditions to the obligations of SEi under this Agreement to be
satisfied on or prior to the Closing Date and to obtain, prior to the
Closing, all consents of all third parties and governmental authorities
necessary for the consummation by Sellers, Datasvar and Subsidiary of the
transactions contemplated hereby. All such consents will be in writing
and executed counterparts will be delivered to SEi at or prior to the
Closing.
(f) cooperate with SEi in SEi's making arrangements to
obtain licenses, permits and certificates required to conduct the Business
or own the Shares at Closing;
(g) provide SEi's officers, employees, counsel,
accountants and other representatives with full access to, during normal
business hours, all of the books and records of Datasvar and Subsidiary,
make available to representatives of SEi, knowledgeable employees of
Datasvar for reasonable periods of time to answer inquiries of such
representatives with respect to SEi's investigation of Datasvar and
Subsidiary and permit such representatives of SEi to consult with the
officers, employees, accountants and counsel of Sellers; provided that no
such activities unreasonably interfere with the operation of the Business;
(h) not grant to any Person a power of attorney or similar
authority to act for Datasvar or Subsidiary;
(i) not enter into any guarantee of the obligations of any
Person to the extent such guarantee shall survive the Closing;
(j) not amend the Articles of Incorporation of Datasvar or
Subsidiary;
(k) make no change in the amount of issued capital stock
of Datasvar or Subsidiary or issue or create any option, warrant or any
other security of Datasvar or Subsidiary;
(l) not increase the compensation payable or to become
payable to any officer, employee or agent of Datasvar other than in the
ordinary course of the Business, nor make any bonus payment or arrangement
to or with any officer, employee or agent of Datasvar other than in the
ordinary course of the Business;
(m) not sell, transfer, lease, abandon or otherwise
dispose of (or commit to do so) any fixed assets; and
(n) not enter into any contract or commitment calling for
payment to or by Datasvar or Subsidiary of an aggregate amount of more
than US$10,000, which is not terminable by Datasvar or Subsidiary on less
than thirty (30) days' notice without penalty.
Section 6.2. Covenants of SEi Pending the Closing. SEi
covenants and agrees that, pending the Closing and prior to the
termination of this Agreement, and except as otherwise agreed to in
writing by Sellers:
(a) SEi shall not take or intentionally omit to take any
action which would result in a breach of any of SEi's representations and
warranties hereunder in any material respect.
(b) SEi shall use its reasonable efforts to cause all of
the conditions to the obligations of Sellers under this Agreement to be
satisfied on or prior to the Closing Date and to obtain prior to the
Closing, all consents of all third parties and governmental authorities
necessary for the consummation by SEi of the transactions contemplated
hereby. All such consents will be in writing and executed counterparts
thereof will be delivered to Sellers at or prior to the Closing.
(c) SEi shall promptly disclose to Sellers any information
relating to SEi's representations and warranties hereunder which, because
of an event occurring after the date hereof, is incomplete or is no longer
correct in any material respect.
Section 6.3. Filings. Promptly after the execution of this
Agreement, each of the parties hereto shall prepare and make or cause to
be made any required filings, submissions and notifications under the laws
of any domestic or foreign jurisdictions to the extent that such filings
are necessary to consummate the transactions contemplated hereby and will
use its reasonable efforts to take all other actions necessary to
consummate the transactions contemplated hereby in a manner consistent
with applicable law. Each of the parties hereto will furnish to the other
party such necessary information and reasonable assistance as such other
party may reasonably request in connection with the foregoing.
Section 6.4. Effective Time of Closing and Transfer. The
Closing shall be effective for all purposes as of the close of business on
the Closing Date.
Section 6.5. Announcements. Except as expressly contemplated
by this Agreement, the parties will mutually agree as to the time, form
and content before issuing any press releases or otherwise making any
public statements or statements to third parties with respect to
transactions contemplated hereby and shall not issue any press release or,
except as necessary to perform their respective obligations hereunder,
discuss the transactions contemplated hereby with any third party prior to
reaching mutual agreement with respect thereto, except as may be required
by law. Notwithstanding the foregoing, in the event prior to the Closing
any party hereto is required by law or the rules of any stock exchange on
which such party's securities are traded to make a statement with respect
to the transactions contemplated herein, such party shall notify in
writing the other party hereto as to the time, form and content of such
statement.
Section 6.6. Costs and Expenses. Whether or not the
transactions contemplated by this Agreement are consummated, each party
hereto shall pay its own costs and expenses (including legal fees and
expenses) incurred in connection with due diligence reviews, the
preparation, negotiation and execution of this Agreement and all other
agreements, certificates, instruments and documents delivered hereunder,
and all other matters relating to the transactions contemplated hereby.
All Swedish transfer and intangible taxes, if any, in connection with the
sale and delivery of the Shares hereunder shall be paid by Seller. All
transfer and intangible taxes, if any, in connection with the sale and
delivery of the Purchase Price Shares hereunder shall be paid by SEi.
Section 6.7. Further Assurances. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use its
reasonable efforts to take, or cause to be taken, all action, and to do,
or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement. If at any time after the
Closing Date any further action is necessary or desirable to carry out the
purposes of this Agreement, the parties hereto shall take or cause to be
taken all necessary action, including, without limitation, the execution
and delivery of such further instruments and documents as may be
reasonably requested by the other party for such purposes or otherwise to
consummate and give effect to the transactions contemplated hereby. If
any consent or approval required for the consummation of the transactions
contemplated hereby is not obtained prior to Closing, Sellers shall
cooperate with SEi, and attempt in good faith, to obtain such consent or
approval during the one year period immediately following the Closing.
Section 6.8. Certain Agreements. On or before the Closing
Date the undersigned will execute, the following agreements to which they
are party, to be effective upon the Closing:
(a) A Registration Rights and Stockholders Agreement between
SEi and Sellers in the form of Exhibit B attached hereto.
(b) An Employment Agreement between Datasvar and Johan Holm in
the form of Exhibit C attached hereto.
(c) An Employment Agreement between Datasvar and Arne Weinz in
the form of Exhibit Dattached hereto.
(d) A Non-competition Agreement between SEi and Institutional
Seller in the form of Exhibit E attached hereto.
Section 6.9. Non-Disclosure; Covenant Not to Compete.
(a) The parties hereto acknowledge that (i) the convenants
contained in this Section 6.9 are a material inducement of the
consummation by SEi of the transactions contemplated by this Agreement and
(ii) SEi would not have entered into or performed this Agreement but for
the covenants herein contained.
(b) Each of the Sellers (other than Institutional Seller)
agrees that, unless acting with the prior consent of SEi, it will not,
either alone or in conjunction with any other Person, or directly or
indirectly through any entity that it now or in the future controls, for a
period of three years from the Closing Date: (i) employ or solicit the
employment of any Person who within the month preceding the Closing Date
had been an employee of Datasvar or Subsidiary; (ii) directly or
indirectly engage or participate, whether as officer, employee, director,
agent, consultant, shareholder, partner, or otherwise, in the ownership,
management, marketing or operation of Business within Sweden (other than
through the ownership of five percent (5%) or less of the equity
securities or equivalent interests of any entity whose shares are traded
on any nationally recognized securities exchange); or (iii) conduct any
business that is similar to any part of the Business with any Person that
is a Customer of Datasvar or Subsidiary as of the Closing Date.
(c) It is stipulated and agreed that the Sellers have
become acquainted with confidential and privileged information of Datasvar
relating to customer files, customer lists, special customer matters,
sales methods and techniques, merchandising concepts and plans, new site
locations, business plans, sources of supply and vendors, special business
relationships with vendors, agents and brokers, promotional materials and
information, financial matters, mergers, acquisitions, selective personnel
matters and confidential processes, designs, formulas, ideas, plans,
devices or materials and other similar matters which are confidential (any
and all such information being referred to herein as the Confidential
Information); and that the use of the Confidential Information against
Datasvar would seriously damage the Business. As a consequence of the
above, each of the Sellers agrees that, unless acting with the prior
written consent of SEi, such Seller shall, whether acting alone, in
conjunction with any other Person, or directly or indirectly through any
entity that such Seller now or in the future controls: not use, divulge,
publish or otherwise reveal or allow to be revealed any aspect of the
Confidential Information to any Person; refrain from any action or conduct
which might reasonably or foreseeably be expected to compromise the
confidentiality or proprietary nature of the Confidential Information; and
have no right to apply for or to obtain any patent, copyright, or other
form of intellectual property protection with regard to the Confidential
Information.
(d) The parties hereto acknowledge and agree that any
remedy at law for any breach of the provisions of this Section 6.9 would
be inadequate and Sellers hereby consent to the granting by any court of
competent jurisdiction of an injunction or other suitable relief and
without the posting of any bond or the necessity of actual monetary loss
being proved, in order that such breach may be effectively restrained.
Section 6.10. Pooling of interests. Sellers hereby acknowledge
and agree that SEi intends to treat the acquisition of the Shares as
"pooling of interests" for financial accounting purposes as permitted
under Accounting Principles Board (APB) Opinion No 16; Sellers, Datasvar
and Subsidiary have not taken, and Sellers shall not, and shall not permit
Datasvar or Subsidiary to take, any action that (without giving effect to
this Agreement, the transactions contemplated hereby, or actions relating
thereto, or any action taken or agreed to be taken by SEi) would prevent
SEi from accounting for the acquisition of the Shares as a "pooling of
interests" including without limitation, (i) transferring shares of
Datasvar s capital stock during the thirty (30) days prior to the Closing
Date and (ii) selling, assigning or transferring , or agreeing or allowing
to be created any rights or obligation for the sale, assignment or
transfer of, any of the Purchase Price Shares before at least thirty days
of combined operations of SEi and Datasvar have elapsed and the financial
statements reflecting such operations have been prepared and published
within the meaning of Section 201.01 of the SEC s Codification of
Financial Reporting Policies, provided, however that nothing shall prevent
Sellers from exercising their right, subject to the restrictions set forth
in Section 4.28 and in the Registration Rights and Stockholders Agreement
attached hereto as ExhibitB, to sell, assign or transfer the Purchase
Price Shares . Except as disclosed in Section 6.10 of the Disclosure
Schedule, none of the Sellers is a party to any contract, document ,
instrument or any written or oral agreement regarding the sale, assignment
or transfer of , or has allowed to be created any rights or obligations
for the sale, assignment or transfer of, or has explicitly or implicitly
agreed to sell, assign or transfer any of the Shares held by any of the
Sellers to any other Seller or any affiliate or family member of any other
Seller. Except as disclosed in Section 6.10 of the Disclosure Schedule,
Datasvar has not engaged in any transactions with respect to its treasury
shares during the two year period ending as of the Closing Date.
Section 6.11. Assumption of Nutek Guarantee. SEi agrees to
assume the obligations of Individual Sellers under their guarantee of
Datasvar's obligations to Nutek, up to a maximum of SEK 300,000, and to
use its best efforts to obtain the release of Individual Sellers from such
obligations at or as soon as possible following the Closing Date. Not
later than the first anniversary of the Closing Date, SEi will assume
the obligations of Institutional Seller under its guarentee to Nutek, up
to a maximum of SEK 150,00, and will use its best efforts to obtain the
release of Institutional Seller as of such date. Prior to such date,
Institutional Seller agrees to maintain its guarantee with Nutek in
support of Datasvar's obligations to Nutek.
ARTICLE VII
TERMINATION
Section 7.1. Termination. This Agreement may be terminated at
any time prior to the Closing:
(a) by mutual written agreement executed by Sellers and
SEi;
(b) by Sellers or SEi at any time after July 31,1996 if,
through no fault of the party seeking termination, the Closing shall not
have occurred;
(c) by Sellers or SEi, if any governmental or regulatory
authority, agency or commission, including courts of competent
jurisdiction, domestic or foreign, shall have issued an order, decree, or
ruling or taken other action, restraining, enjoining or otherwise
prohibiting the transactions contemplated hereby and such order, decree,
ruling or other action shall have become final and nonappealable;
(d) by SEi, if there has been a material violation or
breach by Sellers of any agreement or any representation or warranty
contained in this Agreement which (i) is not curable, (ii) has rendered
the satisfaction of any condition to the obligations of SEi impossible,
and (iii) has not been waived by SEi; or
(e) by Sellers, if there has been a material violation or
breach by SEi or SEi of any agreement, representation or warranty
contained in this Agreement which (i) is not curable, (ii) has rendered
the satisfaction of any condition to the obligations of Sellers
impossible, and (iii) has not been waived by Sellers.
Section 7.2. Procedure and Effect of Termination. In the
event of termination of this Agreement pursuant to Section 7.1 hereof,
written notice thereof shall forthwith be given to the other parties
hereto and this Agreement (other than Section 6.6 hereof and as provided
in paragraph (b) below) shall terminate and the transactions contemplated
hereby shall be abandoned without further action by the parties hereto.
If this Agreement is terminated as provided herein:
(a) all information with respect to the Business, Datasvar
or Subsidiary received by and in the possession of SEi or any Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with SEi shall be returned to
Sellers or destroyed by SEi;
(b) any termination pursuant to subparagraph (b), (c),
(d), or (e) of Section 7.1 shall not be deemed a waiver of any rights or
remedies otherwise available under this Agreement, by operation of law or
otherwise; and
(c) all filings, applications and other submissions made
pursuant to Section 6.3 hereof or prior to the execution of this Agreement
in contemplation thereof shall, to the extent practicable, be withdrawn
from the agency or other Person to which made.
ARTICLE VIII
CONDITIONS TO SEI'S OBLIGATIONS
Each and every obligation of SEi to consummate the transactions
described in this Agreement shall be subject to the fulfillment, on or
before the Closing Date, of the following conditions precedent:
Section 8.1 Sellers' Closing Deliveries. Sellers shall have
delivered, or caused to be delivered, to SEi at or prior to the Closing,
unless specifically waived by Sellers in their sole discretion, each of
the following:
(i) certificate(s) representing the Shares, duly endorsed
in blank, or accompanied by a duly endorsed stock transfer power;
(ii) the Registration Rights and Stockholders Agreement
referenced in Section 6.8(a) executed by Sellers;
(iii) the Employment Agreements referenced in Sections
6.8(b) and 6.8(c) executed byJoha Holm and Arne Weinz, respectively;
(iv) The Non-Competition Agreement referenced in Section
6.8 (d), executed by Institutional Seller;
(v) a copy of the Articles of Incorporation of each of
Datasvar and Subsidiary as in effect on the Closing Date;
(vi) the minutes of all shareholder and director meetings
of Datasvar and Subsidiary, certified by an officer of Datasvar to be
true, complete and correct;
(vii) the resignations of those officers and directors
of Datasvar and Subsidiary as are identified in Section 8.1(viii) of the
Disclosure Schedule;
(viii) valid and binding consents of all Persons whose
consent or approval is required to be set forth in Sections 4.5 and 4.6 of
the Disclosure Schedule;
(ix) the certificates referenced in Section 8.2 and 8.3;
(x) certificate(s) representing all outstanding shares of
Subsidiary, and.
(xi) written confirmation, in form and substance reasonably
satisfactory to SEi, from Nutek that the Grants will not be adversely
affected by the purchase and sale of the Shares.
Section 8.2. Representations and Warranties True. The
representations and warranties of Sellers contained in this Agreement, as
modified by the Disclosure Schedule, shall have been true on the date
hereof, and shall be true on the Closing Date with the same effect as
though such representations were made as of such date and Sellers shall
have delivered to SEi on the Closing Date a certificate, dated the Closing
Date, to such effect.
Section 8.3. Performance. Sellers shall have, in all material
respects, performed and complied with all covenants required by this
Agreement to be performed or complied with by them prior to or at the
Closing and Sellers shall have delivered to SEi on the Closing Date a
certificate, dated the Closing Date, to such effect.
Section 8.4. Legal Opinion. Counsel for Sellers shall have
delivered to SEi its opinion dated the Closing Date and substantially in
the form of Exhibit F attached hereto.
Section 8.5. Governmental Consents and Approvals. All
necessary and appropriate governmental consents, approvals and filings
shall have been obtained or made and all applicable waiting periods
(including any extensions thereof) relating thereto shall have expired or
otherwise terminated.
Section 8.6. No Injunction or Proceeding. No governmental or
regulatory authority, agency or commission, including courts of competent
jurisdiction, domestic or foreign, shall have issued an order, decree, or
ruling or taken other action, restraining, enjoining or otherwise
prohibiting the transactions contemplated hereby, which order, decree,
ruling or other action remains in effect.
ARTICLE IX
CONDITIONS TO SELLERS' OBLIGATIONS
Each and every obligation of Sellers to consummate the transactions
described in this Agreement shall be subject to the fulfillment, on or
before the Closing Date, of the following conditions precedent:
Section 9.1. Delivery of Purchase Price Shares. SEi shall
have delivered or caused to be delivered the certificates representing the
Purchase Price Shares in accordance with Article III hereof.
Section 9.2. SEi's Closing Deliveries. SEi shall deliver, or
cause to be delivered, to Sellers at the Closing, unless specifically
waived by Sellers in their sole discretion, each of the following:
(i) valid and binding consents of all Persons, if any,
whose consent or approval is required to be set forth in Section 5.4 of
the Disclosure Schedule;
(ii) the Registration Rights Agreement referenced in
Section 6.8(a), executed by SEi;
(iii) the Employment Agreements referenced in Section
6.8(b) and 6.8(c), executed by an SEi officer on behalf of Datasvar;
(iv) a certified copy of the resolutions of the Board of
Directors of SEi authorizing the execution, delivery and performance of
this Agreement and the Related Agreements and the issuance and delivery of
the Purchase Price Shares;
(v) the certificates referenced in Sections 9.3 and 9.4
hereof.; and
(vi) provided that Datasvar's auditor so approves, release
of each resigning director of the Board of Datasvar from liability for the
period up to the next general shareholders' meeting.
Section 9.3. Representations and Warranties True. The
representations and warranties of SEi contained in this Agreement, as
modified by the Disclosure Schedule, shall have been true on the date
hereof in all material respects and shall be true on the Closing Date in
all material respects, with the same effect as though such representations
were made as of such date, and SEi shall have delivered to Sellers on the
Closing Date a certificate, dated as of the Closing Date, to such effect.
Section 9.4. Performance. SEi shall have, in all material
respects, performed and complied with all covenants required by this
Agreement to be performed or complied with by it prior to or at the
Closing and SEi shall have delivered to Sellers on the Closing Date a
certificate, dated as of the Closing Date, to such effect.
Section 9.5. Legal Opinion. Counsel for SEi shall have
delivered to Sellers its opinion dated the Closing Date in substantially
the form of Exhibit G attached hereto.
Section 9.6. Governmental Consents and Approvals. All
necessary and appropriate governmental consents, approvals and filings
shall have been obtained or made and all applicable waiting periods
(including any extensions thereof) relating thereto shall have expired or
otherwise terminated.
Section 9.7. No Injunction or Proceeding. No governmental or
regulatory authority, agency or commission, including courts of competent
jurisdiction, domestic or foreign, shall have issued an order, decree, or
ruling or taken other action, restraining, enjoining or otherwise
prohibiting the transactions contemplated hereby, which order, decree,
ruling or other action remains in effect.
ARTICLE X
INDEMNIFICATION
Section 10.1. Indemnification by Sellers.
(a) Sellers shall jointly and severally (except as to
breaches of the representations and warranties set forth in Sections 4.3
through 4.5, for which liability shall be several), reimburse, indemnify
and hold SEi and its officers, directors, shareholders, employees and
agents harmless from and against any and all demands, claims, actions,
suits, liabilities, damages, losses, judgments, costs and expenses
(including, without limitation, reasonable attorneys' fees) but excluding
any claims for punitive damages or consequential damages relating to,
resulting from or arising out of:
(i) any breach or inaccuracy of the representations or
warranties made hereunder by Sellers; or .
(ii) any breach or violation of any covenant or
agreement made hereunder by Sellers.
Section 10.2. Indemnification by SEi.
(a) SEi shall reimburse, indemnify and hold Sellers and
Institutional Seller's officers, directors, shareholders, employees and
agents harmless from and against any and all demands, claims, actions,
suits, liabilities, damages, losses, judgments, costs and expenses
(including, without limitation, reasonable attorneys' fees) but excluding
any claims for punitive damages or consequential damages relating to,
resulting from or arising out of:
(i) any breach or inaccuracy of the representations or
warranties made hereunder by SEi; or .
(ii) any breach or violation of any covenant or
agreement made hereunder by SEi.
Section 10.3. Survival of Representations. The representations
and warranties set forth in Section 4.7, 4.8, 4.11, 4.14, 4.22, 4.24 and
4.26 shall survive until and through the first anniversary of the Closing
Date, at which time such representations and warranties shall expire. All
other representations and warranties made pursuant to this Agreement
including, without limitation, all representations and warranties made in
any exhibit or schedule or certificate delivered thereunder shall survive
until and through the third anniversary of the Closing Date at which time
such representations and warranties shall expire.
Section 10.4. Indemnification Claims Procedures. All claims
for indemnification by any party seeking indemnification (the "Indemnified
Party") from another party (the "Indemnifying Party") under Sections 10.1
and 10.2 shall be asserted and resolved as follows:
(a) In the event that any claim or demand for which the
Indemnifying Party would be liable to any Indemnified Party hereunder is
asserted against or sought to be collected from any Indemnified Party by a
third party, the Indemnified Party shall promptly notify the Indemnifying
Party (and any pertinent insurance carrier) in reasonable detail of such
claim or demand and the amount or the estimated amount thereof to the
extent then feasible (which estimate shall not be conclusive of the final
amount of such claim and demand) (the "Claim Notice"). The Indemnifying
Party shall have thirty (30) days from the personal delivery or mailing of
the Claim Notice (the "Notice Period") to notify the Indemnified Party
whether or not the Indemnifying Party desires to defend the Indemnified
Parties against such claim or demand. All costs and expenses incurred by
the Indemnifying Party in defending such claim or demand shall be a
liability of, and shall be paid by, the Indemnifying Party. In the event
that the Indemnifying Party notifies Indemnified Party within the Notice
Period that it desires to defend the Indemnified Parties against such
claim or demand and except as hereinafter provided, the Indemnifying Party
shall have the right to defend the Indemnified Parties by counsel of the
Indemnifying Party's own choosing, either in the Indemnifying Party's
name, or in one or more of the Indemnified Parties' names by appropriate
proceedings. If any Indemnified Party desires to participate in, but not
control, any such defense or settlement it may do so at its sole cost and
expense and, in any event, each of the Indemnified Parties shall cooperate
with the Indemnifying Party and such counsel. To the extent the
Indemnifying Party shall control or participate in the defense or
settlement of any third party claim or demand, the Indemnified Party shall
give to the Indemnifying Party and its counsel access to, during normal
business hours, the relevant business records and other documents, and
shall permit them to consult with the employees and counsel of the
Indemnified Party, to the extent consistent with the application of
relevant evidentiary privileges. The Indemnifying Party shall keep the
Indemnified Parties reasonably apprised of the course of any negotiations
or proceedings and the Indemnifying Party shall not settle any claim or
demand without the consent of the affected Indemnified Parties, which
consent shall not be unreasonably withheld or unduly delayed. As soon as
reasonably practicable after the Indemnifying Party has reached a final
decision as to whether or not all or any portion of the obligations
related to such claim or demand are obligations for which the Indemnifying
Party is required to indemnify such Indemnified Parties hereunder and, in
any event, prior to entering into any such settlement or other final
resolution of any claim or demand, the Indemnifying Party shall notify the
Indemnified Parties in writing of its position as to whether or not all or
any portion of the obligations related to such claim or demand are
obligations for which the Indemnifying Party is required to indemnify such
Indemnified Parties in accordance with this Article X.
(b) If the Indemnifying Party elects or is deemed to have
elected not to take over the defense of any such claim or demand, the
Indemnified Parties shall have the right to defend, compromise and settle
such claim or demand on such terms as the Indemnified Parties in their
discretion may determine, subject to the prior consent of the Indemnifying
Party, which consent shall not be unreasonably withheld or unduly delayed,
and the Indemnifying Party shall continue to be bound to indemnify the
Indemnified Party in accordance with and to the extent provided under the
terms of this Article X. The Indemnified Party shall or shall direct in
writing its counsel to deliver to the Indemnifying Party copies of all
correspondence and other matters relating to such claim or demand.
Notwithstanding the foregoing, to the extent that the claim or demand
involves or could result in claims against, or potential liability of, the
Indemnifying Party the extent or nature of which were not known by the
Indemnifying Party as of the date the Indemnifying Party elects or is
deemed to have elected not to take over the defense of such claim or
demand, the Indemnifying Party shall, by written notice to the Indemnified
Parties, be entitled to take over the defense of such claim or demand.
(c) In the event an Indemnified Party should have a claim
against the Indemnifying Party hereunder which does not involve a claim or
demand being asserted against or sought to be collected from it by a third
party, the Indemnified Party shall promptly send a Claim Notice with
respect to such claim to the Indemnifying Party.
(d) the Indemnified Party's failure to give reasonably
prompt notice to the Indemnifying Party of any actual, threatened or
possible claim or demand which may give rise to a right of indemnification
hereunder shall not relieve the Indemnifying Party of any liability which
it may have to an Indemnified Party except to the extent the failure to
give such notice prejudiced the Indemnifying Party.
Section 10.5. Right of Set-Off. In addition to any other
remedy available in equity or at law, the Indemnified Party shall be
entitled to set off the amount of any obligation for which it is entitled
to be indemnified under this Article X against any amounts payable to the
Indemnifying Party hereunder or under any other agreement contemplated
hereby.
Section 10.6. Limitations on Liability.
(a) The maximum aggregate liability of SEi on the one
hand, and Sellers on the other hand, shall not exceed SEK 44,000,000;
provided that the maximum aggregate liability of Institutional Seller
shall not exceed SEK 14,670,000.
(b) For purposes of computing liability of Sellers under
this Agreement, any losses arising in Datasvar or affecting the value of
Datasvar will be valued dollar for dollar without consideration of the
purchase price paid for the Shares hereunder.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Dispute Resolution; Jurisdiction. Any dispute,
controversy or claim arising out of or relating to this Agreement,
including any question regarding its existence, validity or termination,
shall be referred to and finally resolved by arbitration in accordance
with the Arbitration Rules of the Stockholm Chamber of Commerce as in
force and effect on the date of this Agreement which are deemed to be
incorporated by reference into this clause. There shall be one arbitrator,
and the appointing authority for the purposes of the Rules of the
Stockholm Chamber of Commerce The arbitrator shall be a person authorized
to practice law in the United States or in England.Where the Rules do not
provide for a particular situation the arbitrator shall determine what
cause or action should be followed. The place of arbitration shall be
Stockholm, Sweden and the English language shall be used throughout the
arbitration proceedings. The jurisdiction of the United States or Swedish
courts to rule on any questions of law affecting the arbitration, or to
hear any appeal from or entertain any judicial review of the arbitration
award, is hereby excluded. The parties agree to waive their right to
appeal to the United States or Swedish courts.
Section 11.2. Entire Understanding, Waiver, Etc. This
Agreement sets forth the entire understanding of the parties and
supersedes any and all prior or contemporaneous agreements, arrangements
and understandings relating to the subject matter hereof, and the
provisions hereof may not be changed, modified, waived or altered except
by an agreement in writing signed by the party entitled to the benefit of
the provision(s) to be waived hereto. A waiver by any party of any of the
terms or conditions of this Agreement, or of any breach thereof, shall not
be deemed a waiver of such term or condition for the future, or of any
other term or condition hereof, or of any subsequent breach thereof.
Section 11.3. Severability. If any provision of this Agreement
or the application of such provision shall be held by a court of competent
jurisdiction to be unenforceable, the remaining provisions of this
Agreement shall remain in full force and effect.
Section 11.4. Captions. The captions herein are for
convenience only and shall not be considered a part of this Agreement for
any purpose, including, without limitation, the constructions or
interpretation of any provision hereof.
Section 11.5. Notices. All notices, requests, demands and
other communications (collectively, "Notices") that are required or may be
given under this Agreement shall be in writing. All Notices shall be
deemed to have been duly given or made: if by hand, immediately upon
delivery; if by telecopier or similar device, immediately upon sending,
provided notice is sent on a Business Day during the hours of 9:00 a.m.
and 6:00 p.m. at the location of the party receiving the Notice, but if
not, then immediately upon the beginning of the first Business Day after
being sent; if by FedEx, Express Mail or any other reputable overnight
delivery service, two Business Days after being placed in the exclusive
custody and control of said courier; and if mailed by certified mail,
return receipt requested, five Business Days after mailing.
Notwithstanding the foregoing, with respect to any Notice given or made by
telecopier or similar device, such Notice shall not be effective unless
and until (i) the telecopier or similar advice being used prints a written
confirmation of the successful completion of such communication by the
party sending the Notice, and (ii) a copy of such Notice is deposited in
first class mail to the appropriate address for the party to whom the
Notice is sent. In addition, notwithstanding the foregoing, a notice of a
change of address by a party hereto shall not be effective until received
by the party to whom such notice of a change of address is sent. All
notices are to be given or made to the parties at the following addresses
(or to such other address as either party may designate by notice in
accordance with the provisions of this Section):
(a) If to Sellers:
Norhold Invest AB
Kopmangatan 10,
852 31 Sundsvall, Sweden
Fax Number: 46 60 15 03 40
Johan Holm
Vintervagen 30
182 74 Stocksund, Sweden
Fax Number: 46 8 622 64 74
Arne Weinz
Strakvagen 7D
191 43 Sollentuna, Sweden
Fax Number: 46 8 358 211
(b) If to SEi:
Sykes Enterprises, Incorporated
100 North Tampa Street
Suite 3900
Tampa, Florida 33602
Attention: Chief Financial Officer
Fax Number:_(813) 273 0148
Section 11.6. Successors and Assigns. Neither this Agreement
nor any of the rights or obligations arising hereunder shall be assignable
without the prior written consent of the parties hereto; provided,
however, that notwithstanding the foregoing SEi may assign its rights and
obligations under this Agreement to any wholly owned subsidiary of SEi
which agrees in writing to be bound by and to perform fully all of SEi's
obligations hereunder and, provided that in the event of any such
assignment by SEi, SEi shall remain liable hereunder for the performance
of SEi's obligations hereunder notwithstanding such assignment.
Section 11.7. Parties in Interest. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns. Nothing in this
Agreement, express or implied, shall confer upon any Person, other than
the parties hereto, and their successors and permitted assigns, any rights
or remedies under or by reason of this Agreement.
Section 11.8. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but
all of which, together, shall constitute one and the same instrument.
Section 11.9. Construction of Terms. Any reference herein to
the masculine or neuter shall include the masculine, the feminine and the
neuter, and any reference herein to the singular or plural shall include
the opposite thereof. The parties to this Agreement acknowledge that each
party and counsel to each party has participated in the drafting of this
Agreement and agree that this Agreement shall not be interpreted against
one party or the other based upon who drafted it.
Section 11.10. Governing Law. This Agreement shall be
controlled, construed and enforced in accordance with the laws of Florida
applicable to agreements made and to be performed in that jurisdiction.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the day and year first above written.
SELLERS:
JOHAN HOLM
/s/ Johan Holm
ARNE WEINZ
/s/ Arne Weinz
NORHOLD INVEST AB
By: Mikael Ericsson
Its: President
SEI:
SYKES ENTERPRISES, INCORPORATED
By: John Crites
Its: Vice President
DISCLOSURE SCHEDULE
Section 4.1. Corporate Organization
Section 4.2. Capitalization of Datasvar
Section 4.5. Sellers' Consents and Approvals; No Violations
Section 4.6. Datasvar's Consents and Approvals; No Violations
Section 4.7. Financial Statements
Section 4.8. Undisclosed Liabilities
Section 4.9. Taxes
Section 4.10. Title to Properties
Section 4.11. Absence of Changes
Section 4.12. Patents, Trademarks, Trade Names
Section 4.13. Leases
Section 4.14(a). Bank Accounts
Section 4.14 (b). Investments
Section 4.15. Material Contracts and Customers
Section 4.16. Related Transactions
Section 4.17. Insurance
Section 4.18(a). Labor Disputes
Section 4.18(b). Employees
Section 4.19. Employee Benefit Plans
Section 4.20. Litigation
Section 4.21. Compliance with Laws
Section 4.24. Adequacy of Assets
Section 4.25. Governmental Grants
Section 4.26. Accounts Receivable
Section 5.4. SEi's Consents and Approvals; No Violations
Section 5.5. Litigation
Section 6.10. Agreements for Share Transfers, etc.
Section 8.1(viii). Resignations of Officers and Directors of Datasvar
SYKES
ENTERPRISES NEWS RELEASE
INCORPORATED
SYKES ENTERPRISES, INCORPORATED TO ACQUIRE DATASVAR SUPPORT AB
Swedish Acquisition to Boost
Sykes Global Expansion
TAMPA, FL -- (JULY 2, 1996) Sykes Enterprises, Incorporated (SEi -
Nasdaq:SYKE), a diverse information technology company providing a variety
of computer-related outsourcing services, announced today that it has
entered into an agreement to purchase Datasvar Support AB of Stockholm,
Sweden, in exchange for approximately 165,000 shares of SEi common stock.
SEi intends to account for the acquisition as a pooling of interest.
"The Datasvar acquisition further enhances SEi's position as a leader
in international technical support," said John H. Sykes, SEi's President
and CEO. "Datasvar's reputation as a market leader and their innovative
use of advanced technology make the company a perfect match for SEi."
"We're excited to become a part of Sykes Enterprises," said Datasvar
chairman Johan Holm. "We will gain substantial additional resources to
serve our existing customers, and look forward to making a significant
contribution to SEi's provision of technical support to the international
business community." Holm and Arne Weinz, Datasvar's president, will
continue in their respective positions to manage a smooth transition.
Datasvar had 1995 revenues of 5.489 million and after-tax earnings of
$996,000 (adjusted to U.S. Gaap). With 90 employees, Datasvar operates
state-of-the art Customer Support Centers in Sveg and Jarvso, Sweden,
providing technical support throughout Sweden, Norway, Denmark and
Finland. The rapid growth in personal computer use in Scandinavia, and
the accompanying need for support, has made Datasvar one of the fastest
growing support firms in the region.
The company won a 1995 award of distinction from Datavarlden,
Sweden's leading information technologies magazine, because of its rapid
growth and innovative approach to information technology.
SEi already has a European presence. Its Customer Support Center in
Amsterdam provides support in 12 languages to 20 European countries. SEi
has five Customer Support Centers in the United States, with two
additional ones scheduled to open this year.
SEi, a diverse information technology company, with more than 2,400
employees, provides a variety of computer-related outsourcing services to
Fortune 500 companies. SEi's business includes third party hardware and
software technical support, help desk services, systems consulting,
documentation development and foreign language localization.
Visit SEi's Web Site: www.sykes.com
FOR MORE INFORMATION:
Marcia Quinn 813 - 274 - 1000
100 N. Tampa Street, Suite 3900
Tampa, FL, U.S.A. 33602-5089
813-274-1000
FAX 813-273-0148
REGISTRATION RIGHTS AND STOCKHOLDERS AGREEMENT
THIS REGISTRATION RIGHTS AND STOCKHOLDERS AGREEMENT (this
"Agreement") dated as of July 16, 1996, is entered into by and among SYKES
ENTERPRISES, INCORPORATED, a Florida corporation (the "Company"), JOHAN
HOLM, an individual residing in Sweden ("Holm"), ARNE WEINZ, an individual
residing in Sweden ("Weinz"), (and together with Holm, the "Individual
Stockholders") and NORHOLD INVEST AB, a corporation organized under the
laws of Sweden ("Norhold", and together with the Individual Stockholders,
the "Stockholders").
WHEREAS, this Agreement is made in connection with the sale by the
Stockholders to the Company of all the outstanding shares (the "Shares")
of the capital stock, nominal value SEK 100 per share, of Datasvar Support
AB, a corporation organized under the laws of Sweden ("Datasvar"),
pursuant to the Stock Purchase Agreement dated July 1, 1996 among the
Company and the Stockholders (the "Purchase Agreement").
WHEREAS, in order to induce the Stockholders to enter into the
Purchase Agreement, the Company has agreed to provide the Stockholders the
registration rights set forth in this Agreement.
WHEREAS, in order to induce the Company to enter into the Purchase
Agreement, the Stockholders have agreed to certain restrictions on the
transfer of the securities received by them pursuant to the Purchase
Agreement as set forth in this Agreement.
WHEREAS, the execution and delivery of this Agreement is a condition
to the sale of the Shares to the Company.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein contained, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties
hereto agree as follows:
1. Definitions.
Common Stock: The common stock, par value $.01 per share, of the
Company.
Holder: A Stockholder so long as such Stockholder owns any
Registrable Securities and any of such Stockholder's respective successors
and assigns who acquire rights in accordance with this Agreement with
respect to Registrable Securities directly or indirectly from such
Stockholder, or from such other successor and assign, and who agree in
writing, in form and substance satisfactory to the Company, to be bound
hereby.
Percentage Interest: A percentage equal to a fraction, the numerator
of which is the number of shares of Subject Common Stock at any given time
held by the Stockholders as a group or by the Individual Stockholder, as
applicable, and the denominator of which is the aggregate number of shares
of Subject Common Stock held at such time or previously held by the
Stockholders as a group or the Individual Stockholder, as applicable. For
purposes of determining Percentage Interest, there shall be excluded any
Subject Common Stock held by an Individual Stockholder not subject to the
restrictions in Section 3(a)(ii) by reason of termination of his
employment.
Registration Expenses: Any and all reasonable expenses actually
incurred incident to performance of or compliance with this Agreement
other than underwriting discounts and commissions and transfer taxes, if
any, but including up to $5,000 in the aggregate of the legal expenses of
the Holders, incurred with respect to the Registrable Securities.
Registrable Securities: All or part of the Subject Common Stock;
provided, however, that specific shares of the Subject Common Stock shall
not be Registrable Securities if and to the extent that (i) a Registration
Statement with respect to such Subject Common Stock shall have been
declared effective under the Securities Act and such shares of Subject
Common Stock shall have been disposed of in accordance with such
Registration Statement, (ii) such shares of Subject Common Stock shall
have been distributed to the public in accordance with Rule 144 (or any
successor provision) promulgated under the Securities Act, or (iii) such
shares of Subject Common Stock shall have been otherwise transferred in
accordance with the provisions of this Agreement and the Purchase
Agreement, and new certificates for them not bearing a legend restricting
further transfer shall have been delivered by the Company.
Registration Statement: Any registration statement of the Company
filed with the SEC which provides for the registration for sale or other
transfer of the Registrable Securities (in whole or in part), including
the prospectus included therein, all amendments and any supplements to
such Registration Statement, including post-effective amendments, all
exhibits and all material incorporated by reference in such Registration
Statement.
SEC: The United States Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended from time to
time, or any successor statute, and the rules and regulations of the SEC
thereunder, all as in effect at the time.
Subject Common Stock: The shares of Common Stock issued to the
Stockholders pursuant to the Purchase Agreement and any additional shares
issued in respect of such shares, by way of stock splits, stock dividends,
or otherwise.
2. Registration under the Securities Act
(a) Registration on Demand.
(i) Request for Registration. At any time during the period
beginning August 30, 1996 and ending on the second anniversary of the date
of issuance of the Subject Common Stock (the "Date of Issuance") and
subject to Sections 2(c) , 2(d) and 3, the Holder or Holders of a majority
of the Registrable Securities then outstanding may request by written
notice to the Company that the Company effect the registration under the
Securities Act of Registrable Securities (a "Demand Registration");
provided, however that the Company shall not be required to effect a
Demand Registration under this Section 2(a):
(A) after the Company has delivered notice of a Piggyback
Registration pursuant to Section 2(b) and for so long as such Piggyback
Registration is pending; provided, that such notice is delivered prior to
receipt by the Company of the notice requesting a Demand Registration;
(B) for Registrable Securities owned by any Holder that
did not, by delivering of the requisite notice, exercise its right to
register such Registrable Securities in a Piggyback Registration when so
offered by the Company under Section 2(b), unless the Demand Registration
is requested at a time when the Company is eligible to register its Common
Stock with the SEC on Form S-3 or any similar form promulgated by the SEC;
or
(C) if the Demand Registration covers Registrable
Securities with an aggregate market value of less than $ 250,000 or which
represent less than a majority of the Registrable Securities then
outstanding and eligible for Transfer under Section 3.
The notice requesting a Demand Registration shall specify the method of
distribution of the Registrable Securities to be covered. Upon receipt of
such notice, the Company will promptly give written notice of such
requested registration ( a "Section 2(a) Notice") to any and all other
Holders who hold of record any Registrable Securities and thereupon will
file a Registration Statement in form and scope sufficient to permit under
the Securities Act, and any other applicable law and regulations, the
Registrable Securities to be registered in accordance with the methods of
distribution specified in such requests (the "Demand Registration
Statement"). The Company shall use its best efforts to have the Demand
Registration Statement declared effective as promptly as practicable (but
in no event later than 90 days after such request) and to keep the Demand
Registration Statement continuously effective for a period of at least one
(1) year following the date on which the Demand Registration Statement is
declared effective or, if shorter, until such time as all the Registrable
Securities covered by the Demand Registration Statement have been sold
pursuant thereto. Notwithstanding the provisions of the preceding
sentence, if a request for Demand Registration pursuant to this Section
2(a) is received by the Company on or after August 30, 1996 and on or
before September 5, 1996, the Company will file a Demand Registration
Statement with the SEC on or before October 1, 1996. The Company will use
its reasonable best efforts to have such Demand Registration Statement
declared effective on or before November 15, 1996, or, if the filing date
is postponed pursuant to this Section, within 45 days after filing. If a
request for Demand Registration is received promptly following the
Company's decision not to complete a Piggyback Registration pursuant to
Section 2(b), then the Company will use its reasonable best efforts to
have the Demand Registration Statement with respect to such request
declared effective within 45 days after filing. The Demand Registration
Statement shall provide for the registration under the Securities Act of:
(A) the Registrable Securities which the Company has been
so requested to register by such Holder or Holders, and
(B) all other Registrable Securities which the Company has
been requested to register by any other Holders of Registrable Securities
by written request (specifying the intended method of distribution
thereof) given to the Company within 15 days after the giving of the
Section 2(a) Notice.
The Company may postpone filing a Demand Registration Statement under this
Section 2(a) for a reasonable period (not in excess of 60 days) if in its
reasonable judgment such filing would require the disclosure of material
information that the Company has a bona fide business purpose for
preserving as confidential. The Company shall be obligated to effect a
Demand Registration pursuant to this Section 2(a) only once and shall not
be obligated to effect any such Demand Registration for Registrable
Securities to the extent that such Registrable Securities are not eligible
for Transfer pursuant to Section 3.
(ii) Registration Statement Form. Registrations under this
Section 2(a) shall be on such appropriate registration forms of the SEC as
shall be selected by the Company, be reasonably acceptable to the Holder
or Holders who are the registered holders of at least a majority of the
Registrable Securities to be registered pursuant to this Section 2(a) and
permit the disposition of Registrable Securities in accordance with the
intended method or methods of disposition specified in the requests for
registration relating thereto.
(iii) Expenses. The Company shall pay all Registration
Expenses in connection with the registration pursuant to this Section 2(a)
and the Holder or Holders requesting registration pursuant to this Section
2(a) shall pay all underwriting discounts and commissions, any transfer
taxes and any expenses of counsel for any Holder or Holders not expressly
included in Registration Expenses relating to the sale or disposition of
such Holder's Registrable Securities pursuant to such Registration
Statement.
(iv) Effective Registration Statement. A registration requested
pursuant to Section 2(a) hereof will not be deemed to have been effected
unless it has been declared effective by the SEC and not less than eighty-
five percent (85%) of the Registrable Securities covered thereby are sold
in accordance with the terms and conditions set forth therein; provided,
however, that if, after it has been declared effective, the offering of
Registrable Securities pursuant to such registration is interfered with by
a stop order, injunction or other order or requirement of the SEC or any
other governmental agency or court, such registration will be deemed not
to have become effective or to have been effected.
(v) Selection of Underwriter. If any of the Registrable
Securities covered by the Demand Registration are to be sold in an
underwritten offering, the Company shall select the underwriter or
underwriters, subject to the reasonable approval of the Holders of a
majority of the shares subject to the demand. The Company and the Holders
will take all reasonable steps to cooperate with the underwriter or
underwriters so selected to conduct the offering in a manner customary for
such underwritten offering, including without limitation entering into an
underwriting agreement with such underwriters.
(b) Piggyback Registrations.
(i) Right to Piggyback. Subject to Sections 2(c), 2(d) and 3
hereof, if at any time the Company proposes to file a Registration
Statement under the Securities Act with respect to any offering of the
Common Stock by the Company for its own account and/or on behalf of any of
its security holders (other than (i) a registration on Form S-8 or S-4 or
any successor form, (ii) a registration relating to a transaction subject
to Rule 145 under the Securities Act, or (iii) any registration of
securities as it relates to an offering and sale to management of the
Company pursuant to any employee stock plan or other employee benefit plan
arrangement) then, as soon as practicable (but in no event less than
twenty (20) days prior to the proposed date of filing such Registration
Statement), the Company shall give written notice of such proposed filing
to the Holders, and such notice shall offer the Holders the opportunity to
register such number of Registrable Securities as the Holders may request
(a "Piggyback Registration"). Subject to subsection 2(d), the Company
shall include in such Registration Statement all Registrable Securities
requested within fifteen (15) days after the receipt of any such notice
(which request shall specify the Registrable Securities intended to be
disposed of by the Holders to be included in the registration for such
offering pursuant to a Piggyback Registration), provided, however, that
if, at any time after giving written notice of its intention to register
Common Stock and prior to the effective date of the Registration Statement
filed in connection with such registration, the Company shall determine
for any reason not to register or to delay registration of such Common
Stock, the Company may, at its election, give written notice of such
determination to the Holder of Registrable Securities and, thereupon, (i)
in the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses
in connection therewith), and (ii) in the case of a determination to delay
registering, shall be permitted to delay registering any Registrable
Securities, for the same period as the delay in registering such Common
Stock.
(ii) Piggyback Expenses. The Registration Expenses of the
Holders of Registrable Securities will be paid by the Company in a
Piggyback Registration. Underwriting discounts and commissions and
transfer taxes, if any, incurred with respect to the Registrable
Securities shall be borne by the Stockholders.
(c) Underwriter's Cutback. Notwithstanding Sections 2(a) and 2(b),
if a Demand Registration or a Piggyback Registration is an underwritten
offering being made on behalf of the Company, and the managing underwriter
or underwriters advise the Company in writing that in their opinion the
number of shares of Common Stock requested to be included in such
registration exceeds the number which can be sold in such offering or
would be reasonably likely to adversely affect the price or distribution
of the Common Stock offered in such offering or the timing thereof, then
the shares of Common Stock to be included in such registration shall be
the number of shares of Common Stock, adjusted on a pro rata basis, that,
in the opinion of such underwriter or underwriters, can be sold without an
adverse effect on the price, timing or distribution of the Common Stock to
be included.
(d) Registration Not Required. Notwithstanding Sections 2(a) and
2(b), in the event the Holder or Holders request that any of the
Registrable Securities covered by this Agreement be sold in an
underwritten offering or otherwise request registration pursuant to this
Agreement, the Company shall not be required to take the action required
or contemplated herein to accommodate or permit such underwritten offering
or other registration of the shares subject to the request if either the
Company or other Holders have received, and provided to the other parties
hereto, an opinion of counsel knowledgeable in Securities Act matters to
the effect that all of such Registrable Securities may immediately be sold
by such Holders under Rule 144 during any ninety (90) day period without
registration under the Securities Act and applicable state securities
laws.
(e) Non Pro-Rata Registration. Notwithstanding the provisions of
Sections 2(a) and 2(b), the Company shall not be required to honor any
request from a Stockholder that the Company register shares in excess of
the maximum number that would be available to such Stockholder if the
restrictions under Section 3(a) (ii) were applied on a pro rata basis
unless such request has been consented to by each other Stockholder whose
shares are subject to such restrictions.
3. Lock-Up Agreements.
(a) Restrictions on Transfer. No Stockholder shall, directly or
indirectly, sell, assign, pledge, encumber, hypothecate or otherwise
transfer (a "Transfer") any Subject Common Stock unless:
(i) such Transfer occurs after November 15, 1996 or pursuant to
a Demand Registration or a Piggyback Registration effected under Section 2
hereof; and
(ii) after giving effect to such Transfer the Stockholders will
own as a group, and the Individual Stockholders will each own, a
Percentage Interest in the Subject Common Stock which is not less than:
(A) during the period ending on the first anniversary of
the Issue Date, 16 2/3%; and
(B) during the period ending on the second anniversary of
the Issue Date, 10%.
(b) Terminated Individual Stockholders. The restrictions on
Transfer set forth in paragraph (ii) above shall not apply to Registrable
Securities owned by an Individual Stockholder whose employment
relationship with the Company has been terminated by reason of death,
permanent disability or by the Company other than for cause amounting to
willful misconduct. In the event of any such termination, the percentages
in paragraph (ii) above will be adjusted so that the minimum number of
shares required to be retained that was applicable immediately prior to
such termination will be the same for the group and the Individual
Stockholder who remain subject to the restrictions on Transfer in such
paragraph (ii).
4. Hold-Back Agreements.
(a) Restrictions on Public Sale by the Holders. In the event
Registrable Securities are covered by a Registration Statement filed
pursuant to Section 2 of this Agreement, the Holders agree not to effect
any public sale or distribution of Common Stock, including a sale pursuant
to Rule 144 under the Securities Act, during the 15-day period prior to,
and during the 90-day period beginning on, the effective date of such
Registration Statement (except pursuant to such Registration Statement),
if, and then only to the extent, so requested in writing by the Company,
in the case of a non-underwritten public offering, or by the managing
underwriter or underwriters, in the case of an underwritten offering.
(b) Restrictions on Public Sale by the Company. The Company agrees
not to effect any public sale or distribution of or purchase any Common
Stock (other than any such sale or distribution of such Common Stock in
connection with any transaction subject to Rule 145 under the Securities
Act or in connection with offers and sales to employees under employee
benefit plans) during the 15-day period prior to, and during the 90-day
period beginning on, the effective date of any Registration Statement
filed pursuant to Section 2 hereof.
5. Registration Procedures. In connection with the Company's
obligations under Section 2 hereof, the Company shall use it best efforts
to effect or cause to be effected the registration of the Registrable
Securities under the Securities Act to permit offers and sales in
accordance with the intended method or methods of distribution thereof.
The Company may require the Holders to use their best efforts to furnish
to the Company such information regarding the distribution of the
Registrable Securities as the Company may from time to time reasonably
request in writing.
6. Indemnification.
(a) The Company agrees to indemnify, to the extent permitted by law,
each Holder of Registrable Securities, its officers and directors and each
person or entity who controls such Holder (within the meaning of the
Securities Act) against all losses, claims, damages, liabilities and
expenses caused by any untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, (in the case of a
prospectus, always in light of the circumstances under which the
statements are made) except insofar as the same are caused by or contained
in any information furnished in writing to the Company by such Holder or
its affiliate expressly for use therein or by such Holder's failure to
deliver a copy of the registration statement or prospectus or any
amendments or supplements thereto after the Company has furnished such
holder with a sufficient number of copies of the same. In connection with
an underwritten offering, the Company will indemnify such underwriters,
their officers and directors and each person or entity who controls such
underwriters (within the meaning of the Securities Act) to the same extent
as provided above with respect to the indemnification of the Holders of
Registrable Securities.
(b) In connection with any registration statement in which a Holder
of Registrable Securities is participating, each such Holder will furnish
to the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such registration
statement or prospectus and, to the extent permitted by law, will
indemnify the Company, its directors and officers and each person or
entity and entity who controls the Company (within the meaning of the
Securities Act) against any losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement of material
fact contained in the registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, (in the case of a
prospectus, always in light of the circumstances under which the
statements are made) but only to the extent that such untrue statement or
omission is contained in any information or affidavit so furnished in
writing by such Holder or its affiliate; provided that the obligation to
indemnify will be several, not joint and several, among such Holders of
Registrable Securities and the liability of each such Holder of
Registrable Securities will be in proportion to and limited to the net
amount received by such Holder from the sale of Registrable Securities
pursuant to such registration statement.
(c) Any person or entity entitled to indemnification hereunder will
(i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification; provided, however, that failure
to give such notice will not prejudice such person's or entity's right to
indemnification from the indemnifying party, except as to any losses
suffered by such person or entity which are attributable to such person's
or entity's failure to promptly give such notice to such indemnifying
party and (ii) unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may
exist with respect to such claim, permit such indemnifying party to assume
the defense of such claim with counsel reasonably satisfactory to the
indemnified party. The indemnifying party will not be subject to any
liability for any settlement made by the indemnified party without its
consent (but such consent will not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the
defense of a claim will not be obligated to pay the fees and expenses of
more than one counsel for all parties indemnified by such indemnifying
party with respect to such claim, unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect
to such claim.
(d) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director or controlling
person or entity of such indemnified party and will survive the transfer
of securities and the termination of this Agreement. The Company also
agrees to make such provisions as are reasonably requested by any
indemnified party for contribution to such party in the event the
Company's indemnification is unavailable or unenforceable for any reason.
7. Stock Certificate Legends.
Each of the Holders hereby agrees that each outstanding certificate
representing Registrable Securities shall bear an endorsement reading
substantially as follows until the transfer restrictions with respect to
such Registrable Securities contained in Section 3 of this Agreement are
no longer effective, at which time the Company will use its reasonable
best efforts to cause the Transfer Agent, upon request of a Holder, to
issue new certificates to the Holders without any such endorsement.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
TRANSFER RESTRICTIONS SET FORTH IN A REGISTRATION RIGHTS AND STOCKHOLDERS
AGREEMENT DATED AS OF JULY 16, 1996, A COPY OF WHICH MAY BE OBTAINED FROM
THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICE AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
WITHOUT COMPLYING WITH THE TERMS AND CONDITIONS OF SUCH AGREEMENT.
8. Regulation S Offering. The Stockholders agree that none of the
Registrable Securities will be offered for sale pursuant to Regulation S
(as promulgated by the SEC) without the prior written consent of the
Company.
9. Miscellaneous.
(a) No Inconsistent Agreements. The Company has not entered into
and will not on or after the date of this Agreement enter into any
agreement with respect to the Common Stock which is inconsistent with the
rights granted in this Agreement to the Stockholders or otherwise
conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the Company has obtained the written
consent to such amendment, modification, or supplement or waiver or
consents to the departure of the Holders.
(c) Notices. All notices and other communications provided for or
permitted under this Agreement shall be in writing and given by personal
delivery, or, if mailed, by certified first-class mail, postage prepaid,
or by telex or telecopier with transmission confirmed by telephone:
(i) if to the Holders, at the address set forth in the Purchase
Agreement, or at the most current address given by the Holders to the
Company by means of a notice given in accordance with the provisions of
this Section 6(c).
(ii) if to the Company, at the address set forth in the Purchase
Agreement, or at the most current address given by the Company to the
Stockholders by means of a notice given in accordance with the provisions
of this Section 6(c).
(d) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(e) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(f) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Florida.
(g) Dispute Resolution; Jurisdiction. Any dispute, controversy or
claim arising out of or relating to this Agreement, including any question
regarding its existence, validity or termination, shall be referred to and
finally resolved by arbitration in accordance with the Arbitration Rules
of the Stockholm Chamber of Commerce as in force and effect on the date of
this Agreement (the "Rules"), which are deemed to be incorporated by
reference into this clause. There shall be one arbitrator and the
appointing authority for the purposes of the Rules shall be the Stockholm
Chamber of Commerce. The arbitrator shall be a person authorized to
practice law in the United States or in England. Where the Rules do not
provide for a particular situation the arbitrator shall determine what
course of action should be followed. The place of arbitration shall be
Stockholm, Sweden and the English language shall be used throughout the
arbitration proceedings. The jurisdiction of the United States or Swedish
courts to rule on any questions of law affecting the arbitration, or to
hear any appeal from or entertain any judicial review of the arbitration
award, is hereby excluded. The parties agree to waive their right to
appeal to the United States or Swedish courts.
(h) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect
and of the remaining provisions contained herein shall not be affected or
impaired thereby.
(i) Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure
to the benefit of the respective permitted successors and assigns of the
parties hereto whether so expressed or not. In addition, whether or not
any express assignment has been made, the provisions of this Agreement
which are for the benefit of purchasers or other permitted holders of
Registrable Securities are also for the benefit of, and enforceable by,
any subsequent permitted Holder of Registrable Securities. The
registration rights of the Holders under this Agreement may be transferred
to any transferee who lawfully acquires at least fifteen thousand (15,000)
shares of the Registrable Securities; provided, however, that the Company
is given written notice by the Holder at the time of such transfer stating
the name and address of the transferee and identifying the securities with
respect to which the rights under this Agreement are being assigned; and
provided further, that such transferee is a person who is reasonably
satisfactory to the Company and executes an agreement in writing agreeing
to be bound by the provisions of this Agreement.
Signatures begin on the following page
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
SYKES ENTERPRISES, INCORPORATED
By: /s/ John Crites
Name: John Crites
Title: Vice President
NORHOLD INVEST AB
By: /s/ Mikael Ericsson
Name: Mikael Ericsson
Title: President
/s/ Johan Holm
Johan Holm
/s/ Arne Weinz
Arne Weinz
