Exhibit 2.1
DATED FEBRUARY 4, 2005
BETWEEN
VASCO DATA SECURITY INTERNATIONAL, INC.
(as Purchaser)
AOS HOLDING B.V.
(as Seller)
FILIPAN BEHEER B.V.
(as Guarantor)
MR. MLADEN FILIPAN
(as Surety)
PIJNENBURG BEHEER N.V.
(as Guarantor)
---------------------------------
SHARE SALE AND PURCHASE AGREEMENT
---------------------------------
Baker & McKenzie Amsterdam N.V.
1017 PS Leidseplein
Amsterdam, The Netherlands
Tel: 20-5517555
Fax: 20-6267949
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THIS SHARE SALE AND PURCHASE AGREEMENT is made on this 4th day
of February 2005
(the "AGREEMENT")
Between:
(1) VASCO DATA
SECURITY INTERNATIONAL, INC., a Delaware corporation, United
States of America with
its principal
place of business at
1901 South
Meyers Road, Oakbrook Terrace, Illinois 60181, United States of
America
(the "PURCHASER");
(2) A.O.S.
HOLDING B.V., a
private limited liability company organized and
existing under the laws of The Netherlands with its registered office
in `s Hertogenbosch
and its principal place of business at De Tweeling
20A, (5215 MC) `s Hertogenbosch, The Netherlands (the
"SELLER");
(3) FILIPAN
BEHEER B.V., a private limited liability company organized
and
existing under the laws of the Netherlands with its registered office
at (5492 BK) Emmausstraat 11, Sint Oedenrode, The Netherlands
("FILIPAN
BEHEER");
(4) MR.
MLADEN FILIPAN, a private individual residing at (5492 BK)
Emmausstraat 11, Sint Oedenrode, The Netherlands, being the ultimate
beneficial owner of Art of Security B.V. ("FILIPAN"); and
(5) PIJNENBURG
BEHEER N.V., a private
limited liability
company organized
and existing
under the laws of The
Netherlands
with its registered
office at (5261 NE) Boxtelseweg 70, Vught, being the sole shareholder
of C.P.S. International B.V. ("PIJNENBURG BEHEER NV").
WHEREAS:
(A) The Seller
is the legal and beneficial owner of the entire issued share
capital of A.O.S.
Hagenuk B.V., a private limited liability company
organized and
existing under the laws of The Netherlands with its
registered office
at `s Hertogenbosch, The Netherlands and its
principal place
of business at (5215 MC) De Tweeling 20A, `s
Hertogenbosch, The Netherlands ("COMPANY").
(B) The
Company is in the
business of the
development and
marketing of
authentication,
verification and IT security software and applications
therefor, including smart card activities;
(C) The
Purchaser designs, develops, markets and supports patented
"Identity Authentication" products for e-business and
e-commerce;
(D) The Seller
and the Purchaser have agreed that the Seller shall sell and
transfer to the Purchaser and the Purchaser shall purchase and acquire
from Seller 100% of
the total issued
share capital of the Company,
consisting of 180 shares, nominal value EUR 100 per share,
numbered 1
to 180 (collectively:
"SHARES") for the Consideration and on the terms
and subject to the conditions contained in this Agreement;
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THEREFORE IT IS HEREBY AGREED AS
FOLLOWS:
ARTICLE 1 - DEFINITIONS AND INTERPRETATION
------------------------------------------
1.1
DEFINITIONS. In this
Agreement, unless the
context otherwise requires
the words and expressions used in this Agreement shall have the
meanings set out in SCHEDULE 1.
1.2 HEADINGS.
Headings are inserted for convenience only and shall not
affect the construction of this Agreement.
ARTICLE 2 - SALE AND PURCHASE OF THE SHARES
-------------------------------------------
2.1 SALE
AND PURCHASE. The Seller hereby, subject to the terms and
conditions of the
Agreement,
sells ("VERKOOPT") the Shares to the
Purchaser, and
the Purchaser hereby, subject to the terms and
conditions of this Agreement, purchases ("KOOPT") the Shares from the
Seller.
2.2 TRANSFERS.
At Closing,
the Seller agrees to
transfer ("LEVEREN")
to
Purchaser the
Shares and the Purchaser agrees to accept the transfer of
the Shares from the Seller.
ARTICLE 3 - CONSIDERATION AND ADJUSTMENT
----------------------------------------
3.1
CONSIDERATION.
The consideration
for the Shares payable by the
Purchaser to the Seller ("CONSIDERATION") shall consist of:
(i) the
payment of a cash amount of EUR 3,750,000 (Three million
seven hundred and fifty thousand Euros) adjusted to (a) add or
subtract the
amounts required to settle any outstanding
balances due from or due to Related Parties as of the Closing
Date and (b) add or subtract the amount by which the Company's
tangible net equity
(defined to be total
net equity less net
intangible assets) as
of January 31, 2005 as reflected in the
Financial
Statements as
defined in EXHIBIT 4 is less
respectively more than
EUR 85,000 (the net
result of all the
foregoing, the "CONSIDERATION CASH");
(ii)
the issuance to Seller
of shares of common
stock, par value
$.001 per share, of
the Purchaser
("CONSIDERATION
SHARES"),
calculated in accordance with Articles 3.3 and 3.4 below; and
(iii) a
variable amount
related to the gross
profits collected
on
sales of POS equipment
to VISA for the
Latin/South
America
markets for a
period of two years after Closing ("GROSS
PROFITS") ("EARN OUT CONSIDERATION"), calculated in accordance
with Article 5.
3.2 CLOSING
CONSIDERATION.
The consideration
payable at Closing ("CLOSING
CONSIDERATION"), which
shall consist of the Consideration Cash and the
Closing Consideration
Shares, shall at Closing be EUR 5,000,0000 (five
million Euros) adjusted as set forth in Article 3.1.(i), if
any.
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3.3 CLOSING
CONSIDERATION SHARES. The number of Consideration Shares issued
to Seller on the Closing Date ("CLOSING CONSIDERATION SHARES") will be
equal to EUR 1,250,000
divided by the Initial Value. The Initial Value
will be measured
five (5) business days prior to the Closing Date
("MEASUREMENT DATE")
and be equal
to the average closing price of
Purchaser common stock on the Nasdaq SmallCap Market during a
period of
thirty (30)
trading days prior to the Measurement Date, less five
percent (5%) (the "INITIAL VALUE"). The Closing Consideration Shares
will be held in escrow for the benefit of the Seller in accordance
with
the terms and conditions of the Escrow Agreement attached as
SCHEDULE 9
(the "ESCROW AGREEMENT").
3.4 ADJUSTMENT
OF CLOSING
CONSIDERATION
SHARES. Twelve months after the
Closing Date
and five days prior to the expiration of the Escrow
Agreement (the
"RE-MEASUREMENT
DATE")
the value of the Closing
Consideration Shares
will be re-measured as of the Re-measurement Date
by reference to the average closing price of the Purchaser common
stock
on the Nasdaq SmallCap
Market during a period of thirty (30)
trading
days prior to the
Re-measurement Date,
less five percent (5%) (the
"FINAL VALUE"). If:
(a) the Final
Value is 90% of the Initial Value or greater, then
there shall
be no adjustment of the amount of Closing
Consideration Shares;
(b) the
Final Value is 80% or greater but less than 90% of the
Initial Value then the amount of Consideration Shares shall be
increased to the number of Consideration Shares multiplied by
a fraction consisting
of the Initial Value divided by the
Final Value;
(c) the Final
Value is less than 80% of the Initial Value then the
amount of Consideration Shares shall be increased to the
number of Closing Shares multiplied by 1.25.
Twelve months
after the Closing
the Consideration Shares shall be
transferred to Seller
in accordance with the
terms and conditions
of
the Escrow Agreement, except for those Consideration Shares
retained by
the escrow agent as additional recourse for indemnity claims made
under
Article 7 below or those Consideration Shares released pursuant to
Article 3.7 below.
3.5
REGISTRATION RIGHTS.
The Purchaser will use
commercially best efforts
to register
the Consideration Shares for resale and have such
registration
declared
effective by
the Securities and Exchange
Commission of the
United States ("SEC")
within six (6) months
of the
Closing Date,
in accordance with the terms and conditions of the
Registration Rights
Agreement attached as SCHEDULE 8
("REGISTRATION
RIGHTS AGREEMENT").
3.6 SURVIVAL
OF ESCROW. If the registration for resale has not been
declared effective by the SEC prior to the release of the
Consideration
Shares from escrow, the adjustment obligation of the Purchaser
pursuant
to Article 3.4 will survive until the earliest date that those shares
can be transferred
by Seller as a result
of valid registration for
resale or qualification under other rules and regulations of the
SEC.
3.7 RELEASE OF
ESCROW SHARES. Six months after Closing the Seller will have
the right to pay an amount of EUR 1,250,000 into the escrow account
against release by the Purchaser of the
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Consideration Shares,
regardless of the
value of those shares at that
time and without
prejudice to the obligations of the Seller as set out
in the Registration
Rights Agreement. In
such an event the Seller and
the Purchaser shall
jointly issue written
instructions to the
escrow
agent appointed under the Escrow Agreement.
ARTICLE 4 - CLOSING
-------------------
4.1 PLACE OF
CLOSING AND CONDITIONS PRECEDENT. Closing shall take place at
the offices of Baker & McKenzie, Leidseplein 29, 1017 PS
Amsterdam, The
Netherlands within
five business days after all of the following
conditions precedent
(the "CONDITIONS PRECEDENT") have been either
fulfilled or waived by the Purchaser, or at such other place and
time
as shall be mutually agreed between the Parties:
(a) Completion
of a legal, financial, tax, actuarial,
environmental and commercial pre-acquisition review over the
business and
records of the
Company and the
results of such
review being
satisfactory
to the Purchaser in its sole and
absolute discretion;
(b) The Seller
Warranties
and the Additional
Seller Warranties
remaining in all material respects true and accurate and not
misleading at Closing
as if repeated
at Closing
and Seller
having complied
in all material respects with all of the
obligations herein
required to be
performed by it prior to
Closing and Seller having delivered to Purchaser at Closing
a
certificate, dated the Closing Date, to the foregoing effect;
(c) Receipt of
audited financial
statements in
accordance
with
U.S. Generally
Accepted Accounting
Principles for the
years
2004, 2003 and
2002 for the
Company, the results of such
audits to be consistent with the financial statements
previously provided to the Purchaser, except as a result of a
difference in accounting principles;
(d) Receipt of
the consent of the AOS's auditors for the Purchaser
to use their opinion on the audited financial statements noted
in 4.1(c) in any
filings to be made with the U.S. Securities
and Exchange Commission;
(e) The
delivery of un-audited balance sheet, income statement and
cash flow ("Interim Financial Statements") for the month ended
just prior to the Closing Date prepared on a basis consistent
with the audited
financial statements noted in 4.1(c). If
closing is on January 31, 2005, Seller will cooperate fully
with Purchaser in the
preparation of such
Interim Financial
Statements as
soon as practicable following closing and
reimburse Purchaser
promptly if the
tangible net equity is
less than 85,000 Euros.
(f) The
execution
of an employment agreement, including
non-compete
provisions, with Mr.
M. Filipan, and
letters of
intent confirming
the willingness to stay employed with
the
Company for each of
the individuals
referred to in Article
4.1.(a) and (b) below,
effective upon the
Closing Date, for
the following periods:
a. M.
Filipan, P. Romein and A. Derks for a
three-year
period, and
b. H.
Braams, B. Hennink, F.
Cornelis, H.
Bourguignon,
M. Selten and M. Langejans for a two-year period;
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(g) The
Company having
operated its business in the ordinary
course thereof,
consistent with past practices, from December
31, 2004 through the Closing Date;
(h) The
Purchaser having reviewed and accepted all
significant
commitments,
agreements or transactions executed prior to the
Closing Date,
including material
contracts with suppliers
and/or
customers,
future employees and contracts out of
the
ordinary course of business;
(i) Approval
by the board of
directors of the
Purchaser of this
Agreement and all transactions contemplated hereby.
4.2 WAIVER OF
CONDITIONS AND
TERMINATION.
The Purchaser and
seller shall
each have the right
(but not the
obligation) to waive
any or more of
the Conditions Precedent as it may deem fit. If by four weeks after
the
signing of this Agreement the Conditions Precedent have not been
either
fulfilled or waived
then each of the
Seller and the
Purchaser shall
have the right to terminate this Agreement forthwith, in which
event no
Party shall liable to any other Party for damages.
4.3 CONDUCT OF
BUSINESS PRIOR TO CLOSING. The Seller and the Purchaser
shall use their
reasonable best
efforts so as to cause the Conditions
Precedent to be fulfilled as soon as reasonably possible after the
date
of this Agreement.
Except as expressly contemplated by this Agreement,
the Seller will
between the date hereof and the Closing Date cause the
Company to conduct its
operations in the
ordinary and usual course of
business and consistent with past practice, and the Company shall, and
the Seller shall cause the Company to use its best efforts, to
preserve
intact its business organization, to keep available the services of
its
officers and employees and to maintain satisfactory relationships with
persons and entities having business dealings or business
relationships
with them. Without limiting the generality of the foregoing, and
except
as otherwise
expressly provided in or contemplated by
this Agreement,
between the date hereof and Closing Date the Company will not,
without
the prior written consent of the Purchaser (which consent shall not be
unreasonably withheld):
(j) amend its
articles of association;
(ii)
issue, sell,
or dispose of any
shares in its
capital, any
options, warrants or
rights of any kind to acquire any shares
in their capital or any securities which are convertible into
or exchangeable for any shares in its capital;
(iii)
split, combine
or reclassify any shares in its capital,
declare, set aside or
pay any dividend or other distribution
(whether in
cash, stock or property or any combination
thereof) in respect of any shares in its capital, or redeem or
otherwise acquire any shares in its capital;
(iv)
create, incur,
or guarantee long-term indebtedness for
borrowed money or short-term indebtedness for borrowed money
which in the aggregate exceeds EUR 25,000 or issue or sell any
debt
securities;
(v) adopt,
enter into or amend any bonus, profit sharing,
compensation, stock
option, warrant, pension, retirement,
deferred compensation,
employment, severance,
termination or
other employee benefit plan, agreement or arrangement for
the
benefit or welfare of any officer, director or employee or
except as reasonably called for pursuant to formulas contained
in existing
employee
benefit
plans or arrangements or
otherwise in the
ordinary course of
business and
consistent
with past practice
(none of which shall
be unreasonable
or
unusual), agree to any increase in the compensation
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payable or to become
payable to any officer, director or
employee;
(vi)
purchase or
otherwise acquire, by merger, consolidation,
acquisition of
securities
or assets or
otherwise,
(i) any
corporation,
partnership,
association or
other business
organization
or division thereof or (ii) any assets or
properties which would be material, in the aggregate, to the
Group taken as a whole;
(vii)
sell, lease,
or otherwise dispose of any of its assets or
properties which are
material to the
Company, other than
in
the ordinary course of business;
(viii) mortgage
or encumber any of its assets or properties which are
material to the Company taken as a whole;
(ix)
make any capital
expenditures
or commitments for capital
expenditures which, in the aggregate, exceed EUR 25,000;
(x) pay or
discharge any material claim or liability other than in
the ordinary
course of business or pursuant to binding
contractual obligations of the Company or set forth herein;
(xi)
enter into any
material contract
other than in the
ordinary
course of business
consistent with past practice or amend any
Material Contract (as such term is defined in SCHEDULE 4);
(xii) take
any action which would
cause any Warranty not to be true
and correct as of the
Closing Date; or
(xiii) agree,
whether
in writing or otherwise, to do any of the foregoing.
4.4 SELLER'S
CLOSING OBLIGATIONS. At Closing, the Seller shall:
(a) deliver or
cause to be delivered to the Purchaser:
(i) the
original shareholders registers of the Company;
(b)
execute:
(i) the
Notarial Transfer Deed;
(ii)
the Escrow Agreement;
(iii) the
Registration Rights Agreement.
(c) cause:
(i) the
Company to execute the Notarial Transfer Deed;
(ii)
Messrs. M. Filipan,
P. Romein, A. Derks,
H. Braams,
B. Hennink, F.
Cornelis, H.
Bourguignon, M.
Selten
and M. Langejans to execute the employment agreements
substantially in
form set forth as Schedule 10
hereto.
(d)
authorize
the civil law notary executing the Notarial Transfer
Deed to make the relevant entries in the shareholders
registers of the Companies.
4.5
PURCHASER'S CLOSING
OBLIGATIONS. At
Closing, and upon the delivery of
the items set out in Article 4.2 above, the Purchaser shall:
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(a) execute
the Notarial Transfer Deed;
(b) execute
the Escrow Agreement;
(c) execute
the Registration Rights Agreement.
(d) instruct
the civil law notary of Baker & McKenzie (who, prior
to Closing, shall have
received from the
Purchaser an amount
equal to the Consideration Cash into its trust account) to pay
the Consideration
Cash to a bank account
designated
by the
Seller in writing, and
Seller's receipt
thereof shall be
an
absolute discharge therefore;
(e) issue the
Closing Consideration Shares to the Escrow Agent.
4.6
NON-COMPLIANCE. If the
Seller or Purchaser fails to perform any action
required from it under
Article 4.4 or 4.5, the other Party may, at its
option and
without prejudice to any of its other rights and claims
(including, also if
this Agreement is terminated, any right to payment
of damages):
(a) demand
that the defaulting Party performs the relevant actions
on a day and at a time to be determined by the non-defaulting
Party; or
(b) terminate
this Agreement by written notice (without any
liability towards the defaulting Party).
ARTICLE 5 - EARN OUT CONSIDERATION
5.1 EARN OUT
CONSIDERATION. The
Purchaser shall pay to the Seller the Earn
Out Consideration as
defined and calculated in more detail in SCHEDULE
7.
5.2 SET-OFF.
The Purchaser shall have the right to set off
any amount of
the Earn Out Consideration against the amount of any Claim.
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES
------------------------------------------
6.1 WARRANTIES
OF THE SELLER. The Seller represents, warrants and
undertakes
("VERKLAART, STAAT
ER VOOR IN EN GARANDEERT") to the
Purchaser that each of the warranties forth on SCHEDULE 4 (the
"SELLER
WARRANTIES") is at the
date of this Agreement
and on the Closing Date
(if different) true,
accurate and not
misleading. The Seller
and the
Purchaser explicitly
agree that the Seller Warranties shall constitute
an allocation
of risks between the Purchaser and the Seller to the
extent that adverse
consequences
from incorrect and/or incomplete
Seller Warranties
shall at all times be for the full account and
liability of the Seller (even if the Purchaser knew or could have been
aware of such incorrectness and/or incompleteness at the time of
this
Agreement or at the time of Closing).
6.2 ADDITIONAL
WARRANTIES
OF THE SELLER, FILIPAN BEHEER, FILIPAN AND
PIJNENBURG BEHEER NV. Each of the Seller, Filipan Beheer, Filipan and
Pijnenburg Beheer NV represents, warrants and
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undertakes
("VERKLAART, STAAT ER
VOOR IN EN
GARANDEERT") to and with
the Purchaser that
each of the warranties
of such person as set forth
on SCHEDULE 5 ("ADDITIONAL SELLER WARRANTIES") hereto is at the
date of
this Agreement and as of the Closing Date (if different) true,
accurate
and not misleading.
Each of the Seller, Filipan, Pijnenburg Beheer NV
and the Purchaser explicitly agrees that the Additional Seller
Warranties shall constitute an allocation of risks among the
Purchaser,
Filipan, Pijnenburg
Beheer N.V. and the Seller to the extent that
adverse consequences from incorrect and/or incomplete Additional
Seller
Warranties shall at
all times be for the full account and liability of
the Seller, Filipan
and Pijnenburg
Beheer NV (even if the
Purchaser
knew or could have been aware of such incorrectness and/or
incompleteness at
the time of this Agreement or at the time of
Closing).
6.3 WARRANTIES
OF THE PURCHASER.
The Purchaser
represents,
warrants and
undertakes ("VERKLAART, STAAT ER VOOR IN EN GARANDEERT")
to the Seller
that each of the
warranties set forth
in SCHEDULE 6 (the
"PURCHASER
WARRAN
