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EXHIBIT 2.01
SHARE PURCHASE AGREEMENT
by and among
TECHTEAM GLOBAL, INC.,
TECHTEAM GLOBAL NV/SA,
AKELA INFORMATIQUE SRL
and
Lucian Ionut Butnaru
Peter Andrei Ungureanu
Sabin Girlea
Philippe Bozier
Alain Joseph Maurice Kremeur
George Tudor
dated as of
OCTOBER 3, 2005
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SHARE PURCHASE AGREEMENT
Share Purchase
Agreement, dated as of October 3, 2005, by and among:
TechTeam Global,
Inc., an American legal entity, incorporated under the
laws of the State of Delaware, with its
head office in 27335 West 11 Mile Road,
Southfield, Michigan 48034, United States
of America, with a Federal Tax ID
number 38-2774613;
TechTeam Global
NV/SA, a Belgian limited liability entity, with its head
office at Zweefvliegtuigstraat 10, 1130
Brussels, Belgium, registered with
Brussels Trade Register under number
604800; (together the "Purchasers"),
Akela
Informatique SRL, whose registered office is at 144, Ghe.
Titeica
Str., 2nd District, Bucharest, Romania,
registered with the Bucharest Trade
Registry under the no. J40/5206/1998, tax
registration code 10629858, tax
attribute R, (the "Company"), and
Lucian Ionut
Butnaru, Peter Andrei Ungureanu, Sabin Girlea, Philippe
Bozier, Alain Joseph Maurice Kremer and
George Tudor who are the holders of all
of the registered capital of the Company in
the percentages set forth on Exhibit
A (each a "Shareholder" and collectively,
the "Shareholders"). Certain
capitalized terms used in this Agreement
have the meanings assigned to them in
Article IX.
WHEREAS, each of
the Shareholders has approved, and deems it advisable and
in the best interests of such Shareholder
to consummate, the acquisition of the
Company by Purchasers; and
WHEREAS, the
Board of Directors of TechTeam Global, Inc. has approved, and
deems it advisable and in the best
interests of the Purchasers to consummate the
acquisition of the Company, which
acquisition is to be effected by the purchase
of all shares of the registered capital of
the Company by Purchasers upon the
terms and conditions set forth herein;
NOW, THEREFORE,
in consideration of the foregoing and the mutual
representations, warranties, covenants and
agreements set forth herein,
intending to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
Section 1.1 Sale and Transfer of Shares.
Subject to the terms and conditions of
this Agreement, at the Closing, each
Shareholder shall sell, convey, assign,
transfer and deliver to Purchasers the
number of Shares set forth opposite such
Shareholder's name on Exhibit A hereto,
free and clear of all Encumbrances.
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Section 1.2 The Purchase Price. Subject to
the terms and conditions of this
Agreement, in consideration of the
aforesaid sale, conveyance, assignment,
transfer and delivery to Purchasers of the
Shares, subject to certain
adjustments and off-sets as set forth in
Sections 1.3 and 1.4 of this Agreement,
Purchasers shall (i) pay to the
Shareholders the aggregate cash amount of Two
Million Four Hundred and Fifty Thousand
Euros (euro2,450,000) (the "Cash
Consideration"); and (ii) issue to the
Shareholders the aggregate number of
shares of Team Common Stock equal to two
Hundred and Fifty Thousand Euros
(euro250,000) in accordance with Section
1.3(c) of this Agreement (the "Stock
Consideration" and together with the Cash
Consideration, the "Initial
Consideration").
Section 1.3 Payment of the Purchase
Price.
(a) Cash Escrow Account. At the Closing, Purchasers shall pay
to
the accounts designated in writing by the
Shareholders the amount equal to the
Cash Consideration less (i) the amount of
One Hundred Thirty-Five Thousand Euros
(euro135,000), which Purchasers shall
deposit into the Account as the working
capital escrow (the "Working Capital
Escrow"), and which shall be held in
accordance with the terms set forth in
Section 1.6 hereof and (ii) the amount of
One Hundred Thirty-Five Thousand Euros
(euro135,000), which Purchasers shall
deposit into the Account as the cash
indemnity escrow (the "Cash Indemnity
Escrow"), and which shall be held in
accordance with the terms of Section 1.6
hereof. The Cash Consideration less the
amounts of the Working Capital Escrow
and the Cash Indemnity Escrow, i.e., the
amount of Two Million One Hundred
Eighty Thousand Euros (euro2,180,000), is
referred to as the "Closing Cash
Consideration".
(b) Stock Escrow Account. On the fourth Business Day following
the Closing Date, Purchasers shall retain
the stock certificates representing
the shares of Team Common Stock (the "Stock
Indemnity Escrow"), which shall be
held in accordance with the terms set forth
in Section 1.6 hereof.
(c) Calculation of Number of Team Common Stock Constituting the
Stock Consideration. The number of shares
of Team Common Stock constituting the
Stock Consideration shall be calculated by
(i) converting the Stock
Consideration from Euros to Dollars using
the euro/US$ spot exchange rate
published by the Wall Street Journal on the
date three (3) Business Days prior
to the Closing Date (the result being the
"Dollar Stock Consideration"); and
(ii) dividing the Dollar Stock
Consideration by the average closing share price
of Team Common Stock as listed on the
NASDAQ Stock Market for the three (3)
Business Days prior to, and the three (3)
Business Days following, the Closing
Date (the "Average Closing Price"). No
fractional shares of Team Common Stock
will be issued in connection with the
Transaction. In lieu of any such
fractional shares, each Shareholder who
would otherwise have been entitled to a
fraction of a share of Team Common Stock
shall be entitled to receive a cash
payment in lieu of such fractional share
determined by multiplying (A) the
Average Closing Price of a whole share of
Team Common Stock by (B) the
fractional share interest to which such
holder would otherwise be entitled,
which amount shall be delivered into the
Stock Indemnity Escrow together with
the Team Common Stock constituting the
Stock Consideration.
(d) Allocation of Purchase Price. The Initial Consideration, as
it
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may be adjusted, and any future
consideration paid by Purchasers pursuant to
Section 1.5 of this Agreement shall be
allocated to the Shareholders in
proportion to the percentage of the total
registered share capital represented
by such Shares, as set forth opposite each
Shareholder's name under the heading
"% of Company Capital" on Exhibit A hereto.
Each Shareholder's share of the
Closing Cash Consideration is set forth in
Exhibit A. The Closing Cash
Consideration or other amounts payable by
Purchasers under this Agreement shall
be paid by the Purchasers to the accounts
designated by the Shareholders in
accordance with this Agreement.
Section 1.4 Purchase Price Adjustment. The
Initial Consideration shall be
adjusted following the Closing as
follows:
(a) if the amount of the Working Capital of the Company
(determined in accordance with this Section
1.4(b)) as of the Closing Date is
less than One Hundred Sixty-nine Thousand
Four Hundred Eight Euros
(euro169,408), the Initial Consideration
shall be decreased by an amount equal
to such difference ("Working Capital
Deficit"). Any Working Capital Deficit
shall be paid to Purchasers from the
Working Capital Escrow, and in the event
the Working Capital Deficit exceeds the
amount of the Working Capital Escrow,
the Shareholders shall pay to Purchasers
the difference between the Working
Capital Deficit and the Working Capital
Escrow within five (5) Business Days
after the amount of Working Capital is
agreed to by the Shareholders and
Purchasers. After payment to Purchasers of
any Working Capital Deficit, any
remaining amounts in the Working Capital
Escrow shall be released to the
Shareholders in accordance with the terms
of Section 1.6; and
(b) if the amount of the Working Capital of the Company
(determined in accordance with this Section
1.4(b)) as of the Closing Date is
greater than One Hundred Sixty-Nine
Thousand Four Hundred Eight Euros
(euro169,408), the Initial Consideration
shall be increased by an amount equal
to such difference (the "Working Capital
Surplus"). Any Working Capital Surplus
shall be paid by Purchasers by wire
transfer of immediately available funds to
the accounts specified by the Shareholders
within five (5) Business Days after
the amount of Working Capital is agreed to
by the Shareholders and Purchasers.
In addition, in the event of a Working
Capital Surplus, the Working Capital
Escrow shall be released to the
Shareholders in accordance with the terms of
Section 1.6.
(c) As used herein, the term "Working Capital" shall mean, as
reflected on the Working Capital Statement,
"current assets" less "current
liabilities", which includes all
indebtedness for borrowed money regardless of
maturity and excludes any and all fees
incurred by Shareholders or the Company
in connection with this Transaction, plus
Fifty-Five Thousand Dollars
(US$55,000). The term "Working Capital
Statement" shall mean the statement of
Working Capital of the Company to be
prepared by Purchasers as of the Closing
Date in accordance with this Section 1.4
and to be delivered to the Shareholders
no later than 90 days after the Closing
Date. The Working Capital Statement
shall be prepared by Purchasers using
accounting principles, procedures,
policies and methods generally accepted in
the United States ("GAAP").
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(d) The Working Capital Statement shall be final and binding on
the parties unless, within 10 days after
delivery to the Shareholders, written
notice is given by the Shareholders to
Purchasers of their objection setting
forth in reasonable detail the
Shareholders' basis for objection. The
Shareholders may dispute items reflected on
the Working Capital Statement only
on the basis that such items were not
arrived at in conformity with the GAAP. If
notice of objection is given, the parties
shall consult with each other with
respect to the objection. Any amount that
is not in dispute will promptly be
paid by the party obligated to make such
payment hereunder to the party entitled
to receive such payment hereunder. If the
parties are unable to reach agreement
within 15 days after the notice of
objection has been given, the dispute shall
be submitted, as promptly as practicable,
for resolution to Jan Glas of Quintus
(the "Accountants"). Each party agrees to
execute, if requested by the
Accountants, a reasonable engagement
letter. The Accountants will make a
determination, based solely on
presentations by the Shareholders and the
Purchasers and not by independent review,
as to (and only as to) each of the
items in dispute, which determination will
be (i) in writing, (ii) furnished to
each of the parties hereto as promptly as
practicable after the items in dispute
have been referred to the Accountants,
(iii) made in accordance with this
Agreement and (iv) conclusive and binding
upon each of the parties hereto. In
connection with their determination of the
disputed items, the Accountants will
be entitled to rely on the accounting
records and similar materials prepared in
connection with the preparation of the
Working Capital Statement, and the fees
and expenses of the Accountants will be
paid one-half by the Purchasers and
one-half by the Shareholders. Each of
Purchasers and the Shareholders will use
reasonable efforts to cause the Accountants
to render their decision as soon as
reasonably practicable (but in no event
later than 20 days following the
expiration of the 15-day period provided
above for Purchasers and the
Shareholders to resolve disputes prior to
submission to the Accountants),
including without limitation by promptly
complying with all reasonable requests
by the Accountants for information, books,
records and similar items.
Section 1.5 Future Consideration. The
Purchaser shall also pay to the
Shareholders the amounts earned by the
Shareholders by meeting the targets set
forth below:
(a) In the event the Company's Gross Profit for fiscal year
2006
equals or exceeds One Million Three Hundred
Thirty Thousand Euros
(euro1,330,000) ("the 2006 Target"),
Purchasers shall pay to the Shareholders
the aggregate amount of One Hundred
Thousand Euros (euro100,000) no later than
March 31, 2007 to the accounts designated
in writing by the Shareholders. If the
Company's Gross Profit for the fiscal year
2006 is between 80% and 90% of the
2006 Target, Purchasers shall pay
Shareholders Fifty Thousand Euros
(euro50,000). If the Company's Gross Profit
for the fiscal year 2006 is between
90% and 100% of the 2006 Target, Purchasers
shall pay Shareholders Seventy-five
Thousand Euros (euro75,000);
(b) In the event the Company's Gross Profit for fiscal year
2007
equals or exceeds Two Million One Hundred
Thousand Euros (euro2,100,000) ("the
2007 Target"), Purchasers shall pay to the
Shareholders the aggregate amount of
Two Hundred Thousand Euros (euro200,000) no
later than March 31, 2008 to the
accounts designated in
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writing by the Shareholders. If
the Company's Gross Profit for the fiscal year
2007 is between 80% and 90% of the 2007
Target, Purchasers shall pay
Shareholders One Hundred Thousand Euros
(euro100,000). If the Company's Gross
Profit for the fiscal year 2006 is between
90% and 100% of the 2007 Target,
Purchasers shall pay Shareholders One
Hundred Fifty Thousand Euros
(euro150,000); and
(c) In the event the Company's aggregate Gross Profit for the
fiscal years 2006 and 2007 equals or
exceeds Four Million One Hundred Thousand
Euros (euro4,100,000), Purchasers shall
pay, no later than March 31, 2008, (a)
Fifty Thousand Euros (euro50,000) to the
Shareholders, and (b) One Hundred
Thousand Euros (euro100,000) contingent
compensation to Key Employees in such in
such amounts as the Company's Board of
Directors determines. In order to receive
a payment under this provision, a Key
Employee must be employed by the Company
on March 1, 2008.
Section 1.6 Account and Release. At or
prior to the Closing, the Purchasers
shall deposit the Working Capital Escrow
and the Cash Indemnity Escrow into an
interest bearing account or accounts
("Account") with a financial institution in
the United States of the Purchasers'
choosing ("Bank"). Purchasers shall release
the Working Capital Escrow from the Account
in accordance with the terms set
forth in Section 1.4 above. The funds in
the Cash Indemnity Escrow and the Team
Common Stock in Stock Indemnity Escrow will
be released in accordance with the
following terms and conditions:
(a) From time to time on or before the expiration of the Cash
Indemnity Escrow and the Stock Indemnity
Escrow in accordance with subsection
(e) below, if the Purchasers have given
notice to Shareholders of any claim
under Section 8.2 of the Purchase
Agreement, the Purchasers may give further
notice to the Shareholders specifying in
reasonable detail the nature and dollar
amount of any claim it may have under
Section 8 of this Agreement, and
Purchasers shall notify the Shareholders
Representative of its intention to
release funds or Team Common Stock from the
Cash Indemnity Escrow or the Stock
Indemnity Escrow ("Release Notice").
b) If Shareholder's Representative gives notice to Purchasers
disputing any Release Notice ("Counter
Notice") within 30 days following
delivery by the Purchasers of the Release
Notice, Purchasers shall not release
any amount from escrow until it has
obtained: (i) the written agreement of the
Shareholder's Representative; or (ii) a
final non-appealable order of a court of
competent jurisdiction substantiating the
amount of the claim set forth in the
Release Notice.
(c) If no Counter Notice is received by Purchasers within the
30-day period set forth in subsection (b)
above, then the Purchasers may release
a payment to the Purchasers in the amount
of the claim. If the amount of money
held in the Cash Indemnity Escrow
insufficient to reimburse the Purchasers for
the claim, the Shareholders hereby
authorize Purchasers to redeem the number of
Team Common Stock equal to the unpaid
amount of the claim, as calculated in
accordance with subsection (d) below) set
forth in the Release Notice as payment
for the claim.
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(d) To determine the amount of Team Common Stock to be released
pursuant to subsection (b) and (c) above,
the Purchasers shall divide the amount
of the claim set forth in the Release
Notice by the closing price of the Team
Common Stock on the date of the Release
Notice, or if the NASDAQ stock market is
closed on the date of the Release Notice,
the closing price on the first day
after the Release Notice that the NASDAQ
stock market is open.
(e) The Purchasers shall distribute the Team Common Stock held
in
the Stock Escrow Account for the
Shareholder, and pay the amount of the funds to
Shareholders that has not been released in
accordance with this Agreement in the
Working Capital Escrow or the Cash Escrow
Account, as applicable, in the
proportions set forth in 1.3(d) on the
following dates:
(i) in the case of a Working Capital Escrow, within five (5)
business days
after the amount of the Working Capital is agreed by the
Shareholders and
the Purchasers or otherwise determined in accordance with
Section 1.4
above.
(ii) in the case of the Cash Escrow Account, within five (5)
business days of
the first-year anniversary of the Closing Date ("Cash
Escrow Account
Termination Date");
(iii) in the case of the Stock Escrow Account, within five
(5) business
days of the second-year anniversary of the Closing Date
("Stock Escrow
Account Termination Date").
(f) Notwithstanding subsection (e) above, if any claims
pursuant
to Section 8 are then pending at the time
of the Cash Escrow Account Termination
Date or the Stock Escrow Account
Termination Date, an amount equal to (i) the
aggregate amount of such claims (as shown
in the relevant notices of such
Claims) or (ii) with respect to any claim
which the Purchasers are unable to
specify the amount of the claim in the
Release Notice, the entire then current
amount in the Case Escrow Account or the
Stock Escrow Account shall be retained
in the Account until the mutual written
agreement of the Purchasers and the
Shareholders with respect to such claim or
a final non-appealable order of a
court of competent jurisdiction with
respect to the claim has been obtained as
contemplated by Section 1.6(b).
Section 1.7. Conduct of Company's Business
Post Acquisition. Purchaser agrees
that during the period from the Closing
through December 31, 2007, Purchaser
will maintain the Company as a separate
entity owned by TechTeam Global, Inc. or
an Affiliate and will exercise good faith
and fair dealing the its transactions
with the Company, including in respect to
the Company's efforts to meet the
targets in Section 1.5 and receive the
payments set forth therein.
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ARTICLE II
THE CLOSING
Section 2.1 The Closing. The sale and
transfer of the Shares by the Shareholders
to Purchasers shall take place at the
offices of TechTeam Global SRL at 2:00
p.m., Romanian time, on October 3, 2005,
provided that all of the conditions to
close have been satisfied or on such date
(other than conditions which can be
satisfied only be the delivery of
certificates or other documents at Closing).
Section 2.2 Deliveries by Shareholders. At
the Closing, each Shareholder shall
deliver to Purchasers:
(a) an original resolution of the general meeting of the
shareholders, in form and in substance
satisfactory to the Purchasers, approving
the sale of the Shares; the election of the
new directors of the Company; and
changes to the charter of the Company in
accordance with the Additional Act, to
take effect on Closing.
(b) the original, signed and notarized powers of attorney
referred to in Section 2.6.
(c) the following executed agreements, in form and substance
satisfactory to Purchasers:
(i) LB Arrangements;
(d) all of the books and records of Shareholders relating to
the
Company;
(e) the Shareholders' Certificate referred to in Section 6.2(b)
(f) the Officers' Certificate referred to in Section 6.2(c)
hereof;
(g) copies of all records, including all signature or
authorization cards, pertaining to the bank
accounts listed in the Appendix
2.2(g);
(h) a general release in favor of the Company in the form of
Exhibit B hereto, duly executed by such
Shareholder;
(i) documentation, in form and substance satisfactory to the
Purchasers, evidencing the acquisition of
the portion of Akela LLC owned by Core
E-Business Solutions LLP.
Section 2.3 Deliveries by Purchasers.
Purchasers shall deliver at the Closing:
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(a) to the Shareholders the Closing Cash Consideration, by wire
transfer in immediately available funds to
accounts designated in writing by the
Shareholders;
(b) to the Bank, the Working Capital Escrow and the Cash
Indemnity Escrow to the Account; and
Section 2.4 Post-Closing Deliveries:
(a) Purchasers shall deliver to Shareholders any amount of cash
payable for a fractional share of stock as
calculated under Section 1.3 (c), and
(b) Shareholders shall deliver to Purchasers to the Stock Power
in the form attached as Appendix 2.4 signed
in blank.
(c) Shareholders, at Purchasers' request, will deliver to
Purchasers additional Stock Power, signed
in blank, in the event a claim is made
after the Stock Indemnity Escrow has been
used to pay another claim.
Section 2.5 Joint Obligations. On the
Closing Date, the Purchasers and the
Shareholders shall register the Purchasers
as the owner of the Shares in the
Company's Shareholders Register.
Section 2.6 Registration. On the Closing
Date, each of the Shareholders shall
give to the Purchasers a notarized power of
attorney, in the form set forth in
Exhibit C, enabling the Purchasers to act
on behalf of the Shareholders without
the direct involvement of the Shareholders
in relation to the registration of
the Additional Act with the Commercial
Registry, on the same day, or, if the
Commercial Registry is then closed, on the
next day on which the Commercial
Registry is open for acceptance of filing
of the Additional Act. The
Shareholders shall take any other act
necessary to vest Purchasers with full and
unconditional ownership of the Shares,
including, without limitation, the
registration of the transfer of ownership
of the Shares, by the Purchasers,
together with the Shareholders, with the
Commercial Registry, as well as any
other act or procedure required under
Romanian law to vest the Purchasers with
full and unconditional ownership of the
Shares.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
SHAREHOLDERS
The
Shareholders, severally and not jointly, represent and warrant
to
Purchasers that all of the statements
contained in Appendix 3 are true and
complete as of the date of this Agreement
(or, if made as of a specified date,
as of such date), and will be true and
complete as of the Closing Date as though
made on the Closing Date, except as
specifically set forth in the Schedules to
Appendix 3.
ARTICLE IV
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REPRESENTATIONS AND WARRANTIES OF
PURCHASERS
Purchasers represents and warrants to the
Shareholders that:
Section 4.1 Organization.
(a) TechTeam Global, Inc. is a
corporation duly organized, validly
existing and in good standing under the laws of Delaware and has
all
requisite corporate or other power and authority and all
necessary
governmental approvals to own, lease and operate its properties and
to
carry on its business as now being conducted, except where the
failure
to be so organized, existing and in good standing or to have
such
power, authority, and governmental approvals would not have,
individually or in the aggregate, a material adverse effect on
its
ability to consummate the Transactions.
(b) TechTeam Global NV/SA is a limited
liability company duly organized,
validly existing and duly registered under the laws of Belgium and
has
all requisite corporate or other power and authority and all
necessary
governmental approvals to own, lease and operate its properties and
to
carry on its business as now being conducted, except where the
failure
to be so organized, existing and duly registered or to have
such
power, authority, and governmental approvals would not have,
individually or in the aggregate, a material adverse on its ability
to
consummate the Transactions.
Section 4.2 Authorization; Validity of
Agreement. Purchasers have full corporate
power and authority to execute and deliver
this Agreement and to consummate the
Transactions. The execution, delivery and
performance by Purchasers of this
Agreement and the consummation of the
Transactions have been duly authorized by
the Board of Directors of each of the
Purchasers, and no other corporate action
on the part of Purchasers are necessary to
authorize the execution and delivery
by Purchasers of this Agreement or the
consummation of the Transactions. This
Agreement has been duly executed and
delivered by Purchasers, and, assuming due
and valid authorization, execution and
delivery hereof by the Company and each
of the Shareholders, is a valid and binding
obligation of Purchasers,
enforceable against Purchasers in
accordance with its terms except (i) as
limited by applicable bankruptcy,
insolvency, reorganization, moratorium,
fraudulent conveyance and other similar
laws of general application affecting
enforcement of creditors' rights generally
and (ii) the availability of the
remedy of specific performance or
injunctive or other forms of equitable relief
may be subject to equitable defenses and
would be subject to the discretion of
the court before which any proceeding
therefore may be brought.
Section 4.3 Consents and Approvals; No
Violations. Except for the filings,
permits, authorizations, consents and
approvals contemplated by this Agreement
or as may be
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required under, and other applicable
requirements of, U.S. securities or blue
sky laws, none of the execution, delivery
or performance of this Agreement by
Purchasers, the consummation by Purchasers
of the Transactions or compliance by
Purchasers with any of the provisions
hereof will (i) conflict with or result in
any breach of any provision of the
certificate of incorporation or by-laws of
Purchasers, (ii) require any filing with,
or permit, authorization, consent or
approval of, any Governmental Entity, (iii)
result in a violation or breach of,
or constitute (with or without due notice
or lapse of time or both) a default
(or give rise to any right of termination,
cancellation or acceleration) under,
any of the terms, conditions or provisions
of any note, bond, mortgage,
indenture, lease, license, contract,
agreement or other instrument or obligation
to which Purchasers are a party or by which
any of them or any of its properties
or assets may be bound, or (iv) violate any
order, writ, injunction, decree,
statute, rule or regulation applicable to
Purchasers or any of their properties
or assets, excluding from the foregoing
clauses (ii), (iii) and (iv) such
violations, breaches or defaults which
would not, individually or in the
aggregate, have a material adverse effect
on Purchasers' ability to consummate
the Transactions or which arise from the
regulatory status of the Company.
Section 4.4 Issuance of Securities. The
shares of Stock Consideration have been
duly and validly authorized for issuance,
offer and sale pursuant to this
Agreement and, when issued and delivered as
provided hereunder against payment
in accordance with the terms hereof, shall
be valid and binding obligations of
the TechTeam Global, Inc. enforceable in
accordance with their respective terms.
Section 4.5 Brokers or Finders. Neither
Purchasers nor any of its Affiliates has
entered into any agreement or arrangement
entitling any agent, broker,
investment banker, financial advisor or
other firm or Person to any broker's or
finder's fee or any other commission or
similar fee in connection with any of
the Transactions.
ARTICLE V
COVENANTS
Section 5.1 Notification of Certain
Matters. The Company and each Shareholder
shall give notice to Purchasers promptly
after becoming aware of (i) the
occurrence or non-occurrence of any event
whose occurrence or non-occurrence
would be likely to cause either (A) any
representation or warranty contained in
this Agreement to be untrue or inaccurate
on the Closing Date or (B) any
condition set forth in Article VI to be
unsatisfied in any material respect on
the Closing Date and (ii) any material
failure of any Shareholder or the Company
or any officer, director, employee or agent
thereof, to comply with or satisfy
any covenant, condition or agreement to be
complied with or satisfied by it
hereunder; provided, however, that the
delivery of any notice pursuant to this
section shall not limit or otherwise affect
the remedies available hereunder to
the party receiving such notice.
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Section 5.2 Shareholders' Non-Compete.
Without the express prior written consent
of Purchasers, none of the Shareholders
shall, at any time during the two-year
period immediately following the Closing
Date, directly or indirectly, own,
manage, control or participate in the
ownership, management or control of, or be
related or otherwise affiliated in any
manner with, any business similar to that
engaged in by the Company in the territory
of Romania. Each Shareholder agrees
that such Shareholder and such
Shareholder's Affiliates will not, for a period
of two years after the Closing Date, seek
to employ any person now employed by
the Company or any Company Subsidiary.
Section 5.3 Subsequent Actions. If at any
time after the Closing, Purchasers
will consider or be advised that any deeds,
instruments of conveyance,
assignments, assurances or any other
actions or things are necessary or
desirable (i) to vest, perfect or confirm
ownership (of record or otherwise) in
Purchasers, its right, title or interest
in, to or under any or all of the
Shares, (ii) to vest, perfect or confirm
ownership (of record or otherwise) in
the Company and the Company Subsidiary, any
of its rights, properties or assets
or (iii) otherwise to carry out this
Agreement, the Shareholders and the Company
shall execute and deliver all deeds, bills
of sale, instruments of conveyance,
powers of attorney, assignments and
assurances and take and do all such other
actions and things as may be requested by
Purchasers in order to vest, perfect
or confirm any and all right, title and
interest in, to and under such rights,
properties or assets in Purchasers or the
Company or any Company Subsidiary or
otherwise to carry out this Agreement.
Section 5.4 Publicity. The initial press
release with respect to the execution
of this Agreement shall be a joint press
release acceptable to Purchasers and
the Shareholders. Neither the Shareholders,
the Company, Purchasers nor any of
their respective Affiliates shall issue or
cause the publication of any press
release or other public announcement with
respect to this Agreement or the other
Transactions without prior consultation
with the other party, except as may be
required by law or by any listing agreement
with a national securities exchange
or trading market.
Section 5.5. Restriction on the Sale of
Stock Consideration. Each Shareholder
agrees that the stock certificates
representing the Stock Consideration are not
registered, cannot be sold by the
Shareholder for two-years following the date
of this Agreement, and shall bear the
following legend:
These securities have not been registered, qualified,
recommended,
approved or disapproved under the United States federal securities
law
or state security law. The shares represented by this certificate
may
not be sold, transferred or otherwise disposed of by an
investor
without (i) registration under United States federal securities
law,
or (ii) delivery of an opinion of counsel satisfactory to the
TechTeam
Global, Inc. that neither the sale nor the proposed transfer
constitutes a violation of any United States federal or state
securities law. The shares represented by this certificate are
the
subject of a lock-up agreement between TechTeam Global, Inc. and
[the
Shareholder] and, in accordance with that agreement, these shares
may
not be sold prior to October 3, 2007, with out the prior
written
consent of TechTeam Global, Inc.
Page 12 of 50
<PAGE>
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Obligations of
both the Purchasers and the
Shareholders to Affect the Closing. The
obligations of either of the parties to
consummate the Closing shall be subject to
the satisfaction on or prior to the
Closing Date of each of the following
conditions:
(a) No Governmental Entity shall have issued any order, decree
or
ruling or taken any other action, and there
shall not be any statute, rule or
regulation, restraining, enjoining or
prohibiting the consummation of the
Transactions and there shall not be overtly
threatened or pending any suit,
action or proceeding by any Governmental
Entity to enjoin, restrain or prohibit
the Transactions, or that would be
reasonably likely to prevent or make illegal
the consummation of the transactions
contemplated by this Agreement.
(b) There shall not have occurred any material adverse change
(or
any development that, insofar as can be
foreseen, is likely to result in any
material adverse change) in the
consolidated financial condition, businesses,
results of operations or prospects of the
Company (and the Company Subsidiary)
or of the Purchasers.
Section 6.2 Conditions to Obligations of
Purchasers to Affect the Closing. The
obligations of Purchasers to consummate the
Closing shall be subject to the
satisfaction on or prior to the Closing
Date of each of the following
conditions:
(a) All of the representations and warranties of the
Shareholders
set forth in this Agreement shall be true
and complete in all respects as of the
date of this Agreement and as of the
Closing Date.
(b) The Shareholders shall have delivered to Purchasers at the
Closing a certificate signed by each of the
Shareholders, dated the Closing
Date, in form and substance satisfactory to
Purchasers, to the effect that, as
of the Closing Date, (x) all of the
representations and warranties of the
Shareholders set forth in this Agreement
are true and complete, (y) there has
not occurred any material adverse change
(or any development that, insofar as
reasonably can be foreseen, is reasonably
likely to result in any material
adverse change) in the consolidated
financial condition, businesses, results of
operations or prospects of the Company and
the Company Subsidiary, taken as a
whole and (z) the Shareholders have
performed all obligations required under
this Agreement to be performed by it at or
prior to the Closing.
(c) The Company shall have delivered to Purchasers at the
Closing
a certificate signed by the director of the
Company and by the highest ranking
financial person in the Company, dated the
Closing Date, in form and substance
satisfactory to Purchasers, to the effect
that, as of the Closing Date, (x) all
of the
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<PAGE>
representations and warranties of the
Shareholders regarding the Company set
forth in this Agreement are true and
complete, (y) there has not occurred any
material adverse change (or any development
that, insofar as reasonably can be
foreseen, is reasonably likely to result in
any material adverse change) in the
consolidated financial condition,
businesses, results of operations or prospects
of the Company and the Company Subsidiary,
taken as a whole and (z) the Company
has performed all obligations required
under this Agreement to be performed by
it at or prior to the Closing.
(d) There shall not have occurred any material adverse change
(or
any development that, insofar as can be
foreseen, is likely to result in any
material adverse change) in the
consolidated financial condition, businesses,
results of operations or prospects of the
Company and the Company Subsidiary.
(e) There shall have been passed an original resolution of the
general meeting of the shareholders, in
form and substance satisfactory to the
Purchasers, approving the sale of the
Shares; the election of the new directors
of the Company; and changes to the charter
of the Company in accordance with the
Additional Act, to take effect on
Closing.
(f) The Shareholders shall have delivered the original, signed
and notarized powers of attorney referred
to in Section 2.6.
(g) The Purchasers shall have received copied of the following
executed agreements, in form and substance
satisfactory to Purchasers:
(i) LB Arrangements;
(h) The Purchasers shall have received a general release in
favor
of the Company in the form of Exhibit B
hereto, duly executed by such
Shareholder;
(i) The Purchasers shall have received documentation, in form
and
substance satisfactory to the Purchasers,
evidencing the acquisition of the
portion of Akela LLC owned by Core
E-Business Solutions LLP.
(j) None of the Shareholders or the Company shall have failed
to
perform in any material respect any
obligation or to comply in any material
respect with any agreement or covenant to
be performed or complied with by such
Shareholder or the Company under this
Agreement.
The foregoing conditions are for the sole
benefit of Purchasers, may be waived
in writing by Purchasers, in whole or in
part, at any time and from time to time
in the sole discretion of Purchasers. The
failure by Purchasers at any time to
exercise any of the foregoing rights shall
not be deemed a waiver of any such
right.
Page 14 of 50
<PAGE>
Section 6.3. Conditions to Obligations of
the Shareholders to Affect the
Closing. The obligations of the
Shareholders to consummate the Closing shall be
subject to the satisfaction on or prior to
the Closing Date of each of the
following conditions:
(a) All of the
representations and warranties of the Purchasers set forth
in this Agreement shall be true and
complete in all respects as of the date of
this Agreement and as of the Closing
Date.
(b) The
Purchasers shall have performed and complied in all material
respects with any agreement or covenant to
be performed or complied with by it
under this Agreement.
(c) If any are
required, all notices by Purchasers to, and declarations,
filings and registrations by Purchasers
with, and consents, approvals and
waivers from any Governmental Entity or
regulatory authorities, required by
applicable laws to consummate the
transactions contemplated hereby or required
under this Agreement to have been obtained
prior to Closing other than routine
post-closing notifications or filings,
shall have been made or obtained and any
required waiting period shall have
elapsed.
The foregoing conditions are for the sole
benefit of the Shareholders, and may
be waived in writing by the Shareholders
Representative, in whole or in part, at
any time and from time to time in the sole
discretion of the Shareholders
Representative. The failure by the
Shareholders at any time to exercise any of
the foregoing rights shall not be deemed a
waiver of any such right.
ARTICLE VII
TERMINATION
Section 7.1 Termination. The Transactions
contemplated herein may be terminated
or abandoned at any time prior to the
Closing by the Purchasers if any
Shareholder or the Company shall have
breached any representation, warranty,
covenant or other agreement contained in
this Agreement which would give rise to
the failure of a condition set forth in
Article VI.
Section 7.2 Effect of Termination. In the
event of the termination or
abandonment of the Transactions pursuant to
the terms of this Agreement, written
notice thereof shall forthwith be given to
the other Shareholders specifying the
provision hereof pursuant to which such
termination or abandonment of the
Transactions is made, and there shall be no
liability or obligation thereafter
on the part of Purchasers, the Shareholders
or the Company except (a) for fraud
or for breach of this Agreement prior to
such termination or abandonment of the
Transactions and (b) as set forth in
Section 10.1.
Page 15 of 50
<PAGE>
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Indemnification; Remedies.
(a) Each Shareholder shall indemnify, defend and hold harmless
the Purchasers Indemnified Persons from and
against and in respect of 100% of
all Purchasers Losses.
(b) In addition to the provisions of (a) of this Section 8.1,
and
notwithstanding any Schedules to the
representations and warranties contained in
or made by or pursuant to this Agreement,
each Shareholder shall indemnify,
defend and hold harmless the Purchasers
Indemnified Persons from and against and
in respect of 100% of any and all Taxes
imposed upon the Company relating to the
operations of the Company or the Company
Subsidiary prior to the Balance Sheet
Date (other than any amount for Taxes
specifically identified and reflected as a
liability for unpaid Taxes on the Balance
Sheet), including without limitation
any Taxes imposed on the Company.
Section 8.2 Notice of Claim; Defense.
Purchasers shall give each Shareholder
prompt notice of any third-party claim that
may give rise to any indemnification
obligation under this Article VIII,
together with the estimated amount of such
claim. The Shareholders shall have the
right to assume the defense (at the
Shareholders' expense) of any such claim
through counsel satisfactory to
Purchasers in its sole discretion, and
approved in writing by the Purchasers.
Failure to give such notice shall not
affect the indemnification obligations
hereunder in the absence of actual and
material prejudice. If, under applicable
standards of professional conduct, a
conflict with respect to any significant
issue between any Purchasers Indemnified
Person and any Shareholder exists in
respect of such third-party claim, the
Shareholders shall pay the reasonable
fees and expenses of such additional
counsel as may be required to be retained
in order to resolve such conflict. The
Shareholders shall be liable for the fees
and expenses of counsel employed by
Purchasers for any period during which the
Shareholders have not assumed the defense
of any such third-party claim (other
than during any period in which Purchasers
will have failed to give notice of
the third-party claim as provided above).
If the Shareholders assume such
defense, Purchasers shall have the right to
participate in the defense thereof
and to employ counsel, at its own expense,
separate from the counsel employed by
the Shareholders, it being understood that
the Shareholders shall control such
defense. If the Shareholders choose to
defend or prosecute a third-party claim,
Purchasers shall cooperate in the defense
or prosecution thereof, which
cooperation shall include, to the extent
reasonably requested by the
Shareholders, the retention, and the
provision to Shareholders, of records and
information reasonably relevant to such
third-party claim, and making employees
of the Company available on a mutually
convenient basis to provide additional
information and explanation of any
materials provided hereunder. If the
Shareholders choose to defend or prosecute
any third-party claim, Purchasers
shall agree to any settlement, compromise
or discharge of such third-party claim
that the Shareholders may recommend and
that, by its terms, discharges
Purchasers and the Purchasers Affiliates
from the full amount of liability in
connection with such third-party claim;
provided, however, that, without the
consent of
Page 16 of 50
<PAGE>
Purchasers, the Shareholders shall not
consent to, and Purchasers shall not be
required to agree to, the entry of any
judgment or enter into any settlement
that (i) provides for injunctive or other
non-monetary relief affecting
Purchasers or any Affiliate of Purchasers
or (ii) does not include as an
unconditional term thereof the giving of a
release from all liability with
respect to such claim by each claimant or
plaintiff to each Purchasers
Indemnified Person that is the subject of
such third-party claim.
Section 8.3 Survival of Indemnification
Claims; Release from Escrow, Set-off.
The indemnification obligations set forth
in this Article VIII shall survive the
Closing and shall first be satisfied by the
Cash Indemnity Escrow and the Stock
Indemnity Escrow. If the amounts of the
Cash Indemnity Escrow and/or the Stock
Indemnity Escrow are insufficient or have
been released to the Shareholders in
accordance with Section 1.6, the
Shareholders indemnification obligations may be
satisfied in whole or in part, by: (a)
offset against obligations of Purchasers
under this Agreement, including any future
consideration payments under Section
1.5 of this Agreement; or (b) if the future
consideration has been paid in its
entirety, the Shareholders paying to the
Purchasers the difference of the amount
claimed by the Purchasers within five (5)
business days of notification by the
Purchasers of such deficiency.
Section 8.4 Tax Effect of Indemnification
Payments. All indemnity payments made
by Shareholders to Purchasers Indemnified
Persons, or by Purchasers Indemnified
Persons to Shareholders, pursuant to this
Agreement shall be treated for all Tax
purposes as adjustments to the
consideration paid with respect to the Shares.
Section 8.5 Effect of Investigation. The
right to indemnification, payment of
Purchasers Losses or for other remedies
based on any representation, warranty,
covenant or obligation of any Shareholder
or the Company contained in or made
pursuant to this Agreement or the Closing
Documents shall not be affected by any
investigation conducted with respect to, or
any knowledge acquired (or capable
of being acquired) at any time, whether
before or after the execution and
delivery of this Agreement or the date the
Closing occurs, with respect to the
accuracy or inaccuracy of or compliance
with, any such representation, warranty,
covenant or obligation. The waiver of any
condition to the obligation of
Purchasers to consummate the Transactions,
where such condition is based on the
accuracy of any representation or warranty,
or on the performance of or
compliance with any covenant or obligation,
shall not affect the right to
indemnification, payment of Purchasers
Losses, or other remedy based on such
representation, warranty, covenant or
obligation.
Section 8.6 Limitations On Amount.
Shareholders will have no liability for
indemnification under this Article VIII
until the total amount of all claims
with respect to such matters exceeds
Twenty-Five Thousand Euros (euro25,000),
and then only for the amount in which the
total amount of such claims exceed
Twenty-Five Thousand Euros (euro25,000).
The maximum amount for which the
Shareholders may be liable shall be
euro1,000,000.
Section 8.7 Survival of Covenants,
Representations and Warranties. Each of the
covenants, representations and warranties
of the Shareholders in this Agreement
or in any
Page 17 of 50
<PAGE>
appendix, schedule, instrument or other
document delivered pursuant to this
Agreement shall survive the Closing Date
and shall continue in force thereafter.
Section 8.8. Time Limitation. Except for a
claim under Section 1.31, Tax
Matters, of Appendix 3, no Shareholder will
have any liability for
indemnification or otherwise with respect
to any representation or warranty
contained in Article III unless on or
before October 3, 2007, Purchasers
notifies Shareholders Representative of a
claim specifying the factual basis of
that claim in reasonable detail to the
extent then known by Purchaser. A claim
under Section 1.31 may be made by the
Purchasers at any time prior to 30 days
after the expiration of the applicable
statute of limitation for such claim.
ARTICLE IX
DEFINITIONS AND INTERPRETATION
Section 9.1 Definitions. For all purposes
of this Agreement, except as otherwise
expressly provided or unless the context
clearly requires otherwise:
"Account" has the meaning set forth in Section 1.6.
"Additional Act" means the additional act to the constitutive
documents of the Company substantially in
the form agreed as set forth in
Exhibit D.
"Affiliate" shall mean a Person that directly, or indirectly
through
one or more intermediaries, controls, or is
controlled by, or is under common
control with, the Person specified.
"Agreement" or "this Agreement" shall mean this Share Purchase
Agreement, together with the Exhibits,
Appendices and Schedules hereto.
"Balance Sheet" shall mean the most recent audited balance sheet
of
the Company and its consolidated
subsidiaries included in the Financial
Statements.
"Balance Sheet Date" shall mean 31 December 2004.
"Bank" has the meaning set forth in Section 1.6.
"Business Days" shall mean a day other than a Saturday or Sunday or
a
public holiday when the banks are not open
in Romania and the United States.
"Butnaru" shall mean Lucian Ionut Butnaru whose domicile is at
2-6
Elena Caragiani Str., bl. 3B, apt. 31, 1st
District, Bucharest, Romania, CNP
1780806080030.
"Cash Consideration" has the meaning set forth in Section 1.2.
"Cash Indemnity Escrow" has the meaning set forth in Section
1.3(a).
Page 18 of 50
<PAGE>
"Charter" shall mean the certificate of incorporation and
memorandum
and articles of association or articles of
incorporation, bylaws, statutes,
operating agreement and all other
constitutional documents (as applicable) of
the Company or any Company Subsidiary, as
in effect at the relevant time;
"Closing" shall mean the closing referred to in Section 2.1.
"Closing Cash Consideration" has the meaning set forth in
Section
1.3(a).
"Closing Date" shall mean the date on which the Closing occurs.
"Commercial Registry" means the commercial registry maintained by
the
Commercial Registry Office of the Bucharest
Tribunal operating under the
authority of the National Commercial
Registry Office.
"Company" has the meaning set forth in the Preamble.
"Company Agreement" shall mean any Indebtedness in the
principal
amount of euro100,000 or more or which
requires total payments equal to or in
excess of such sum, any Lease, lease of
personal property calling for annual
payments in excess of euro50,000 per annum,
any material license, other material
contract, or agreement or other material
instrument or obligation to which the
Company or any Company Subsidiary is a
party or by which any of them or any of
their properties or assets may be
bound.
"Company Intellectual Property" shall mean all Intellectual
Property
that is currently owned by the Company or
any Company Subsidiary used in the
business of the Company or any Company
Subsidiary or that is necessary or useful
to conduct the business of the Company or
the Company Subsidiary as presently
conducted or as currently proposed to be
conducted.
"Company Subsidiary" shall mean each Person which is a Subsidiary
of
the Company, and in particular, Akela
LLC.
"Computer Software" shall mean computer software programs,
databases
and all documentation related thereto.
"Computer System" means the computer hardware, computer data
and
Computer Software used by the Company in
the conduct of its business;
"Copyrights" shall mean registered and unregistered copyrights
(including those in computer software and
databases), rights of publicity and
all registrations and applications to
register the same.
"Defect" shall mean a defect or impurity of any kind, whether
in
development, design, manufacture,
processing, or otherwise, including any
dangerous propensity associated with any
reasonably foreseeable use of a
product, or the failure to
Page 19 of 50
<PAGE>
warn of the existence of any defect,
impurity, or dangerous propensity.
"Disclosure Schedule" shall mean the disclosure schedules delivered
by
Shareholders to Purchasers concurrently
with the exectution and delivery of this
Agreement and attached as an integral part
hereof to Appendix 3 hereto.
"Encumbrances" shall mean any and all liens, charges, security
interests, options, claims, mortgages,
pledges, proxies, voting trusts or
agreements, obligations, understandings or
arrangements or other restrictions on
title or transfer of any nature
whatsoever.
"Environmental Claim" shall mean any claim, action, cause of
action,
investigation or notice (written or oral)
by any Person alleging actual or
potential liability for investigatory,
cleanup or governmental response costs,
or natural resources or property damages,
or personal injuries, attorney's fees
or penalties relating to (i) the presence,
or release into the environment, of
any Materials of Environmental Concern at
any location owned or operated by the
Company or any Company Subsidiary, now or
in the past, or (ii) circumstances
forming the basis of any violation, or
alleged violation, of any Environmental
Law.
"Environmental Law" shall mean Romanian state and local law and
regulation relating to pollution,
protection or preservation of human health or
the environment including ambient air,
surface water, ground water, land surface
or subsurface strata, and natural
resources, and including each law and
regulation relating to emissions,
discharges, releases or threatened releases of
Materials of Environmental Concern, or
otherwise relating to the manufacturing,
processing, distribution, use, treatment,
generation, storage, containment
(whether above ground or underground),
disposal, transport or handling of
Materials of Environmental Concern, or the
preservation of the environment or
mitigation of adverse effects thereon and
each law and regulation with regard to
record keeping, notification, disclosure
and reporting requirements respecting
Materials of Environmental Concern.
"euro" or "Euro" shall mean the Euro, the legal currency of the
European Monetary Union.
"Exchange Act" shall mean the U.S. Securities Exchange Act of 1934,
as
amended.
"Financial Statements" shall mean (a) the consolidated balance
sheets
of the Company and the Company's
consolidated Subsidiaries as of 31 December in
each of the years 2003 through 2004
together with consolidated statements of
income, shareholders' equity and cash flows
for each of the years then ended,
including the notes thereto, all as
certified by Mazars Romania SRL, independent
certified public accountants, whose reports
thereon are included therein, and
(b) the unaudited consolidated balance
sheet of the Company and the Company's
consolidated Subsid
