Exhibit 10.38
SHARE PURCHASE
AGREEMENT
THIS SHARE PURCHASE AGREEMENT (the
“ Agreement ”) is made as of March 31,
2009, by and between DAX Partners, LP, a limited partnership
organized under the laws of the Cayman Islands (the “
Purchaser ”), and Selectica, Inc., a Delaware
corporation (the “ Seller ”). Certain other
capitalized terms used in this Agreement are defined in Exhibit
A hereto.
The Seller is the beneficial owner
of all of the outstanding shares (the “ Shares
”) of capital stock of Selectica India Pvt. Ltd., a company
organized under the laws of India (the “ Company
”). This Agreement contemplates the sale by the Seller to the
Purchaser of the Shares.
In consideration of the foregoing
and the mutual provisions set forth in this Agreement and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as
follows:
ARTICLE 1
THE TRANSACTION
1.1 Sale and Purchase of
Shares . Upon the terms and conditions set forth in this
Agreement, at the Closing (as defined below), the Seller will sell
and transfer to the Purchaser, and the Purchaser will purchase and
acquire from the Seller, all of the Shares, free and clear of any
Encumbrances.
1.2 Purchase Price . The
aggregate purchase price for the Shares (the “ Purchase
Price ”) is US$3,219,000, of which $2,219,000 (the
“ Closing Payment ”) will be paid to the Seller
on the Closing Date, and $1,000,000 (the “ Escrow
Amount ”) will be deposited with an escrow agent to be
mutually agreed upon by the parties (the “ Escrow
Agent ”) upon execution of the Escrow Agreement (as
defined below), which the parties desire to occur as soon as
commercially practicable following the Closing. The Escrow Amount,
once deposited with the Escrow Agent, will be held in accordance
with the terms of this Agreement and an escrow agreement (the
“ Escrow Agreement ”), the terms and conditions
of which will be mutually agreed to by the parties as soon as
commercially practicable after the Closing. The Escrow Agent will
distribute the Escrow Amount to the Seller on the Final Payment
Date, in accordance with to the terms of the Escrow Agreement. For
the avoidance of any doubt, in no event will the Escrow Amount be
subject to offset or reduction of any kind, notwithstanding the
parties’ respective rights hereunder.
1.3 Closing . The closing
(the “ Closing ”) of the transactions
contemplated by this Agreement (the “ Contemplated
Transactions ”) will take place at the principal
executive offices of the Seller on the date hereof (such date, the
“ Closing Date ”) and concurrently with the
execution of this Agreement.
1.4 Transfer of Beneficial
Ownership.
(a) The Shares will be sold,
conveyed, transferred and delivered, pursuant to instruments in
such form as may be necessary or appropriate to effect a conveyance
of the Shares under applicable Law. Such transfer instruments will
be in form and substance reasonably acceptable to the parties and
will include the following: (i) a share transfer form in the
form to be agreed upon by the parties, which will transfer the
Shares to the parties specified in writing by the Purchaser; and
(ii) such other instruments and agreements as may be required
to effect the Contemplated Transactions (the “ Transfer
Documents ”).
(b) The transfer of the Shares will
be effective as of the Closing Date, from and after which date the
Purchaser will be the beneficial owner of the Shares for all
purposes and to the extent registered ownership of the Shares is
not transferred to the Purchaser as of the Closing Date,
the Seller will hold the Shares
(including, for the purposes hereof, the Nominee Share (as such
term is defined herein)) as nominee or trustee for the benefit of
the Purchaser until the Shares have been formally registered in the
name of the Purchaser and/or such other Person(s) as the Purchaser
may designate. It is the parties’ intent that all the
benefits and burdens of ownership of the Shares will transfer to
the Purchaser on the Closing Date. To the extent that transfer of
registered ownership of the Shares is not perfected on the Closing
Date or would be contrary to applicable Law or requires the
consent, authorization or approval of any Person, including any
Governmental Authority, which consent, authorization or approval
the parties were not able to obtain prior to the Closing Date, the
parties will use their best efforts to provide to, or cause to be
provided to, the Purchaser, to the extent permitted by Law, the
rights and benefits associated with registered ownership of the
Shares and take such other actions as may reasonably be requested
by the Purchaser in order to place the Purchaser, insofar as
reasonably possible, in the same position as if the Purchaser were
the registered shareholder. Without limiting the foregoing and in
connection therewith, the Purchaser will have the right (i) to
receive all dividends or distributions (liquidating or otherwise)
associated with the Shares, or direct the Seller to deliver such
dividends or distributions to the party of its selection,
(ii) to direct the Seller to sell, transfer or encumber the
Shares, and receive the proceeds therefrom, including any of the
rights or privileges associated with the Shares, and (iii) to
direct the Seller to vote the Shares as it instructs.
(c) In connection with the
arrangement set forth in this Section 1.4, and without
limiting the foregoing, the Seller covenants and agrees as follows:
(i) to vote the Shares at the meetings of the shareholders of
the Company only as directed by the Purchaser; (ii) to observe
all corporate formalities and filing requirements that may have to
be met with regard to the Shares; (iii) to forward to the
Purchaser, or any other Person identified by the Purchaser, all
dividends, distributions (liquidating or otherwise), and sale
proceeds made with respect to the Shares; (iv) to sell,
transfer or encumber the Shares only as directed by the Purchaser;
(v) to immediately notify the Purchaser upon attachment or
attempted seizure of, or acquisition of, any interest or assertion
of any rights in, the Shares by any third Person and take
appropriate action to defend against such attachment and to protect
the Purchaser’s interest in the Shares; (vi) to not take
any action with respect to the Company’s bank accounts, or
the funds therein, without the prior written consent of the
Purchaser; and (vii) to be entitled to rely on the written
instructions of the officers and directors of the Purchaser, and
such instructions will be deemed to have been duly authorized by
the Purchaser.
(d) Without limiting the
parties’ respective rights and obligations under this
Section 1.4, the parties agree to cooperate in good faith and
take any such actions as may be reasonably necessary to cause the
Contemplated Transactions to be consummated under applicable Law as
soon as commercially practicable following the Closing.
1.5 Closing Deliveries
.
(a) As soon as commercially
practicable after the Closing, the Seller will deliver or cause to
be delivered to the Purchaser:
(i) the duly executed Transfer
Documents;
(ii) certificates representing
the Shares, duly endorsed in blank, with all the appropriate share
transfer tax stamps affixed to the Transfer Documents;
and
(iii) resignations effective as
of the Closing Date of each director and officer of the Company as
the Purchaser may have requested in writing.
(b) At the Closing, the Purchaser
will deliver or cause to be delivered to the Seller the Closing
Payment, less any amounts withheld in accordance with
Section 6.9 hereof, by wire transfer of immediately available
funds to the account specified by the Seller.
(c) Upon delivery of the items set
forth in Section 1.5(a) to the Purchaser (such delivery date,
the “ Final Payment Date ”), the Escrow Amount
will be distributed to the Seller. In the event the Escrow
Agreement has not been executed as of the Final Payment Date, the
Purchaser will pay the Escrow Amount to the Seller on the Final
Payment Date.
(d) In the event that the documents
set forth in Section 1.5(a) are not delivered within 90
calendar days of the Closing (which failure is not caused by any
act or omission of the Purchaser), the Purchaser will be entitled
to retain any interest accrued on the Escrow Amount pursuant to the
Escrow Agreement through the termination of the Escrow Agreement.
The parties further recognize and agree that any breach of
Section 1.5(a) may give rise to irreparable harm to the
Purchaser for which money damages would not be an adequate remedy
and, agree that, in addition to the other remedies, the Purchaser
will be entitled to enforce the terms of this Agreement by decree
of specific performance without the necessity of proving the
inadequacy of a remedy of money damages.
(e) In connection with the Closing,
the parties, as applicable, will cause the Company to undertake the
following as soon as reasonably practicable thereafter:
(i) convene a meeting of the
board of directors of the Company (the “ Company Board
”) to discuss the following: (A) approval of the
transfer of Shares from the Seller to the Purchaser or its nominees
as set forth in the Transfer Documents; and (B) the
appointment of new directors nominated by the Purchaser to the
Company Board;
(ii) convene a second meeting
of the Company Board within 7 days of the meeting referred to in
subsection (i) above to note the resignations of the existing
directors, as may be requested by the Purchaser;
(iii) file a Form 32 for the
resignation of the existing directors and appointment of new
directors to the Company Board, as required under applicable
Law;
(iv) record the changes to the
Register of Members maintained by the Company under applicable
Law;
(v) make an endorsement back of
the Share Certificate submitted to it by the Purchaser;
and
(vi) instruct the
Company’s bank to change the authorized signatories for the
Company’s bank account(s) to the persons designated by the
Purchaser.
1.6 Taxes . Any and all
applicable sales, use, transfer, stamp, stock transfer, value-added
or other similar Taxes that are, or become due and payable as a
result of the Contemplated Transactions, whether such Taxes are
imposed by Law on the Seller, the Purchaser or the Company (such
Taxes, the “ Transfer Taxes ”) will be borne
solely by the Seller. Any and all other applicable Taxes
(including, without limitation, capital gains or other taxes
imposed by any applicable Governmental Authority in India, whether
such Taxes are imposed by Law on the Seller, the Purchaser or the
Company (such Taxes, the “ Other Taxes ”), will
be borne solely by the Purchaser.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF
THE SELLER
The Seller represents and warrants
to the Purchaser that the statements set forth in this Article 2
are true and correct as of the Closing:
2.1 Organization and Good
Standing .
(a) The Seller is a corporation duly
organized, validly existing and in good standing under the Law of
the State of Delaware, and has all requisite corporate power and
authority to conduct its business as presently
conducted.
(b) The Company is duly organized,
validly existing and in good standing under the Law of India, and
has all requisite corporate power and authority to conduct its
business as presently conducted.
2.2 Authority and
Enforceability . The Seller has all requisite corporate power
and authority to execute and deliver this Agreement and to perform
its obligations under this Agreement. The execution, delivery and
performance of this Agreement and the consummation of the
Contemplated Transactions by the Seller have been duly authorized
by all necessary action on the part of the Seller. The Seller has
duly and validly executed and delivered this Agreement. Assuming
the due authorization, execution and delivery of this Agreement by
the Purchaser, this Agreement constitutes the valid and binding
obligation of the Seller enforceable against the Seller in
accordance with its terms, subject to (a) Law of general
application relating to bankruptcy, insolvency and the relief of
debtors and (b) Law governing specific performance, injunctive
relief and other equitable remedies.
2.3 No Conflict . Neither the
execution, delivery and performance of this Agreement by the
Seller, nor the consummation by the Seller of the Contemplated
Transactions, will (a) conflict with or violate (i) the
Seller’s certificate of incorporation or bylaws, or
(ii) the Company’s memorandum of association, articles
of association or similar constituent document, each as amended to
date, (b) result in a breach or default under, or create in
any Person the right to terminate, cancel, accelerate or modify, or
require any notice, consent or waiver under, any Contract of the
Seller or the Company, (c) to the best of Seller’s
Knowledge, violate any Law or Judgment applicable to the Seller or
the Company or (d) require the Seller or the Company to obtain
any Governmental Authorization or make any filing with any
Governmental Authority except as contemplated by Section 1.5
and 1.6 hereof.
2.4 Capitalization and
Ownership .
(a) The authorized capital stock of
the Company consists solely of 1,000,000 shares of capital stock,
par value 0.10 rupees per share, of which 757,520 shares are issued
and outstanding. The Seller is the registered holder of 757,519 of
the Shares (the “ Registered Shares ”).
Selectica UK Ltd. (the “ Nominee ”) is the
registered owner of 1 of the Shares (the “ Nominee
Share ”) and holds such Nominee Share on behalf of the
Seller. The Seller is the sole beneficial owner of all of the
Shares, free and clear of all Encumbrances. Upon payment in full of
the Purchase Price, good and valid title to the Shares will pass to
the Purchaser, free and clear of any Encumbrances, and with no
restrictions on the voting rights or other incidents of record and
beneficial ownership of such Shares, except to the extent
contemplated by this Agreement. The Shares are duly authorized,
validly issued, fully paid and nonassessable. There are no
contracts to which either the Seller or any other Person is a party
or bound with respect to the voting (including voting trusts or
proxies) of the Shares. Other than the Shares, there are no
outstanding or authorized options, warrants, rights, agreements or
commitments to which the Company is a party or which are binding
upon the Company providing for the issuance or redemption of any
shares of the Company’s capital stock.
(b) The Company does not directly or
indirectly own any capital stock of, or other equity interests in,
any corporation, limited liability company, partnership or any
other entity.
2.5 Certain Payments
.
(a) To the Knowledge of the Seller,
neither the Seller, nor any member, officer, agent, employee,
Affiliate or other Person associated with or acting on behalf of
the Seller has (i) provided, or arranged for the provision of,
any unlawful contribution, gift, entertainment or other unlawful
expense relating to any political party or official thereof or any
candidate for public office; (ii) violated any provision of
the Foreign Corrupt Practices Act of 1977, as amended, the
anti-laundering compliance provisions of the USA PATRIOT Act of
2001, as amended, or any other applicable anti-corruption Laws or
regulations; (iii) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any Person
(including any representative or employee of any Governmental
Authority); or (iv) violated or operated in noncompliance with
any export restrictions, anti-boycott regulations or embargo
regulations.
(b) None of the assets and
properties of the Company (i) has been acquired by the Company
pursuant to a transaction that has involved directly or indirectly
an illegal payment to a representative or employee of any
Governmental Authority or (ii) represents the proceeds of any
illegal activity.
(c) As per the Seller’s books
and records, the Seller’s cost basis in the Shares as of the
Closing Date is US$2,978,407.
2.6 Cash Balance . As of
March 30, 2009, the aggregate value of the Company’s
cash and cash equivalents was 221,415,962 rupees (the “
March Cash Balance ”).
2.7 Brokers’ Fees . The
Seller has no Liability to pay any fees or commissions to any
broker, finder or agent with respect to the Contemplated
Transactions.
2.8 Disclosure of all Material
Liabilities . During the course of negotiation of this
Agreement and prior to the date hereof, Seller has made available
to Purchaser any and all information and materials requested by
Purchaser and/or Purchaser’s accountants, advisors, attorneys
or other representatives in connection with the Purchaser’s
evaluation of the Company and the Contemplated Transactions. To the
Seller’s Knowledge (after reasonable inquiry and
investigation), there are no Liabilities of the Company other than
those disclosed to the Purchaser in connection herewith, whether
reflected on the books of account of the Company or otherwise
(including, for such purpose but without limitation, the March Cash
Balance).
2.9 Disclaimer of Other
Representations and Warranties . The representations and
warranties set forth in this Article 2 are the only representations
and warranties made by the Seller with respect to the Shares, the
Seller, the Company or any other matter relating to the
Contemplated Transactions.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF
THE PURCHASER
The Purchaser represents and
warrants to the Seller that the statements set forth in this
Article 3 are true and correct as of the Closing:
3.1 Organization and Good
Standing . The Purchaser is a corporation duly organized,
validly existing and in good standing under the Law of the Cayman
Islands, and has all requisite corporate power and authority to
conduct its business as it is presently conducted.
3.2 Authority and
Enforceability . The Purchaser has all requisite corporate
power and authority to execute and deliver this Agreement. The
execution, delivery and performance of this Agreement by the
Purchaser and the consummation of the Contemplated Transactions by
the Purchaser have been duly authorized by all necessary action on
the part of the Purchaser. The Purchaser has duly and validly
executed and delivered this Agreement. Assuming the due
authorization, execution and delivery of this Agreement by the
Seller, this Agreement constitutes the valid and binding obligation
of the Purchaser, is enforceable against the Purchaser in
accordance with its terms, subject to (a) Law of general
application relating to bankruptcy, insolvency and the relief of
debtors and (b) Law governing specific performance, injunctive
relief and other equitable remedies.
3.3 No Conflict . Neither the
execution, delivery and performance of this Agreement by the
Purchaser, nor the consummation by the Purchaser of the
Contemplated Transactions, will (a) conflict with or violate
the Purchaser’s articles of association, memorandum of
association or other constituent documents, each as amended to
date, (b) result in a breach or default under, or create in
any Person the right to terminate, cancel, accelerate or modify, or
require any notice, consent or waiver under, any contract,
(c) violate any Law or Judgment applicable to the Purchaser or
(d) require the Purchaser to obtain any Governmental
Authorization or make any filing with any Governmental Authority,
except in any case that would not reasonably be expected to have a
Material Adverse Effect on the Purchaser.
3.4 Investment Intent . The
Purchaser is acquiring the Shares for the Purchaser’s own
account and investment purposes and is not acquiring the Shares
with a view to, or for sale in connection with, any distribution
thereof within the meaning of any federal or state securities Law.
The Purchaser is an “accredited investor” within the
meaning of Rule 501(a) of Regulation D as promulgated by the
Securities and Exchange Commission under the Securities Act of
1933, as amended, and has sufficient business and financial
knowledge and experience to protect its own interests and to
evaluate the merits and risks in connection with the purchase of
the Shares.
3.5 Legal Proceedings . There
is no Proceeding pending or, to the Purchaser’s Knowledge,
threatened against the Purchaser that questions or challenges the
validity of this Agreement or that may prevent, delay, make illegal
or otherwise interfere with the ability of the Purchaser to
consummate any of the transactions contemplated by this
Agreement.
3.6 Financial Capacity and
Related Matters .
(a) The Purchaser has immediately
available cash in an amount sufficient to pay the Purchase Price on
the Closing Date.
(b) The source of funds for such
cash are not derived from, or related to, any activity that is
illegal or illegitimate or deemed criminal under the laws of the
United States, the Cayman Islands or any other jurisdiction, nor
are they derived from any account, Person, or entity located in a
jurisdiction that: (i) is listed on any of the lists of OFAC
prohibited countries, territories and Persons (found on the OFAC
website at www.treas.gov/ofac) or subject to OFAC regulations or
sanctions; (ii) has been designated a “non-cooperative
country or territory” by the Financial Action Task Force on
Money Laundering; or (iii) has been designated by the U.S.
Secretary of the Treasury as a “primary money laundering
concern” subject to “Special Measures for
Jurisdictions, Financial Institutions, or International
Transactions of Primary Money Laundering Concern” regulations
implemented by the US Department of Treasury or Financial Crimes
Enforcement Network.
(c) The investment made by the
Purchaser in the Shares will not directly or indirectly contravene
any applicable anti-money laundering laws, regulations or
conventions of the United States, the Cayman Islands or other
international jurisdictions, nor will such investment made by the
Purchaser (to the extent that such matters are within the control
of the Purchaser) cause either the Seller or the Company to be in
violation of any applicable anti-money laundering laws, regulations
or conventions of the United States, the Cayman Islands or other
international jurisdictions, including the Cayman Islands
Anti-Money Laundering Regulations, The Proceeds of Criminal Conduct
Law (as amended) of the Cayman Islands, OFAC regulations, the
United States Bank Secrecy Act and corresponding regulations, the
United States Money Laundering Control Act of 1986, or the United
States International Money Laundering Abatement and Anti-Terrorist
Financing Act of 2001.
3.7 Brokers’ Fees . The
Purchaser has no Liability to pay any fees or commissions to any
broker, finder or agent with respect to the Contemplated
Transactions.
3.8 Independent Investigation
. The Purchaser has conducted its own independent investigation,
review and analysis of the business, operations, assets,
liabilities, results of operations, financial condition and
prospects of the business of the Company as it has deemed
appropriate, which investigation, review and analysis was done by
the Purchaser and its Affiliates and representatives. The Purchaser
acknowledges that it and its Affiliates and representatives have
been provided adequate access to the personnel, properties,
premises and records of the Seller and the Company for such
purpose. In entering into this Agreement, the Purchaser
acknowledges that it has relied solely upon the aforementioned
investigation, review and analysis and not on any factual
representations or opinions of the Seller, the Company or their
representatives (except the representations and warranties set
forth in Article 2). The Purchaser hereby acknowledges and agrees
that other than the representations and warranties set forth in
Article 2, none of the Seller, the Company, any of their
Affiliates, or any of their respective officers, directors,
employees, agents, representatives or stockholders, makes or has
made any representation or warranty, express or implied, at Law or
in equity, as to any matter whatsoever relating to the Shares, the
Seller, the Company, or any other matter relating to the
Contemplated Transactions including as to (i) merchantability
or fitness for any particular use or purpose, (ii) the
operation of the business of the Company after the Closing in any
manner or (iii) the probable success or profitability of the
business of the Company after the Closing.
ARTICLE 4
POST-CLOSING
COVENANTS
4.1 Further Assurances;
Cooperation .
(a) From and after the Closing, the
Seller and the Purchaser each will use its best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable to make effective as promptly
as practicable the Contemplated Transactions and to cooperate with
each other in connection with the foregoing, including to:
(i) obtain all necessary waivers, consents and approvals from
other parties; (ii) obtain all Governmental Authorizations
that are required to be obtained under any Law and
(iii) effect all necessary registrations and filings including
filings and submissions of information requested or required by
an
