<PAGE>
STOCK PURCHASE AGREEMENT
BETWEEN
SPECTRALINK CORPORATION AND SPECTRALINK DENMARK APS
AND
EACH OF THE SHAREHOLDERS OF KIRK TELECOM A/S
<PAGE>
CONTENTS
<TABLE>
<S>
<C>
ARTICLE 1 Certain
Definitions.............................................
2
ARTICLE 2 The Share
Purchase.............................................. 7
ARTICLE 3 Sellers'
Warranties (in Danish: "Indestaelser").................
12
ARTICLE 4 Warranties
and Covenants of Buyer and SpectraLink............... 13
ARTICLE 5 Pre-Closing
Covenants of the Sellers............................ 14
ARTICLE 6 Pre-Closing
Covenants of Buyer and Principal Shareholders
Guarantee.......................................................
19
ARTICLE 7 Conditions
to Obligations of the Sellers........................ 20
ARTICLE 8 Conditions
to Obligations of Buyer.............................. 20
ARTICLE 9 Termination
of Agreement........................................ 21
ARTICLE 10 Survival Indemnification and
Remedies........................... 23
ARTICLE 11
Confidentiality.................................................
27
ARTICLE 12 General
Provisions..............................................
28
</TABLE>
EXHIBITS
Exhibit A:
List of shareholders
of Kirk Telecom A/S
Exhibit B:
Consultant Agreement
Exhibit C:
Non-competition and Invention Assignment Agreement
Exhibit D:
Accounting Principles
Exhibit E:
Disclosure Letter
Exhibit F: Due
Diligence Documentation
Exhibit G:
Material Agreements
Exhibit H:
Escrow Agreement
Exhibit I: Form
for Preliminary Net Income Statement
Exhibit J: Press
Release
Annex I: Warranties
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<PAGE>
STOCK PURCHASE AGREEMENT
This
STOCK PURCHASE AGREEMENT (this "AGREEMENT") is entered into as
of
December 12, 2005 (the "AGREEMENT DATE") between SpectraLink
Corporation
("SPECTRALINK"), a Delaware corporation and SpectraLink Denmark
ApS, a Danish
limited company registered under CVR no. 29177872 with the Danish
Commerce and
Companies Agency and a wholly-owned subsidiary of SpectraLink
Corporation
("BUYER") and each of the shareholders of Kirk Telecom A/S (the
"COMPANY")
listed in Exhibit A hereto (the "SELLERS").
RECITALS
A.
The Sellers own all of the issued and outstanding shares of the
Company,
consisting solely of nominally DKK 10,000,000 ordinary shares in
the aggregate
(the "COMPANY SHARES"), and no other securities of the Company are
outstanding.
B.
The Sellers desire to sell and transfer all of the Company Shares
to
Buyer, and Buyer desires to purchase all of the Company Shares from
the Sellers,
subject to the terms and conditions set forth in this Agreement
(the "SHARE
PURCHASE").
C.
Concurrently with the execution and delivery of this Agreement, and
as a
condition and inducement for the parties' willingness to enter into
this
Agreement: (i) Peter Skov is entering into a consultancy agreement
with
SpectraLink in the form attached hereto as Exhibit B (the
"CONSULTANT
AGREEMENT"), and (ii) each Seller, except DKA, is entering into
a
non-competition and invention assignment Agreement with SpectraLink
and Buyer in
the form attached hereto as Exhibit C (the "NON-COMPETITION AND
INVENTION
ASSIGNMENT AGREEMENT"). All of such agreements would become
effective upon the
closing of the Share Purchase.
NOW,
THEREFORE, in consideration of the foregoing and the mutual
promises,
covenants and conditions contained herein and other good and
valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the
parties, each intending to be bound hereby, agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
As
used herein, the following terms will have the meanings set forth
below:
"ACCOUNTING PRINCIPLES" means the Company's accounting policies
stated in
Exhibit D, except that the corporate income tax rate shall for the
purpose of
the Company Net Income be calculated in accordance with Tax laws
prevailing at
Closing.
"ACTION" means any action, arbitration, cause of action, claim,
demand,
dispute, inquiry, investigation, mediation, proceeding or suit.
"ACQUISITION PROPOSAL"
means any offer or proposal by a Person (other than
Buyer or any of its Subsidiaries) relating to (1) the Company
Shares or any
other securities of the Company, including (a) any acquisition or
purchase of
the Company Shares or other securities of the Company from any of
the
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<PAGE>
Sellers and/or the Company; (b) any tender offer, exchange offer or
private
transaction; (c) any merger, consolidation, business combination or
similar
transaction involving the Company; or (2) any sale, lease,
exchange, transfer,
license, acquisition or disposition of all or substantially all of
the assets or
business of the Company.
"APPLICABLE LAWS" means all foreign, federal, state, local,
municipal or
other laws, ordinances, regulations, rules and other provisions
having the force
or effect of law, and all judicial and administrative orders,
writs,
injunctions, awards, judgments, decrees and determinations,
applicable to a
specified Person or to such Person's assets, properties or
business.
"BUSINESS DAY" means any day on which banks are generally open for
the
public in Denver, Colorado, USA, New York, New York, USA and
Copenhagen,
Denmark.
"CLOSING" has the meaning stated in Article 2.2(a).
"COMPANY" means Kirk Telecom A/S, a company incorporated and
existing under
the laws of Denmark, CVR no. 15622741, Langmarksvej 34, DK-8700
Horsens.
"COMPANY BUSINESS" means the business of the Group Companies as
presently
being conducted and as proposed to be conducted between signing of
this
Agreement and Closing.
"COMPANY IP RIGHTS" means the Company-Owned IP Rights and
Company-Licensed
IP Rights collectively and any other Intellectual Property Right
necessary for
the conduct of the Company Business.
"COMPANY-LICENSED IP RIGHTS" means Intellectual Property Rights
licensed to
the Company, Kirk Scantel or Kirk U.S. on a non-exclusive
basis.
"COMPANY NET INCOME" means the consolidated after tax net profit of
the
Group Companies, calculated in accordance with the Accounting
Principles and the
Danish Financial Statements Act (in Danish: "Arsregnskabsloven")
applying to
enterprises of reporting class C, during the period beginning May
1, 2005
through December 31, 2005 (unless Closing is postponed, cf.
subsection 2.2(a) in
which case the actual date of Closing shall be applied) and
consistent with the
presentation of such line item on the Company's financial
statements for the
financial year 2004/2005. In addition:
-
"PRELIMINARY NET INCOME STATEMENT" means a statement delivered by
the
Sellers to Buyer at Closing which sets forth the Sellers' best
good
faith estimate of the Company Net Income.
-
"FINAL NET
INCOME STATEMENT" means a statement which sets forth the
Company Net Income prepared and finally agreed upon in accordance
with
Section 2.2(b)(iii) hereof.
"COMPANY-OWNED IP RIGHTS" means Company IP Rights that are owned by
or
exclusively licensed to the Company, Kirk Scantel or Kirk U.S.
"COMPANY PRODUCT" means any product or service currently
manufactured,
marketed, sold, distributed or provided by the Company, Kirk
Scantel or Kirk
U.S.
"COMPANY RIGHTS" means all stock appreciation rights, options,
warrants,
calls, rights, commitments, conversion privileges or preemptive or
other rights
or agreements outstanding to purchase or otherwise acquire any
Company Shares,
shares of Kirk Scantel or shares of Kirk U.S., or any securities or
debt
(including loans or notes) convertible into or exchangeable for
Company Shares,
shares of Kirk Scantel or shares of Kirk U.S., or obligating the
Company, Kirk
Scantel or Kirk U.S. to grant, extend or enter into any such
option, warrant,
call, right, commitment, conversion privilege or preemptive or
other right or
agreement.
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"CONTRACT" means any contract, binding agreement, binding
arrangement,
binding commitment, undertaking, instrument, permit, mortgage,
license,
sublicense, binding letter of intent or purchase order (in each
case, whether
oral or in writing).
"CONTROL" means with respect to any Person, the ability to exercise
such
influence over another Person as would make that other Person a
Subsidiary.
"DISCLOSURE LETTER" means the disclosure letter from the Sellers to
Buyer,
including any and all appendices hereto, referred to in Section 3.2
as set out
in Exhibit E.
"DKA" means Dansk Kapitalanlaeg Aktieselskab, a company
incorporated and
existing under the laws of Denmark, CVR. no. 61095918, Gothersgade
103, 1008
Copenhagen K, Denmark.
"DKK" means Danish krone, the basic unit of currency in
Denmark.
"DESIGNATED EMPLOYEES" means Erik Stridbaek, Soren E. Mikkelsen,
Ole
Lysgaard Madsen, Karsten Omann, Heidi T. Jorgensen, Claus W.
Thomsen, Soren K.
Andersen and Gert W. Schmidt.
"DIRECTOR", when used with respect to the Group Companies, means a
member
of the Supervisory Board (in Danish: "bestyrelsen") or a similar
supervisory
board of the Group Companies.
"DUE
DILIGENCE DOCUMENTATION" has the meaning stated in Section 3.2 and
as
set out in Exhibit F and "ADDITIONAL DUE DILIGENCE DOCUMENTATION"
has the
meaning stated in Section 3.2.
"ENCUMBRANCE" means, with respect to any asset, any mortgage, deed
of
trust, lien, pledge, charge, security interest, title retention
device,
conditional sale or other security arrangement, collateral
assignment, charge,
adverse claim of title, ownership or right to use, or other
encumbrance of any
kind in respect of such asset (including any restriction on (a) the
voting of
any security or the transfer of any security or other asset, (b)
the receipt of
any income derived from any asset, (c) the use of any asset, and
(d) the
possession, exercise or transfer of any other attribute of
ownership of any
asset).
"ESCROW ACCOUNT" has the meaning stated in subsection
2.2(b)(i).
"ESCROW AGENT" has the meaning stated in subsection 2.2(b)(i).
"ESCROW AGREEMENT" has the meaning stated in subsection
2.2(b)(i).
"FIRST ESCROW AMOUNT" has the meaning stated in subsection
2.2(b)(i).
"FIRST INSTALLMENT" has the meaning stated in stated in
subsection
2.2(b)(ii)(A).
"GROUP COMPANIES" means the Company, Kirk Scantel and Kirk U.S.
"HOLDBACK AMOUNT"
means DKK 38,800,000.
"INDEPENDENT ACCOUNTANT" has the meaning stated in Article
2.2(b)(iii)(C).
"INTELLECTUAL PROPERTY RIGHTS" means, collectively, all
worldwide
industrial and intellectual property rights, including patents,
patent
applications, patent rights, trademarks, trademark registrations
and
applications therefore, trade dress rights, trade names, service
marks, service
mark registrations and applications therefore, Internet domain
names, Internet
and World Wide Web URLs or addresses, copyrights, copyright
registrations and
applications therefore, mask work rights, mask work registrations
and
applications therefore, inventions, trade secrets, know-how,
customer lists,
supplier lists, proprietary
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<PAGE>
processes and formulae, software source code and object code,
hardware
description language code, netlists, design databases, design
methodologies,
design schematics, transceivers, interconnects, equalizers,
algorithms, net
lists, architectures, structures, technology, screen displays,
photographs,
images, layouts, development tools, designs, blueprints,
specifications,
technical drawings (or similar information in electronic format)
and all
documentation and media constituting, describing, embodying or
relating to any
of the foregoing, including manuals, programmers' notes, memoranda
and records.
"KIRK SCANTEL" means Kirk Scantel A/S, a company incorporated and
existing
under the laws of Denmark, CVR no. 25194837, Radhustorvet 2,
DK-8700 Horsens.
"KIRK U.S." means Kirk telecom Inc., a company incorporated and
existing
under the laws of the state of Georgia, U.S.A., 229 Peachtree
Street N.E., suite
1010, Atlanta, GA 30303, U.S.A.
"LIABILITIES" means any debt, liability or obligation, whether
accrued or
fixed, absolute or contingent, matured or unmatured, determined or
determinable,
known or unknown, and whether due or to become due, in each case
that would be
required by Accounting Principles and the Danish Financial
Statements Act to be
reflected on a balance sheet or in the notes thereto, as well as
off balance
sheet liabilities and obligations.
"MANAGER", when used with respect to the Group Companies, means a
member of
the Executive Board (in Danish: "direktionen") or a similar
management board of
the Group Companies.
"MATERIAL ADVERSE EFFECT," when used with reference to any Person,
means
any event, change, violation, inaccuracy, circumstance or effect
(each, an
"EFFECT") that, individually or taken together with all other
Effects, (i) is
materially adverse in relation to the near-term or longer term
condition
(financial or otherwise), capitalization, properties, employees,
assets
(including intangible assets), business, prospects, operations or
results of
operations of such Person and its Subsidiaries, taken as a whole,
or (ii)
materially impedes or delays such Person's ability to consummate
the
transactions consummated by this Agreement in accordance with its
terms and
applicable legal requirements.
"MATERIAL AGREEMENTS" shall mean the agreements listed in Exhibit
G.
"NET
AMOUNT" has the meaning stated in subsection 2.2(b)(iii)(A).
"PERMITTED ENCUMBRANCES" means (i) any Encumbrance existing on
April 30,
2005 except to the extent the amount or restriction covered by the
encumbrance
has increased; (ii) any netting or set-off arrangement entered into
by the
Company, Kirk U.S. or Kirk Scantel, respectively, in the ordinary
course of
their banking arrangements for the purpose of netting debit and
credit balances;
(iii) any: (aa) Encumbrance arising by operation of law and in the
ordinary
course of trading; (ab) Encumbrance which is incidental to the
Company Business;
(ac) Encumbrance arising by operation of Tax law and in the
ordinary course of
business; (ad) Encumbrance entered into in the ordinary course of
business
securing any derivative transaction entered into in connection with
protection
against or benefit from fluctuation in any rate or price; or (ae)
any
Encumbrance due to a leasing contract entered into in the ordinary
course of
business with the Company, Kirk U.S. or Kirk Scantel as lessee; or
(iv) any
Encumbrance over or affecting any asset acquired by the Company,
Kirk U.S or
Kirk Scantel after the Agreement Date if: (aa) the Encumbrance was
not created
in contemplation of the acquisition of that asset by the Company,
Kirk U.S. or
Kirk Scantel; (ab) the principal amount secured or the restriction
has not been
increased in contemplation of, or since the acquisition of that
asset by the
Company, Kirk U.S. or Kirk Scantel; and (ac) the Encumbrance is
removed or
discharged within six (6) months of the date of the acquisition of
such asset.
"PERSON" means any individual, corporation, general or limited
partnership,
limited liability partnership, joint venture, estate, trust, firm,
company
(including any limited liability company or joint stock company),
association,
organization, entity or Regulatory Authority (defined below).
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<PAGE>
"PRELIMINARY NET INCOME STATEMENT" has the meaning stated in
Section 5.10.
"PRELIMINARY POSITIVE NET AMOUNT" has the meaning stated in
subsection
2.2(b)(ii)(B).
"PRO
RATA SHARE" means, with respect to each Seller receiving
payment
pursuant to Section 2.1, the quotient (rounded to the fourth
decimal place)
obtained by dividing (a) the number of Company Shares held by such
Seller
immediately prior to the Closing, by (b) the total number of
Company Shares
outstanding immediately prior to the Closing.
"PUBLIC SOFTWARE" means any software that contains, or is derived
in any
manner (in whole or in part) from, any software that is distributed
as free
software, open source software (e.g., Linux), including software
licensed or
distributed under any of the following licenses or distribution
models, or
licenses or distribution models similar to any of the following:
GNU General
Public License (GPL), GNU Lesser General Public License (LGPL),
Mozilla Public
License (MPL), BSD licenses, the Artistic License, the Netscape
Public License,
the Sun Community Source License (SCSL) the Sun Industry Standards
License
(SISL) and the Apache License.
"PURCHASE PRICE" means the Base Price, adjusted as follows: (a)
increased
or decreased as a result of the Net Income Adjustment; and (b)
reduced to the
extent of any Transaction Expenses as of the Closing paid or to be
paid by the
Company, to the extent not already reflected in the Net Income
Adjustment. For
purposes of this definition:
-
"BASE
PRICE" means DKK 388,000,000.
-
"NET
INCOME ADJUSTMENT" means (i) if the Company Net Income exceeds
DKK 21,000,000, a DKK-for-DKK increase to the Base Price equal to
the
amount by which the Company Net Income exceeds DKK 21,000,000,
and
(ii) if the Company Net Income is less than DKK 21,000,000, a
DKK-for-DKK reduction from the Base Price equal to the amount by
which
the Company Net Income is less than DKK 21,000,000.
"REGULATORY AUTHORITY" means any court, administrative agency,
commission
or other governmental or regulatory agency or authority.
"REPEATING WARRANTIES" means the Warranties repeated at Closing as
set
forth in Section 3.1.
"SELLER ANCILLARY AGREEMENTS" means the Consultant Agreement,
the
Non-competition and Invention Assignment Agreements, and any other
agreements
(other than this Agreement) and documents to which one or more of
the Sellers is
or will be a party that are required to be executed pursuant to
this Agreement.
"SELLERS' KNOWLEDGE" shall mean, with respect to any fact,
circumstance,
event or other matter in question, the actual knowledge of the
Sellers or of
Peter Skov, Erik Stridbaek, Steen Lonberg Jorgensen or Soren E.
Mikkelsen of
such fact, circumstance, event or other matter after having made
due and
reasonable inquiries prior to the Agreement Date (and only then) to
each of Ole
Lysgaard Madsen, Karsten Omann, Heidi T. Jorgensen, Claus W.
Thomsen and Soren
K. Andersen, allowing such persons to make due and reasonable
investigations
into the subject matter in question before responding to such
inquiries.
"SPECTRALINK" means SpectraLink Corporation, a company incorporated
and
existing under the laws of a Delaware, 5755 Central Avenue,
Boulder, Colorado,
USA.
"SUBSIDIARY" shall have the meaning set forth in Annex 1, part B,
item 2 of
the Danish Financial Statements Act.
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"TAX" and "TAXES" mean all taxes and tax liabilities whether actual
or
deferred, including income, gains, franchise, excise, property,
sales, use,
employment, license, payroll, services, occupation, recording,
value added or
transfer taxes, VAT, governmental charges, fees, levies,
assessments or other
taxes (whether payable directly or by withholding), and, with
respect to such
taxes, charges, fees, levies and assessments, any estimated tax,
interest,
fines, penalties or additions and interest on such fines, penalties
and
additions.
"TERMINATION DATE" means March 31, 2006.
"TRANSACTION EXPENSES" has the meaning specified in Section
12.6.
"USD" means US dollars, the basic unit of currency in the United
States of
America.
"WARRANTIES" means the warranties undertaken by the Sellers as set
forth in
Section 3.1 and Annex I.
ARTICLE 2
THE SHARE PURCHASE
2.1
Agreement to Sell and Purchase Shares. Each Seller hereby agrees
to
sell, convey, assign, transfer and deliver to Buyer, and Buyer
hereby agrees to
purchase from each Seller, at Closing and subject to the terms and
conditions of
this Agreement, all Company Shares held by each such Seller as set
forth
opposite such Seller's name in Exhibit A (which in the aggregate
constitute all
of the issued and outstanding shares of the Company), free and
clear of all
Encumbrances and with the benefit of all rights of whatsoever
nature attaching
or accruing to such shares on or after Closing, in consideration of
a cash
payment equal to such Seller's Pro Rata Share of the Purchase Price
(subject to
Sections 2.2 and 2.3 below).
2.2
Closing and Purchase Price.
(a) Closing. Closing of the Share Purchase ("CLOSING") will take
place
at the offices of Jonas Bruun, Bredgade 38, DK-1260 Copenhagen K,
on January 3,
2006, provided that the conditions set forth in Article 7 and
Article 8 have
been satisfied or waived in accordance with this Agreement (other
than those
conditions which, by their terms, are to be satisfied at Closing),
or at such
other location, time and date as the parties hereto agree in
writing.
(b) Payment of Purchase Price.
(i) At the signing. At the signing of this Agreement, the Buyer
shall deposit an amount of USD 55,147,581.37 (the "FIRST ESCROW
AMOUNT") in an
escrow account (the "ESCROW ACCOUNT") with Nordea Bank Danmark A/S
(the "ESCROW
AGENT") on the terms set out in Exhibit H hereto (the "ESCROW
AGREEMENT"), such
payment to be evidenced by a statement from Danske Bank confirming
that the
First Escrow Amount has been irrevocably transferred to the Escrow
Account.
(ii) At Closing. At Closing the Buyer shall against the
Sellers'
delivery of the items listed in subsections 2.2(c) pay the First
Installment,
deposit the Preliminary Positive Net Amount, if any, and deposit
the Holdback
Amount as follows:
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(A) Payment of First Installment. Buyer shall transfer by
means of wire transfer to each Seller in accordance with the wire
instructions
set forth in Exhibit A hereto each such Seller's Pro Rata Share of
an aggregate
amount (the "FIRST INSTALLMENT") equal to:
(aa) DKK 349,200,000 minus the Net Income Adjustment
amount if the Company Net Income pursuant to the Preliminary Net
Income
Statement is less than DKK 21,000,000; or
(ab) DKK 349,200,000 if the Company Net Income pursuant
to the Preliminary Net Income Statement is equal to or higher than
DKK
21,000,000.
At Closing, the First Escrow Amount shall have been
converted into DKK and shall be released to the Sellers as payment
of the First
Installment. If the First Escrow Amount in DKK is less than the
First
Installment to be paid by Buyer, then Buyer shall pay any
difference in DKK
directly to the Sellers. If the First Escrow Amount in DKK exceeds
the First
Installment, Buyer shall be entitled to demand that the excess
amount be
released to Buyer at Closing.
(B) Deposit of the Preliminary Positive Net Amount. If the
Company Net Income pursuant to the Preliminary Net Income Statement
is higher
than DKK 21,000,000, Buyer shall deposit the excess amount (the
"PRELIMINARY
POSITIVE NET AMOUNT") on the Escrow Account on the terms set out in
the Escrow
Agreement as security for Buyer's duty (if any) to pay the Net
Amount.
(C) Deposit of Holdback Amount. Buyer shall deposit the
Holdback Amount on the terms set out in the Escrow Agreement.
(iii) Post-Closing True-Up.
(A) Calculation. The Sellers shall deliver the Final Net
Income Statement as promptly as possible (and in any event within
thirty (30)
Business Days) following Closing. The Final Net Income Statement
shall be (i)
derived from and in accordance with the books and records of the
Group
Companies, (ii) fairly and accurately representative of the
revenue, cost of
revenue, operating expenses and after tax "net profit" of the Group
Companies as
of the Closing, and (iii) prepared in accordance with the
Accounting Principles
and the Danish Financial Statements Act applied on a basis
consistent with prior
periods. The Sellers shall specify the basis for any changes
between the
Preliminary Net Income Statement and the Final Net Income
Statement. If Buyer
accepts the Final Net Income Statement, then: (1) if the net amount
of the
Purchase Price, with the Net Income Adjustment component calculated
based on the
Final Net Income Statement, less the Holdback Amount and the First
Installment
(the "NET AMOUNT") is greater than zero (0), then Buyer shall pay
an aggregate
cash amount equal to the Net Amount within five (5) Business Days
of such
acceptance, by means of a wire transfer to each Seller of such
Seller's Pro Rata
Share of such amount in accordance with the wire instructions set
forth on
Exhibit A hereto, whereas (2) if the Net Amount is less than zero
(0), then
Buyer shall be entitled to elect either (or a combination of) the
following: (a)
the Sellers' shall personally (and severally but not jointly)
indemnify, within
five (5) Business Days of such acceptance, Buyer for the amount of
such
difference, or (b) such difference shall be treated as
indemnifiable Damages
under Section 10.2, and the Sellers shall be conclusively deemed to
have
consented (and without any right to contest), to the forfeiture of
such portion
of the Holdback Amount sufficient to satisfy such Damages. The
Sellers shall in
the period following Closing be granted reasonable access to the
books, records
and employees of the Group Companies in order for the Sellers to
prepare the
Final Net Income Statement.
(B) Review of Final Net Income Statement. Buyer shall be
entitled to review the Final Net Income Statement for a period of
twenty (20)
Business Days after the date it receives the Final Net Income
Statement (the
"REVIEW PERIOD"), and during the Review Period the Sellers agree to
make
themselves available as reasonably requested by Buyer to address
inquiries and
provide supporting information with respect to the Final Net Income
Statement.
Buyer may dispute the Final Net Income Statement by delivering
written notice to
the Sellers setting forth the item(s) in dispute and, in
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reasonable detail, the basis for the dispute (a "DISPUTE NOTICE"),
at any time
during the Review Period. If Buyer does not deliver a Dispute
Notice to the
Sellers before 11:59 P.M. Colorado Time on the last day of the
Review Period,
Buyer shall be deemed to have accepted the Final Net Income
Statement as of the
date following the expiration of the Review Period.
(C) Dispute Resolution. In the event that Buyer delivers a
Dispute Notice to the Sellers during the Review Period, Buyer and
the Sellers
shall meet within thirty (30) Business Days of the delivery of such
Dispute
Notice to attempt to resolve such dispute in good faith. If a final
resolution
of such dispute is reached, the agreed upon Final Net Income
Statement shall be
deemed final and binding. If no final resolution is reached within
thirty (30)
Business Days of the delivery of such Dispute Notice, either Buyer
or each of
the Sellers may, at their option request that the dispute be
submitted to Ernst
& Young State-Authorized Accounting Firm, or if Ernst &
Young does not accept
such task, another independent, well-reputed, international
accounting firm
having an office in Copenhagen, Denmark, appointed by the
Association of State
Authorized Accountants in Denmark (in Danish: "Foreningen af
Statsautoriserede
Revisorer") or such other firm as mutually agreed to by Buyer and
the Sellers
(the "INDEPENDENT ACCOUNTANT"). In the event a dispute is submitted
to the
Independent Accountant, (i) each of the parties to this Agreement
shall provide
full cooperation to the Independent Accountant, and (ii) each such
party may
submit a "position paper" to the Independent Accountant setting
forth the
position of such party with respect to such dispute, to be
considered by such
Independent Accountant as it deems fit. The Independent Accountant
shall (1) act
in its capacity as an expert and not as an arbitrator, (2) consider
only those
specific matters as to which there is a dispute between the Buyer
and the
Sellers, and (3) be instructed to reach its conclusions regarding
any such
dispute within thirty (30) Business Days after its appointment and
provide a
written explanation of its decision. The fees and expenses charged
by the
Independent Accountant shall be borne by the party whom the
Independent
Accountant determines is least correct in the aggregate with
respect to the
disputed item(s) referred to the Independent Accountant. In the
event both
parties are equally correct/incorrect, the fees and expenses shall
be split
evenly between the Buyer, on the one hand, and the Sellers, on the
other hand.
The decision of the Independent Accountant shall be final and
binding with
respect to the determination of the Final Net Income Statement.
Within five (5)
Business Days following the earliest of (aa) mutual agreement upon
a Final Net
Income Statement, or (bb) receipt of written notice of a final
decision of the
Independent Accountant, Buyer shall pay any additional amount
required pursuant
to clause (A) to the extent that the Net Amount calculated on the
basis of the
Final Net Income Statement exceeds zero (0), or alternatively Buyer
shall
automatically be entitled to elect either indemnification by the
Sellers
personally or forfeiture of a portion of the Holdback Amount to the
extent that
the Net Amount is less than zero (0).
(iv) Other Terms of Payment. No interest will be paid or
accrued
on any cash payable pursuant to Article 2, except the Holdback
Amount and except
if any amount is not paid when due in which case interest will
accrue under the
Danish Act on Interest (in Danish: "Renteloven"). The Sellers
hereby agree that
payment of the First Installment will be in full satisfaction of
all rights
pertaining to the Company Shares (other than pursuant to Sections
2.2 and 2.3),
and no dividends or distributions will be paid after the Agreement
Date or after
the Closing with respect to the Company Shares or otherwise to the
Sellers. Any
Danish stamp duty, transfer Tax or similar Tax payable in
connection with the
transfer of Company Shares by any Seller will be payable by such
Seller.
(v) Release of a deposited amount in excess of Holdback Amount.
If following the payment of the Net Amount under subsection
2.2(b)(iii)(A) or,
in case a Dispute Notice is given, under subsection 2.2(b)(iii)(C),
the amount
on the Escrow Account exceeds the Holdback Amount plus interest
accrued thereon,
then the Buyer shall be entitled to demand that the Escrow Agent
releases such
excess amount to Buyer. Any such amount shall be released not
earlier than five
(5) Business Days and not later than ten (10) Business Days after
the Escrow
Agent's receipt of notice from Buyer to this effect, such notice to
be given on
or after the date of the Final Net Income Statement becoming final
under
subsection 2.2(b)(iii) with a copy to the Sellers.
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(c) Deliverables of the Sellers at Closing. At Closing, the
Sellers
shall, against delivery by Buyer of payment of the First
Installment pursuant to
subsection 2.2(b)(ii) and Buyer's deposit of the Preliminary
Positive Net Amount
(if any) and the Holdback Amount on the Escrow Account pursuant to
subsection
2.2(b)(ii),deliver to Buyer:
1. The Company's register of shareholders with the Buyer duly
registered as the owner of the Company Shares, free and clear of
all
Encumbrances.
2. The original share certificates pertaining to the Company
Shares duly endorsed to evidence the Share Purchase;
3. The Group Companies' minute books including minutes of
general
meetings, minutes of meetings of the boards of directors and audit
minutes to
the extent such documents are not in the possession of the Group
Companies.
4. Signed letters of resignation from the Directors then in
office and elected by a general meetings of the Group Companies
(except for
employee representatives), confirming their respective resignations
and
confirming that they do not have any claims against the Group
Companies other
than for fees as board members for the period from May 1st 2005
until Closing
(which fees shall be fully reflected in the Preliminary and Final
Net Income
Statement), and relinquish any other rights which they may have
under any
contract of employment, consultancy, etc. with the Group Companies
and under any
statutory provisions or otherwise including any rights to damages
for wrongful
dismissal, redundancy or compensation for loss of office or unfair
dismissal; it
being agreed and understood that the entire agreement between Peter
Skov, the
Group Companies and the Buyer shall be as set out in this
Agreement, including
Exhibits B and C.
5. Documentation evidencing that the Supervisory Board of the
Company has approved the sale and purchase of the Company Shares as
contemplated
in this Agreement.
6. Documentary evidence of the due execution of this Agreement
in
accordance with each Sellers' rules of signature.
7. The Preliminary Net Income Statement, cf. Article 5.10.
8. A statement (if any) with respect to Repeating Warranties as
set out in Section 9.1(d).
9. A statement from each Seller confirming that the Sellers'
conditions specified in Article 7 have been fulfilled or
waived.
10. A statement confirming that Buyer's conditions specified in
Article 8 are fulfilled to the extent such conditions are under the
Sellers'
control.
11. Index of Additional Due Diligence Documentation.
(d) Deliverables of Buyer at Closing. At Closing, Buyer and
SpectraLink shall, against the Sellers' delivery of the items set
forth in
subsection 2.2(c), deliver to the Sellers:
1. Documentary evidence of the due execution of the Agreement
in
accordance with the Buyer's and SpectraLink's respective rules of
signature.
2. Evidence that the First Installment has been transferred to
the Sellers as set forth in subsection 2.2(b)(ii).
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3. Evidence that the Preliminary Positive Net Amount (if any)
and
the Holdback Amount have been deposited on the Escrow Account.
4. A statement confirming that Buyer's conditions specified in
Article 8 have been fulfilled or waived.
5. A statement confirming that Sellers' conditions specified in
Article 7 are fulfilled to the extent such conditions are under the
Buyer's
control.
(e) Deliverables of the Sellers at signing of this Agreement.
At
signing of this Agreement, the Sellers shall deliver to the
Buyer:
1. Documentary evidence of the due execution of this Agreement
in
accordance with each Seller's rules of signature.
2. The Escrow Agreement duly executed by each Seller.
(f) Deliverables of Buyer and SpectraLink at signing of this
Agreement. At signing of this Agreement, Buyer shall deliver to the
Sellers:
1. Documentary evidence of the due execution of this Agreement
in
accordance with the Buyer's and SpectraLink's respective rules of
signature.
2. The Escrow Agreement duly executed by Buyer and SpectraLink.
3. Documentary evidence that Danske Bank has irrevocably
transferred the First Escrow Amount to the Escrow Agent.
(g) Expenses relating to the termination of Peter Skov's
employment
with the Company. The parties agree that if, for accounting
purposes, the
Preliminary or Final Net Income Statement includes a provision for
the costs
relating to the termination of Peter Skov's employment with the
Company, this
shall have no impact on the Purchase Price. Therefore, the Net
Income Adjustment
shall be calculated on the basis of a Company Net Income of DKK
21,000,000 less
the after tax effects of such provision. The minimum Company Net
Income in
Section 8.5 shall be reduced by the same amount.
2.3
Release of Holdback Amount.
(a) The Holdback Amount shall serve as collateral to secure the
indemnification obligations of Sellers pursuant to Article 10 of
this Agreement
from Closing until 11:59 p.m. Colorado time on the date that is
fifteen (15)
months following the Closing (the "RELEASE DATE"), or such later
date as
provided in Section 2.3(b) and the payment to the Sellers of the
remaining part
of the Purchase Price, if any, at the expiry of the Release Date.
Interest shall
accrue on the Holdback Amount at the interest rate granted from
time to time by
the Escrow Agent for deposits of the same nature and length as the
amount on
escrow and as set out in the Escrow Agreement. No portion (nor all)
of the
Holdback Amount, nor any beneficial interest therein, may be
pledged, subjected
to any Encumbrance, sold, assigned or transferred by Buyer or by
any Seller, or
be taken or reached by any legal or equitable process in
satisfaction of any
debt or other Liability of Buyer or any Seller, prior to the
disbursement of the
Holdback Amount to Buyer or to any Seller in accordance with
Section 2.3(b)
below, except that Sellers shall be entitled to assign their rights
to the
Holdback Amount by will, by the laws of intestacy or by other
operation of law.
(b) Within five (5) Business Days following the Release Date,
the
Escrow Agent will disburse to each Seller, in accordance with the
wire transfer
instructions for each Seller specified on Exhibit A, such Seller's
Pro Rata
Share of the Holdback Amount in excess of that portion of the
Holdback Amount
that (i) has been released to Buyer in satisfaction of previously
resolved
claims in
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<PAGE>
accordance with Article 10 of this Agreement, and/or (ii) is
necessary to
satisfy all unsatisfied or disputed claims specified in any notice
of Claim
delivered to the Sellers with a copy to the Escrow Agent prior to
the Release
Date and pursued by legal action, both as required under Article 10
of this
Agreement. Together with such disbursement each Seller shall
receive such
Seller's Pro Rata Share of interest accrued on the released part of
the Holdback
Amount. Any portion of the Holdback Amount held following the
Release Date with
respect to pending but unresolved Claims that is not awarded to
Buyer upon the
resolution of such Claims shall be disbursed to the Sellers within
five (5)
Business Days following resolution of such Claims.
2.4
Tax Consequences. Neither Buyer nor the Sellers make any
representations or warranties to the other party regarding the Tax
treatment of
the Share Purchase, or any of the Tax consequences to the other
party of this
Agreement or any of the transactions or agreements contemplated
hereby. The
parties acknowledge that they are relying solely on their own Tax
advisors in
connection with this Agreement and the transactions and agreements
contemplated
hereby.
2.5
Tax Withholding Rights. Buyer shall be entitled to deduct and
withhold
from the payments to any Seller hereunder such amounts as Buyer is
required to
deduct and withhold under the laws of Denmark due to the Sellers'
tax
liabilities with respect to any such deliveries and payments. To
the extent that
amounts are so withheld, such withheld amounts shall be treated for
all purposes
of this Agreement as having been delivered and paid to such holders
in respect
of which such deduction and withholding was made.
2.6
Further Assurances. The Sellers hereby agree, subject to the
Buyer's
performance of its obligations under this Agreement, from and after
the
Agreement Date and continuing after the Closing, to (i) file any
notice,
statement or other communication, (ii) obtain and provide to Buyer
(and will
immediately prepare all filings and applications, requests and
notices
preliminary to obtaining) all approvals and consents, (iii) execute
and deliver
all such other and additional instruments, notices, assignments,
releases,
undertakings and documents, and (iv) do all such other acts and
take such
further actions necessary or reasonably desirable to assure to
Buyer all the
rights and interests granted under this Agreement. The Sellers
further agree to
take or cause to be taken such other actions as Buyer may
reasonably require (a)
to transfer, convey and assign to Buyer, and vest in Buyer, the
Company Shares
and (b) to carry out such Sellers' obligations under this Agreement
and give
effect to the transactions contemplated hereby.
ARTICLE 3
SELLERS' WARRANTIES (IN DANISH: "INDESTAELSER")
3.1
Warranties. By executing this Agreement, each Seller (severally and
not
jointly) makes to the Buyer the warranties and statements contained
in Annex I
hereto (the "WARRANTIES"), each of which will be considered a part
of this
Article 3. Such Warranties are made and shall, subject to the
qualifications set
out in section 3.2, be true and correct as of the Agreement Date,
and those
marked with an asterix (*) in Annex I (the "REPEATING WARRANTIES")
shall be
repeated at Closing and shall, subject to the qualifications set
out in section
3.2, also be true and correct as of Closing.
3.2
Qualifications of Warranties.
The Sellers' Warranties are subject to the following
qualifications:
(a) The Buyer and its advisors have prior to the execution of
this
Agreement conducted, and will prior to Closing be able to conduct,
a review of
the written material of the Group Companies set out in Exhibit F
hereto (the
"DUE DILIGENCE DOCUMENTATION"), which material will be updated in
the period
from the Agreement Date until Closing to reflect events occurring
in this
period,
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which updating (the "ADDITIONAL DUE DILIGENCE DOCUMENTATION") will
be
communicated to Buyer and specified in an appendix to be delivered
by the
Sellers at Closing. The Sellers shall not be liable for any breach
of the
Warranties to the extent it was within Buyer's or its advisors'
actual knowledge
prior to signing of this Agreement that the Warranties were
incorrect.
Information shall only be deemed to have been within Buyer's and/or
its
advisors' actual knowledge if it has been fairly and adequately
presented to
Buyer and/or Buyer's external advisors in the Due Diligence
Documentation and in
a manner or form that would reasonably enable a buyer of the
Company Shares to
recognize an issue in violation of the Warranties. The Additional
Due Diligence
Documentation shall not serve as a disclosure to the Repeating
Warranties.
(b) The Warranties, including all Schedules thereto, are subject
to
the disclosures set forth in the letter addressed to Buyer from the
Sellers and
dated as of the Agreement Date (which will specifically reference
the Sections
of this Agreement, including the Warranties, to which the specific
items of
disclosure therein constitute an exception, and which shall be
considered
included under any other Section of the Agreement only to the
extent such
inclusion is readily recognizable based on the substance of such
disclosure)
which has been delivered by the Sellers to Buyer concurrently with
the parties'
execution of this Agreement as Exhibit E (the "DISCLOSURE LETTER").
The Sellers
shall not be liable for any breach of the Warranties if, subject to
the
preceding provisions of this Section, the event, circumstance or
document making
the Warranties incorrect, incomplete and/or misleading is fairly
and adequately
stated or specifically referred to in the Disclosure Letter, and
provided that
any document referred to in the Disclosure Letter have been
presented as part of
the Due Diligence Documentation.
(c) The Sellers understand that Buyer is entering into this
Agreement
in reliance on the Warranties and no qualifications is made with
respect to the
Warranties set forth in Section I.1 (Good and Valid Title), Section
II.4
(Capitalization) and Section 10 (Taxes) of Annex I, except for
such
qualifications explicitly stated in the corresponding section of
the Disclosure
Letter.
3.3 No implied
warranties etc. Subject to what is stated elsewhere in this
Agreement, the Warranties are the Sellers' complete and exhaustive
warranties
regarding the business of the Group Companies, and, consequently,
the Buyer
cannot rely on any other warranties including but not limited to
implied
warranties or assumptions in this respect; nor do the Sellers make
any
warranties in respect of forecasts, estimates, assessments, on
future
developments, events, or figures found in the Due Diligence
Documentation or the
Additional Due Diligence Documentation or elsewhere expressing the
Sellers', the
Company's management's and/or the Group Companies'
expectations.
ARTICLE 4
WARRANTIES AND COVENANTS OF BUYER AND SPECTRALINK
Buyer and SpectraLink warrant to the Sellers that each of the
statements
contained in the following sections of this Article 4 is true and
correct as of
the Agreement Date and will be true and correct as of the Closing,
and hereby
agrees with the Sellers as follows.
4.1
Organization and Good Standing. SpectraLink is a corporation
duly
organized, validly existing and in good standing under the laws of
the State of
Delaware and Buyer is a corporation duly organised and validly
existing under
the laws of Denmark, and Buyer and SpectraLink have the power and
authority to
own, operate and lease their properties and to carry on their
business as
presently being conducted and as proposed to be conducted.
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4.2
Power, Authorization and Validity.
(a) Buyer and SpectraLink have the right, power and authority to
enter
into and perform their respective obligations und
