znga-8k_20200531.htm
false 0001439404 0001439404 2020-05-31 2020-05-31

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 31, 2020

 

ZYNGA INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware

001-35375

42-1733483

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

 

 

 

699 Eighth Street

San Francisco, CA 94103

 

94103

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (855) 449-9642

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A common stock

ZNGA

Nasdaq Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 


 

Item 1.01. Entry into a Material Definitive Agreement.

Acquisition of Peak

On May 31, 2020, Zynga Inc., a Delaware corporation (“Zynga”), entered into a Share Sale and Purchase Agreement (the “Agreement”) with the shareholders (collectively, the “Sellers”) of Peak Oyun Yazılım ve Pazarlama Anonim Şirketi, a Turkey joint stock company (“Peak”), pursuant to which Zynga will acquire at closing all allotted and issued share capital (including all rights to acquire share capital) of Peak in exchange for consideration of approximately $1.8 billion of which (a) $900 million will be payable in cash, subject to adjustments as set forth in the Agreement (the “Closing Cash Consideration”) and (b) the remaining $900 million will be satisfied by the issue of approximately 113 million shares (the “Zynga Stock Consideration” and together with the Closing Cash Consideration, the “Base Consideration”) of Class A common stock of Zynga (the “Zynga Stock”), based on the volume-weighted average closing price of the Zynga Stock during the 30 consecutive trading days immediately preceding the date of the Agreement, subject to adjustments as set forth in the Agreement. The Zynga Stock Consideration will be subject to a 6-month holding period for all Sellers (with 50% of the Zynga Stock Consideration issued to the Management Seller named in the Agreement subject to a 12-month holding period).

The Base Consideration will be (i) decreased by the Sellers’ portion of certain transfer taxes and the premium payment related to a warranty and indemnity insurance policy; (ii) decreased by Peak’s outstanding indebtedness on the closing date, the amount of any change of control related payments and transaction expenses incurred by Peak and its affiliates; and (iii) increased, or decreased, by the amount by which Peak’s working capital on the closing date exceeds, or is less than, a specified amount (the Base Consideration, as adjusted, the “Total Purchase Consideration”).

The closing is expected to occur during the third quarter of 2020, subject to satisfaction or waiver of specified conditions, including required antitrust filings. Following the closing, Peak will be a direct, wholly-owned subsidiary of Zynga.

The Agreement is governed by and shall be construed in accordance with English law. The Agreement provides investors with information regarding its terms. The terms and information in the Agreement should not be relied on as factual disclosure about Zynga or Peak without consideration of the periodic and current reports and other statements that Zynga files with the Securities and Exchange Commission (the “SEC”). The terms of the Agreement govern the contractual rights and relationships, and allocate risks, among the parties thereto in relation to the transaction. In particular, the Agreement contains customary warranties of each of Zynga and the Sellers. The warranties of each party set forth in the Agreement have been made solely for the benefit of the other parties to the Agreement, and such warranties should not be relied on by any other person. In addition, such warranties (1) have been qualified by a disclosure letter from the Sellers, (2) are subject to the materiality standards set forth in the Agreement, which may differ from what may be viewed as material by investors, (3) in certain cases, were made as of a specific date, and (4) may have been used for purposes of allocating risk between the respective parties rather than establishing matters of fact. Accordingly, no person should rely on the warranties as characterizations of the actual state of facts. Moreover, information concerning the subject matter of the warranties may change after the date of the execution of the Agreement. Zynga does not undertake any obligation to publicly release any revisions to these warranties, except as required under U.S. federal or other applicable securities laws.

Pursuant to the Agreement, the Sellers have agreed to indemnify Zynga for losses related to specified matters, including, among other things, breaches or inaccuracies of warranties of the Sellers contained in the Agreement, specified tax matters, and for other customary matters. As security for such indemnification obligations, $120 million of the Total Purchase Consideration otherwise payable to the Sellers has been deposited into an escrow fund in cash.

The Agreement may be terminated upon material breach of certain provisions in the Agreement or if the closing has not occurred by August 31, 2020, subject to extension as set forth in the Agreement.

The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement. The Agreement is filed as Exhibit 2.1 hereto and incorporated herein by reference.

Item 3.02. Unregistered Sales of Equity Securities.

The information set forth under Item 1.01 of this Current Report on Form 8-K is hereby incorporated into this Item 3.02. In accordance with the Agreement, a portion of the consideration to be delivered to the Sellers at closing consists of the Zynga Stock Consideration. The Zynga Stock Consideration will be issued pursuant to exemptions from registration provided by Section 4(a)(2) and/or Regulation S of the Securities Act of 1933, as amended (the “Securities Act”).

Item 7.01. Regulation FD Disclosure.

On June 1, 2020, Zynga issued a press release announcing the entry into the Agreement to acquire Peak and providing updated financial guidance for its second quarter and full year 2020. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8‑K and is incorporated herein by reference. The information furnished in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended

 


 

(the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.

This Current Report on Form 8-K contains forward-looking statements relating to, among other things, Zynga’s expectations related to the timing and closing of the acquisition of Peak and its ability to achieve the intended benefits of the acquisition; and Zynga’s future economic performance and its ability to achieve financial projections, including revenue, bookings, income and margin goals. Forward-looking statements often include words such as “outlook,” “projected,” “intends,” “will,” “anticipate,” “believe,” “target,” “expect,” and statements in the future tense are generally forward-looking. The achievement or success of the matters covered by such forward-looking statements involves significant risks, uncertainties and assumptions, including those described in Zynga’s public filings with the SEC, copies of which may be obtained by visiting Zynga’s Investor Relations web site at http://investor.zynga.com or the SEC's website at www.sec.gov. Zynga’s actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of our future performance. Factors that could cause or contribute to such differences include, but are not limited to, delays or other challenges in the completion of the Peak acquisition and its integration and the success of its current and future games as part of Zynga. Undue reliance should not be placed on such forward-looking statements, which are based on information available to Zynga on the date hereof. Zynga assumes no obligation to update such statements.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

 

 

Exhibit Number

Description

2.1+

Share Sale and Purchase Agreement relating to the sale and purchase of the entire issued share capital of Peak Oyun Yazılım ve Pazarlama Anonim Şirketi between those persons listed in Schedule 1 as Sellers and Zynga Inc. as Purchaser

99.1

Press Release, dated June 1, 2020

104

Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document)

+

Certain portions of this exhibit have been omitted pursuant to Items 601(a)(5) and 601(b)(2) of Regulation S-K. A copy of any omitted portion will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however, that Zynga may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any document so furnished.

 

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

ZYNGA INC.

 

 

 

 

Date:  June 1, 2020

 

By:

/s/ Phuong Y. Phillips

 

 

 

Phuong Y. Phillips

 

 

 

Chief Legal Officer and Secretary

 

 

znga-ex21_31.htm

 

Certain portions of this document have been omitted pursuant to Items 601(a)(5) and 601(b)(2) of Regulation S‑K and, where applicable, have been marked with “[***]” to indicate where omissions have been made. A copy of any omitted portion will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however, that Zynga may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any document so furnished.

Exhibit 2.1

Dated 31 May 2020

Share Sale and Purchase Agreement

relating to the sale and purchase of the entire issued share capital of Peak Oyun Yazılım ve Pazarlama Anonim Şirketi

between

Those persons listed in Schedule 1

as Sellers

Zynga Inc.

as Purchaser

 

 

 

 

 

 

 

 


 

Table of Contents

Page

1.

Interpretation1

 

2.

Sale and Purchase18

 

3.

Conditions19

 

4.

Consideration21

 

5.

Escrow22

 

6.

Pre‑Completion Obligations22

 

7.

Completion26

 

8.

Post-Completion Stock Awards27

 

9.

Post-Completion Undertakings28

 

10.

Purchasers’ Warranties28

 

11.

Sellers’ Warranties30

 

12.

Sellers’ Limitations on Liability31

 

13.

Specific Indemnities32

 

14.

Restrictions on the Management Seller33

 

15.

Business Information34

 

16.

Termination34

 

17.

Confidentiality34

 

18.

Announcements35

 

19.

No Assignment36

 

20.

Further Assurance36

 

21.

Entire Agreement36

 

22.

Severance and Validity36

 

23.

Variations36

 

24.

Remedies and Waivers36

 

25.

Effect of Completion37

 

26.

Third Party Rights37

 

27.

Payments37

 

28.

Costs and Expenses38

 

29.

Transfer Taxes38

 

30.

Default Interest38

 

31.

Notices38

 

32.

Counterparts39

 

33.

Governing Law and Jurisdiction39

 

34.

Agent for Service of Process39

 

35.

Sellers’ Representatives39

 

 

 

(i)

 

 


 

 

Page

36.

Transfer Restrictions40

 

Schedule 1

The Sellers43

Schedule 2

The Group45

Part 1

The Company45

Part 2

The Subsidiary46

Schedule 3

Completion Arrangements47

Part 1

Sellers’ Obligations47

Part 2

Purchaser’s Obligations49

Schedule 4

Warranties50

Part 1

Fundamental Warranties50

Part 2

Management Warranties52

Schedule 5

Sellers’ Limitations on Liability75

Schedule 6

Conduct of Business81

Part 1

Governing Principles81

Part 2

Negative Covenants82

Schedule 7

Properties83

Part 1

Leased Properties83

Schedule 8

Excluded Business84

Schedule 9

Completion Accounts85

Part 1

Rules for Preparation of Completion Accounts85

Part 2

Specific Accounting Treatments87

Part 3

Preparation, Delivery and Agreement88

Schedule 10

Post Completion Financial Adjustments90

Part 1

Adjustments90

Part 2

Settlement of Adjustments90

Schedule 11

Escrow Account91

Part 1

General91

Part 2

Payments from the Escrow Account91

Schedule 12

Tax Covenant93

 

 

 

 

 

(ii)

 

 


 

This Agreement is made on 31 May 2020

Between:

(1)

The persons whose details are set out in Schedule 1 (The Sellers) (together, the “Sellers”); and

(2)

Zynga Inc., a company incorporated in Delaware with registered number 4446916 and whose registered office is at 699 8th Street, San Francisco, California 94103 (the “Purchaser”).

Whereas:

(A)

Each of the Sellers is, at the date of this Agreement, the beneficial owner and registered holder of that number of Relevant Sale Shares as set out opposite its name in Schedule 1.

(B)

Each of the Sellers has agreed to sell, and the Purchaser has agreed to purchase, all of the Relevant Sale Shares as set out opposite its name in Schedule 1, in each case on the terms and subject to the conditions of this Agreement (the “Transaction”).

It is agreed:

1.

Interpretation

1.1

In this Agreement:

Accounts Date” means December 31, 2019;

Actual Debt” means the Debt owed by the Group as at 9 am Istanbul time on the Completion Date, as calculated and determined in accordance with Part 1 of Schedule 9 (Completion Accounts);

Actual Working Capital” means the Working Capital of the Group as at 9 am Istanbul time on the Completion Date, as calculated and determined in accordance with Part 1 of Schedule 9 (Completion Accounts);

Agents” means, in relation to a person, that person’s directors, officers, employees, advisers, agents and representatives;

Anti‑Bribery Laws” means, in each case to the extent that they have been applicable to a Group Company at any time prior to the date of this Agreement: (i) the UK Bribery Act 2010; (ii) the U.S. Foreign Corrupt Practices Act of 1977 (as amended); (iii) any applicable law, rule, or regulation promulgated to implement the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, signed on 17 December 1997; and (iv) any other applicable law, rule or regulation of similar purpose and scope in any jurisdiction, including books and records of offences relating directly or indirectly to a bribe;

Antitrust Law” means, in each case to the extent that they have been applicable to a Group Company at any time prior to the date of this Agreement: (i) Articles 101 and 102 of the Treaty on the Functioning of the European Union and the provisions of national laws in the European Economic Area member states that are substantially similar thereto; (ii) Sections 1 and 2 of the U.S. Sherman Act, the Clayton Act, the HSR Act, and the Federal Trade Commission Act; (iii) the Act against Restraints of Competition of Germany, in particular its merger control provisions in §§ 35 pp; and (iii) any other Law of any jurisdiction, including but not limited to Law on Protection of Competition (Rekabetin Korunması Hakkında Kanun) numbered 4054 published in the Official Gazette dated 13 December 1994 and numbered 22140, intended to prohibit or regulate agreements, understandings, practices or behavior that could restrict competition or could lead to anti-competitive effects, through the merger or combination by any other means of independent businesses, or otherwise;

 

 

1

 

 


 

Applicable Accounting Standards” means International Financial Reporting Standards (IFRSs), International Accounting Standards and Interpretations of those standards issued by the International Accounting Standards Board and the International Financial Reporting Interpretations Committee and their predecessors and the requirements of all relevant laws.

Auditors” means Güney Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş., an affiliate of Ernst & Young in Turkey;

Authority” means a supra-national, national or sub-national authority, commission, department, agency, regulator or regulatory body with jurisdiction in any jurisdiction whose Laws are applicable to the Group Companies;

B, C, D and E Sellers” means all the Sellers other than the Management Seller;

Beneficiarieshas the meaning given to it in Clause 8.1;

Beşiktaş Branch” means the branch of the Company established on 14 February 2019, with the registered address Levazım Mahallesi Koru Sk. Zorlu Center Apt. no 2/445 Besiktas/Istanbul;

Budget” means the operating budget for the calendar years 2020, 2021 and 2022 in the agreed terms to be adopted by the Company on Completion;

Business” means the business of the Group comprising the development, marketing and publishing of games on mobile and online platforms as conducted by it on the date of this Agreement and from time to time thereafter;

Business Data” means all data and information that is created or used by a Group Company, or is processed by or stored on any Company IT Asset;

Business Day” means a day (other than a Saturday or Sunday or a public holiday) when commercial banks are open for ordinary banking business in London, United Kingdom, Istanbul, Turkey, and San Francisco, California;

Business Domain Name” means any domain name which any of the Group Companies has or purports to have, control of or an ownership interest of any nature in (whether exclusively, jointly with another person, or otherwise);

Business Information” means drawings, formulae, test results, reports, project reports and testing, operation and manufacturing procedures, shop practices, instruction and training manuals, tables of operating conditions, market forecasts, specifications, data, quotations, tables, lists and particulars of customers and suppliers, marketing methods and procedures, technical literature and brochures and any other technical, industrial and commercial information and techniques in any tangible form (including paper, electronically stored data, magnetic media, microfiche, film and microfilm);

Business IP” means any Intellectual Property Right in which any of the Group Companies has or purports to have an ownership interest of any nature (whether exclusively, jointly with another person, or otherwise) or that is used, or held for use, by any Group Company;

Business Materials” means all:

 

(a)

Business Software; and

 

(b)

Business Information and other documents, designs, drawings, methodologies, or materials that are material to the operation of the Business;

Business Owned IP” means all:

 

(a)

Registered Business IP Rights;

 

 

2

 

 


 

 

(b)

Business Domain Names;

 

(c)

Business Owned Software; and

 

(d)

other Business IP in which any of the Group Companies has or purports to have an ownership interest of any nature (whether exclusively, jointly with another person, or otherwise);

Business Owned Software” means any and all Business Software in which any of the Group Companies has or purports to have an ownership interest of any nature (whether exclusively, jointly with another person, or otherwise);

Business Plan” means the business plan and the Budget in the agreed terms to be adopted by the Company on Completion;

Business Product” means all products, games or other offerings:

 

(a)

marketed, made commercially available, distributed by or on behalf of the Company, including the mobile games “Toon Blast” and Toy Blast”;

 

(b)

under licence or development by, or for, any of the Group Companies; or

 

(c)

contemplated to be developed by or for the Group Companies, but not currently under development;

Business Social Media Account” means any online social media or customer outreach services maintained by any of the Group Companies;

Business Software” means all Software that is:

 

(a)

used, marketed, sold, distributed, provided, published or licensed; or

 

(b)

being developed; or

 

(c)

used in the design, development, distribution, publication, testing, maintenance, or support of, any Business Product,

in each case by or on behalf of any of the Group Companies at any time, but excluding any third-party Software that is generally available on standard commercial terms and is licensed to a Group Company, in object code form and on a non-exclusive basis;

Cash” means, in relation to the Group,

 

(a)

the aggregate of its cash in hand or credited to any account with any banking, financial, acceptance credit, lending or other similar institution or organisation (and any accrued and outstanding interest thereon); less

 

(b)

the aggregate of all cash received between the date of this Agreement and the Completion Date by the Group, which comprises the proceeds of any insurance claim in respect of the destruction of, or damage to, any asset of any member of the Group, to the extent that such entity would need to apply it towards the replacement or repair of the insured asset in order to be able to continue to use or earn income from the asset or its replacement in the manner in which it did so during its period of ownership; and

 

(c)

the aggregate cash value of any declared but unpaid dividends and other distributions attributable to the Shares;

Cause Eventmeans any event, act or omission that entitles any Group Company that employs the relevant Management Seller or Key Employee to terminate the employment of such Management Seller or Key Employee (i) due to a material breach by such Management

 

 

3

 

 


 

Seller of Clause 14 (Restrictions on the Management Seller) of this Agreement or the Management Seller Employment Agreement, or (ii) due to a material breach by such Key Employee of the Key Employee Employment Agreement, or (iii) in accordance with Article 25 of the Turkish Labor Law, except for Article 25(II)(g), for so long as any such Management Seller or Key Employee’s absence does not materially impact the Company’s Business and day-to-day operations or (iv) due to such Management Seller or Key Employee (a) engaging in conduct that constitutes fraud, fraudulent misrepresentation or wilful misconduct in the performance of his or her duties and responsibilities; and (b) failing to carry out material duties of his or her position as determined under the respective Management Seller Employment Agreement or Key Employee Employment Agreement or follow lawful instructions from his or her superiors, being the Company’s board of directors or the Purchaser in the case of the Key Employees and the Company’s board of directors or the Purchaser in the case of the Management Seller; (d) engaging in or committing an unlawful act causing material breach of trust to the Company, Group Company or the Purchaser; (e) committing any willful, material violation of any Law applicable to the Group Companies, code of ethics, policies or regulation applicable to the Business of the Company and the Group Company causing material damage thereto; (f) failing (other than due to physical incapacity) to cooperate with an investigation by a Governmental Authority or the Company, Group Company or Purchaser of the Company’s Business or financial condition in violation of the applicable laws; regardless of whether such actions under (a) through (f) qualify as one of the reasons under Article 25 of the Turkish Labor Law; provided, that in each case under clause (i) through (iv), the Company provides the relevant Management Seller or Key Employee (as applicable) with written notice of the facts related to such claimed reason within 30 days of becoming aware of such claimed reason, and if such claimed reason is not cured (if capable of being curable) within 30 days after the receipt of such written notice by the relevant Management Seller or Key Employee (such 30-day period the “Company Management Cure Period”), and the Company actually terminates, or serves notice to terminate, employment for cause within 10 days after the expiration of the Company Management Cure Period (as applicable);

Cessation Date” means the effective termination date on which the Management Seller or a Key Employee actually ceases to be an employee of the Purchaser or any Group Company;

Change of Control Payments” means any compensation, bonuses, profit sharing, severance or other termination payments or benefits, retention payments, ‘phantom stock agreements’, stock-based or phantom equity compensation items, and other similar payments or benefits owed by a Group Company to the Workers, Key Employees and Management Seller, former employees, shareholders or contractors of any Group Company that are triggered in connection with the Transaction or the transfer of the Excluded Business following Completion and the employer portion of any Taxes resulting from such payments or benefits;

Claim” means any Warranty Claim, Indemnity Claim, or Tax Claim;

Code” means the United States Internal Revenue Code of 1986, as amended;

Company” means Peak Oyun Yazılım ve Pazarlama Anonim Şirketi, further details of which are set out in Part 1 of Schedule 2;

Company IT Assets” means all Software, databases, systems, servers, computers, Hardware, firmware, middleware, networks, data communications lines, routers, hubs, switches and other information technology or communication equipment used in the operation of the business of a Group Company;

Completion” means completion of the sale and purchase of the Shares under this Agreement, in accordance with the provisions hereof;

Completion Accounts” means the accounts prepared in accordance with Part 1 of Schedule 9 (Rules for Preparation of Completion Accounts);

 

 

4

 

 


 

Completion Date” means the fifth (5th) Business Day after (and excluding) the day on which the last of the Conditions has been satisfied or waived in accordance with this Agreement or such other date as the Parties agree in writing;

Conditions” means the conditions referred to in Clause 3 (Conditions);

Connected Person” means, in relation to an Undertaking:

 

(a)

any other person who has Control of that Undertaking (a “Controlling Person”);

 

(b)

any Controlling Person’s own spouse or civil partner, parents and siblings (including step-siblings and half-siblings), linear ancestors and direct descendants, including adopted children, of that Controlling Person and of other such persons and their respective spouses or civil partners, parents and siblings (including step-siblings and half-siblings), linear ancestors and direct descendants, including adopted children (together, the “Controlling Person’s Family”);

 

(c)

any trust established by or for the benefit of a Controlling Person or a member of a Controlling Person’s Family;

 

(d)

any Undertaking in whose equity shares or partnership interests a Controlling Person and/or one or more members of a Controlling Person’s Family are, taken together, able to exercise or control the exercise of at least twenty (20) per cent. of the votes able to be cast at general meetings, or to appoint or remove directors or equivalent officers holding a majority of voting rights at meetings of the board or equivalent management body, in each case on all, or substantially all, matters;

 

(e)

any Undertaking whose directors or equivalent officers are accustomed to act in accordance with the directions or instructions of a Controlling Person and/or any one or more members of a Controlling Person’s Family;

 

(f)

any Undertaking (other than any Group Company) of which a Controlling Person or a member of a Controlling Person’s Family is a director or equivalent officer; and

any nominee, trustee or agent or any other person acting on behalf of any person referred to in in this definition;

Continuing Provisions” means Clause 1 (Interpretation), Clause 17 (Confidentiality), Clause 18 (Announcements), Clause 19 (No Assignment), Clause 21 (Entire Agreement), Clause 22 (Severance and Validity), Clause 23 (Variations), Clause 24 (Remedies and Waivers), Clause 26 (Third Party Rights), Clause 27 (Payments), Clause 28 (Costs and Expenses), Clause 31 (Notices), Clause 33 (Governing Law and Jurisdiction), Clause 34 (Agent for Service of Process) and Clause 35 (Sellers’ Representatives), all of which shall continue to apply after the termination of this Agreement pursuant to Clause 3.10 (Conditions) and Clause 7.6(c) (Completion) without limit in time;

Control” means, in relation to a person, any person who:

 

(a)

holds or controls, directly or indirectly, a majority of the voting rights exercisable at shareholder meetings (or the equivalent) of that person; or

 

(b)

has, directly or indirectly, the right to appoint or remove directors holding a majority of the voting rights exercisable at meetings of the board of directors (or the equivalent) of that person; or

 

(c)

has, directly or indirectly, the ability to direct or procure the direction of the management and policies of that person, whether through the ownership of shares, by contract or otherwise; or

 

 

5

 

 


 

 

(d)

has the ability, directly or indirectly, whether alone or together with another, to ensure that the affairs of that person are conducted in accordance with his or its wishes,

and the terms “Controlling” and “Controlled” shall be construed accordingly and any two or more persons acting together to secure or exercise Control of another person shall be viewed as Controlling that other person;

Controller” means any entity that, alone or jointly with others, determines the purposes for which, and means by which, Personal Data are Processed;

[***];

Data Protection Authority means any local, national, supranational, state, governmental or quasi-governmental agency, body, department, board, official or entity exercising regulatory or supervisory authority pursuant to any Data Protection Laws;

Data Protection Laws” means, in each case to the extent that they have been applicable to a Group Company at any time prior to the date of this Agreement: (a) all Laws applicable to the Processing of Personal Data, including, but not limited to, Regulation (EU) 2016/679, EU Directives 95/46/EC, 2002/58/EC and 2009/136/EC (each as implemented into the national laws of EU Member States), Turkish Personal Data Protection Law numbered 6698 and its secondary legislation, Federal Trade Commission Act of 1914, Children’s Online Privacy Protection Act of 1998, and California Consumer Privacy Act of 2018; and (b) all formal guidance and codes issued by any Data Protection Authority in the European Union or the United Kingdom (including guidance and codes issued by the Article 29 Working Party and the European Data Protection Board, or the Information Commissioner's Office), all formal guidance issued by Turkish Personal Data Protection Authority, all guidance and regulations issued by applicable United States federal Authorities (including, but not limited to, the Federal Trade Commission) and applicable state Authorities (including, but not limited to, any state attorney general),each to the extent in force, implemented, and applicable, and each as amended, consolidated or replaced from time to time;

Data Room” means the electronic data room facility hosted by Merrill DatasiteOne comprising the actual copies of documents and other information relating to the Business and the Group made available to the Purchaser’s Group and its advisers, as itemised in the data room index in the agreed terms;

Data Subject” means an individual who is the subject of the relevant Personal Data;

Debt” means the aggregate of:

 

(a)

all borrowings, and indebtedness in the nature of borrowings, of the Group owed to any banking, financial, acceptance credit, lending or other similar institution or organisation, excluding any creditor taken into account in calculating Working Capital;

 

(b)

all indebtedness of the Group for unsatisfied deferred purchase consideration in respect of shares, assets or businesses owed to any person that is not a member of the Group; and

 

(c)

any accrued and outstanding interest on any amounts specified above;

Disclosed” means fairly and specifically disclosed in the Disclosure Letters with sufficient detail to enable the Purchaser to understand the nature and scope of the matter disclosed;

Disclosure Letters” means (i) the First Disclosure Letter, (ii) the Second Disclosure Letter and (iii) the Updated Second Disclosure Letter;

Draft Completion Accounts” has the meaning given in paragraph 1.1, Part 3 of Schedule 9 (Preparation, Delivery and Agreement);

 

 

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Economic Sanctions Lawmeans, in each case to the extent that they have been applicable to a Group Company at any time prior to the date of this Agreement: economic or financial sanctions, restrictive measures, trade embargoes or export control Laws imposed, administered or enforced from time to time by any Sanctions Authority;

Encumbrance” means any pledge, charge, lien, mortgage, debenture, hypothecation, security interest, pre‑emption right, option, claim, equitable right, power of sale, pledge, retention of title, right of first refusal or other third party right or security interest of any kind or an agreement, arrangement or obligation to create any of the above;

Escrow Account” means the deposit account to be opened in the name of the Escrow Agent and operated in accordance with the Escrow Agreement;

Escrow Agent” means JPMorgan Chase Bank, N.A.;

Escrow Agreement” means the escrow agreement to be entered into on or around the date of this Agreement between the Escrow Agent, the Purchaser and the Sellers;

Escrow Amount” means the amount of US$120,000,000;

Estimated Debt” means the Management Seller's good faith estimate of (i) the aggregate Debt to be owed by the Group as at 9 am Istanbul time on the Completion Date; (ii) all Change of Control Payments; and (iii) all Transaction Expenses, as notified to the Purchaser in writing not less than (five) 5 Business Days prior to Completion, together with such supporting evidence in written form as is reasonably necessary for the Purchaser to understand the estimate;

Estimated Working Capital means the Working Capital estimated by the Management Seller in good faith to be held by the Group as at 9 am Istanbul time on the Completion Date, as notified to the Purchaser in writing not less than (five) 5 Business Days prior to Completion, together with such supporting evidence in written form as is reasonably necessary for the Purchaser to understand the estimate;

Excluded Business” means the [***] business unit of the Group and all projects being carried out by that business unit, together with all Intellectual Property Rights owned by a Group Company and used, or held for use, exclusively in that business unit and any working furniture, fixtures, Hardware or Software, in each case used, or held for use, exclusively in that business unit, details of which are set out in Schedule 8 (Excluded Business);

Excluded Business Entity” means the entity to which the Excluded Business will be transferred on the Excluded Business Transfer Terms;

Excluded Business Transfer” means the transfer of the Excluded Business on the Excluded Business Transfer Terms;

Excluded Business Transfer Terms” means the terms on which it is proposed to transfer the Excluded Business to a third party between the signing of this Agreement and three (3) months following the Completion Date, including details of any transitional services agreement under which it is intended that the Company should provide [***] services to the purchaser of the Excluded Business;

Existing Shareholders’ Agreement” means the shareholders’ agreement relating to the Company, dated 22 December 2017;

Expert” has the meaning given in paragraph 2.1, Part 3 of Schedule 9 (Preparation, Delivery and Agreement);

First Disclosure Letter” means the letter of today’s date from the Management Seller to the Purchaser in the agreed terms and delivered to the Purchaser before the execution of this Agreement in respect of the Management Warranties;

 

 

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Fundamental Warranties” means the Warranties set out in Part 1 of Schedule 4 (Warranties);

Fundamental Warranty Claim” means any claim for breach of a Fundamental Warranty;

General Loan Agreements” means the general loan agreements entered into by the Company [***];

Good Leaver” means any Key Employee or Management Seller who becomes a Leaver by reason of: (i) his or her termination of employment by a Group Company other than as a result of a Cause Event; or (ii) his or her resignation for a Good Reason;

Good Reason” means any of the following actions being undertaken by the Company's board of directors or general assembly or by any person other than the Management Seller authorised or directed by the Company's board of directors or general assembly to undertake the same without the relevant Management Seller’s or Key Employee’s prior written consent (as applicable): (a) the Company requiring the relevant Management Seller or Key Employee (as applicable) to relocate to a facility or location more than 50 kilometres from the location at which he or she was primarily located immediately prior to such requirement; (b) any reduction in the relevant Management Seller's or Key Employee’s (as applicable) base salary or target bonus, or any significant reduction in their benefits (other than a reduction consented to by such Management Seller/Key Employee) (for the avoidance of doubt, this excludes equity-based awards granted by the Purchaser or one-time payments or awards paid or granted in connection with the Transaction without limiting the Management Seller's or Key Employee’s rights to receive a one-time grant of RSUs under Clause 8 (Post-Completion Stock Awards) of this Agreement); (c) any significant reduction in the Management Seller’s and/or any Key Employee’s title, role and responsibilities by the Company’s board of directors or general assembly (without the Management Seller's prior written consent); (d) employment of any employee to the Group Companies, without the Management Seller's prior written consent not to be unreasonably withheld, delayed or conditioned; (e) the assignment of any duties materially inconsistent in any respect with the relevant Management Seller's or Key Employee’s (as applicable) role and responsibilities or any other action by the Company resulting in a material detriment to the participant’s position, authority, duties or responsibilities; (f) any other circumstances constituting unlawful termination (haksız fesih) in Turkey of the relevant Management Seller or Key Employee (as applicable); (g) any material breach by the Purchaser of this Agreement or any material breach by the Purchaser or the Company of the Management Seller Employment Agreement or Key Employee Employment Agreement; (h) any dissolution or liquidation of the Company; (i) with respect to the Management Seller only, any disposition or exclusive license of any material non-cash asset of the Company to any party (except for the permitted assignees and dispositions with respect to the Excluded Business) without the Management Seller’s prior written consent; or (j) adoption and modification of any internal directive and signature circular which cause any significant reduction in the Management Seller’s and/or any Key Employee’s authority, provided, in each case (a) through (j), that the relevant Key Employee or the Management Seller provides the Company with written notice of the existence of the change, breach or condition described above within 30 days of the Management Seller or the relevant Key Employee becoming aware of its occurrence, and the change, breach or condition is not cured (if curable) within 30 days after the Purchaser’s receipt of such written notice (such 30-day period the “Company Cure Period”), and the Management Seller or the relevant Key Employee (as applicable) actually terminates, or serves notice to terminate, employment for Good Reason within 10 days after the expiration of the Company Cure Period (as applicable);

Governmental Authority” means any federal, national, supranational, state, provincial, local or similar government, governmental, regulatory or administrative authority, branch, agency or commission or any court, tribunal, or arbitral or judicial body;

 

 

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Group” means the Company and its Subsidiary and the expression “Group Company” shall be construed accordingly;

Hardware” means any and all:

 

(a)

computer, telecommunications and network equipment;

 

(b)

operation user manuals;

 

(c)

maintenance manuals; and

 

(d)

associated documentation (but not including Software);

Harmful Code” means “back door,” “drop dead device,” “time bomb,” “Trojan horse,” “virus,” or “worm” (as such terms are commonly understood in the software industry) or any similar mechanism or device, or any other code designed or intended to have, or intended to be capable of performing, any of the following functions: (a) disrupting, disabling, harming, or otherwise impeding in any manner the operation of, or providing unauthorised access to, a computer system or network or other device on which such code is stored or installed; or (b) damaging or destroying any data or file, in each case, without the user’s consent;

HSR Act” means the Hart Scott Rodino Antitrust Improvements Act of 1976, 15 U.S.C. § 18a et seq., as amended, and the rules and regulations promulgated thereunder;

IFRS Accounts” means the audited consolidated financial statements of the Group, prepared based on the Applicable Accounting Standards, for the accounting reference period ended on the Accounts Date and for each of the three (3) previous accounting reference periods, together with, in each case, the auditors’ and directors’ reports and the notes to the audited financial statements, such financial statements comprising, in each case, a balance sheet, a profit and loss account and a cash flow statement;

Indemnities” means the indemnities given by the Sellers in Clause 13 (Specific Indemnities);

Indemnity Claim” means any claim under the Indemnities;

Intellectual Property Right” means (i) patents, all reissues, divisions, renewals, extensions, continuations and continuations in part thereof, rights in inventions and invention disclosures and utility models, (ii) trademarks, service marks, trade and business names, trade dress, rights in get-up, goodwill, any right to sue for passing-off, rights in and to domain names, (iii) registered designs, design rights, (iv) copyright and neighbouring rights, rights in Software, works of authorship (whether copyrightable or not) and mask works, (v) database rights, (vi) rights in Business Information, trade secrets, know-how and confidential information of all kinds and (vii) any other intellectual property rights or industrial property rights or proprietary rights which may subsist now or in the future, in each case of (i) through (vii) in any part of the world and whether or not registered, issued or granted, or subject to a pending application for registration, issuance or grant, and including, any registration of and application (and rights to apply) for, registration, issuance or grant, or renewals or extensions of, and all rights to claim priority from, any of the foregoing;

Interest Rate” means interest at the rate of two per cent. (2%) per annum above the LIBOR, calculated and compounded quarterly, provided if the LIBOR is negative then it should be considered as zero for the purposes of calculation of the Interest Rate;

Issued Shares” means all shares of Purchaser’s Common Stock issued to any of the Sellers in accordance with this Agreement in satisfaction of the Purchaser’s obligation to pay the Total Purchase Consideration;

 

 

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IT Contracts” means all written and oral agreements and arrangements relating to any of the Company IT Assets or under which any third party provides or is obliged to provide any element of, or services relating to, any of the Company IT Assets;

Key Employee” means each of [***];

Key Employee Employment Agreements” means the employment agreements or employment agreement amendments, which include non-competition and non-solicitation restrictive covenants applicable both for the term of employment and post termination, in the agreed terms to be entered into on Completion between the Company and each of the Key Employees;

Knowledge” means (i) with respect to the Management Seller, such Seller’s actual knowledge and the knowledge that such Seller would reasonably be expected to have obtained if such Seller had made reasonable enquiries of the Key Employees, (ii) with respect to the B, C, D and E Sellers, such Seller’s actual knowledge, and (iii) with respect to all Sellers, including any knowledge such Seller has obtained as a result of having served as or appointed a director to the board of directors of the Company (if applicable);

Law” means any statute, law, ordinance, rule or regulation of any Governmental Authority;

Leased Properties” means the leased land and premises currently owned, used or occupied by the Group, details of which are set out in Part 1 of Schedule 7 (Properties);

Leaver” means the Management Seller or a Key Employee in relation to whom a Cessation Date has occurred;

LIBOR” means the London Inter-Bank Offered Rate administered by ICE Benchmark Administration Limited (or any other person who takes over the administration of that rate) giving an average rate at which a leading bank can obtain unsecured funding for a given period in a given currency in the London market displayed on pages LIBOR01 or LIBOR 02 of the Thomson Reuters screen (or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters);

Long Stop Date” means 31 August 2020, subject to an automatic extension of one (1) month to the extent that the Merger Conditions have not been satisfied by such date, provided that such failure is not due to any act or omission of the Purchaser, or such other date as the Parties may agree in writing;

Loss” or “Losses” means any and all direct or indirect or consequential (in each case only to the extent reasonably foreseeable and not remote) losses, liabilities (including Tax), actions and claims, including charges, costs, damages, fines, penalties, interest and all legal and other professional fees and expenses (as long as reasonable and documented) including, in each case, all related Taxes, but in each case excluding any punitive, exemplary or special damages;

Management Accounts” means the unaudited balance sheet of the Group Companies as at April 30, 2020 and the unaudited profit and loss account and unaudited cash flow statement of the Group Companies for the period ended on such date;

Management Seller” means Sidar Şahin;

Management Seller Certificate” means a certificate signed by the Management Seller and dated on the Completion Date confirming that (i) other than as Disclosed in the First Disclosure Letter or the Second Disclosure Letter (if applicable), the Non-Material Warranties are true and accurate in all material respects as at the Completion Date and (ii) the Company has performed and complied with each of the covenants and obligations under this Agreement required to be performed and complied with by it as of the Completion Date;

 

 

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Management Seller Employment Agreement” means the employment agreement, which includes post termination non-competition and non-solicitation restrictive covenants, in the agreed terms to be entered into on Completion between the Company and the Management Seller;

Management Seller Payments” means any payments owed by the Management Seller to the Workers, Key Employees, former employees, shareholders or contractors of any Group Company in connection with the Transaction or the transfer of the Excluded Business following Completion;

Management Warranties” means the Warranties set out in Part 2 of Schedule 4 (Warranties);

Management Warranty Claim” means any claim for breach of a Management Warranty;

Material Contract” means the agreements set out under paragraph 5.1 of Schedule 4 (Warranties);

“Material Effect” means where the Losses arising as a result of, or in connection with, any Fundamental Warranties and/or Material Warranties not being true and accurate would exceed, or could reasonably be expected to exceed, US$[***] in aggregate, except where the breach of the Fundamental Warranties or Material Warranties arises from general political, economic or financial events that do not disproportionately affect the Group taken as a whole;

Material Warranties” means the following Management Warranties set out at paragraphs 7.1, 9, 10.1, 16.3, 16.6, 16.7, 16.10, 16.11, 16.12, 16.14, 16.15, 16.16, 16.17, 16.20(a), 16.21, 16.23, 16.27, 16.28, 16.29, 17.2, 17.4 (IP); and 18.1, 18.14 (Data Protection);

Non‑Acceptance Notice” has the meaning given in paragraph 1.2(b), Part 3 of Schedule 9 (Preparation, Delivery and Agreement);

Non-Exclusive Software Licences” means non-exclusive licences to third-party software that:

 

(a)

is not incorporated into, or used in the development, testing, distribution, maintenance, or support of, any Business Product and that is not otherwise material to the Business;

 

(b)

is licensed solely in executable or object code form, in non-customized form, and solely for a Group Company’s internal use; and

 

(c)

is generally available on standard terms for less than $10,000;

Non-Material Warranties” means the Management Warranties that are not Material Warranties;

Open Source Code” (a) means any software (including libraries) that (i) consists of, contains, or is derived in any manner (in whole or in part) from, any software that is distributed as free software or open source software or (ii) requires as a condition of its use, modification or distribution that it, or other software incorporated into it, linked with it, distributed with it, or derived from it, be disclosed or distributed in source code form or made available at no charge; and (b) includes any and all software (including libraries) licensed under the GNU General Public License (GPL), the GNU Lesser/Library GPL, the Mozilla Public License, or any other licence listed at www.opensource.org;

Paid Change of Control Payments” means the Change of Control Payments that have been satisfied on or before Completion and included in the Estimated Debt;

 

 

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Parent Undertaking” means an Undertaking which, in relation to another Undertaking, a “Subsidiary Undertaking”:

 

(a)

holds a majority of the voting rights in the Undertaking; or

 

(b)

is a member of the Undertaking and has the right to appoint or remove a majority of its board of directors; or

 

(c)

has the right to exercise a dominant influence over the Undertaking, by virtue of provisions contained in its constitutional documents or elsewhere; or

 

(d)

is a member of the Undertaking and controls alone, pursuant to an agreement with the other shareholders or members, a majority of the voting rights in the Undertaking,

and an Undertaking shall be treated as the Parent Undertaking of any Undertaking in relation to which any of its Subsidiary Undertakings is, or is to be treated as, the Parent Undertaking, and Subsidiary Undertaking shall be construed accordingly;

Party” means a party to this Agreement and “Parties” shall mean the parties to this Agreement;

Personal Data” means any information relating to an identified or identifiable natural person;

Personal Data Breach” means a breach of security leading to the accidental or unlawful destruction, loss, alteration, unauthorised disclosure of, or access to, Personal Data transmitted, stored or otherwise Processed;

Preliminary Seller Certificates” means: (a) a certificate signed by each Seller and delivered to the Purchaser no later than 3 Business Days before the Completion Date confirming that other than as Disclosed in the First Disclosure Letter, the Fundamental Warranties in respect of that Seller are true and accurate in all material respects as at the date of the certificate; and (b) a certificate signed by the Management Seller and delivered to the Purchaser no later than 3 Business Days before the Completion Date confirming that other than as Disclosed in the First Disclosure Letter, the Material Warranties are true and accurate in all material respects as at the date of the certificate, in each case except for the actions, situations, circumstances or events which occur between the date of this Agreement and the date of the certificates, information in respect of which is set out in the certificate with sufficient detail to enable the Purchaser to understand the nature and scope of the information provided;

Privacy and Data Security Policies” means: (1) all of the privacy policies and procedures of the Group Companies; and (2) all of the policies and procedures of the Group Companies relating to data security; that have been adopted and implemented at any time, whether such policies or procedures are formal or informal or written or unwritten;

Pro Rata Portion” means, in relation to a Seller, the percentage figure specified opposite that Seller’s name in column 3 of Schedule 1 (The Sellers);

Processing” means any operation or set of operations which is performed upon Personal Data, whether or not by automatic means, including but not limited to: collection, recording, organization, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment or combination, blocking, erasure or destruction;

Processor” means any person or entity that Processes Personal Data on behalf of a Controller (other than an employee of the Controller);

Prohibited Person” means any person, organisation or vessel: (i) listed on, or owned or controlled (as such terms, including any applicable ownership and control requirements, are defined and construed in the applicable Economic Sanctions Law or in any related official

 

 

12

 

 


 

guidance) by a person or organisation listed on, a Sanctions List; (ii) a government of a Sanctioned Territory; (iii) an agency or instrumentality of, or an entity directly or indirectly owned or controlled by, a government of a Sanctioned Territory; (iv) resident or located in, operating from, or incorporated under the laws of, a Sanctioned Territory; or (v) otherwise a target of any Economic Sanctions Law, or is acting on behalf of any of the persons listed in paragraphs (i) to (v) above, for the purpose of evading or avoiding, or having the intended effect of or intending to evade or avoid, or facilitating the evasion or avoidance of any Economic Sanctions Law;

Properties” means the Leased Properties;

Purchaser’s Common Stock” means the Class A common stock, par value US$0.00000625 per share of the Purchaser listed on the NASDAQ Global Select Market;

Purchaser’s Common Stock Price” means the volume-weighted average closing price per share rounded to four decimal places of the Purchaser’s Common Stock as reported on the NASDAQ Global Select Market during the thirty (30) consecutive trading day period immediately prior to the signing date of this Agreement (as adjusted to reflect any stock split, reverse stock split, stock dividend or similar transaction impacting the Purchaser’s Common Stock which may be made by the Purchaser after the date of this Agreement);

Purchaser’s Group” means the Purchaser, its Subsidiary Undertakings, any Parent Undertaking of the Purchaser and all other Subsidiary Undertakings of any such Parent Undertaking as the case may be from time to time (and including, after Completion, the Group);

Purchaser’s Lawyers” means White & Case LLP of 5 Old Broad Street, London EC2N 1DW and GKC Partners of Ferko Signature, Büyükdere Caddesi No: 175 Kat: 10, 34394 Levent, İstanbul;

Purchaser’s Warranties” means the warranties referred to in Clause 10.1 (Purchaser's Warranties);

Refund Amount” has the meaning given to it in paragraph 8.4, Schedule 12 (Tax Covenant);

Registered Business IP Right” means any Intellectual Property Right that is the subject matter of a grant, issuance or registration, or of an application for any of the foregoing, and in which any of the Group Companies has or purports to have an ownership interest of any nature (whether exclusively, jointly with another person, or otherwise);

Regulation” means Council Regulation (EC) 139/2004;

Related Persons” has the meaning given in Clause 21.4;

Relevant Party’s Group” means in relation to the Purchaser, the Purchaser’s Group; in relation to a Seller, the Sellers and their Related Persons;

Relevant Portion of W&I Premium” means the proportion of W&I Premium to be paid by each of the Sellers based on its Pro Rata Portion;

Relevant Sale Shares” means, in relation to a Seller, the Shares set out against that Seller’s name in Schedule 1;

Relief” means any relief, loss, allowance, credit, set-off, deduction or exemption for any Tax purposes and any right to repayment of Tax; and:

 

(a)

any reference to the use or set off of a Relief shall be construed accordingly and shall include the use of set-off in part; and

 

(b)

any reference to the loss of a Relief shall include the absence, non-existence or

 

 

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cancellation of any such Relief, or to such Relief being available only in a reduced amount;

Reports” means the legal due diligence report dated 30 May 2020 prepared by the Purchaser’s Lawyers and the tax due diligence report dated 27 May 2020 prepared by [***], each addressed to the Purchaser;

RSUs” has the meaning given in Clause 8.1;

Rule 144” means Rule 144 promulgated by the SEC pursuant to the Securities Act, as such rule may be amended time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such rule;

Sanctioned Territory” means any country or other territory subject to a general export, import, financial or investment embargo under any Economic Sanctions Law, which, as of the date of this Agreement, include Crimea, Cuba, Iran, North Korea, Sudan and Syria;

Sanctions” means any laws or regulations relating to economic or financial sanctions or trade embargoes or related restrictive measures imposed, administered or enforced from time to time by a Sanctions Authority;

Sanctions Authority” means: (i) the United States; (ii) the United Nations Security Council; (iii) the European Union or any member state thereof; (iv) the United Kingdom; or (v) the respective governmental institutions of any of the foregoing including, without limitation, OFAC, the U.S. Department of Commerce, the U.S. Department of State, any other agency of the U.S. government, and Her Majesty’s Treasury;

Sanctions List” means any of the lists of designated or sanctioned individuals or entities (or equivalent) issued by any Sanctions Authority, each as amended, supplemented or substituted from time to time, including, without limitation, the List of Specially Designated Nationals and Blocked Persons, Foreign Sanctions Evaders List, Sectoral Sanctions Identifications List, and List of Persons Identified as Blocked Solely Pursuant to Executive Order 13599, each administered by OFAC; the Consolidated List of Persons, Groups and Entities Subject to EU Financial Sanctions; and the Consolidated List of Financial Sanctions Targets in the UK, each administered by Her Majesty’s Treasury;

Second Disclosure Lettermeans the letter from the Management Seller to the Purchaser delivered to the Purchaser no later than three (3) Business Days before the Completion Date of any action, situation, circumstance or event occurring between the date of this Agreement and the Completion Date and which (i) would result in a Non-Material Warranty failing to be true and accurate as at the date of Completion in all material respects and/or (ii) is an update to the matters previously Disclosed in the First Disclosure Letter;

Seller Certificates” means: (a) a certificate signed by each Seller and delivered to the Purchaser on the Completion Date confirming that other than as Disclosed in the First Disclosure Letter, the Fundamental Warranties in respect of that Seller are true and accurate in all material respects as at the date of the certificate; and (b) a certificate signed by the Management Seller and delivered to the Purchaser on the Completion Date confirming that other than as Disclosed in the First Disclosure Letter, the Material Warranties are true and accurate in all material respects as at the date of the certificate, in each case substantially in the same form as the Preliminary Seller Certificates save for any actions, situations, circumstances or events that have arisen or became known to the relevant Seller between the date of the Preliminary Seller Certificates and the Completion Date, information in respect of which is set out in the certificate with sufficient detail to enable the Purchaser to understand the nature and scope of the information provided;

Seller’s Designated Bank Account” means (i) the relevant bank account details set out next to each Seller in Schedule 1 or (other bank account details to be notified by the relevant Seller

 

 

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to the Purchaser in writing by no later than three (3) Business Days before the Completion Date);

Sellers’ Lawyers” means Esin Attorney Partnership and Baker McKenzie LLP;

Sellers’ Portion of Transfer Taxes” means 50% of the total amount of the stamp duties to be paid by the Purchaser in connection with this Agreement and the Escrow Agreement and as deducted from the Total Purchase Consideration of each Seller in the amounts set out in Schedule 1;

Sellers’ Representatives” means the persons designated by each of the Sellers to serve as its representative in accordance with Clause 35 (Sellers’ Representatives);

Shares” means the 28,593,128 ordinary shares of TL 1.00 each comprising the entire issued share capital of the Company as at the date of this Agreement and as at Completion, together with any other share options, warrants, convertible securities or any other rights to acquire shares (or interests in shares) in the capital of the Company in existence at Completion;

Software” means any and all (i) computer code and computer programs, including all application programming interfaces (APIs), whether in Source Code, object code or other form, (ii) electronic databases and other electronic compilations and collections of data and information, and all data and information included in any of the foregoing, (iii) screens and user interfaces; (iv) descriptions, flow-charts, diagrams, user requirements, specifications, algorithms and other materials used to design, plan, organize and develop any of the foregoing, and (v) source code annotations and other documentation (including user, installation and other manuals) relating to any of the foregoing;

Source Code” means software programming code (including flash .swf source code, C++ server source code and JAVA source code) expressed in human readable language;

Statutory Books” means all statutory books and records of the Company, including, (i) for the Company: journal (yevmiye defteri), book of final entry (defter-i kebir), inventory book (envanter defteri), fixed asset ledger (amortisman defteri), general assembly resolution book (genel kurul karar defteri), board of directors resolution book (yönetim kurulu karar defteri), share book (pay defteri); and (ii) for the Subsidiary: shareholders’ register, special register, board of directors and shareholders’ resolutions, annual reports, and financials;

Subsidiary” means Peak Games Inc., further details of which are set out in Part 2 of Schedule 2;

Target Working Capital” means US$[***];

Tax or “Taxation means: (i) any form of tax, levy, impost, or duty, including net income, alternative or add-on minimum, gross income, estimated, gross receipts, sales, use, ad valorem, VAT, digital, advertising, entertainment, transfer, franchise, fringe benefit, capital stock, profits, license, registration, resource utilization support fund, special consumption, special transaction, banking and insurance transaction, recycling contribution fee, withholding, payroll, social security, employment, unemployment, disability, excise, severance, stamp, occupation, premium, property (real, tangible, or intangible), environmental or windfall profit tax, custom duty or other tax, governmental fee or other similar assessment or charge, together with any interest or any penalty, imposed, collected or assessed by, or payable to, a Taxation Authority; (ii) any liability for the payment of any amounts of the type described in clause (i) of this sentence as a result of being a member of an affiliated, consolidated, combined, unitary or aggregate group for any period; and (iii) any liability for the payment of any amounts of the type described in clause (i) or (ii) of this sentence as a result of being a transferee of or successor to any person or as a result of any contract (other than an ordinary commercial agreement);

 

 

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Tax Authority Claim means any claim, demand, assessment, letter or other document issued, or action taken, by or on behalf of any Taxation Authority or person;

Tax Claim” means any Tax Covenant Claim or Tax Warranty Claim;

Tax Covenant” means the tax covenant set out in Schedule 12;

Tax Covenant Claim” means any claim by the Purchaser under the Tax Covenant;

Tax Warranties” means the Warranties set out in paragraph 22 of Schedule 4 (Warranties);

Tax Warranty Claim” means any claim for breach of a Tax Warranty;

Taxation Authority means any government, federal, state, local, or foreign tax service, agency, municipality, customs office, competition authority, social security institution, office, commission, department, bureau, court or similar organization with authority to assess, assert, or otherwise impose Tax or collect unpaid Taxes of any Party;

TCC” means the Turkish Commercial Code No. 6102 (Türk Ticaret Kanunu) published in the Official Gazette dated 14 February 2011 and numbered 27846;

Termination Agreement” means the termination agreement of the Existing Shareholders’ Agreement in agreed form to be entered into on Completion;

TFRS” means Turkish Accounting Standards and Turkish Financial Reporting Standards issued by the Turkish Public Oversight Accounting and Auditing Standards Authority in accordance with the TCC and the Public Oversight, Accounting and Auditing Standards Authority’s Organization and Responsibilities Decree numbered 660 published on 2 November 2011;

TFRS Accounts” means the audited consolidated financial statements of the Group prepared based on the TFRS, for the accounting reference period ended on the Accounts Date and for each of the three (3) previous accounting reference periods, together with, in each case, the auditors’ and directors’ reports and the notes to the audited financial statements, such financial statements comprising, in each case, a balance sheet, a profit and loss account and a cash flow statement;

Total Purchase Consideration” has the meaning given to it in Clause 4.1;

Transaction” has the meaning given to it in Recital (B);

Transaction Documents” means this Agreement, the Termination Agreement, the Disclosure Letters, the Escrow Agreement, any arbitration clauses and/or agreements in connection with the Transaction;

Transaction Expenses” means any fees, costs and expenses incurred or agreed to be incurred by the Group to the extent that they are specifically incurred in connection with the Transaction, including: (i) all termination, balloon or similar payments resulting from early termination of contracts or outstanding debt as a result of or in connection with the Transaction; (ii) all payments required to obtain consents, waivers, terminations or amendments under any agreement of the Company as a result of or in connection with the Transaction; (iii) the employer portion of any taxes and any withholding taxes resulting from the cash out of share options and other compensatory payments in connection with the Transaction; (iv) all premiums and other amounts payable to obtain tail coverage under the Company’s existing D&O insurance policy; (v) any other similar expenses discovered during due diligence that remain unpaid at Completion; and (vi) any and all costs, taxes that the Company will pay in connection with the Transaction, including but not limited to payables to advisors and/or bonus payments to the Workers, Key Employees and the Management Seller and/or any other employees of the Group;

 

 

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Transfer Taxesmeans all transfer, documentary, sales, use, stamp, registration, VAT, and other similar Taxes and fees (including any penalties and interest);

U.S. GAAP” means generally accepted accounting principles in the United States as in effect as of the applicable date of determination;

Undertaking” means a body corporate or partnership or an unincorporated association carrying on trade or business;

Unpaid Change of Control Payments” means any Change of Control Payments that are not Paid Change of Control Payments;

"Updated Second Disclosure Letter" means the letter from the Management Seller to the Purchaser delivered to the Purchaser on the Completion Date and being in substantially the same form as the Second Disclosure Letter, save for any action, situation, circumstance or event occurring between the date of the Second Disclosure Letter and the Completion Date and which (i) would result in a Non-Material Warranty failing to be true and accurate as at the date of Completion in all material respects and/or (ii) is an update to the matters previously Disclosed in the First Disclosure Letter or the Second Disclosure Letter;

VAT” means any Tax levied by reference to added value or any sales or turnover tax of a similar nature;

W&I Insurance” means the buyer’s warranties and indemnity insurance policy issued to the Purchaser by VALE Insurance Partners Europe B.V. with policy number [***] together with the follow on letters signed in connection with such policy under the same terms;

W&I Premium” means USD[***];

Warranties” means the warranties referred to in Clause 11 (Sellers’ Warranties) and set out in Schedule 4 (Warranties);

Warranties Condition” has the meaning given to it in Clause 3.1(c) (Conditions);

Warranty Claim” means any claim for breach of Warranty;

Workers” means current or former employees, directors, officers, workers, consultants and self-employed contractors of the Group; and

Working Capital” means the aggregate working capital of the Group, being the aggregate of the Group’s Cash, current assets (including accounts receivables, other receivables and other current assets and current liabilities (including any pre-Completion taxes and accounts payable but excluding any Debt)).

1.2

The expression “in the agreed terms” means in the form agreed between the Purchaser and the Management Seller and signed for the purposes of identification by or on behalf of the Purchaser and the Management Seller.

1.3

Any reference to “writing” or “written” means any method of reproducing words in a legible and non‑transitory form.

1.4

References to “include” or “including” are to be construed without limitation.

1.5

References to a “company” include any company, corporation or other body corporate wherever and however incorporated or established.

1.6

References to a “person” include any individual, company, partnership, joint venture, firm, association, trust, governmental or regulatory authority or other body or entity (whether or not having separate legal personality).

 

 

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1.7

The table of contents and headings are inserted for convenience only and do not affect the construction of this Agreement.

1.8

Unless the context otherwise requires, words in the singular include the plural and vice versa and a reference to any gender includes all other genders.

1.9

References to Clauses, paragraphs and Schedules are to clauses and paragraphs of, and schedules to, this Agreement. The Schedules form part of this Agreement.

1.10

References to any statute or statutory provision include a reference to that statute or statutory provision as amended, consolidated or replaced from time to time (whether before or after the date of this Agreement) and include any subordinate legislation made under the relevant statute or statutory provision.

1.11

References to any Turkish legal term for any action, remedy, method of financial proceedings, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than Turkey, be deemed to include what most nearly approximates in that jurisdiction to the Turkish legal term.

1.12

The liabilities of the Sellers are several, and not joint and several. The Purchaser may release or compromise the liability of a Seller without affecting the liability of the other Sellers. If any liability of a Seller is, or becomes illegal, invalid or unenforceable in any respect this shall not affect or impair the liability of the other Sellers under this Agreement.

1.13

All payments required in accordance with this Agreement shall be made in US$. For the purposes of applying a reference to a monetary sum expressed in US$, an amount in a different currency shall be converted into US$ on a particular date at an exchange rate equal to the US$ buying rate (döviz alış) announced by the Central Bank of the Republic of Turkey on the previous Business Day at 3:30 pm İstanbul time.

1.14

In relation to a Claim, the date of such conversion shall be the date of receipt of notice of that Claim in accordance with Schedule 5 (Sellers' Limitations on Liability).

1.15

The expressions “ordinary course of business” or “business in the ordinary course” mean the ordinary and usual course of business of the relevant Group Company, consistent in all material respects (including nature and scope) with the prior practice of such Group Company.

1.16

This Agreement shall be binding on and be for the benefit of the successors and permitted assignees of the Parties.

2.

Sale and Purchase

2.1

On the Completion Date, each of the Sellers shall sell and transfer, and the Purchaser shall purchase and acquire, the Relevant Sale Shares with all rights now or in the future attaching to them (including, without limitation, the right to receive all dividends, distributions and interest declared, made, accrued or paid at any time after the Completion), and the Relevant Sale Shares shall be sold free from all Encumbrances, on the terms of this Agreement.

2.2

Each of the Sellers hereby waives and shall procure the waiver of any rights which have been conferred on it as may affect the transactions contemplated by this Agreement (other than its rights pursuant to this Agreement) including, without limitation:

 

(a)

any rights of redemption, pre-emption, first offer, first refusal, drag-along, tag-along or transfer, pursuant to the Existing Shareholders’ Agreement, it may have with respect to the Relevant Sale Shares; and

 

(b)

any rights to acquire any Relevant Sale Shares.

 

 

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2.3

The Purchaser shall not be obliged to complete the purchase of any of the Shares unless the purchase of all the Shares is completed simultaneously.

3.

Conditions

3.1

The obligations of the Purchaser and the Sellers to complete the sale and purchase of the Shares are in all respects conditional on the satisfaction (or waiver, as the case may be) of:

 

(a)

merger control approval decision having been received from the Federal Cartel Office (“FCO”) in Germany under the applicable provisions of the Act against Restraints of Competition or the FCO has waived its jurisdiction; or the applicable statutory waiting periods have expired, or the statutory prohibition to complete the transactions contemplated by this Agreement, has otherwise fallen away (the “FCO Merger Condition”);

 

(b)

expiration or early termination of any applicable waiting period (and any extension thereof) under the HSR Act with respect to the transactions contemplated by this Agreement (the “HSR Merger Condition” and together with the FCO Merger Condition, the “Merger Conditions”); and

 

(c)

the Fundamental Warranties and the Material Warranties being true and accurate in all material respects on Completion (as qualified by the matters Disclosed in the First Disclosure Letter) (the “Warranties Condition”) and, for the purposes of this Clause 3.1, the Fundamental Warranties and the Material Warranties shall be deemed to be true and accurate in all material respects on Completion provided that the breaches in respect of the Fundamental Warranties and the Material Warranties do not have a Material Effect.

3.2

The Purchaser shall, at its own cost, use its reasonable endeavours to procure the fulfilment of the FCO Merger Condition on behalf of all Parties involved as soon as possible and, in any event, prior to the Long Stop Date. In this respect, the Purchaser shall:

 

(a)

have primary responsibility for obtaining all consents, approvals or actions which are required to satisfy the FCO Merger Condition on behalf of all Parties involved and shall take all reasonable steps necessary for that purpose, including making appropriate submissions, notifications and filings, in consultation with the Sellers, within seven (7) Business Days after the signing of this Agreement);

 

(b)

make and progress all such notifications and filings with the FCO with all due diligence and in accordance with the applicable time limits;

 

(c)

provide as soon as is reasonably practicable all information which is requested or required by the FCO and in any event in accordance with the applicable time limits; and

 

(d)

as soon as is reasonably practicable (and in any event within three (3) Business Days) notify the Sellers (and provide copies or, in the case of non-written communications, details) of any communications with or from the FCO (to the extent that such documentation is not commercially sensitive).

3.3

The Purchaser may waive in whole or in part the Condition set out at Clause 3.1(c) by notice in writing to the Sellers.

3.4

The Purchaser and the Sellers at their own costs shall use their respective commercially reasonable efforts to procure the fulfilment of the HSR Merger Condition as soon as possible and in any event prior to the Long Stop Date and shall promptly file or cause to be filed as soon as possible (and in any event within seven (7) Business Days after the signing of this

 

 

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Agreement) all required filings under the HSR Act, shall consult and cooperate with each other in the preparation of such filings, and shall promptly inform the other Parties of any material communication received by such Party from any competition or other governmental or regulatory authority regarding the transactions contemplated by this Agreement. The Purchaser’s and Sellers' obligations under this Clause 3.4 to use commercially reasonable efforts shall not include proposing, negotiating, committing to or effecting, by consent decree, hold separate order, or otherwise, the sale, transfer, license, divestiture or other disposition of, or any prohibition or limitation on the ownership, operation, effective control or exercise of full rights of ownership of, any of the businesses, product lines or assets of the Purchaser or any of its affiliates or of any of the Group Companies.

3.5

The Purchaser shall be responsible for any filing fees required under the HSR Act.

3.6

Each Party shall provide all such assistance and co‑operation (including the provision of information) as the other Party may reasonably require in connection with the Conditions and as soon as reasonably practicable after being requested to do so.

3.7

The Parties shall, in connection with the Merger Conditions:

 

(a)

respond to any request for information from any competition or other governmental or regulatory authority and any related request for information from the other Party promptly and in any event in accordance with any relevant time limit;

 

(b)

promptly notify the other Party of any material communication (whether written or oral) from any competition or other governmental or regulatory authority and provide copies (or, in the case of non‑written communications, a written summary) to the other Party;

 

(c)

provide the other Party (or its advisers), except as may be prohibited by any applicable law, with a final non-confidential draft of all submissions, notifications, filings (excluding the filings pursuant to the HSR Act) and other communications to any governmental or regulatory authority at such time as will allow the other Party (or its advisers) a reasonable opportunity to provide comments and for the other Party to take account of and consider in good faith any such reasonable comments of the Sellers (or their advisers) (or, in the case of drafts related to the HSR Act, the Purchaser (or its advisers)) on such drafts prior to their submission;

 

(d)

shall not participate in any meeting with any competition or other governmental or regulatory authority unless it first consults with the other Party in advance, and to the extent permitted by such authority, gives the other Party the opportunity to be present thereat; and

 

(e)

shall not agree to any voluntary extension of any statutory deadline or waiting period or to any voluntary delay of the consummation of the transactions contemplated by this Agreement at the behest of any competition or other governmental or regulatory authority without the written consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed).

3.8

The Parties undertake to notify the other Party in writing of anything which will or may prevent any of the Conditions from being satisfied on or before the Long Stop Date promptly after it comes to its attention.

3.9

Each Party undertakes to notify the other Parties as soon as possible on becoming aware that any of the Conditions has been satisfied and in any event within two (2) Business Days of such satisfaction.

3.10

If any of the Conditions is not fulfilled (or waived under Clause 3.3) on or before the Long Stop Date (or having been fulfilled, ceases to be fulfilled), each of the Purchaser on one side and the

 

 

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Sellers on the other side, shall be entitled to treat this Agreement as terminated subject to, and on the basis set out in Clause 16 (Termination).

3.11

The Purchaser may terminate this Agreement by notice in writing to the Management Seller if, prior to Completion there has been a breach of a Material Warranty and/or a Fundamental Warranty which (together with any other such breaches) has a Material Effect and which has not been remedied by the Sellers before Completion or which is not capable of being remedied due to its nature.

4.

Consideration

4.1

The consideration for the sale of the Shares shall be the payment by the Purchaser to the Sellers (subject to and in accordance with the terms of this Agreement) of an aggregate amount equal to:

 

(a)

US$1,800,000,000 (one billion and eight hundred million U.S. dollars) less the Sellers’ Portion of Transfer Taxes and less the W&I Premium;

 

(b)

less the aggregate of (i) the Actual Debt; (ii) all Unpaid Change of Control Payments; and (iii) all Transaction Expenses;

 

(c)

plus the amount by which the Actual Working Capital exceeds the Target Working Capital or less the amount by which the Actual Working Capital is less than the Target Working Capital,

 

(d)

plus the Refund Amount arising as a result of Change of Control Payments

(together, the “Total Purchase Consideration”).

4.2

The Total Purchase Consideration shall be paid to the Sellers as follows:

 

(a)

On Completion, the Purchaser shall:

 

(i)

pay to the B, C, D and E Sellers the aggregate amount of US[***] less the Sellers’ Portion of Transfer Taxes payable by the B, C, D and E Sellers less each of their Relevant Portion of W&I Premium, to be satisfied by the payment in cash to each of the B, C, D and E Sellers of the amount set opposite their respective names in column (5) of Schedule 1 and by the issue to each of them of such number of Purchaser’s Common Stock set opposite their respective names in column (6) of Schedule 1 (as adjusted to reflect any stock split, reverse stock split, stock dividend or similar transaction impacting the Purchaser’s Common Stock which may be made by the Purchaser after the date of this Agreement);

 

(ii)

pay to the Management Seller the amount of US$[***] less the Estimated Debt plus the amount by which the Estimated Working Capital exceeds the Target Working Capital or less the amount by which the Estimated Working Capital is less than the Target Working Capital and less the Sellers’ Portion of Transfer Taxes payable by the Management Seller less the Management Seller’s Relevant Portion of W&I Premium, to be satisfied by the payment of 50 per cent of such amount in cash and by the issue to the Management Seller of such number of Purchaser’s Common Stock as is equal to the remaining 50 per cent of the payment divided by the Purchaser’s Common Stock Price (as adjusted to reflect any stock split, reverse stock split, stock dividend or similar transaction impacting the Purchaser’s Common Stock which may be made by the Purchaser after the date of this Agreement);

 

(iii)

pay the Escrow Amount into the Escrow Account; and

 

 

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(iv)

pay the W&I Premium to the W&I Insurance insurer.

 

(b)

Within ten (10) Business Days of the date on which the Completion Accounts are agreed or determined in accordance with Schedule 9 (Completion Accounts), the Purchaser or the Management Seller (as the case may be) shall make a payment to the other in accordance with Part 2 of Schedule 10 (Post Completion Financial Adjustments). Where the Purchaser is due to make an adjusting payment to the Management Seller, such payment shall be satisfied by the payment of such amount in cash.

 

(c)

The Purchaser shall pay the Refund Amount arising as a result of the Change of Control Payments to the Management Seller as set out under Schedule 12 (Tax Covenant).

4.3

At Completion, the Purchaser shall procure that the Purchaser's Common Stock as determined (including any adjustments) in accordance with Clause 4.2 above be transferred to the Sellers, with all rights now or in the future attaching to them (including, without limitation, the right to receive all dividends, distributions and interest declared, made, accrued or paid at any time after the Completion), free from any Encumbrances except for transfer restrictions set out under Clause 36 (Transfer Restrictions).

4.4

Payments from the Escrow Account shall be determined in accordance with the provisions of Schedule 11 (Escrow Account).

4.5

The Parties shall prepare the Completion Accounts and make the relevant payments in accordance with the provisions of Schedule 9 (Completion Accounts) and Schedule 10 (Post Completion Financial Adjustments) respectively.

5.

Escrow

5.1

The Parties acknowledge and agree that amounts shall only be deducted from the Escrow Account in accordance with Schedule 11 (Escrow Account) in order to satisfy claims against the Sellers (or any of them) under this Agreement which have been agreed or determined in accordance with Schedule 11 (Escrow Account), including pursuant to Clause 13.2 (Specific Indemnities) and/or for a breach of any of the Management Warranties, the Tax Warranties and/or the Tax Covenant.

5.2

Payments from the Escrow Account shall be determined in accordance with the provisions of Schedule 11 (Escrow Account); in particular, payments shall only be made out of the Escrow Account once a claim has been settled or agreed in accordance with paragraph 6, Part 2 of Schedule 11 (Escrow Account).

6.

Pre‑Completion Obligations

6.1

Subject to Clause 6.2 and 6.5, the Sellers shall procure that from the date of this Agreement until Completion, each Group Company will conduct its business in the ordinary course consistent with past practices in all material respects and that, in the absence of the prior written consent of the Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed), no Group Company will do or agree to do any of the following:

 

(a)

declaring, making or paying any dividend or other distribution;

 

(b)

creating, allotting or issuing any shares, loan capital or other securities;

 

(c)

creating, issuing, redeeming or granting any option or right to subscribe in respect of any share or loan capital or other securities;

 

 

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(d)

entering into, modifying or terminating without cause any Material Contract (provided that the defaulting party is given the opportunity to remedy the breach within the terms of any Material Contract);

 

(e)

disposing of or granting any option in respect of any material part of its assets;

 

(f)

acquiring or disposing of any fixed asset having a book value in excess of two hundred fifty thousand U.S. dollars (US$250,000);

 

(g)

making any capital commitment in excess of two hundred fifty thousand U.S. dollars (US$250,000) individually or which together with all other such capital commitments entered into between the date of this Agreement and Completion exceeds two hundred fifty thousand U.S. dollars (US$250,000) in aggregate;

 

(h)

making any material change in the nature or organisation of its business, including with respect to the Excluded Business;

 

(i)

discontinuing or ceasing to operate any material part of its business, including with respect to the Excluded Business;

 

(j)

making any variation to the terms and conditions of employment of the Management Seller, a Key Employee or of any employee earning fifty thousand U.S. dollars (US$50,000) per annum or more, including any change in salary, benefits, job title or responsibilities or reportings, and granting or amending any existing rights to severance benefits, stay pay or termination pay, but excluding any salary increases that do not exceed 5% in USD terms of such Worker’s existing salary, provided that the Purchaser’s Chief People Officer is notified in writing of all such modifications no later than three (3) Business Days prior to Completion, and in all cases such increases do not exceed the Budget;

 

(k)

appointing, employing or offering to appoint or employ any person at a rate of remuneration per annum in excess of fifty thousand U.S. dollars (US$50,000) individually, provided that the Purchaser’s Chief People Officer is notified in writing of any such appointments, employment offers or similar no later than three (3) Business Days prior to Completion, and in all cases the compensation paid to such new Workers do not exceed the Budget;

 

(l)

unless otherwise required by applicable law or in accordance with the terms of a Scheme in place as of the date of this Agreement, increasing or granting (or committing to increase or grant, as applicable) the salaries, benefits or other compensations (including incentive or bonus compensation), of any Workers, including granting or amending any existing rights to severance benefits, stay pay or termination pay or Change of Control Payments, with or for the benefit of any Workers, taking any action to accelerate the vesting or payment of any compensation or benefits, or recognizing or promising neutrality to any employee representatives but excluding any salary increases that do not exceed the Budget, provided that the Purchaser’s Chief People Officer is notified in writing of all such adjustments no later than three (3) Business Days prior to Completion;

 

(m)

dismissing the Management Seller, a Key Employee or any other employee earning fifty thousand U.S. dollars (US$50,000) per annum or more or, directly or indirectly, inducing or attempting to induce any employee, Management Seller or a Key Employee to terminate his/her employment;

 

(n)

borrowing money or incurring any indebtedness otherwise than in the ordinary course of business (and within limits subsisting at the date of this Agreement);

 

(o)

granting any loan, advance or capital contribution to any other person;

 

 

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(p)

reducing its share capital or purchasing or redeeming its own shares;

 

(q)

acquiring any share or other interest in any person or other venture or acquiring any business carried on by any person;

 

(r)

creating any Encumbrance or redeeming or releasing any Encumbrance or giving any guarantees or indemnities, in excess of one hundred and fifty thousand U.S. dollars (US$150,000);

 

(s)

incurring or paying any management charge or making any other payment in each case to any Seller, except the payment of salary to the Management Seller in accordance with past practices;

 

(t)

disposing of any Business Owned IP or granting, modifying or terminating any rights or entering into any agreement relating to any Business Owned IP or doing or omitting to do anything to jeopardise the validity or enforceability of any Business Owned IP, including the non‑payment of any application, search, maintenance or other official fees;

 

(u)

instituting or settling any legal proceedings (except debt collection in the normal course of business and except in relation to [***]) with a value greater than one hundred and fifty thousand U.S. dollars (US$150,000);

 

(v)

settling or compromising any Tax Claims or liabilities in excess of twenty five thousand U.S. dollars (US$25,000);

 

(w)

making any change to the accounting procedures, policies, reference date or treatment by reference to which its accounts or other financial statements are prepared (or requesting a Taxation Authority to make such changes);

 

(x)

taking any steps or other action which could result in either a change to its residence for Tax purposes and/or in establishing a taxable presence in any jurisdiction outside of its jurisdiction of incorporation;

 

(y)

taking any steps or other action which could reduce or otherwise materially adversely impact the availability utility or quantum of any Relief;

 

(z)

take any step or other action (including making any admission to a Taxation Authority) which is inconsistent with past practices which could increase any liability to Tax and/or could result in any liability to Tax arising (or being deemed to arise) in the post-Completion period rather than the pre-Completion period;

 

(aa)

making or changing any Tax election;

 

(bb)

amending any Tax return (other than such amendments as are required to rectify and/or clarify any bona fide error made when the relevant Tax return was originally submitted and which are not expected by the Sellers (acting in good faith) to have any impact on the Tax position of the Group);

 

(cc)

consenting to an extension or waiver of the limitations period applicable to any Tax Claim or assessment;

 

(dd)

failing to take any action to maintain in force any of its insurance policies currently in force or doing anything to make any policy of insurance void or voidable or reducing the level of insurance cover provided;

 

(ee)

amending its articles of association, by-laws or equivalent constitutional documents, adopting further articles of association, by‑laws or equivalent constitutional documents or passing resolutions which are inconsistent with them;

 

 

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(ff)

passing any resolutions in general assembly meetings; or

 

(gg)

agreeing to do anything to give effect to any of the foregoing;

provided that the prior written consent of the Purchaser shall be deemed obtained if the Purchaser does not respond to the Sellers’ request for consent within five (5) Business Days of receipt in accordance with Clause 31 (Notice). For the purposes of this Clause 6.1, each of the Purchaser’s Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Chief Administrative Officer, Chief People Officer, Chief Legal Officer or President of Publishing or such other person notified by the Purchaser to the Sellers (or the Sellers’s Representatives) in accordance with Clause 31 (Notice) shall have the authority to act on behalf of the Purchaser.

6.2

The Sellers' obligations under Clause 6.1 above shall be limited to the following:

 

(a)

In respect of the Management Seller, not casting any votes at the general assembly and/or Board meeting of the Company and not taking any action (including, without limitation, directing, permitting or failing to prevent any other person that the Management Seller would be reasonably expected to prevent, from taking any action) that would cause the Company to breach Clause 6.1; and

 

(b)

In respect of the B, C, D, and E Sellers, not casting any votes at the general assembly of the Company and procuring that the respective directors they have nominated to the Board of the Company do not cast any votes at the Board of the Company that would breach Clause 6.1.

For the avoidance of doubt, B, C, D and E Sellers shall not be liable against the Purchaser, if the Company takes any actions that would breach Clause 6.1 unless such action is approved by B, C. D or E Sellers at a general assembly and/or board meeting (through the respective directors they have nominated), or such breach occurs due to B, C, D and/or E Sellers not participating to take the necessary decision(s) at a general assembly and/or board meeting (through the respective directors they have nominated).

6.3

Subject to Clause 6.3(b),

 

(a)

from the date of this Agreement until Completion the Management Seller shall procure that the Purchaser and its Agents shall be allowed, to the extent permitted by applicable law and in line with the measures taken in relation to COVID-19:

 

(i)

reasonable access to, and to take copies of (at the Purchaser’s sole expense), the books, records and documents of or relating in whole or in part to the Group;

 

(ii)

reasonable access to the Key Employees (who shall be instructed to give all such information, assistance and explanations as the Purchaser or any of the Purchaser’s Agents may reasonably request); and

 

(iii)

reasonable access to the professional advisers (including any accounts, auditors and tax lawyers) to the Group (who shall be instructed to give all such non-privileged information, assistance and explanations as the Purchaser or any of the Purchaser’s Agents may reasonably require).

 

(b)

Any access granted pursuant to Clause 6.3 shall only be permitted:

 

(i)

on reasonable prior notice having been provided to the Management Seller;

 

(ii)

to the extent reasonably required by the Purchaser to plan for the integration of the Group into the Purchaser’s Group; and

 

(iii)

provided that access shall not give the Purchaser or its Agents any right to give

 

 

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instructions or otherwise interfere with the management and conduct of any Group Company and is otherwise subject to the legal, regulatory and compliance obligations of the Group Companies.

6.4

The Management Seller shall (and shall cause the Group Companies to) prepare or shall cause to be prepared all Tax returns required to be filed under any applicable law by any Group Company on or prior to Completion, and shall provide the Purchaser with a copy of such Tax returns as soon as practically possible after the filing.

6.5

Clause 6.1 does not apply in respect of and shall not operate so as to restrict or prevent:

 

(a)

any matter reasonably undertaken by any member of the Group in an emergency or disaster situation, epidemics and pandemics including the COVID-19 pandemic, with the intention of and to the extent only of those matters strictly required with a view to minimising any adverse effect thereof (and of which the Purchaser will be notified in writing as soon as reasonably practicable);

 

(b)

any matter expressly permitted by, or necessary for performance of, this Agreement or the Transaction Documents or necessary for Completion;

 

(c)

any matter undertaken at the written request or with the written consent of the Purchaser;

 

(d)

providing information to any regulatory body or government agency or commissioning body in the ordinary course of business; and

 

(e)

any matter to the extent required by law.

7.

Completion

7.1

Completion shall take place on the Completion Date at the offices of the Sellers’ Lawyers in Turkey or at such other place outside of the United Kingdom as is agreed in writing by the Sellers and Purchaser.

7.2

No less than three (3) Business Days prior to the Completion Date the Management Seller shall deliver to the Purchaser a Second Disclosure Letter (if applicable) and the Sellers shall deliver to the Purchaser Preliminary Seller Certificates.

7.3

At Completion, the Sellers shall undertake those actions listed in Part 1 of Schedule 3 (Completion Arrangements).

7.4

At Completion, the Purchaser shall undertake those actions listed in Part 2 of Schedule 3 (Completion Arrangements).

7.5

The Parties agree that all certificates, deeds and documents deliverable on Completion to any Party, or the Purchaser’s Lawyers or the Seller’s Lawyers respectively (together the “Deliverables”), shall be held by the Purchaser’s Lawyers or the Seller’s Lawyers (as the case may be) to the order of the person delivering the same until such time as Completion shall have taken place at which such time such Deliverables shall be released immediately to the order of the intended recipient.

7.6

If the Purchaser or the Sellers materially fail to comply with any obligations specified in Schedule 3 (Completion Arrangements) as required by this Clause 7 (including, without limitation, the failure by the Sellers to comply with paragraph 4.1 of Schedule 3 (Completion Arrangements) which the Parties hereby acknowledge shall constitute a material failure hereunder), on the Completion Date, the Purchaser (in the case of a default by the Sellers) or

 

 

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the Sellers (in the case of a default by the Purchaser) shall not be obliged to complete this Agreement and may:

 

(a)

proceed to Completion as far as practicable (without limiting its rights and remedies under this Agreement);

 

(b)

defer Completion for a period of ten (10) Business Days to rectify the failure to comply (in which case the provisions of this Clause 7 applying to Completion as so deferred); or

 

(c)

subject to Completion having first been deferred at least once pursuant to Clause 7.6(b) above, and the failure not being capable of remedy or the failing Party not being able to remedy such failure, then, as a last resort, terminate the Agreement for breach of condition subject to, and on the basis set out in, Clause 16 (Termination).

7.7

The payment of the amounts as set out in Clause 4.2 and the issuance of the Purchaser’s Common Stock for the Sellers as set out in Clause 4.3 in accordance with Part 2 of Schedule 3 (Completion Arrangements) and Part 2 of Schedule 10 (Post Completion Financial Adjustments) shall discharge the obligations of the Purchaser under Clauses 2 (Sale and Purchase) and 4 (Consideration) and the Purchaser shall not be concerned with the application of such sum by the Sellers.

7.8

All actions and transactions constituting the Completion shall be regarded as one (1) single concurrent transaction so that, at the option of the Party having interest in the performance of the specific action or transaction, no action or transaction shall be deemed to have taken place if and until all other actions and transactions constituting the Completion shall have been properly performed in accordance with the provisions of this Agreement.

8.

Post-Completion Stock Awards

8.1

At and with effect from Completion, the Purchaser shall grant to the Key Employees, the Management Seller and those certain other employees agreed (in the respective amounts) between the Management Seller and the Purchaser prior to the date of this Agreement (the “Beneficiaries”) restricted stock unit awards with regards to a number of shares in the Purchaser’s Common Stock (“RSUs”) based on an aggregate value of US$[***] divided by the Purchaser’s Common Stock Price [***]. The terms and conditions of the RSUs are contained in the Purchaser’s 2011 Equity Incentive Plan, as amended from time to time (including all sub-plans) and the applicable award agreements (including any appendices for the RSU recipient’s country). The amounts of all such awards to the Beneficiaries shall be allocated as agreed between the Management Seller and the Purchaser prior to the date of this Agreement, by reference to the following principles:

 

(a)

any such RSU awards will be granted in accordance with the Purchaser’s standard practices as notified to the Management Seller before the date hereof;

 

(b)

the RSU awards shall vest [***]; and

 

(c)

the Purchaser may at any time unilaterally substitute, wholly or partially, an RSU award for a cash bonus on similar terms and of equal value (based on the amount allocated) to the extent required in order to comply with any securities, exchange control, tax or other applicable law, rule, regulation or practice, and any such substitution will be in full and final settlement of any entitlement under the equity incentive plan at the time,

provided that any unvested RSU awards granted to the Management Seller or any Key Employee in connection with the transactions contemplated by this Agreement shall accelerate in full upon such person becoming a Good Leaver. For the avoidance of doubt, provided that

 

 

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in all cases, the Management Seller and Key Employees shall be entitled to the RSU awards vested until the Cessation Date.

8.2

At Completion, the Purchaser shall, deliver the grant documentation in relation to the RSUs (including award agreements and a true, accurate and complete copy of the Purchaser’s 2011 “Equity Incentive Plan”, as amended from time to time and including all sub-plans) to the Beneficiaries, provided that the relevant Beneficiaries shall comply with their relevant administrative requirements with regards to providing information to the Purchaser (or any third party on behalf of the Purchaser) and opening the relevant online accounts.

9.

Post-Completion Undertakings

9.1

With effect from Completion, and at all times subject to compliance with Law applicable to the Group Companies, the Purchaser and the Management Seller undertake to:

 

(a)

comply with the provisions of Part 1 of Schedule 6 (Conduct of Business); and

 

(b)

not effect any of the matters set out in Part 2 of Schedule 6 (Conduct of Business) without the Board Consent.

9.2

Between the signing of this Agreement and three (3) months following the Completion, and at all times subject to compliance with Law applicable to the Group Companies, the Management Seller and the Purchaser will procure that the Excluded Business is transferred by the Company to the Excluded Business Entity [***] on the Excluded Business Transfer Terms that shall not be less favourable for the Company than the following:

 

(a)

neither the Management Seller nor any Key Employee shall have any ongoing ownership interest or operational role (including as an employee, advisor, consultant, contractor or director) in the Excluded Business;

 

(b)

[***];

 

(c)

[***];

 

(d)

[***]; and

 

(e)

[***].

9.3

Except in the case of fraud, wilful misconduct or conduct that would give rise to a termination right pursuant to Article 25 of the Turkish Labor Law the Purchaser shall not, and shall cause its Connected Persons not to, make any claim for monetary damages or losses against any of the directors and Key Employees of the Group Companies for the period before Completion (provided that if a director or Key Employee were to bring a claim against the Company then the Purchaser would be entitled (i) to defend itself against those claims and (ii) to bring any counterclaims against the relevant director or Key Employee that it might consider necessary or desirable in all the circumstances) and the Purchaser shall cause the Company to release and discharge the directors of the Group Companies who were on duty up to (and including) the Completion Date to the maximum extent permitted by applicable law at the first ordinary general assembly meeting to be held by each Group Company. The directors shall be entitled to enforce this Clause 9.3 under the Contracts (Rights of Third Parties) Act 1999.

10.

Purchasers’ Warranties

10.1

The Purchaser warrants to the Sellers that:

 

(a)

it has been duly incorporated and is, and at Completion will be, validly existing and in good standing under the laws of its place of incorporation and has, and at Completion

 

 

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will have, all requisite power to carry on its business as it is carried on at the date of this Agreement;

 

(b)

it has, and at Completion will have, the legal right, full power and authority and all necessary consents and authorisations, including any consents and authorizations required by the rules and regulations of the NASDAQ Stock Market (“NASDAQ”), to enter into and to perform its obligations under this Agreement and each other Transaction Document to which it is or will be party;

 

(c)

the execution, delivery and performance by the Purchaser of the Transaction Documents to which it is or will be a party, and the consummation of the transactions contemplated by this Agreement and each other Transaction Document to which it is a party, will not (i) violate any provision of its certificate of incorporation, by‑laws or equivalent constitutional documents, (ii) violate any laws or regulations applicable to the Purchaser in any relevant jurisdiction or (iii) violate any order, judgment, decree or decision of any court or Governmental Authority applicable to the Purchaser in any jurisdiction;

 

(d)

this Agreement and each other Transaction Document to which it is or will be party constitutes, or will when executed constitute, legal, valid and binding obligations on it in accordance with their respective terms (assuming that each such Transaction Document has been properly executed by the other parties to it and that their entry into them has been duly authorised);

 

(e)

there are no, and at Completion will not be any, agreements (including its articles of association, by‑laws or other constitutional documents), arrangements or any other restrictions of any kind that prohibit or restrict the ability of the Purchaser to enter into and to perform its obligations under this Agreement and each other Transaction Document to which it is or will be party;

 

(f)

the execution, delivery and performance by the Purchaser of its obligations under the Transaction Documents to which it is or will be a party will not require it to obtain any consent, waiver or approval of, or give any notice to or make any registration or filing with, any governmental, regulatory or other authority, including NASDAQ, or other person which will not have been made as may be required in accordance with the terms on which such consent, waiver or approval or notice, registration or filing is required to have been made on a basis both unconditional and which cannot be revoked, provided that this paragraph 10.1(f) shall not extend to those consents, waivers or approvals referred to in the Conditions in Clause 3;

 

(g)

the Purchaser has filed or furnished, as applicable, forms, statements, reports and schedules required to be filed or furnished by it with the U.S. Securities and Exchange Commission (the “SEC”) pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or the Securities Act of 1933, as amended (the “Securities Act”) since 31 December 2018 (collectively, the “Purchaser Reports”). Each of the Purchaser Reports, at the time of its filing or being furnished, and if amended or supplemented, at the time of the last such amendment or supplement, complied in all material respects with the applicable requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act of 2002, as amended, and any rules and regulations of the SEC promulgated thereunder applicable to the Purchaser Reports. As of their respective dates (and, if amended, as of the date of the last such amendment), the Purchaser Reports did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances in which they were made, not misleading;

 

(h)

the Purchaser is in compliance in all material respects with the applicable listing and corporate governance rules and regulations of NASDAQ;

 

 

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(i)

each of the consolidated balance sheets included in or incorporated by reference into the Purchaser Reports filed with the SEC under the Exchange Act fairly presented in all material respects the consolidated financial position of the Purchaser and its consolidated subsidiaries as of its date and each of the consolidated statements of income, changes in shareholders’ equity (deficit) and cash flows included in or incorporated by reference into Purchaser Reports (including any related notes and schedules) fairly presented in all material respects the results of operations, retained earnings (loss) and changes in financial position, as the case may be, of such companies for the periods set forth therein (subject, in the case of unaudited statements, to normal year-end audit adjustments), in each case in accordance with U.S. GAAP consistently applied during the periods involved, except as may be noted therein;

 

(j)

upon the issuance of the Issued Shares of Purchaser’s Common Stock contemplated pursuant to this Agreement, the Issued Shares will be duly authorized, validly issued, fully paid and non-assessable shares of the Purchaser, and, subject to the accuracy of the Sellers’ Warranties set out in Part 1 Section 2 of Schedule 4 (Warranties), will have been issued in compliance with all applicable federal, state and local securities laws of any applicable jurisdiction;

 

(k)

there are, and at Completion there will be, sufficient shares of the Purchaser’s Common Stock available for issuance under the Purchaser’s 2011 Equity Incentive Plan to cover all of the RSUs to be issued pursuant to Clause 8 (Post-Completion Stock Awards) hereof;

 

(l)

it has, and as of Completion it will have, carried out its business and dealt with its assets in all material respects in accordance with all material applicable laws and regulations in any relevant jurisdictions and neither the Purchaser nor any person for whom the Purchaser is vicariously liable is, or at Completion will be, the subject of any enforcement proceedings by any governmental body, and no enforcement proceedings are, so far as the Purchaser is aware, pending or threatened and, so far as the Purchaser is aware, there are no circumstances likely to give rise to any such investigation, enquiry or enforcement proceedings;

 

(m)

the Purchaser has, and will have at the time of payment, immediately available on an unconditional basis (subject only to Completion) the necessary cash resources to pay the cash portion of the Total Purchase Consideration; and

 

(n)

at the date of this Agreement, the Purchaser is not aware of any fact, matter or circumstance which would, or is reasonably likely to, result in a delay in, or adversely affect, the Purchaser's ability to comply in full with any of its obligations under this Agreement or the satisfaction of the Conditions and which has not been disclosed to the Sellers prior to the date of this Agreement.

10.2

The Purchaser acknowledges that the Sellers are entering into this Agreement on the basis of and in reliance on the warranties set out in Clause 10.1 above.

11.

Sellers’ Warranties

11.1

Each of the Sellers warrants, on a several basis and in respect of itself only, to the Purchaser that each of the Fundamental Warranties is true and accurate in all respects at the date of this Agreement and will on Completion be true and accurate in all material respects.

11.2

The Management Seller warrants to the Purchaser that each of the Management Warranties (as if references to “Sellers” were references to “Management Seller”) is true and accurate in all respects at the date of this Agreement and will on Completion be true and accurate in all material respects.

 

 

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11.3

Each of the Sellers severally acknowledges that the Purchaser is entering into this Agreement on the basis of and in reliance on warranties in the terms of the Fundamental Warranties and the Management Warranties.

11.4

The Sellers shall not be liable under the Warranties to the extent that the facts which cause the Management Warranties to be breached were Disclosed, but in all other circumstances and without prejudice to paragraph 9(b) of Schedule 5, the Purchaser shall be entitled to claim that any of the Warranties has been breached, or is untrue notwithstanding that the Purchaser knew or could have discovered the fact of such breach or inaccuracy on or before Completion other than by reason of it being Disclosed. For the avoidance of doubt, the Parties hereby expressly acknowledge that inclusion of any fact, action, situation, circumstance and/or information contained in the Preliminary Seller Certificates or Seller Certificates shall not bar the Purchaser from bringing a Warranty Claim for breach of a Fundamental Warranty or of a Material Warranty and that this is the case even if the Purchaser decides not to terminate this Agreement if the Warranties Condition is not satisfied or otherwise waives the Warranties Condition.

11.5

Each of the Sellers severally undertakes to irrevocably waive any right and claim which it may have against a Group Company or any present or past Agent of a Group Company arising in connection with this Agreement or any other Transaction Document, save in the case of fraud.

11.6

Each of the Warranties shall be separate and independent and (unless expressly provided otherwise) shall not be limited by reference to any other Warranty or by anything in this Agreement.

11.7

Each of the Sellers warrants that they hold printed share certificates as described in the TCC and each of the Seller warrants to satisfy the VAT exemption conditions of transfer of shares certificates pursuant to article 17 of Turkish Value Added Tax Law numbered 3065.

11.8

In the event that any of the Warranties is breached and not cured (if capable of cure) by the Sellers within sixty (60) days from the date on which the Purchaser notifies the Sellers of such event, matter, fact or circumstance, the Sellers covenant to pay to the Purchaser an amount equal to the Purchaser's Losses incurred in connection with, or arising from, such breach of the Warranties, subject to the limitations set out under Clause 12 (Sellers’ Limitations on Liability) and Schedule 5 (Sellers’ Limitations on Liability) in accordance with the terms of this Agreement.

12.

Sellers’ Limitations on Liability

12.1

The liability of the Sellers in respect of all Warranty Claims shall be limited as provided in Schedule 5 (Sellers’ Limitations on Liability) and the liability of the Sellers in respect of all Tax Covenant Claims shall be limited as provided in paragraph 4 of Schedule 12 (Tax Covenant).

12.2

Without prejudice to any other provision of this Agreement, the liability of each Seller in respect of all claims under this Agreement shall not exceed the amount of the Total Purchase Consideration received by such Seller. To the extent the liability of the relevant Seller exceeds the cash element of the Total Purchase Consideration received by such Seller, the Seller shall be obliged promptly to sell any such Seller’s Issued Shares not already sold by it and, provided the Seller has complied with such obligation, the Purchaser's sole recourse shall be against the total proceeds received by the Seller at any time in respect of the sale of such Seller’s Issued Shares. For the avoidance of doubt, no Seller shall be obligated under this Clause 12.2 to sell any Issued Shares unless and until such sale is permitted in accordance with Rule 144 or Regulation S and Clause 36 hereof or the Purchaser has caused such Issued Shares to be registered for resale under the requirements of the Securities Act and any applicable state securities laws and regulations.

 

 

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13.

Specific Indemnities

13.1

The Management Seller undertakes to indemnify and hold the Purchaser harmless from and against all Losses suffered or incurred by it or any of the Group Companies (or arising in respect of, by reference to or in consequence of):

 

(a)

the Excluded Business Transfer, including (without limitation): (i) any and all Losses of the Group Companies arising in respect of, by reference to or in consequence of : (A) the Excluded Business Transfer; (B) any agreements related to the Excluded Business Transfer (including any termination of employment contracts in connection with the Excluded Business Transfer); and/or (C) any actions taken or failure to take any actions under those agreements referenced in (B) above; (ii) any liabilities of the Excluded Business that should have been transferred as part of the Excluded Business Transfer; (iii) any liability to or in respect of Tax arising in respect of, by reference to or in consequence of the Excluded Business Transfer and/or any act, omission or transaction taken (whether prior to, on or following Completion) to facilitate or enable the Excluded Business Transfer to take place or otherwise be implemented on the terms contemplated; (iv) the loss, reduction or non-availability of any Relief arising in respect of, by reference to or in consequence of the Excluded Business Transfer, and/or (v) any Transfer Taxes payable in relation to or arising from the Excluded Business Transfer;

 

(b)

[***]; and

 

(c)

[***].

13.2

For the avoidance of doubt, the provisions of Clause 29 (Transfer Taxes), and Schedule 5 (Sellers’ Limitations on Liability) (save for the last sentence in paragraph 1.2, 4, and 8 of Schedule 5 which shall apply) shall not apply to Clause 13.1.

13.3

Any payment under Clause 13.1 shall be settled only from the Management Seller's Pro Rata Portion of the amount in the Escrow Account immediately after Completion as may be reduced by any payments under this indemnity and the Management Seller's Pro Rata Portion of any Warranty Claim and/or any Tax Claim in accordance with Schedule 11 (Escrow Account).

13.4

In the circumstances where any claim is made against the Purchaser which may give rise to an Indemnity Claim or where the Management Seller shall have paid to the Purchaser an amount in respect of the Indemnity Claim and subsequently to the making of such payment the Purchaser becomes or shall become entitled to recover from some other person a sum which is referable to that payment (a “Third Party Indemnity Claim”), the Purchaser shall as soon as reasonably practicable give the Management Seller notice in writing of the Third Party Indemnity Claim (a “Third Party Indemnity Claim Notice”) and in any event no later than the earlier of (i) ten (10) Business Days after becoming aware of such claim or potential claim and (ii) five (5) Business Days before the statutory deadline for responding to such claim or a potential claim. The Third Party Indemnity Claim Notice shall include (to the extent such information is reasonably available to the Purchaser at the relevant time) (i) a description of the circumstances that could give rise to the Loss and (ii) the amount claimed with a breakdown of the various elements of which it is comprised (if this can be estimated). The Third Party Indemnity Claim Notice shall be accompanied by (to the extent such documentation is reasonably available to the Purchaser at the relevant time) any supporting documentation that is reasonably necessary to evaluate the Third Party Indemnity Claim and the amount claimed.

13.5

Within the twenty (20) Business Days following receipt of the Third Party Indemnity Claim Notice or, if there is a shorter procedural or legal term in which to reply to the Third Party Indemnity Claim Notice, the Management Seller shall be entitled to assume the defence against such Third Party Indemnity Claims by notifying the Purchaser in writing.

 

 

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13.6

If Management Seller does not assume the defence in accordance with Clause 13.5 or reply within the agreed time period, the Purchaser may, acting in good faith and without prejudice to its common law duty to mitigate damages, take any such defensive action as it may deem appropriate, including a settlement in or out of court or an agreement. In all cases, the Management Seller shall be entitled to be kept informed of the progress of the claim in question and shall have full access to all the information and documentation regarding the same.

13.7

If the Management Seller assumes the defence in accordance with Clause 13.5, he shall be entitled to take any such defensive action alone or through the advisors he freely designates as he may deem appropriate against the Third Party Indemnity Claim and he shall bear the expenses incurred in the defence of such Third Party Indemnity Claim, as well as any expenses in relation to the provision or maintenance of payments into court, security deposits or guarantees that may have to be granted as a result of said defence in any proceeding. In all cases, the Purchaser, alone or through the advisors it freely designates, shall have access to all information and documentation regarding the claim in question. The Purchaser shall and shall procure that the Group Companies shall (to the extent such information is reasonably available to the Purchaser or the Group Companies at the relevant time) supply the information necessary for the Management Seller to take the defensive action to which this Clause 13.7 refers and shall provide the appropriate cooperation, including granting powers of attorney or other instruments of representation to the lawyers and court procedural representatives freely designated by the Management Seller.

13.8

The Management Seller or its advisors shall be entitled to enter into a settlement, agreement or in any other manner reach a settlement in or out of court with the competent public authorities or with any third party, without the express, prior and written consent of the Purchaser only in the following circumstances:

 

(a)

the Management Seller makes available to the Purchaser all the funds that he must pay the third party pursuant to the settlement or agreement; and

 

(b)

the settlement or agreement is solely for cash, without admission of any other liability on the Purchaser or the Group Companies; and

 

(c)

such settlement or out of court agreement (i) does not have a material negative effect on the image or reputation of the Purchaser, its Affiliates or any of their respective officers, directors, stockholders, managers, members, partners, employees, agents or representatives; or (ii) requires the Purchaser, or the Group Companies to do or omit to do any act or thing which act or omission would be or be likely to be materially adversely prejudicial to its and their business, goodwill, standing or reputation.

Any other settlement or disposition may only be made with the prior written consent of the Purchaser, which shall not be unreasonably withheld, conditioned or delayed.

14.

Restrictions on the Management Seller

14.1

The Management Seller undertakes that he shall not, directly or indirectly, either alone or jointly with or as agent for any other person or in any capacity whatsoever for a period of five (5) years following the Completion Date:

 

(a)

carry on, own any interest in, or be engaged, concerned or otherwise interested in, or in any way assist, any business anywhere in the world which competes with the Business or any part of the Business, other than ownership of less than five percent (5%) of the stock of publicly traded companies;

 

(b)

solicit or entice away any Worker then employed by any Group Company or Key Employee or any person then employed by any member of the Purchaser’s Group or employ any such person or any Worker employed by the Group during the period of

 

 

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six (6) months immediately prior to the relevant date or offer similar services, save for any employment made upon a general recruitment advertisement without any direct inducement of the relevant employee as specified herein;

 

(c)

take such actions or otherwise be engaged in any activities anywhere in the world which would reasonably be regarded as interfering with the customers, business relationships and business operations of each Group Company or the Business; or

 

(d)

assist, instruct, or incite any other person to do any of the above.

14.2

Each of the restrictions contained in this Clause 14 is given to the Purchaser and each Group Company. Each such restriction shall be construed as a separate provision of this Agreement. If any restriction is unenforceable but would be valid if reduced in scope or duration the restriction shall apply with the minimum modifications as may be necessary to make it valid and enforceable. The Management Seller acknowledges that each restriction is no greater than is reasonably necessary to protect the interests of the Purchaser’s Group and each Group Company and the Business. The Purchaser acknowledges that if any Group Company makes a monetary claim for damages against the Management Seller due to Management Seller's breach of his non-compete or non-solicitation obligations under his employment agreement, the Purchaser shall not be entitled to make a claim against the Management Seller under this Clause 14 for the same breach.

15.

Business Information

15.1

If any information required for the Business of any Group Company is not in the possession of any Group Company but remains held by a Seller, the Sellers shall procure that such information is provided to the Purchaser or, as directed by the Purchaser, to the relevant Group Company, as soon as practically possible on written request.

15.2

In the event that Purchaser determines in its sole and absolute discretion to make an election under Section 338(g) of the Code, each Seller will cooperate with Purchaser in (i) determining if notice under Treasury Regulation Section 1.338-2(e)(4) is required and (ii) in completing and delivering the notice under Treasury Regulation Section 1.338-2(e)(4).

16.

Termination

16.1

If this Agreement is terminated by the Parties in accordance with:

 

(a)

Clause 3.10 (Conditions);

 

(b)

Clause 7.6(c) (Completion),

or by the mutual agreement of the Parties in writing, the rights and obligations of the Parties under this Agreement shall cease immediately without any further liability on any of the Parties, save under the Continuing Provisions.

16.2

Save for each of the Parties' express right to terminate this Agreement pursuant to this Clause 16, Clause 3.10 and Clause 7.6(c) none of the Parties shall be entitled to rescind or terminate this Agreement, whether before or after the Completion. This shall not exclude any liability for (or remedy in respect of) fraud, or fraudulent misrepresentation.

17.

Confidentiality

17.1

Save as expressly provided in Clause 17.3, each of the Sellers severally undertakes that it shall, treat as confidential the provisions of the Transaction Documents, and all information it has received or obtained relating to the Purchaser’s Group as a result of negotiating or entering into

 

 

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the Transaction Documents and, with effect from Completion, all information it possesses relating to each Group Company, and shall not and shall procure Agents shall not disclose or use any such information.

17.2

Save as expressly provided in Clause 17.3, the Purchaser shall, and shall procure that each member of the Purchaser’s Group shall, treat as confidential the provisions of the Transaction Documents and all information it has received or obtained relating to the Sellers, and, if the Completion fails to take place, those relating to each Group Company as a result of negotiating or entering into the Transaction Documents or during the course of due diligence conducted by the Purchaser, and shall not and shall procure Agents shall not disclose or use any such information.

17.3

A Party may disclose, or permit the disclosure of, information which would otherwise be confidential if and to the extent that it:

 

(a)

is disclosed to Agents of that Party or of other members of the Relevant Party’s Group if this is reasonably necessary or appropriate in connection with this Agreement (and provided that such persons are required to treat that information as confidential); or

 

(b)

is disclosed to a person whom the other Parties have approved as a prospective permitted assignee in accordance with Clause 19 (No Assignment) or to its Agents in connection with a potential assignment to that person in accordance with the provisions of that Clause (provided that any such person needs to know the information for the purposes of considering, evaluating, advising on or furthering the potential assignment and is required to treat the information as confidential);

 

(c)

is required by law or any securities exchange, regulatory or governmental body or Taxation Authority;

 

(d)

is required in order to manage the Tax affairs of that Party or other members of the Relevant Party’s Group;

 

(e)

was already in the lawful possession of that Party or its Agents without any obligation of confidentiality (as evidenced by written records); or

 

(f)

is in the public domain at the date of this Agreement or comes into the public domain other than as a result of a breach by a Party of this Clause 17,

provided that prior written notice of any confidential information to be disclosed pursuant to Clause 17.3(b) shall be given to the other Party and their reasonable comments taken into account.

18.

Announcements

18.1

Save as expressly provided in Clause 18.2, no announcement shall be made by or on behalf of any Party or their Related Persons relating to the terms of the Transaction Documents without the prior written approval of the other Party.

18.2

A Party may make an announcement relating to the terms of the Transaction Documents without the prior written approval of the other Party if (and only to the extent) required by the law of any relevant jurisdiction or any securities exchange, regulatory or governmental body provided that prior written notice of any announcement required to be made is given to the other Parties (to the extent lawful) in which case such Party shall take all steps as may be reasonable and practicable in the circumstances to agree the contents of such announcement with the other Parties prior to making such announcement in accordance with the Laws governing such disclosure.

 

 

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19.

No Assignment

No Party may assign, transfer, charge, create an Encumbrance over, declare a trust of or otherwise dispose of all or any part of its rights and benefits under this Agreement or any other Transaction Document (including any cause of action arising in connection with any of them) or of any right or interest in any of them without the prior written consent of the other Party.

20.

Further Assurance

The Parties shall from time to time and at their own cost do, execute and deliver or procure to be done, executed and delivered all such further acts, documents and things necessary in order to give full effect to this Agreement and its rights, powers and remedies under this Agreement.

21.

Entire Agreement

21.1

This Agreement, together with the Transaction Documents and any other documents referred to in this Agreement or any Transaction Document, constitutes the whole agreement between the Parties and supersedes any previous arrangements or agreements between them relating to the sale and purchase of the Shares.

21.2

Each Party confirms that it has not entered into this Agreement or any other Transaction Document on the basis of any representation, warranty, undertaking or other statement whatsoever which is not expressly incorporated into this Agreement or the relevant Transaction Document.

21.3

Save for any claim under or for breach of this Agreement or any other Transaction Document, no Party nor any of its Related Persons shall have any right or remedy, or make any claim, against another Party nor any of its Related Persons in connection with the sale and purchase of the Shares.

21.4

In this Clause 21, “Related Persons” means, in relation to a Party, members of the Relevant Party’s Group and the Agents of that Party and of members of the Relevant Party’s Group.

21.5

Nothing in this Clause 21 shall operate to limit or exclude any liability for fraud.

22.

Severance and Validity

If any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect under the Law of any jurisdiction, it shall be deemed to be severed from this Agreement and the Parties shall use all reasonable endeavours to replace such provision with one having an effect as close as possible to the deficient provision. The remaining provisions will remain in full force in that jurisdiction and all provisions will continue in full force in any other jurisdiction.

23.

Variations

No variation of this Agreement shall be effective unless in writing and signed by or on behalf of the Parties.

24.

Remedies and Waivers

24.1

No waiver of any right under this Agreement or any other Transaction Document shall be effective unless in writing. Unless expressly stated otherwise a waiver shall be effective only in the circumstances for which it is given.

 

 

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24.2

No delay or omission by any Party in exercising any right or remedy provided by law or under this Agreement shall constitute a waiver of such right or remedy.

24.3

Each Party acknowledges and agrees that the only remedy available to it in respect of a breach of any provision of this Agreement shall be for damages for breach of contract and that the relevant Party shall have no claim or remedy in tort in respect of such breach. No Party shall have a right to rescind this Agreement.

24.4

The single or partial exercise of a right or remedy under this Agreement shall not preclude any other nor restrict any further exercise of any such right or remedy.

24.5

The rights and remedies provided in this Agreement are cumulative and do not exclude any rights or remedies provided by law.

25.

Effect of Completion

The provisions of this Agreement and of the other Transaction Documents which remain to be performed following Completion shall continue in full force and effect notwithstanding Completion.

26.

Third Party Rights

26.1

This Agreement is made for the benefit of the Parties and their successors and is not intended to benefit any other person, and no other person shall have any right to enforce any of its terms, except that Clause 8 (Post-Completion Stock Awards) is intended to benefit each Beneficiaries; Clause 9.3 (Post-Completion Undertakings) is intended to benefit each Key Employees and directors of the Group Companies; Clause 14 (Restrictions on the Management Seller) and Clause 15 (Business Information) are intended to benefit each Group Company, Clause 11.5 (Sellers’ Warranties) is intended to benefit each Group Company, Clause 17 (Confidentiality) is intended to benefit any member of the Purchaser’s Group and Clause 21 (Entire Agreement) is intended to benefit a Party’s Related Persons, and each such Clause shall be enforceable by any of them to the full extent permitted by law, subject to the other terms and conditions of this Agreement.

26.2

The Parties may amend or vary this Agreement in accordance with its terms without the consent of any other person.

27.

Payments

27.1

Any amount payable by the Sellers to, or at the direction of, the Purchaser under this Agreement (including, for the avoidance of doubt, any amount payable from the Escrow Account to the Purchaser) shall, so far as possible, be deemed to be a reduction of the Total Purchase Consideration.

27.2

Save as otherwise set out in this Agreement, any amount payable by the Sellers to the Purchaser or by the Purchaser to the Sellers shall be made in full without set‑off or counter‑claim and free from any deduction or withholding whatsoever, except as required by law.

27.3

If any deduction or withholding is required by law to be made from any payment in respect of a claim under this Agreement (excluding a claim, if any, for payment of the Total Purchase Consideration) the payer shall increase the amount of the payment to the extent necessary to ensure that the net amount received and retained by the recipient (after taking into account all deductions, withholdings or Tax) is equal to the amount that it would have received had the payment not been subject to any such deductions, withholdings or Tax.

 

 

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28.

Costs and Expenses

28.1

Except as provided otherwise, each Party shall pay its own costs and expenses in connection with the negotiation, preparation and performance of this Agreement and the other Transaction Documents.

29.

Transfer Taxes

29.1

In respect of the stamp duties arising under Turkish Law from the execution of this Agreement and the Escrow Agreement, as soon as reasonably practicable and in any event no later than the date such payment is required to be made pursuant to applicable Law, the Purchaser shall make any required filings and shall pay to the relevant Taxation Authority one hundred (100) per cent of the cost of any such stamp duties; and provide reasonable proof of such payment to the Sellers as soon as reasonably practicable after payment.

29.2

The Sellers shall bear the entire cost of any non-Turkish Transfer Taxes which arise as a result of or in connection with the transfer of the Relevant Sale Shares.

29.3

For the avoidance of doubt, nothing in this Clause 29 applies to a claim under Clause 13 (Specific Indemnities).

30.

Default Interest

Any and all amounts which are due and payable by one Party to another under this Agreement shall be paid in US$ and shall carry interest at the Interest Rate from the due date for payment up to and including the date of actual payment. In the case of a Claim, the due date for payment shall be treated as being settlement date among the Parties and/or final order or judgment of a court of competent jurisdiction (with all rights of appeal having been exhausted) in accordance with Schedule 5 (Sellers' Limitations on Liability).

31.

Notices

31.1

Any notice or other communication to be given under or in connection with this Agreement (“Notice”) shall be in the English language in writing and signed by or on behalf of the Party giving it. A Notice may be delivered personally or sent by email or international courier to the address provided in Clause 31.3, and marked for the attention of the person specified in that Clause.

31.2

A Notice shall be deemed to have been received:

 

(a)

at the time of delivery if delivered personally or by international courier, with acceptance personally acknowledged at such time of delivery; or

 

(b)

at the time of transmission if sent by email

provided that if deemed receipt of any Notice occurs after 6:00 pm or is not on a Business Day, deemed receipt of the Notice shall be 9:00 am on the next Business Day. References to time in this Clause 31 are to local time in the country of the addressee.

31.3

However, notices described in Article 18/III of the TCC shall be sufficiently given only if delivered via notary public, by telegram or by registered mail, return receipt requested, and shall be deemed to have been given as of the date of proper service in accordance with the Laws of Turkey. Any communication to be delivered to any Party, including the notices sent by e‑mail, shall, without prejudice to any other evidences as permitted by the applicable Law, constitute legal evidence between the Parties. The addresses for service of Notice are:

 

 

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Sellers: to the addresses set out under their names in Schedule 1.

Purchaser:

Name:Zynga Inc.

Address: 699 8th Street, San Francisco, California 94103

For the attention of:Chief Legal Officer

Email address:[***]@zynga.com

31.4

A Party shall notify the other Parties of any change to its details in Clause 31.3 in accordance with the provisions of this Clause 31, provided that such notification shall only be effective on the later of the date specified in the notification and five (5) Business Days after deemed receipt.

32.

Counterparts

This Agreement may be executed in counterparts and shall be effective when each Party has executed and delivered a counterpart. Each counterpart shall constitute an original of this Agreement, but all the counterparts shall together constitute one and the same instrument.

33.

Governing Law and Jurisdiction

33.1

This Agreement, including any non‑contractual obligations arising out of or in connection with this Agreement, is governed by and shall be construed in accordance with English law.

33.2

The Parties agree that the courts of England shall have exclusive jurisdiction to hear and determine any suit, action or proceedings arising out of or in connection with this Agreement (including any non‑contractual obligations arising out of or in connection with this Agreement) and, for such purposes, irrevocably submit to the jurisdiction of such courts.

34.

Agent for Service of Process

34.1

Each of the Sellers irrevocably and individually appoints [***]; and the Purchaser irrevocably appoints [***], in each case as its agent for service of process in England.

34.2

If any person appointed as agent for service of process ceases to act as such the relevant Party shall immediately appoint another person to accept service of process on its behalf in England and notify the other Parties of such appointment. If it fails to do so within ten (10) Business Days any other Party shall be entitled by written notice to the other Parties to appoint a replacement agent for service of process.

35.

Sellers’ Representatives

35.1

(i) The Management Seller designates [***] and (ii) B, C, D and E Sellers designates [***] to serve as its representative (the “Sellers’ Representatives”) and to act on their behalf with respect to notices, consents or approvals or requests, elections or proposals required to be given or accepted by the Sellers acting together and otherwise with respect to the actions or decisions expressly identified in this Agreement to be performed or made by the Sellers’ Representative.

35.2

Each of the Sellers irrevocably appoints the relevant Sellers’ Representative as its agent, proxy and attorney and gives the relevant Sellers’ Representative full power and authority on such Seller’s behalf to do all acts and to execute and deliver and receive all such documents or deeds as may be required to resolve or address all matters as are expressly contemplated by the Transaction Documents.

35.3

Any action taken or document executed by a Sellers’ Representative on behalf of a Seller in connection with this Agreement shall be deemed to have been made on behalf of such Seller

 

 

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and the Purchaser shall be entitled at its sole discretion to have regard only to, and to rely absolutely upon and act in accordance with, without any liability to any party for having relied or acted thereon, notices, including requests, elections or proposals, issued by a Sellers’ Representative. Service of any notice or other communication on a Sellers’ Representative shall be deemed to constitute valid service thereof on the respective Seller to rely upon such action or document as being binding on such Seller without further enquiry.

35.4

Each of the Sellers’ Representatives may resign and be discharged from its duties and obligations under this Agreement by giving notice and specifying a date (which date shall be the later of the date specified in the notice and five (5) Business Days after deemed receipt) on which such resignation shall take effect or be removed by the relevant Sellers provided, however, that until a successor Sellers’ Representative shall have been appointed, that Sellers’ Representative shall continue to perform its duties and obligations under this Agreement.

35.5

The Sellers shall, as soon as reasonably practicable after the signing of this Agreement, and in any case within fifteen (15) Business Days, execute and provide to the Purchaser a certified copy of a power of attorney granted by each Seller in favour of the Sellers’ Representatives in the agreed terms, and shall promptly notify the Purchaser of any revocation of modification of such powers of attorney.

36.

Transfer Restrictions

36.1

The Sellers understand that the Issued Shares shall be subject to restrictions on resale pursuant to this Agreement and applicable laws and that any certificates representing the Issued Shares or the applicable balance account of a Seller with the Purchaser’s transfer agent shall bear transfer restrictions with the effect of the following applicable legends:

 

(a)

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.”; and

 

(b)

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS, CONDITIONS, RESTRICTIONS, RIGHTS, PREFERENCES, PRIVILEGES AND LIMITATIONS SET FORTH IN A SHARE PURCHASE AGREEMENT, DATED 31 MAY 2020, WHICH, AMONG OTHER THINGS, CONTAINS RESTRICTIONS ON THE TRANSFER OF SUCH SHARES. A COPY OF THE SHARE PURCHASE AGREEMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF ZYNGA INC.”; and

 

(c)

any other legends required by applicable state securities Laws.

36.2

The Issued Shares shall not bear the transfer restrictions set forth in Clause 36.1(a) hereof: (a) following any sale of Issued Shares pursuant to Rule 144; or (b) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the SEC). The Issued Shares shall not bear the transfer restriction set forth in Clause 36.1(b) hereof upon the termination of the restrictions set forth in Clause 36.6 hereof. The Issued Shares shall not bear the transfer restrictions set forth in Clause 36.1(c) hereof following a sale of the Issued Shares if, following such a sale, the Issued Shares are not required to carry a legend pursuant to such applicable laws.

 

 

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36.3

With a view to making available to the Sellers the benefits of certain rules and regulations of the SEC which may permit the Sellers to sell the Issued Shares to the public without registration while a public market exists for the Purchaser’s Common Stock, as long as any Seller owns Issued Shares or until the date which is 24 months from and including the Completion Date, whichever is earlier, the Purchaser shall make available adequate current public information, as those terms are understood and defined in Rule 144, including by filing all reports and other documents required of the Purchaser under the Exchange Act, so long as the Purchaser remains legally obligated to comply with such public reporting requirements and for so long as the filing of such reports and other documents is required for the applicable provisions of Rule 144.

36.4

The Purchaser shall make all necessary arrangements and shall facilitate the timely preparation and delivery of the Issued Shares to be sold pursuant to Rule 144 free and clear of any restrictive legends and representing such number of Issued Shares, and registered in such name or names, as such Seller may request a reasonable period of time prior to sales of such Issued Shares pursuant to Rule 144. In connection with the obligations set forth in this Clause 36.4 the Purchaser shall, if required by the Purchaser’s transfer agent, arrange for an opinion by counsel to the Purchaser to be delivered to the Purchaser and its transfer agent, in form and substance reasonably satisfactory to its transfer agent that such legends need not appear on such shares. Following the Completion the Purchaser shall promptly cooperate with any requests from the Sellers to support the transfer of the Issued Shares to such brokerage accounts as may be identified by the Sellers from time to time, provided that any Issued Shares that are transferred to such brokerage accounts shall be held in compliance with the requirements of this Clause 36 until the relevant legends set forth in Clause 36.1 are removed.

36.5

During the Restricted Period, the Sellers shall not, directly or indirectly, by operation of applicable law, contract or otherwise, (a) sell, contract to sell, give, assign, hypothecate, pledge, encumber, grant a security interest in, offer, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any economic, voting or other rights in or to any Issued Shares, or (b) enter into a short sale of, or trade in, derivative securities representing the right to vote or economic benefits of, any Issued Shares in violation of this Agreement or the requirements of the Securities Act or other applicable Laws (clauses (a) and (b), a “Transfer”), other than, in each case, pursuant to a Permitted Transfer; provided that the Sellers may engage in hedging and other similar transactions in compliance with this Agreement and the requirements of the Securities Act and other applicable Laws.

36.6

For the purposes of this Clause, the following terms have the following meanings

 

(a)

Restricted Period” means:

 

(i)

in respect of the Issued Shares paid to the B, C, D and E Sellers: the period commencing on the Completion Date and ending on the six (6) month anniversary of the Completion Date; and

 

(ii)

in respect of the first half of the Issued Shares paid to the Management Seller: the period commencing on the Completion Date and ending on the six (6) month anniversary of the Completion Date; and in respect of the second half of the Issued Shares paid to the Management Seller: the period commencing on the Completion Date and ending on the twelve (12) months anniversary of the Completion Date.

 

(b)

Permitted Transfer” means

 

(i)

a Transfer that has been approved in advance by an authorized officer of the Purchaser;

 

 

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(ii)

a Transfer to the acquirer in a transaction (whether direct or indirect, including by way of merger, share exchange, consolidation, business combination, tender offer, exchange offer or other similar transaction) that would result in such acquirer beneficially owning more than fifty percent (50%) of the total outstanding shares of the Purchaser’s Common Stock; or

 

(iii)

a Transfer to one of its affiliates so long as such affiliate shall agree in writing with the Purchaser to be bound by the provisions of this Clause 36 at the time of such Transfer.

In Witness Whereof each Party has executed and delivered this Agreement as a deed on the date which first appears above.

 

 

 

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Schedule 1

The Sellers1

Seller and Notice Details (1)

Number of Relevant Sale Shares (2)

Pro Rata Portion (3)

Cash to be received at Completion (4)

Shares of Purchaser’s Common Stock to be received at Completion (as adjusted in accordance with this Agreement)(5)

Amount of Escrow Amount (6)

Seller's Designated Bank Account Details (7)

Sellers' Portion of Transfer Taxes (8)

Sidar Şahin

Address: [***]

Email: [***]

6,100,946 A

[***]%

$[***]

[***]

$[***]

 

$[***]

Hummingbird Ventures CVA

Address: [***]

Email: [***]

4,107,936 B

[***]%

$[***]

[***]

$[***]

[***]

$[***]

Hummingbird Ventures II CVA

Address: [***]

Email: [***]

1,652,583 B

[***]%

$[***]

[***]

$[***]

[***]

$[***]

 

1

Note: Final numbers are to be updated just before Completion.

 

EMEA 126241067

43

 

 


 

Earlybird Verwaltungs GmbH

Address: [***]

Email: [***]

12,386,113 C

[***]%

$[***]

[***]

$[***]

[***]

$[***]

Endeavor Catalyst, Inc.

Address: [***]

Email: [***]

757,792 E

[***]%

$[***]

[***]

$[***]

[***]

$[***]

Evren Üçok

Address: [***]

Email: [***]

2,213,941 D

[***]%

$[***]

[***]

$[***]

[***]

$[***]

Demet Suzan Mutlu Üçok

Address: [***]

Email: [***]

1,373,817 D

[***]%

$[***]

[***]

$[***]

[***]

$[***]

Total

28,593,128

 100%

$[***]

[***]

$120,000,000

 

$[***]

 

 

EMEA 126241067

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Schedule 2The Group

Part 1The Company

Company name

:

Peak Oyun Yazılım ve Pazarlama Anonim Şirketi

Company number

:

750337 (Istanbul Trade Registry)

Date and place of incorporation

:

12 October 2010, İstanbul

Registered address

:

Ömer Avni Mahallesi İnebolu Beytulmalci Sokak No.39 Haktan İş Merkezi Kat:3, Kabataş, Beyoğlu, İstanbul

Issued share capital

:

TL 28,593,128

Shareholders

:

Sidar Şahin

Evren Üçok

Demet Suzan Mutlu Üçok

Hummingbird Ventures II CVA

Hummingbird Ventures CVA

Earlybird Verwaltungs GmbH

Endeavor Catalyst, Inc.

Directors

:

Sidar Şahin (Chairman of the Board)

Earlybird Verwaltungs GmbH (Real person representative: Aycan Avcı) (Vice Chairman of the Board),

Eda Azaroğlu (Member of the Board)

Hummingbird Ventures CVA (Real person representative: Galip Murat Selçuk) (Member of the Board)

Evren Üçok (Member of the Board)

Auditors

:

Güney Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş., an affiliate of Ernst & Young in Turkey

Accounting reference date

:

1 January - 31 December

Tax residency

:

Beyoğlu Tax Office

Tax identification number

:

[***]

 


 

 

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Part 2The Subsidiary

Company name

:

Peak Games Inc.

Company number

:

6011424

Date and place of incorporation

:

3 May 2016, Delaware

Registered address

:

3500 S Dupont Hwy, City of Dover, County of Kent, Delaware 19901

Issued share capital

:

USD 150,000

Shareholder

:

Peak Oyun Yazılım ve Pazarlama A.Ş.

Directors

:

[***](President, Secretary, Treasurer and General Manager)

[***](Director)

Auditors

 

[***]

Accounting reference date

 

1 January – 31 December

Tax residency

 

California

Employer identification number

:

[***]

 

 

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Schedule 3Completion Arrangements

Part 1
Sellers’ Obligations

At Completion the Sellers shall:

1.

Procure the meetings of the Company's board at which:

the Transaction shall be approved, and it shall be resolved that the transfer of the Shares shall be approved for registration and (subject to satisfaction of such legal or other requirements as are necessary for the registration to be effected) the Purchaser as the owner of the Shares be registered in the share ledger of the Company and the Subsidiary; and

2.

Procure the ordinary general assembly meetings of the Company and shareholders' meeting of the Subsidiary (where applicable) at which:

2.1

(i) the Management Seller in his capacity acting as board member and (ii) [***] capacity acting as board member shall be released from their duties for the year 2018;

2.2

the balance sheet, and profit and loss statement for the years 2018 and 2019 shall be approved;

2.3

all the directors shall be released from their duties for the year 2019;

2.4

new directors shall be appointed in accordance with the Purchaser’s nominations; and

2.5

the resignations of the directors shall be tendered and accepted with effect from the close of the meeting.

3.

Execute and deliver to the Purchaser the Escrow Agreement, the Termination Agreement, the Management Seller Employment Agreement and the Key Employee Employment Agreements.

4.

Deliver to the Purchaser or the Purchaser’s Lawyers:

4.1

copies of documents in relation to the conclusion of [***] they have commenced including but not limited to the withdrawal petitions (davadan feragat) to the respective courts and documents proving that these are duly recorded to the national judiciary information system (UYAP) in relation to [***];

4.2

as an obligation of the Management Seller only, a release in the agreed form from each recipient of a Paid Change of Control Payment acknowledging that the receipt of the monies stated in the releases shall be in full and final settlement of any obligation any Group Company might have to them in respect of any Change of Control Payment, as an obligation of all the Seller, together with a certified copy of the minutes of the meeting of the board of directors of the Company at which the Company’s entry into the obligation to make the Change of Control Payments was approved;

4.3

copies of resignation letters of the current directors of the Group Companies signed mutually by the directors and the Group Companies, where the Group Companies release the directors for any action taken by them until the date of Completion;

4.4

a certified copy of the general assembly resolutions of the Company referred to in paragraph 2, at which the entry into the Transaction is also approved, in accordance with the Existing Shareholders’ Agreement and the articles of association of the Company in effect from time to time;

4.5

the duly endorsed share certificates (in paper form) for the Shares;

4.6

a certified copy of the minutes of the meetings referred to in paragraph 1 and 2;

4.7

the Management Seller Certificate;

 

 

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4.8

an Updated Second Disclosure Letter (if applicable);

4.9

the Seller Certificates from each Seller; and

4.10

executed counterpart of the Escrow Agreement.