znga-8k_20200804.htm
false 0001439404 0001439404 2020-08-04 2020-08-04

 

 

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): August 4, 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.

On August 4, 2020, Zynga Inc., a Delaware corporation (“Zynga”), entered into a Share Sale and Purchase Agreement (the “Agreement”) with the shareholders (collectively, the “Sellers”) of Rollic Games Oyun Yazılım ve Pazarlama Anonim Şirketi (“Rollic”), pursuant to which Zynga will acquire (i) at closing, 80% of all issued and outstanding share capital of Rollic (the “Shares”) in exchange for consideration of $168 million in cash (the “Closing Consideration”), subject to adjustments and certain transaction expenses as set forth within the Agreement, and (ii) the remaining 20% of the Shares for additional consideration (the “Step-In Consideration”) during each of the three years following the closing (the “Step-In Period”) payable annually based upon the achievement of specified profitability metrics by Rollic, as set forth within the Agreement. The Closing Consideration will be increased by the amount of Rollic’s unrestricted cash, cash equivalents, accounts receivable, advances paid and pre-paid VAT and decreased by accounts payable (including unpaid transaction expenses), specified change of control fees and outstanding indebtedness. The Step-In Consideration will consist of at least 50% of each payment in cash and the remainder, at Zynga’s discretion, in cash and unregistered shares of Zynga’s Class A common stock (the “Zynga Stock”) based on the volume-weighted average closing price of the Zynga Stock during a 30 consecutive trading day period in advance of each payment. Following the end of the Step-In Period, Rollic will be a direct, wholly-owned subsidiary of Zynga. The closing is expected to occur on October 1, 2020, subject to satisfaction or waiver of specified conditions.

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 Rollic 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, $16 million of the Closing Consideration otherwise payable to the Sellers has been deposited into an escrow fund.

The Agreement may be terminated upon material breach of certain provisions in the Agreement or if the closing has not occurred by October 31, 2020.

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 Step-In Consideration may be satisfied through the issuance of Zynga Stock. If Zynga determines to issue shares of Zynga Stock as Step-In Consideration, such shares would 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 August 5, 2020, Zynga issued a press release announcing the planned acquisition of Rollic. 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 Rollic 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 Rollic 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 Rollic Games 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 August 5, 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:  August 5, 2020

 

By:

/s/ Phuong Y. Phillips

 

 

 

Phuong Y. Phillips

 

 

 

Chief Legal Officer and Secretary

 

 

znga-ex21_37.htm

 

EXHIBIT 2.1

 

EXECUTION VERSION

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.

 

Dated 4 August 2020

Share Sale and Purchase Agreement

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

between

Those persons listed in Schedule 1

as Sellers

Zynga Inc.

as Purchaser

 

White & Case llp

5 Old Broad Street

London EC2N 1DW

 

EMEA 127299637

 

 

 


 

 

 

Table of Contents

Page

1

Interpretation

1

2

Sale and Purchase

18

3

Conditions

19

4

Consideration

20

5

Step-In Consideration

21

6

Escrow

23

7

Pre Closing Obligations

23

8

Closing

26

9

Step-In Closings

27

10

Post-Closing Stock Awards

28

11

Post-Closing Undertakings

29

12

Purchasers’ Warranties

29

13

Sellers’ Warranties

30

14

Sellers’ Limitations on Liability

31

15

Specific Indemnities

31

16

Restrictions on the Employee Sellers

31

17

Business Information

32

18

Termination

32

19

Confidentiality

33

20

Announcements

34

21

No Assignment

34

22

Further Assurance

35

23

Entire Agreement

35

24

Severance and Validity

35

25

Variations

35

26

Remedies and Waivers

35

27

Effect of Closing

36

28

Third Party Rights

36

29

Payments

36

30

Costs and Expenses

37

31

Taxes

37

32

Default Interest

37

33

Notices

38

34

Counterparts

38

35

Governing Law and Jurisdiction

38

36

Agent for Service of Process

39

37

Sellers’ Representative

39

38

Other Provisions

40

Schedule 1

The Sellers

42

Schedule 2

The Company

44

Schedule 3

Closing Arrangements

45

Part 1

Sellers’ Closing Obligations

45

Part 2

Purchaser’s Closing Obligations

47

Part 3

Sellers’ and Purchaser’s Joint Closing Obligations

48

 

EMEA 127299637

(i)

 

 


 

 

Page

Table of Contents

Page

Part 4

Employee Sellers’ Step-In Closing Obligations

49

Part 5

Purchaser’s Step-In Closing Obligations

50

Schedule 4

Warranties

51

Part 1

Fundamental Warranties

51

Part 2

Operational Warranties

52

Schedule 5

Sellers’ Limitations on Liability

79

Schedule 6

Conduct of Business

83

Part 1

Governing Principles

83

Schedule 7

Closing Accounts

84

Part 1

Rules for Preparation of Closing Accounts

84

Part 2

Specific Accounting Treatments

85

Part 3

Preparation, Delivery and Agreement

86

Schedule 8

Post-Closing Financial Adjustments

88

Part 1

Adjustments

88

Part 2

Settlement of Adjustments

88

Schedule 9

Step-In Consideration

89

Part 1

Rules for Preparation of Step-In Accounts and Accounting Treatment

89

Part 2

Preparation, Delivery and Agreement of Step-In Accounts

89

Schedule 10

Escrow Account

92

Part 1

General

92

Part 2

Payments from the Escrow Account

92

Schedule 11

Tax Covenant

95

1

Definitions and interpretation

95

2

Covenant

96

3

Exclusions And Limitations On Liability

97

4

Corresponding Relief

98

5

Recovery From Third Parties

99

6

Conduct Of Pre Closing Tax Affairs

100

7

Conduct Of Tax Authority Claims

100

8

Payment Of Claims

103

 

 

 

 

EMEA 127299637

(ii)

 

 


 

This Agreement is made on 4 August  2020

Between:

(1)

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

(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 Company 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 Company 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 30 June 2020;

Actual Cash” means the Cash held by the Company at 9am CET on the Closing Date, as calculated and determined in accordance with Schedule 7 (Closing Accounts);

Actual Debt” means the Debt owed by the Company as at 9am CET on the Closing Date, as calculated and determined in accordance with Schedule 7 (Closing Accounts);

Actual Working Capital” means the Working Capital of the Company as at 9am CET on the Closing Date, as calculated and determined in accordance with Schedule 7 (Closing Accounts);

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

Annex” means the list of disputes agreed by the Parties and annexed to this Agreement on the date hereof;

Anti‑Bribery Laws” means, in each case to the extent that they have been applicable to the 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;

Anti-Money Laundering Law” means all laws relating to money laundering or the proceeds of criminal activity including, without limitation: (i) European Union Money Laundering Directives and member states’ implementing legislation; (ii) the UK Proceeds of Crime Act 2002; (iii) the U.S. Bank Secrecy Act, the U.S. Patriot Act and other U.S. legislation relating to money laundering, (iv) Federal Law of the Russian Federation No. 115-FZ “On Countering the Legalization of Illegal Earnings (Money Laundering) and the Financing of Terrorism” dated 7 August 2001 (as amended) and (v) Law on the Prevention of Laundering the Income Generated from Criminal Activities (Suç Gelirlerinin Aklanmasının Önlenmesi Hakkında Kanun) numbered 5549 and published in the Official Gazette dated October 18, 2006 and numbered 26323;

 

EMEA 127299637

 

 

 


 

Antitrust Law” means: (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; 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 December 13, 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 if and as applicable to the Company and/or the Seller;

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 PwC YMM A.Ş.;

Authoritymeans 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 Company;

Board” means the board of directors of the Company;

Business” means the business of the Company comprising the development, marketing and publishing of games on mobile and online platforms and display, distribution and publication of paid-advertisements 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 the 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 the Company has or purports to have, control of or an ownership interest of any nature in (whether exclusively, jointly with another person, or otherwise) or that is used or held for use by the Company;

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 the Company 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 the 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;

 

EMEA 127299637

2

 

 


 

Business Plan” means the business plan and operating budget [***] in the agreed terms to be adopted by the Company on Closing;

Business Owned IP” means all:

 

(a)

Registered Business IP Rights;

 

(b)

Business Domain Names;

 

(c)

Business Owned Software; and

 

(d)

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

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

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

 

(a)

under licence or development by, or for, the Company; or

 

(b)

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

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

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 the Company at any time, but excluding any third-party Software that is generally available on standard commercial terms and is licensed to the Company solely for internal use, in object code form, and on a non-exclusive basis;

Business Third Party Softwaremeans any and all Business Software in which a third party has an ownership interest of any nature (whether exclusively, jointly with another person, or otherwise);

Cash” means, in relation to the Company, the aggregate of its unrestricted cash, cash equivalents and marketable securities held 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) as determined in accordance with Applicable Accounting Standards, less

 

(a)

the aggregate of all cash received between the date of this Agreement and the Closing Date by the Company, which comprises the proceeds of any insurance claim in respect of the destruction of, or damage to, a non‑cash asset of any member of the Company, 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

 

(b)

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

 

EMEA 127299637

3

 

 


 

Cause Event” means any event, act or omission that entitles the Company that employs the relevant Employee Seller to terminate the employment of such Employee Seller due to (i) a material breach by such Employee Seller of this Agreement or Employee Seller Employment Agreement, as applicable, or (ii) reasons as specified under Article 25 of the Turkish Labor Law or (iii) due to the Employee Seller’s misbehavior or poor performance as specified under Article 18 of the Turkish Labor Law or personal misconduct which may not be qualified as one of the reasons as specified under Article 25 of the Turkish Labor Law, however it may be considered reasonably material by the Company to terminate employment for cause provided, that in each case under clause (i) and (iii), the Company provides the relevant Employee Seller (as applicable) with written notice of the facts related to 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 Employee Seller (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 earlier of (i) the date on which notice of termination of employment is given or received by the Employee Seller and (ii) the date on which the Employee Seller actually ceases to be an employee of the Purchaser or the 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 to the Workers, Key Employees and Employee Sellers, former employees, shareholders, formers shareholders or contractors of the Company that are triggered in connection with the Transaction following the Closing Date (and/or any Step-In Closing) and the employer portion of any Taxes resulting from such payments or benefits;

Claim” means any Warranty Claim or Indemnity Claim;

Closing” means closing of the sale and purchase of the Closing Shares under this Agreement;

Closing Accounts” means the accounts prepared in accordance with Part 1 of Schedule 7 (Rules for Preparation of Closing Accounts);

Closing Accounts Adjusting Payment” means any amount owed by the Sellers to the Purchaser pursuant to Clause 4.2(b) and Schedule 8 (Post Closing Financial Adjustments);

Closing Date” means the latest to occur of (i) 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, (ii) October 1, 2020 or (iii) such other date as the Parties agree in writing;

Closing Shares” means the aggregate number of Company Shares sold on Closing and set out in column 3 of Schedule 1;

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

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

Company Bookings” means the Company’s revenue calculated on the basis of the Purchaser’s accounting policies and principles consistent with the principles applied by the Purchaser prior to the Closing Date to determine the Company’s revenue, excluding the impact of the change in the Company’s deferred revenue;

Company EBITDA” means the EBITDA of the Company prepared in accordance with the Applicable Accounting Standards, specifically including amounts attributable to the operations of the Company (consisting of Company Bookings, cost of sales and operating expenses (which

 

EMEA 127299637

4

 

 


 

shall include all legal expenses, settlements and judgements actually incurred by or on behalf of the Company) but excluding the impact of the change in the Company’s deferred revenue and non-recurring and one time expenses);

Company EBITDA Margin” means the amount equal to the Company EBITDA divided by the Company Bookings;

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 the Company;

Company Shares” means all the issued and outstanding shares of the Company as at the date of this Agreement, together with all issued and allocated option rights (whether vested or unvested), convertible securities or any other rights to acquire shares (or interests in shares) in the Company;

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 the 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 9 (Sellers’ Warranties), Clause 14 and Schedule 4 (Sellers’ Limitations on Liability), Clause 19 (Confidentiality), Clause 20 (Announcements), Clause 21 (Assignment), Clause 23 (Entire Agreement), Clause 24 (Severance and Validity), Clause 25 (Variations), Clause 26 (Remedies and Waivers), Clause 28 (Third Party Rights), Clause 29 (Payments), Clause 30 (Costs and Expenses), Clause 31 (Default Interest), Clause 33 (Notices), Clause 35 (Governing Law and Jurisdiction), Clause 36 (Agent for Service of Process) and Clause 37 (Sellers’ Representative), all of which shall continue to apply after the termination of this Agreement pursuant to Clause 3.6

 

EMEA 127299637

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(Conditions), Clause 8.5(c) (Closing) and 8.6(c) (Closing) or Clause 13.11 (Sellers’ Warranties) 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

 

(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 Lawsmeans: (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 and the UK), 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 EU or UK Data Protection Authority (including guidance and codes issued by the Article 29 Working Party, the European Data Protection Board and the European Data Protection Supervisor), 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 file hosting facility operated by [***] and comprising the actual copies of documents and other information relating to the Business and the Company made available to the Purchaser’s Group and its advisers, as recorded in a set of two (2) non-rewritable USBs delivered on the date hereof to the Purchaser’s Lawyers;

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 Company (including by way of net debit balances, loan stocks, obligations under any foreign exchange, interest rate, or other hedging or derivative contract, bonds, debentures, notes, commercial paper, finance leases or similar) owed to any banking, financial, acceptance credit, lending or other similar institution or organisation;

 

(b)

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

 

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(c)

any accrued and outstanding interest on any amounts specified above;

Designated Bank Account” means the relevant bank account details notified by the relevant Seller to the Purchaser in writing by no later than three (3) Business Days before the relevant Closing Date and each Step-In Closing (to the extent the existing details have changed);

Disclosed” means fairly disclosed with sufficient particularity in such a manner and in such detail as to enable the Buyer to make a reasonably informed identification of the nature and scope of the fact, matter or circumstance concerned and specifically disclosed in the Disclosure Letter and the Disclosure Letter Update;

Disclosure Letter” means the letter of today’s date from the Sellers to the Purchaser in the agreed terms and delivered to the Purchaser containing disclosures against the Operational Warranties;

Draft Disclosure Letter Update” means the draft letter from the Sellers delivered to the Purchaser no later than 7 (seven) days prior to the Closing Date of any action, situation, circumstance or event occurring between the date hereof and Closing and which is a draft update to the matters previously Disclosed in the Disclosure Letter;

Disclosure Letter Update” means the letter from the Sellers delivered to the Purchaser on the Closing Date in the same form and similar content of the Draft Disclosure Letter Update;

Draft Closing Accounts” has the meaning given in paragraph 1.1, Part 3 of Schedule 7 (Preparation, Delivery and Agreement);

EBITDA” means with respect to the Company, the earnings before interest, corporate income taxes, depreciation and amortisation of intangible assets (excluding any amortisation of prepaid developer costs) excluding (i) extraordinary items as defined by Purchaser’s accounting policies under U.S. generally accepted accounting principles; and (ii) all gains and losses due to exchange rate movements; all of which determined in accordance with the Applicable Accounting Standards, for the avoidance of doubt, sales tax, employer payroll taxes and other corporate non-income taxes are to be included as operating expenses or deducted from Company Bookings for purposes of computing EBITDA;

Economic Sanctions Law” means economic or financial sanctions, restrictive measures, trade embargoes or export control laws imposed, administered or enforced from time to time by any Sanctions Authority;

Employee Sellers” means the Sellers who are employed by the Company on the Closing Date;

Employee Seller Employment Agreements” means the employment agreement amendments, which include a minimum employment term of five (5) years from the Closing Date and such other terms as agreed by the Purchaser with the Employee Sellers, in the agreed terms to be entered into on Closing between the Company and each of the Employee Sellers;

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;

Environment” means all or any of the following media (alone or in combination): air (including the air within buildings and the air within other natural or man‑made structures whether above or below ground); water (including water under or within land or in drains or sewers); soil and land and any ecological systems and living organisms supported by these media;

 

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Environmental Authority” means any legal person or body of persons (including any government department or government agency or court or tribunal) having jurisdiction to determine any matter arising under Environmental Law and/or relating to the Environment;

Environmental Law” means all applicable laws, statutes, regulations, statutory guidance notes and final and binding court and other tribunal decisions of any relevant jurisdiction whose purpose is to protect, or prevent pollution of, the Environment or to regulate emissions, discharges or releases of Hazardous Substances into the Environment, or to regulate the use, treatment, storage, burial, disposal, transport or handling of Hazardous Substances, and all by‑laws, codes, regulations with any of therein, decrees or orders issued or promulgated or approved under or in connection with any of them;

Environmental Permit means any licence, approval, authorisation, permission, notification, waiver, order or exemption, which is issued, granted or required under Environmental Law, which is required for the operation of the business of the Company as it has been operated in the five (5) years before the date of this Agreement;

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

Escrow Agent” means [***];

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$16,000,000 (sixteen million) and all interest accrued on such amount in the Escrow Account;

“Estimated Debt” means (i) the aggregate Debt estimated by the Sellers in good faith to be owed by the Company as at 9am CET on the Closing Date; (ii) all Change of Control Payments; and (iii) all Transaction Expenses, as notified to the Purchaser in writing not less than (ten) 10 Business Days prior to Closing, supported by such evidence (provided to the Purchaser in writing together with the notification) as is necessary to enable the Purchaser to understand and assess the reasonableness of the estimated Debt figure;

Estimated Working Capital means the Working Capital estimated by the Sellers in good faith to be held by the Company as at 9am CET on the Closing Date, as notified to the Purchaser in writing not less than (ten) 10 Business Days prior to the Closing, supported by such evidence (provided to the Purchaser in writing together with the notification) as is necessary to enable the Purchaser to understand and assess the reasonableness of the estimated Working Capital figure;

Existing Employee Seller Employment Agreements” means the existing employment agreements entered into between the Company and each of the Employee Sellers;

Existing Shareholders’ Agreement” means the shareholders’ agreement relating to the Company, dated December 13, 2018;

Expert” has the meaning given in paragraph 2.1, Part 3 of Schedule 7 (Preparation, Delivery and Agreement);

Finance Director” means [***], or his successor;

First Step-In Period means the period commencing on the first day of the next whole calendar month following the Closing Date and ending on the last day of the twelfth completed calendar month following the Closing Date;

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

 

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

Good Leaver” means any Employee Seller who becomes a Leaver by reason of: (i) his or her termination of employment by the 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 without the relevant Employee Seller’s prior written consent (as applicable): (a) the Company requiring the relevant Employee Seller (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; or (b) any significant reduction in the relevant Employee Seller (as applicable) base salary or target bonus or benefits (other than a reduction consented to by such Employee Seller) (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); or (c) the assignment of any duties materially inconsistent in any respect with the relevant Employee Seller (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; or (d) any other circumstances constituting “haksız fesih” in Turkey of the relevant Employee Seller which shall be a termination which violates Article 18 or Article 25 of the Turkish Labor Law; or (e) any dissolution or liquidation of the Company; or (f) any material breach by the Purchaser of this Agreement or any material breach by the Purchaser or the Company of the Employee Seller Employment Agreement, provided, in each case, that the relevant Employee Seller provides the Company with written notice of the existence of the change, breach or condition described above within 30 days of the relevant Employee Seller 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 relevant Employee Seller ethics(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;

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 Codemeans “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;

Hazardous Substances” means any wastes, pollutants, contaminants and any other natural or artificial substance (whether in the form of a solid, liquid, gas or vapour) which is capable of causing harm or damage to the Environment or a nuisance to any person;

Indemnities” means the indemnities given by the Sellers in Clause 15 (Specific Indemnities);

 

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Indemnity Claim” means any claim under the Indemnities or the Tax Covenant;

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

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) trade marks, 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 Step-In Consideration;

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 post termination non-competition and non-solicitation restrictive covenants, in the agreed terms to be entered into on Closing between the Company and each of the Key Employees;

Knowledge” means (i) with respect to the Employee Sellers, such Employee Seller’s knowledge and the knowledge that such Employee Seller would reasonably be expected to have obtained if such Employee Seller had made all reasonable enquiries of the Key Employees, (ii) with respect to the other Sellers, such Seller’s knowledge, and (iii) with respect to all Sellers, including any knowledge such Seller has obtained (including through the Connected Person of such Seller) as a result of having served as or appointed a director to the Board (if applicable);

Leased Properties” means the leased land and premises currently owned, used or occupied by the Company;

Leaver” means an Employee Seller 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 October 31, 2020 or such other date as the Parties may agree in writing;

 

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Loss” or “Losses” means any and all, direct or indirect or consequential (in each case only to the extent reasonably foreseeable) 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 (i) the unaudited balance sheet of the Company as of 31 December 2019 and the unaudited profit and loss account of the Company for the period ended on 31 December 2019, (ii) the income statement for the 12 months prior ended on 31 December 2019, (iii) the balance sheet as of 30 June 2020 and the income statement for the six months period ended on 30 June 2020, each as prepared in accordance with the Applicable Accounting Standards;

Material Contract” means the agreements set out in paragraph 4.2 of Schedule 4 (Warranties);

Materiality Threshold” means [***];

Non‑Acceptance Notice” has the meaning given in paragraph 1.2(b), Part 3 of Schedule 7 (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 the Company’s internal use; and

 

(c)

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

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;

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

Operational Warranty Claim” means any claim for breach of an Operational Warranty;

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,

 

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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;

Privacy and Data Security Policiesmeans: (1) all of the privacy policies and procedures of the Company; and (2) all of the policies and procedures of the Company 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;

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 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;

Pro Rata Portion” means, in relation to a Seller, the percentage figure specified opposite that Seller’s name in column 4 of Schedule 1 (The Sellers);

Purchaser’s Common Stock” means the Class A common stock, par value US$0.00000625 per share of the Purchaser;

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 determination of the Closing Accounts in accordance with Schedule 7 (Closing Accounts) and in respect of the Closing;

Purchaser’s Common Stock Step-In 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) trading day period immediately prior to the determination of the relevant Step-In Accounts in accordance with Schedule 9 (Step-In Consideration) and in respect of the relevant Step-In Closing;

 

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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 Closing, the Company);

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;

Registered Business IP Rightmeans 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 the Company 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 23.4;

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;

Relief” means any relief, loss, allowance, credit, deduction, exemption or set off for the purposes of Tax or 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 cancellation of any such Relief, or to such Relief being available only in a reduced amount;

RSUs” has the meaning given in Clause 10.1;

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 Step-In Period means the period commencing on the first day of the calendar month following the ending of the First Step-In Period and ending on the last day of the twelfth completed calendar month following the ending of the First Step-In Period;

 

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Sellers’ Lawyers” means Çalışkan Okkan Toker of Krizantem Sokak No. 52, 34330, Levent Beşiktaş, İstanbul;

Sellers’ Representative” means the person designated by each of the Sellers to serve as its representative in accordance with Clause 37 (Sellers’ Representative);

Softwaremeans 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), fixsed 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;

Step-In Accounts” means the statements of Company Bookings, Company EBITDA and Company EBITDA Margin for the accounting reference periods ending on the last day of each of the First Step-In Period, Second Step-In Period and Third Step-In Period, as determined in accordance with Applicable Accounting Standards and the provisions set out in Schedule 9 (Step-In Consideration);

Step-In Closings” means each of the Step-In Year One Closing, the Step-In Year Two Closing, and the Step-In Year Three Closing;

Step-In Consideration” means each of the Step-In Year One Closing Consideration, the Step-In Year Two Closing Consideration, and the Step-In Year Three Closing Consideration;

Step-In Period” means the First Step-In Period, the Second Step-In Period or the Third Step-In Period, as applicable;

Step-In Shares” means the Step-In Year One Closing Shares, the Step-In Year Two Closing Shares, and the Step-In Year Three Closing Shares;

Step-In Supporting Documentation” means any and all relevant supporting documentation required by the Purchaser for the purposes of calculating and paying the Step-In Considerations to the Employee Sellers;

Step-In Year One Closing” means the closing of the sale and purchase of the Step-In Year One Closing Shares;

Step-In Year One Closing Consideration” has the meaning given in Clause 5.2;

Step-In Year One Closing Date” has the meaning given in Clause 9.1;

Step-In Year One Closing Shares” means, in relation to a Seller, those Company Shares set out beside that Seller’s name in Column 5 of Schedule 1 (The Sellers);

Step-In Year One Company Bookings Growth Threshold” means a growth of [***] of the Company Bookings generated during the First Step-In Year Period compared to the Company

 

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Bookings generated during the twelve month period ending the day immediately prior to the Closing Date;

Step-In Year One Multiple” shall be determined in accordance with Clause 5.3;

Step-In Year Three Closing” means the closing of the sale and purchase of the Step-In Year Three Closing Shares;

Step-In Year Three Closing Consideration” has the meaning given in Clause 5.6;

Step-In Year Three Closing Date” has the meaning given in Clause 9.3;

Step-In Year Three Closing Shares” means, in relation to a Seller, those Company Shares set out beside that Seller’s name in Column 7 of Schedule 1 (The Sellers);

Step-In Year Three Company Bookings Growth Threshold” means a growth of [***] of the Company Bookings generated during the Third Step-In Year Period compared to the Company Bookings generated during the Second Step-In Year Period;

Step-In Year Three Multiple” shall be determined in accordance with Clause 5.7;

Step-In Year Two Closing” means the closing of the sale and purchase of the Step-In Year Two Closing Shares;

Step-In Year Two Closing Consideration” has the meaning given in Clause 5.4;

Step-In Year Two Closing Date” has the meaning given in Clause 9.2;

Step-In Year Two Closing Shares” means, in relation to a Seller, those Company Shares set out beside that Seller’s name in Column 6 of Schedule 1 (The Sellers);

Step-In Year Two Company Bookings Growth Threshold” means a growth of [***] of the Company Bookings generated during the Second Step-In Year Period compared to the Company Bookings generated during the First Step-In Year Period;

Step-In Year Two Multiple” shall be determined in accordance with Clause 5.5;

Subsidiary Undertaking” means any Undertaking in relation to which another Undertaking is its Parent Undertaking;

Target Working Capital” means [***];

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, addition to tax, or additional amount (whether disputed or not) imposed, collected or assessed by, or payable to, a Tax 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);

Tax Authority means any government, federal, state, local, or foreign tax service, agency, municipality, customs office, competition authority, social security institution, office,

 

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commission, department, bureau, court or similar organization with authority to assess, assert, or otherwise impose Tax or collect unpaid Taxes of any Party;

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

Tax Covenant” means the tax covenant set out in Schedule 11;

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

Tax Return” means any return, declaration, report, claim for refund, information return or other document (including any related or supporting schedule, statement or information) filed or required to be filed in connection with the determination, assessment or collection of any Taxes or the administration of any laws or administrative requirements relating to any Taxes, and including any amendment thereof;

Tax Warranties” means the Warranties set out in paragraph 23 of Schedule 4 (Warranties);

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

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

“Termination Agreement” means the termination agreement to be entered into among each of the Sellers at the Closing pursuant to which the Existing Shareholders' Agreement shall be terminated;

Third Step-In Period” means the period commencing on the first day of the calendar month following the ending of the Second Step-In Period and ending on the last day of the twelfth completed calendar month following the ending of the Second Step-In Period;

Total Purchase Consideration” means the aggregate of the Initial Consideration and the Step-In Considerations;

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

Transaction Documents” means this Agreement, the Disclosure Letter, the Escrow Agreement and the Disclosure Letter Update;

Transaction Expenses” means any fees, costs and expenses incurred or agreed to be incurred by the Company, 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 that remain unpaid as a result of the transactions contemplated by this Agreement; 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 Employee Sellers and/or any other employees of the Company;

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

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

 

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

Warranties” means the representations and warranties referred to in Clause 13.1 (Sellers’ Warranties) and set out in Schedule 4 (Warranties);

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 Company; and

Working Capital” means the aggregate working capital of the Company, being the aggregate of the Company’s Cash, current accounts receivables, advances paid, pre-paid VAT and current liabilities (including any pre-Closing 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 Sellers and signed for the purposes of identification by or on behalf of the Purchaser and the Sellers and/or the Sellers’ Representative.

1.3

Any reference to “writing” or “written” means any method of reproducing words in a legible and non‑transitory form (excluding, for the avoidance of doubt, email).

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).

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 English 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 England, be deemed to include what most nearly approximates in that jurisdiction to the English legal term.

1.12

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 closing rate for converting that currency into US$ as quoted in the Bloomberg Currencies website (https://www.bloomberg.com/markets/currencies) at or immediately after 6.00 pm İstanbul time on the previous Business Day.

 

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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 4.

1.15

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

1.16

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

1.17

References to any indemnity or covenant to pay (“Payment Obligation”) being given on an “after Tax basis” or expressed to be “calculated on an after Tax basis” means that the amount payable pursuant to such Payment Obligation (“Payment”) shall be reduced by the amount of any actual cash Tax benefit or saving for the indemnified party or the recipient of the Payment that the indemnified party or recipient of the Payment (as applicable) reasonably determines, acting in good faith, the Payment, or matter or thing giving rise to the Payment Obligation, is reasonably expected to give rise to at any time up to the twenty four (24) months after the end of the accounting period in which the matter or thing giving rise to the Payment Obligation arose.

2.

Sale and Purchase

2.1

At Closing, the Purchaser shall purchase the Closing Shares with all rights attaching to them as at the Closing and each of the Sellers shall transfer full legal and beneficial title to its Closing Shares to the Purchaser free from all Encumbrances on the terms of this Agreement.

2.2

At the Step-In Year One Closing, the Purchaser shall purchase the Step-In Year One Closing Shares with all rights attaching to them as at the Step-In Year One Closing Date and each of the Employee Sellers shall transfer full legal and beneficial title to its Step-In Year One Closing Shares to the Purchaser free from all Encumbrances on the terms of this Agreement.

2.3

At the Step-In Year Two Closing, the Purchaser shall purchase the Step-In Year Two Closing Shares with all rights attaching to them as at the Step-In Year Two Closing Date and each of the Employee Sellers shall transfer full legal and beneficial title to its Step-In Year Two Closing Shares to the Purchaser free from all Encumbrances on the terms of this Agreement.

2.4

At the Step-In Year Three Closing, the Purchaser shall purchase the Step-In Year Three Closing Shares with all rights attaching to them as at the Step-In Year Three Closing Date and each of the Employee Sellers shall transfer full legal and beneficial title to its Step-In Year Three Closing Shares to the Purchaser free from all Encumbrances on the terms of this Agreement.

2.5

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 Company Shares; and

 

(b)

any rights to acquire any Company Shares,

in each case at Closing.

Each of the Employee 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:

 

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(c)

any rights of redemption, pre-emption, first offer, first refusal, drag-along, tag-along or transfer it may have with respect to the Company Shares; and

 

(d)

any rights to acquire any Company Shares,

at each of the Step-In Closings.

2.6

The Purchaser shall not be obliged to complete the purchase of any of the:

 

(a)

Closing Shares unless the purchase of all of the Closing Shares is completed simultaneously at Closing;

 

(b)

Step-In Year One Closing Shares unless the purchase of all of the Step-In Year One Closing Shares is completed simultaneously on Step-In Year One Closing;

 

(c)

Step-In Year Two Closing Shares unless the purchase of all of the Step-In Year Two Closing Shares is completed simultaneously on Step-In Year Two Closing; or

 

(d)

Step-In Year Three Closing Shares unless the purchase of all of the Step-In Year Three Closing Shares is completed simultaneously on Step-In Year Three Closing,

in each case in accordance with the terms of this Agreement.

2.7

The Purchaser hereby acknowledges and undertakes to pursue the Transaction and continue to uphold the terms of this Agreement (including the payment obligations under Clauses 4 (Consideration) and 5 (Step-In Consideration) in the event of a change of Control of the Purchaser arising on or after the date hereof.

3.

Conditions

3.1

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

 

(a)

receipt of such approvals, consents, waivers and other documents required under the Existing Shareholders’ Agreement in connection with the Transaction, including the prior written approval of Mehmet Ayan, Volkan Biçer and Yunus Emre Gönül approving the transfer of the Closing Shares held by the Employee Sellers on Closing; and

 

(b)

the Warranties being true and accurate in all material respects on Closing (in respect of any Operational Warranties, as qualified by the matters Disclosed in the Disclosure Letter and the Disclosure Letter Update) (the “Warranties Condition”) and for the purposes of this Clause 3.1, the Operational Warranties shall be deemed to be true and accurate in all material respects on Closing provided that the events, matters or circumstances so Disclosed are below the Materiality Threshold,

(together, the “Conditions”).

3.2

The Purchaser may waive in whole or in part the Conditions set out at Clause 3.1(a) and (b) by notice in writing to the Sellers.

3.3

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.

3.4

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

 

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the Long Stop Date, in respect of the Condition set out at Clause 3.1(a), and by Closing, in respect of the Condition set out at Clause 3.1(b).

3.5

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.

3.6

If any of the Conditions is not fulfilled (or waived under Clause 3.2) on or before the Long Stop Date, in respect of the Condition set out at Clause 3.1(a), and by Closing, in respect of the Condition set out at Clause 3.1(b) (or having been fulfilled, any of the Conditions ceases to be fulfilled), the Purchaser shall be entitled to treat this Agreement as terminated subject to, and on the basis set out in Clause 18 (Termination).

3.7

For the avoidance of doubt, the Step-In Closings are not subject to any conditions.

4.

Consideration

4.1

The consideration for the sale of the Closing 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$168 million (one hundred and sixty eight million);

 

(b)

less the aggregate of (i) the Actual Debt; (ii) all 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,

(together, the “Initial Consideration”).

4.2

The Initial Consideration shall be paid to the Sellers as follows:

 

(a)

On Closing, the Purchaser shall:

 

(i)

pay to the Sellers the aggregate amount of US$168 million (one hundred and sixty eight million) (less the relevant Sellers’ portion of the escrow payment $16 million (sixteen million)), 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, to be satisfied by the payment of 100 per cent of such amount in cash; and

 

(ii)

pay the Escrow Amount into the Escrow Account.

 

(b)

Within ten (10) Business Days of the date on which the Closing Accounts are agreed or determined in accordance with Schedule 7 (Closing Accounts), the Purchaser or the Sellers (as the case may be) shall make a payment to the other in accordance with Part 2 of Schedule 8 (Post Closing Financial Adjustments). Where the Purchaser is due to make an adjusting payment to the Sellers, such payment shall be satisfied by the payment of such amount by the Purchaser in cash.

4.3

Payments from the Escrow Account shall be determined in accordance with the provisions of 10 (Escrow Account).

 

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4.4

The Parties shall prepare the Closing Accounts and make the relevant payments in accordance with the provisions of Schedule 7 (Closing Accounts) and Schedule 8 (Post Closing Financial Adjustments) respectively.

4.5

At Step-In Year One Closing, the Purchaser shall pay the Step-In Year One Consideration for the Step-In Year One Closing Shares half in cash and the remaining half, as determined by the Purchaser in its sole discretion (x) in cash; (y) by the issue to the Employee Sellers of shares of Purchaser’s Common Stock based on the Purchaser’s Common Stock Step-In Price; or (z) by delivery of any combination of cash and shares of Purchaser’s Common Stock, to the Employee Sellers as determined in accordance with Clause 5.2.

4.6

At Step-In Year Two Closing, the Purchaser shall pay the Step-In Year Two Consideration for the Step-In Year Two Closing Shares half in cash and the remaining half, as determined by the Purchaser in its sole discretion (x) in cash; (y) by the issue to the Employee Sellers of shares of Purchaser’s Common Stock based on the Purchaser’s Common Stock Step-In Price; or (z) by delivery of any combination of cash and shares of Purchaser’s Common Stock, to the Employee Sellers as determined in accordance with Clause 5.4.

4.7

At Step-In Year Three Closing, the Purchaser shall pay the Step-In Year Three Consideration for the Step-In Year Three Closing Shares half in cash and the remaining half, as determined by the Purchaser in its sole discretion (x) in cash; (y) by the issue to the Employee Sellers of shares of Purchaser’s Common Stock based on the Purchaser’s Common Stock Step-In Price; or (z) by delivery of any combination of cash and shares of Purchaser’s Common Stock, to the Employee Sellers as determined in accordance with Clause 5.6.

4.8

All payments of the Total Purchase Consideration (to the extent payable in cash) shall be made by the Purchaser in US$.

5.

Step-In Consideration

5.1

For the avoidance of doubt, the payment of the Step-In Consideration to the Employee Sellers shall not be conditional or dependent upon whether any Employee Seller continues or ceases to be employed by the Company or the Purchaser following Closing.

Step-In Year One Closing Consideration

5.2

The Purchaser shall pay to the Employee Sellers as consideration for the Step-In Year One Closing Shares, an aggregate amount equal to (“Step-In Year One Closing Consideration”):

 

(a)

the Company EBITDA for the First Step-In Period; multiplied by,

 

(b)

the Step-In Year One Multiple (as determined in accordance with Clause 5.3 below), multiplied by;

 

(c)

six-and-two-thirds per cent.

5.3

The Step-In Year One Multiple shall be calculated as follows:

 

(a)

The Step-In Year One Multiple shall be [***] if:

 

(i)

the Company Bookings for the First Step-In Period is equal to or exceeds the Step-In Year One Company Bookings Growth Threshold; and

 

(ii)

the Company EBITDA Margin for the First Step-In Period is equal to or exceeds [***]; and

 

(b)

If the Company Bookings for the First Step-In Period are less than the Step-In Year One Company Bookings Growth Threshold or the Company EBITDA Margin for the

 

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First Step-In Period is less than [***], the Step-In Year One Multiple shall be equal to [***].

Step-In Year Two Closing Consideration

5.4

The Purchaser shall pay to the Employee Sellers as consideration for the Step-In Year Two Closing Shares, an aggregate amount equal to (“Step-In Year Two Closing Consideration”):

 

(a)

the Company EBITDA for the Second Step-In Period, multiplied by;

 

(b)

the Step-In Year Two Multiple (as determined in accordance with Clause 5.5 below), multiplied by;

 

(c)

six-and-two-thirds per cent.

5.5

The Step-In Year Two Multiple shall be calculated as follows:

 

(a)

The Step-In Year Two Multiple shall be [***] if:

 

(i)

the Company Bookings for the Second Step-In Period is equal to or exceeds the Step-In Year Two Company Bookings Growth Threshold; and

 

(ii)

the Company EBITDA Margin for the Second Step-In Period is equal to or exceeds [***]; and

 

(b)

If the Company Bookings for the Second Step-In Period are less than the Step-In Year Two Company Bookings Growth Threshold or the Company EBITDA Margin for the Second Step-In Period is less than [***], the Step-In Year Two Multiple shall be equal to [***].

Step-In Year Three Closing Consideration

5.6

The Purchaser shall pay to the Employee Sellers as consideration for the Step-In Year Three Closing Shares, an aggregate amount equal to (“Step-In Year Three Closing Consideration”):

 

(a)

the Company EBITDA for the Third Step-In Period, multiplied by;

 

(b)

the Step-In Year Three Multiple (as determined in accordance with Clause 5.7 below), multiplied by;

 

(c)

six-and-two-thirds per cent.

5.7

The Step-In Year Three Multiple shall be calculated as follows:

 

(a)

The Step-In Year Three Multiple shall be [***] if:

 

(i)

the Company Bookings for the Third Step-In Period is equal to or exceeds the Step-In Year Three Company Bookings Growth Threshold; and

 

(ii)

the Company EBITDA Margin for the Third Step-In Period is equal to or exceeds [***]; and

 

(b)

If the Company Bookings for the Third Step-In Period are less than the Step-In Year Three Company Bookings Growth Threshold or the Company EBITDA Margin for the Third Step-In Period is less than [***], the Step-In Year Three Multiple shall be equal to[***].

5.8

If the Company EBITDA for the relevant Step-In Period is a negative number, then the Step-In Consideration payable by the Purchaser with respect to that relevant corresponding Step-In Period shall be US$0.01 (USD one cent).

 

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5.9

Payments due pursuant to this Clause 5 (Step-In Consideration) shall be paid in accordance with Clause 4.5, 4.6 and 4.7 (as applicable) and Schedule 9 (Step-In Consideration).

6.

Escrow

6.1

The Parties acknowledge and agree that amounts shall only be deducted from the Escrow Account in accordance with Schedule 10 (Escrow Account) and/or to satisfy claims against the Sellers (or any of them) under this Agreement arising out of or in relation to (i) breach of any of the Warranties or (ii) satisfaction of any claims under the Tax Covenant or (iii) any claims pursuant to Clause 15.

6.2

Payments from the Escrow Account shall be determined in accordance with the provisions of Schedule 10 (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 paragraphs 3 and 4 of Part 2 of Schedule 10 (Escrow Account).

7.

Pre‑Closing Obligations

7.1

Subject to Clause 7.4, the Sellers shall procure that from the date of this Agreement until Closing, the Company will conduct its business in the ordinary course consistent with past practice in all material respects and that, in the absence of the prior written consent of the Purchaser, the Company will not do or agree to do anything which is not of a routine and unimportant nature including:

 

(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;

 

(d)

entering into, modifying or terminating any Material Contract unless otherwise required by applicable law or otherwise than in the ordinary course of business;

 

(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 US$[***];

 

(g)

making any capital commitment in excess of US$[***] individually or which together with all other such capital commitments entered into between the date of this Agreement and Closing exceeds US$[***] in aggregate;

 

(h)

making any material change in the nature, organisation or geographic scope of how and where its Business if conducted;

 

(i)

discontinuing or ceasing to operate any part of its business;

 

(j)

making any variation to the terms and conditions of employment of an Employee Seller, a Key Employee or of any employee earning US[***] per annum, 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;

 

(k)

appointing, employing or offering to appoint or employ any person at a rate of remuneration per annum in excess of US[***] individually or which together with all other such appointments or offers made between the date of this Agreement and Closing exceeds US[***] in aggregate;

 

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(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, making any changes in the terms of employment of any Workers of the Company, taking any action to accelerate the vesting or payment of any compensation or benefits, or recognizing or promising neutrality to any Employee Representatives;

 

(m)

dismissing an Employee Seller or a Key Employee;

 

(n)

dismissing any other employee earning US[***] per annum or more otherwise than in the ordinary course of business;

 

(o)

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

 

(p)

granting any loan, advance or capital contribution to any other person other than those to be granted to the current employees not exceeding in aggregate US[***];

 

(q)

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

 

(r)

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

 

(s)

acquiring any marketable securities;

 

(t)

creating any Encumbrance or redeeming or releasing any Encumbrance or giving any guarantees or indemnities;

 

(u)

incurring or paying any management charge or making any other payment in each case to any Seller other than those within the scope of the Existing Employee Seller Employment Agreements and the attendance fees to the Sellers who are members of the Board;

 

(v)

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

 

(w)

instituting or settling any legal proceedings (except: subject to due information and consultation to the Purchaser prior to any action (a) instituting or settling debt collection and labour lawsuits; or (b) instituting legal proceedings to obtain injunctive relief against a third party’s infringement of the Business IP; (c) initiating proceedings for the pursuance of any defences with regard to proceedings relating to infringements of the Business IP including those that are set forth in the Annex, in each case, in the normal course of business);

 

(x)

settling or compromising any Tax Claims, liabilities, disputes, investigations or audits with a Tax Authority;

 

(y)

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

 

(z)

taking any steps of 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;

 

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(aa)

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

 

(bb)

take any step or other action (including making any admission to a Tax Authority) which is inconsistent with past practice which could increase any liability to Tax;

 

(cc)

take any step or other action (including making any admission to a Tax Authority) which could result in any liability to Tax arising (or being deemed to arise) in the post-Closing period rather than the pre-Closing period;

 

(dd)

making or changing any Tax election;

 

(ee)

amending any Tax Return;

 

(ff)

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

 

(gg)

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

 

(hh)

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;

 

(ii)

unless otherwise required by applicable law, passing any resolutions in general meeting or by way of written resolution, or otherwise exercising or taking a decision not to exercise any voting rights which the Sellers may have as shareholders in the Company; or

 

(jj)

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 seven (7) Business Days of receipt in accordance with Clause 33. For the purposes of this Clause, each of the Purchaser’s Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Chief Legal Officer, Chief Accounting Officer, Chief People Officer or President of Publishing or such other person notified by the Purchaser to the Sellers (or the Sellers’s Representative) in accordance with Clause 33 shall have the authority to act on behalf of the Purchaser.

7.2

Subject to Clause 7.4, the Sellers shall procure that from the date of this Agreement until Closing, the Company will conduct its business in the ordinary course consistent with past practice in all material respects including:

 

(a)

maintaining the assets and the properties of the Company in good operating condition and repair and continue normal maintenance;

 

(b)

maintaining the Statutory Books in the ordinary course;

 

(c)

maintaining the insurance coverage consistent with past practices;

 

(d)

maintaining all registrations of each of the Company’s Intellectual Property Rights and any applications thereof; and

 

(e)

complying in all material respects with the applicable laws.

7.3

(a)Subject to Clause 7.3(b), from the date of this Agreement until Closing the Sellers shall procure that the Purchaser and its Agents shall be allowed:

 

(i)

reasonable access to, and to take copies of (at the Purchaser’s sole expense),

 

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the books, records and documents of or relating in whole or in part to the Company;

 

(ii)

reasonable access to the Finance Director and the Employee Sellers or Key Employees at the presence of the Employee Sellers (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 Company (who shall be instructed to give all such information, assistance and explanations as the Purchaser or any of the Purchaser’s Agents may reasonably require).

 

(b)

Any access granted pursuant to Clause 7.3 shall only be permitted:

 

(i)

on reasonable prior written notice (where an e-mail would be sufficient) having been provided to the Sellers;

 

(ii)

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

 

(iii)

provided that access shall not give the Purchaser or its Agents any right to give instructions or otherwise interfere with the management and conduct of the Company and is otherwise subject to the legal, regulatory and compliance obligations of the Company.

7.4

Clause 7.1 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 Company in an emergency or disaster situation 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 promptly notified in writing);

 

(b)

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

 

(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.

8.

Closing

8.1

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

8.2

On Closing, the Sellers shall undertake those actions listed in Part 1 and Part 3 of Schedule 3 (Closing Arrangements).

8.3

On Closing, the Purchaser shall undertake those actions listed in Part 2 and Part 3 of Schedule 3 (Closing Arrangements).

8.4

The Parties agree that all certificates, deeds and documents deliverable on Closing 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

 

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order of the person delivering the same until such time as Closing shall have taken place at which such time such Deliverables shall be released immediately to the order of the intended recipient.

8.5

If there is a material breach by the Sellers of Clause 8.2 and Part 1 and/or Part 3 of Schedule 3 (Closing Arrangements) on the Closing Date, the Purchaser shall not be obliged to complete this Agreement and may:

 

(a)

defer Closing (with the provisions of this Clause 8 applying to Closing as so deferred); or

 

(b)

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

 

(c)

treat this Agreement as terminated for breach of condition subject to, and on the basis set out in, Clause 18 (Termination).

8.6

If there is a material breach by the Purchaser of Clause 8.3 and Part 2 and/or Part 3 of Schedule 3 (Closing Arrangements) on the Closing Date, the Sellers shall not be obliged to complete this Agreement and may:

 

(a)

defer Closing (with the provisions of this Clause 8 applying to Closing as so deferred); or

 

(b)

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

 

(c)

treat this Agreement as terminated for breach of condition subject to, and on the basis set out in, Clause 18 (Termination).

8.7

The payment of the amounts set out in Clause 4.2 in accordance with paragraph 1, Part 2 and Part 3 of Schedule 3 (Closing Arrangements) shall discharge the obligations of the Purchaser under Clauses 2 (Sale and Purchase) and 4 (Consideration), in each case pertaining to the payment of the Initial Consideration for the Closing Shares, and the Purchaser shall not be concerned with the application of such sum by the Sellers.

9.

Step-In Closings

9.1

Step-In Year One Closing shall take place within twenty (20) Business Days of the final determination of the first Step-In Accounts after the First Step-In Period in accordance with Part 2 of Schedule 9 (Step-In Consideration) as reasonably specified in advance by the Purchaser (the “Step-In Year One Closing Date”) at the offices of the Purchaser’s or Sellers’ Lawyers or at such other place as is agreed in writing by the Sellers’ Representative and Purchaser.

9.2

Step-In Year Two Closing shall take place within twenty (20) Business Days of the final determination of the second Step-In Accounts after the Second Step-In Period in accordance with Part 2 of Schedule 9 (Step-In Consideration) as reasonably specified in advance by the Purchaser (the “Step-In Year Two Closing Date”) at the offices of the Purchaser’s or Sellers’ Lawyers or at such other place as is agreed in writing by the Sellers’ Representative and Purchaser.

9.3

Step-In Year Three Closing shall take place within twenty (20) Business Days of the final determination of the third Step-In Accounts after the Third Step-In Period in accordance with Part 2 of Schedule 9 (Step-In Consideration) as reasonably specified in advance by the Purchaser (the “Step-In Year Three Closing Date”) at the offices of the Purchaser’s or Sellers’ Lawyers or at such other place as is agreed in writing by the Sellers’ Representative and Purchaser.

 

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9.4

At each Step-In Closing, the Employee Sellers shall undertake those actions listed in Part 4 (Employee Sellers’ Step-In Closing Obligations) of Schedule 3 (Signing and Closing Arrangements).

9.5

At each Step-In Closing, the Purchaser shall undertake those actions listed in Part 5 (Purchaser’ Step-In Closing Obligations) of Schedule 3 (Signing and Closing Arrangements).

9.6

The Parties agree that all certificates, documents and the Step-In Consideration deliverable on the Step-In Closings to any Party, or the Purchaser’s Lawyers or the Seller’s Lawyers respectively (together the “Step-In 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 the relevant Step-In Closing shall have taken place at which such time such Step-In Deliverables shall be released immediately to the order of the intended recipient.

9.7

If there is a material breach of Clause 9.4 and Part 4 (Employee Sellers’ Step-In Closing Obligations) of Schedule 3 (Signing and Closing Arrangements) on the relevant Step-In Closing (as applicable) the Purchaser shall not be obliged to complete that Step-In Closing and may:

 

(a)

defer the relevant Step-In Closing (with the provisions of this Clause 9 (Step-In Closings) applying to Closing as so deferred); or

 

(b)

proceed to the relevant Step-In Closing as far as practicable (without limiting its rights and remedies under this Agreement).

9.8

If there is a material breach of Clause 9.4 and Part 5 (Purchaser’s Step-In Closing Obligations) of Schedule 5 (Signing and Closing Arrangements) on the relevant Step-In Closing (as applicable) the Employee Sellers shall not be obliged to complete that Step-In Closing and may:

 

(a)

defer the relevant Step-In Closing (with the provisions of this Clause 9 (Step-In Closings) applying to Closing as so deferred); or

 

(b)

proceed to the relevant Step-In Closing as far as practicable (without limiting its rights and remedies under this Agreement).

9.9

The payment of the relevant Step-In Consideration (as applicable) in accordance with Schedule 3 (Signing and Closing Arrangements) shall discharge the obligations of the Purchaser under Clauses 2 (Sale and Purchase) and Clause 5 (Step-In Consideration), in each case pertaining to the payment of the Step-In Consideration for the relevant Step-In Shares and the Purchaser shall not be required to concern itself with any subsequent allocation of such amounts between the Sellers.

10.

Post-Closing Stock Awards

10.1

The Purchaser acknowledges that following Closing it intends to offer the Employee Sellers (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 [***] 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 shall be determined by the Purchaser in consultation with the Employee Sellers between the date of this Agreement and Closing, by reference to the following principles:

 

(a)

any such RSU awards will be granted in accordance with the Purchaser’s standard practices;

 

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(b)

any such RSU awards shall begin vesting on the 15th day of the following month immediately following Closing;

 

(c)

any such RSU awards shall vest [***]; and

 

(d)

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) 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 any Employee Seller in connection with the transactions contemplated by this Agreement shall accelerate in full upon a person becoming a Good Leaver.

10.2

The Purchaser shall, as soon as reasonably practicable after Closing, and in any event no later than 30 days from the Closing Date, 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.

11.

Post-Closing Undertakings

11.1

With effect from Closing, the Employee Sellers (to the extent of their power) and the Purchaser undertake to, and shall procure that the Company undertakes to, comply with the provisions of Schedule 6 (Conduct of Business).

11.2

With effect from the Closing Date, the Employee Sellers, the Key Employees and such other employees of the Company as determined by the Purchaser shall be subject to the Purchaser’s global employee and compliance policies, including the Purchaser’s Code of Business Conduct and Ethics; Insider Trading Policy; Corporate Disclosure/Regulation FD Policy; Gifts, Entertainment, & Hospitality Policy; Global Anti-Corruption Compliance Policy; Acceptable Use Policy; System Security Policy; and related legal and compliance training programs, each, as amended from time-to-time.

12.

Purchasers’ Warranties

12.1

The Purchaser warrants to the Sellers that:

 

(a)

it has, and at Closing will have, the legal right, full power and authority and all necessary consents and authorisations to enter into and to perform its obligations under this Agreement and each other Transaction Document to which it is or will be party on Closing;

 

(b)

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);

 

(c)

there are no, and at Closing 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

 

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and to perform its obligations under this agreement and each other Transaction Document to which it is or will be party;

 

(d)

the Purchaser has, and will have at the time of payment, immediately available on an unconditional basis (subject only to Closing) the necessary cash resources to pay the Initial Consideration.

12.2

If a material breach of a Purchaser’s warranty occurs prior to Closing, the Sellers shall be entitled to treat this Agreement as terminated subject to, and on the basis set out in, Clause 18 (Termination).

12.3

Where the context so requires, references in Clause 12.1 are repeated in respect of relevant Step-In Closing (as applicable).

13.

Sellers’ Warranties

13.1

Each of the Sellers warrants, on a several basis and in respect of itself only, to the Purchaser that:

 

(a)

each of the Fundamental Warranties is true and accurate on the date hereof and will continue to be true and accurate in all material respects on Closing; and

 

(b)

each of the Operational Warranties is true and accurate on the date hereof and will continue to be true and accurate in all material respects on Closing.

13.2

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

13.3

The Sellers shall not be liable under the Warranties to the extent that the facts which cause the Operational Warranties to be breached or misleading were Disclosed, but in all other circumstances the Purchaser shall be entitled to claim that any of the Warranties has been breached, is untrue or is misleading notwithstanding that the Purchaser knew or could have discovered the fact of such breach or inaccuracy on or before Closing 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 Disclosure Letter Update shall not bar the Purchaser from brining a Warranty Claim and that this is the case even if the Purchaser decides not to terminate this Agreement pursuant to Clause 3.7 (Conditions).

13.4

The Warranties contained in this Agreement are in lieu of all other warranties however provided under Applicable Laws and constitute all of the warranties made by the Sellers in connection with the Transaction. Without limiting the generality of the foregoing, the Sellers make no representation and give no warranty to the Purchaser with respect to financial projections, budgets or management analyses and as to the future profitability and financial performance of the Company.

13.5

No Disclosure relating to any possible violation of any agreement or Applicable Law shall be construed as an admission that any such violation exists or has actually occurred.

13.6

The Purchaser shall be entitled to postpone the Closing Date for assessment of the content of the Disclosure Letter Update by a number of days that is equal to the number of days that have lapsed between the Draft Disclosure Letter Update and the Disclosure Letter Update.

13.7

The Sellers shall not and shall procure that the Company shall not do or omit to do anything which would result in any of the Warranties being breached or misleading at any time up to and including Closing.

 

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13.8

Each of the Sellers shall notify the Purchaser immediately in writing with full details of anything that comes to its notice which is or may reasonably be expected to give rise to a liability which will or may cause or result in a breach of, or be inconsistent with, any of the Warranties whether before, at the time of, or after Closing.

13.9

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

13.10

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.

13.11

Where the context so requires, references in Schedule 4 (Warranties) to the date of this Agreement or similar terminology shall (to the extent that the relevant Warranty is repeated) mean the Closing Date and/or, with respect to the Sellers’ Fundamental Warranties only, the relevant Step-In Closing (as applicable).

13.12

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

14.

Sellers’ Limitations on Liability

The liability of the Sellers in respect of a claim under the Warranties shall be limited as provided in Schedule 5 (Sellers’ Limitations on Liability).

15.

Specific Indemnities

15.1

Subject to Clause 14, each Seller undertakes, on a several basis and in respect of itself only, to indemnify and hold the Purchaser and the Company harmless from and against all Losses suffered or incurred by it arising from:

 

(a)

a breach of any of the Warranties, save for a breach of the warranty set out in paragraph 4.1(b) in Schedule 4 (Warranties) on Closing pursuant to the terms of this Agreement;

 

(b)

any claims arising out of the disputes as specified in the Annex; and

 

(c)

any matter arising out of fraud, intentional misrepresentation or wilful breach of the relevant Seller.

15.2

The Purchaser retains the right to unilaterally deduct from the Escrow Account in accordance with Schedule 10 (Escrow Account) such amounts equal to any payments under Clause 15.1.

16.

Restrictions on the Employee Sellers

16.1

Each Employee 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 four (4) years following the Closing 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;

 

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(b)

solicit or entice away any Worker of the Company, Key Employee or other Employee Seller or any member, employee or consultant of the Purchaser’s Group or employ any such person or offers similar services;

 

(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 the Purchaser’s Group; or

 

(d)

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

16.2

Each of the restrictions contained in this Clause 16 is given to the Purchaser and the 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. Each Employee Seller acknowledges that each restriction is no greater than is reasonably necessary to protect the interests of the Purchaser’s Group and the Company.

17.

Business Information

17.1

If any information required for the Business is not in the possession of the Purchaser 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 Company, immediately on request.

17.2

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).

18.

Termination

18.1

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

 

(a)

Clause 3.6 (Conditions);

 

(b)

Clause 8.5(c) (Closing);

the rights and obligations of the Parties under this Agreement shall cease immediately, save in respect of antecedent breaches and under the Continuing Provisions.  

18.2

In addition to the circumstances provided in Clause 18.1, the Purchaser shall be entitled to terminate this Agreement at any time before Closing by notice in writing to the Sellers if the Sellers commit a material breach of any of their other obligations under this Agreement, (unless such material breach is remediable and is remedied by and at the sole expense of the Sellers, within 20 days) whereupon the rights and obligations of the Parties under this Agreement shall cease immediately, save in respect of antecedent breaches and under the Continuing Provisions.

18.3

The Sellers undertake to disclose promptly to the Purchaser in writing any breach, matter, event, condition, circumstance, fact or omission of which any Seller or Related Persons is or becomes aware that may reasonably give rise to a termination right under this Agreement.

 

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18.4

If this Agreement is terminated by the Sellers in accordance with Clause 8.6(c) (Closing), the rights and obligations of the Parties under this Agreement shall cease immediately, save in respect of antecedent breaches and under the Continuing Provisions.  

18.5

In addition to the circumstances provided in Clause 18.4, the Sellers shall be entitled to terminate this Agreement at any time before Closing by notice in writing to the Purchaser if:

 

(a)

in accordance with Clause 12.1 (Purchaser’s Warranties), a material breach of a Warranty occurs prior to Closing; or

 

(b)

the Purchaser commits a material breach of any of their other obligations under this Agreement,

whereupon the rights and obligations of the Parties under this Agreement shall cease immediately, save in respect of antecedent breaches and under the Continuing Provisions.

18.6

The Purchaser undertakes to disclose promptly to the Sellers in writing any breach, matter, event, condition, circumstance, fact or omission of which any Purchaser or Related Persons is or becomes aware that may reasonably give rise to a termination right under this Agreement.

18.7

For the avoidance of doubt, to the extent that a breach by any Party of any of its obligations under this Agreement does not limit, restrict, hinder or otherwise obstruct the sale and purchase of the Shares, the other Party shall not be entitled to terminate the Agreement pursuant to Clause 18.2 or 18.5(b).

19.

Confidentiality

19.1

Save as expressly provided in Clause 19.3, each of the Sellers severally undertakes that it shall, treat as confidential the provisions of the Transaction Documents, all information it has received or obtained relating to the Purchaser’s Group as a result of negotiating or entering into the Transaction Documents and, with effect from Closing, all information it possesses relating to the Company, including for the avoidance of doubt, any Step-In Supporting Documentation, and shall not disclose or use any such information.

19.2

Save as expressly provided in Clause 19.3, 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 as a result of negotiating or entering into the Transaction Documents, and shall not disclose or use any such information.

19.3

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 qualifying as a prospective permitted assignee under Clause 21 (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 Tax Authority;

 

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(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 19,

provided that prior written notice of any confidential information to be disclosed pursuant to Clause 19.3(b) shall be given to the other Party and their reasonable comments taken into account.

20.

Announcements

20.1

Save as expressly provided in Clause 20.2, no announcement shall be made by or on behalf of any Seller or his Related Persons relating to the terms of the Transaction Documents without the prior written approval of the Purchaser.

20.2

A Seller may make an announcement relating to the terms of the Transaction Documents 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 Purchaser in which case such Seller shall take all steps as may be reasonable in the circumstances to agree the contents of such announcement with the Purchaser prior to making such announcement.

21.

No Assignment

21.1

No Seller 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 Purchaser.

21.2

The Purchaser shall be free to assign its rights and obligations under this Agreement to a third party without having to obtain the consent of the Employee Sellers, provided that (i) any assignee agrees to be bound to the terms and conditions of this Agreement (as may be amended from time to time); and (ii) if the Purchaser proposes to assign its obligations this Agreement (including, for the avoidance of doubt, Clause 11 (Post-Closing Undertakings) and Schedule 6 (Conduct of Business) as amended from time to time), it shall, prior to such assignment, enter into a guarantee with and in favour of the Employee Sellers, in a form satisfactory to the Employee Sellers (acting reasonably and in good faith, having regard to the relevant circumstances, the identity of the assignee and customary market practice), pursuant to which, amongst other things, the Purchaser will, as principal obligor (A) guarantee to the Employee Sellers the due, punctual and full performance by the assignee of all of the Purchaser’s obligations under this Agreement (including the payment, when due, of any amount payable to the Employee Sellers); (B) in the event of default by the assignee, perform immediately on demand such obligations (including paying any amount which has become due to the Employee Sellers); and (C) indemnify the Employee Sellers, on or after Tax basis, in respect of any failure or delay by the assignee in complying with or discharging any of the obligations under this Agreement assigned to it by the Purchaser. The Purchaser’s guarantee will remain in full force and effect until all of the assigned obligations have been discharged in full and will remain in full force and effect notwithstanding any waiver, amendment or variation to the Agreement. The Parties agree and acknowledge that a change of control of the Purchaser shall not constitute an assignment of the Purchaser’s rights and obligations under this Agreement.

 

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22.

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.

23.

Entire Agreement

23.1

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 Company Shares.

23.2

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.

23.3

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 Company Shares.

23.4

In this Clause 23, “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.

23.5

Nothing in this Clause 23 shall operate to limit or exclude any liability for fraud.

24.

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.

25.

Variations

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

26.

Remedies and Waivers

26.1

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.

26.2

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.

26.3

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.

26.4

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

 

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27.

Effect of Closing

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

28.

Third Party Rights

28.1

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 15 (Indemnities), Clause 16 (Restrictions on Sellers), Clause 17 (Business Information), Clause 29 (Payments) and Clause 31 (Default Interest) are intended to benefit the Company, Clause 13.9 (Sellers’ Warranties) is intended to benefit the Company, Clause 19 (Confidentiality) is intended to benefit any member of the Purchaser’s Group and Clause 23 (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.

28.2

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

29.

Payments

29.1

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 Consideration.

29.2

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.

29.3

If immediately prior to or on a Step-In Closing, an Employee Seller owes the Purchaser an amount in respect of a breach of any of the Warranties or to satisfy any claims under the Tax Covenant or any claim pursuant to Clause 15 (Specific Indemnities), and the amount has been agreed between the Purchaser and the relevant Employee Seller or determined by a court or tribunal of competent jurisdiction from whose decision there is no right of appeal or the period allowed for an appeal has expired and no appeal has been made (a “determined claim”), the Purchaser shall be entitled to set off against (and deduct from) the portion of relevant Step-In Consideration otherwise payable to such Employee Seller (the “Relevant Employee Seller Step-In Consideration”) the sum owed by such Employee Seller to the Purchaser in respect of the determined claim.

29.4

If immediately prior to or on a Step-In Closing, a claim has been made against an Employee Seller by the Purchaser for an amount in respect of a breach of any of the Warranties or to satisfy any claims under the Tax Covenant or any claim pursuant to Clause 15 (Specific Indemnities), but that claim has not become a determined claim (an “unresolved claim”), the Purchaser shall be entitled to withhold from the Relevant Employee Seller Step-In Consideration the sum which the Purchaser has been advised in writing by the legal advisers engaged in pursuing the claim to be the maximum amount reasonably likely to be awarded to the Purchaser in respect of the unresolved claim (which may be the full amount of the unresolved claim if so advised in writing) (the “withheld sum”). If, when the unresolved claim becomes a determined claim, an amount is owed by the Employee Seller to the Purchaser in respect of such determined claim, such amount will be satisfied by set off against the withheld sum in accordance with Clause 29.3 and any balance of the withheld sum in excess of such amount shall be dealt with as if it had become payable as part of the Relevant Employee Seller Step-In Consideration.

 

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29.5

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

29.6

If any deduction or withholding is required by law to be made from any payment by the Sellers to the Purchaser under this Agreement, the Sellers 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.

29.7

If any amount payable by the Sellers to the Purchaser under this Agreement is subject to Tax in the hands of the Purchaser, that amount shall be increased so as to ensure that the net amount retained by the Purchaser after taking the Tax into account is equal to the full amount which would have been retained by the payee but for the Tax.

30.

Costs and Expenses

30.1

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.

31.

Taxes

31.1

In respect of any Transfer Taxes arising under Turkish law:

 

(a)

the Purchaser shall bear fifty (50) per cent; and

 

(b)

the Sellers shall bear fifty (50) per cent,

of any such Turkish Transfer Taxes which arise as a result of or in connection with the transfer of the Company Shares.

 

31.2

The Seller will procure that the necessary conditions will be satisfied to apply for VAT exemption on the transfer of the Company Shares as per article 17 of Turkish VAT Law numbered 3065.

31.3

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 Company Shares, including the payment of the income taxes, if any, arising from the same.

31.4

Schedule 11 (Tax Covenant) shall apply with effect from the date of this Agreement.

31.5

Upon such reasonable request by the Sellers’ Representative, the Purchaser shall, at the Sellers’ expense, cause the Company to procure the benefit of any Turkish Tax amnesty or peace procedure that relates to a taxable period ending on or prior to the Closing Date.

32.

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 (both before and after any judgment).  In the case of a Claim, the due date for payment shall be treated as being the date of receipt of notice of that Claim in accordance with Schedule 5 (Sellers’ Limitations on Liability).

 

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33.

Notices

33.1

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, fax, pre‑paid recorded delivery or international courier to the address or fax number provided in Clause 33.3, and marked for the attention of the person specified in that Clause.

33.2

A Notice shall be deemed to have been received:

 

(a)

at the time of delivery if delivered personally;

 

(b)

at the time of transmission if sent by email or fax;

 

(c)

two (2) Business Days after the time and date of posting if sent by pre‑paid recorded delivery; or

 

(d)

three (3) Business Days after the time and date of posting if sent by international courier,

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 33 are to local time in the country of the addressee.

33.3

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 fax and e‑mail, shall, without prejudice to any other evidences as permitted by the Law, constitute legal evidence between the Parties. The addresses for service of Notice are:

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:legalnotices@zynga.com

 

33.4

A Party shall notify the other Parties of any change to its details in Clause 33.3 in accordance with the provisions of this Clause 33, 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.

34.

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.

35.

Governing Law and Jurisdiction

35.1

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.

 

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35.2

The Parties agree that any claim, dispute or difference of whatever nature arising under, out of or in connection with this Agreement (including a claim, dispute or difference regarding its existence, termination or validity or any non-contractual obligations arising out of or in connection with this Agreement) (a “Dispute”), shall be referred to and finally settled by arbitration in accordance with the Rules of Arbitration of the International Chamber of Commerce (“ICC”) (the “Rules”) as in force at the date of this Agreement and as modified by this clause, which Rules shall be deemed incorporated into this clause. The number of arbitrators shall be one to be jointly nominated by the claimant(s) and by the respondent(s) following the request in writing from the claimant(s) to the respondent(s) (the “Request for Joint Appointment”), provided that if such arbitrator has not been nominated within thirty (30) days of the Request for Joint Appointment, such arbitrator shall be appointed by the ICC Court. The seat of arbitration shall be London, England and the language of arbitration shall be English.

36.

Agent for Service of Process

36.1

The Sellers irrevocably and jointly appoint Process Agent Limited with registered office at Kemp House, 152-160 City Road, London EC1V 2NZ, United Kingdom with registration number 10710790, and the Purchaser irrevocably appoints [***], in each case as its agent for service of process in England.

36.2

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 notice to the other Parties to appoint a replacement agent for service of process.

37.

Sellers’ Representative

37.1

Each of the Sellers designates Mr. Volkan Biçer to serve as its representative (the “Sellers’ Representative”) and to act on its 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.

37.2

Each of the Sellers irrevocably appoints the Sellers’ Representative as its agent, proxy and attorney and gives the 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.

37.3

Any action taken or document executed by the Sellers’ Representative on behalf of a Seller in connection with this Agreement shall be deemed to have been made on behalf of such Seller 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 all the Sellers to rely upon such action or document as being binding on such Seller without further enquiry.

37.4

The Sellers’ Representative 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 Sellers provided, however, that until a

 

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successor Sellers’ Representative shall have been appointed, the Sellers’ Representative shall continue to perform its duties and obligations under this Agreement.

37.5

The Sellers shall, on the signing of this Agreement, execute and provide to the Purchaser a certified copy of a power of attorney granted by each Seller in favour of the Sellers’ Representative in the agreed terms, and shall promptly notify the Purchaser of any revocation of modification of such powers of attorney.

38.

Other Provisions

38.1

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.”;

 

(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 4 AUGUST 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 legend required by other applicable laws.

38.2

The Issued Shares shall not bear the transfer restrictions set forth in Clause 38.1(a) hereof: (a) following any sale of Issued Shares pursuant to Rule 144 promulgated under the Securities Act 1933 (“Rule 144”) (or any successor provision then in effect); 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 38.1(b) hereof upon the termination of the restrictions set forth in Clause 38.4 hereof. In addition, the Issued Shares shall not bear the transfer restrictions set forth in Clause 38.1(c) hereof following a sale of Issued Shares if, following a sale, the Issued Shares are not required to carry a legend pursuant to such applicable laws.

38.3

During the relevant 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 shares of Purchaser Common Stock, (b) engage in any hedging, swap, forward contract or other similar transaction that is designed to or which reasonably could be expected to lead to or result in a sale or disposition of beneficial ownership of, or a pecuniary interest in, any shares of Purchaser Common Stock, including any short sale or any purchase, sale or grant of any right (including without limitation any put or call option) with respect to such equity security, or (c) enter into a short sale of, or trade in, derivative securities representing the right to vote or economic

 

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benefits of, any shares of Purchaser Common Stock (clauses (a)-(c), a “Transfer”), other than, in each case, pursuant to a Permitted Transfer.

38.4

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

 

(a)

Restricted Period” means in respect of the first half of the Issued Shares paid to the Employee Sellers: the period commencing on the relevant Step-In Closing Date and ending on the six (6) month anniversary of the relevant Step-In Closing Date; and in respect of the second half of the Issued Shares paid to the Employee Sellers: the period commencing on the relevant Step-In Closing Date and ending on the twelve (12) months anniversary of the relevant Step-In Closing Date.

 

(b)

Permitted Transfer” means

 

(i)

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

 

(ii)

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 38 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 Sellers

Seller and Notice Details (1)

Number of Company Shares (2)

Number of Closing Shares (3)

Pro Rata Portion (4)

Step-In Year One Closing Shares (5)

Step-In Year Two Closing Shares (6)

Step-In Year Three Closing Shares (7)

Amount of Escrow Amount (9)

Mehmet Can Yavuz

Address: [***]

 

Email: [***]

16,667

5,212

9.7%

3,818

 

3,818

 

3,819

 

1,552,000

 

Deniz Başaran

Address: [***]

 

Email: [***]

16,667

 

5,212

9.7%

3,818

 

3,818

 

3,819

1,552,000

 

Burak Vardal

Address: [***]

 

Email: [***]

16,667

 

5,212

9.7%

3,818

 

3,818

 

3,819

1,552,000

 

Volkan Biçer

Address: [***]

Email: [***]

68,386

68,386

 

39.8%

-

-

-

6,368,000

 

 

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Seller and Notice Details (1)

Number of Company Shares (2)

Number of Closing Shares (3)

Pro Rata Portion (4)

Step-In Year One Closing Shares (5)

Step-In Year Two Closing Shares (6)

Step-In Year Three Closing Shares (7)

Amount of Escrow Amount (9)

Mehmet Ayan

Address: [***]

 

Email: [***]

 

35,052

 

35,052

 

20.4%

-

-

-

3,264,000

 

Yunus Emre Gönül

Address: [***]

Email: [***]

18,385

 

18,385

 

10.7%

 

-

-

-

1,712,000

 

Total

171,824

137,459

100.00%

11,454

11,454

11,457

16,000,000

 

 

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Schedule 2The Company

Company name

:

Rollic Games Oyun Yazılım ve Pazarlama Anonim Şirketi

Company number

:

169468-5

Date and place of incorporation

:

December 14, 2018; İstanbul

Registered address

:

Hacımimi Mahallesi Hocaali Sokak No.14/2 Beyoğlu, İstanbul/Turkey

Issued share capital

:

171,824 shares of TL 1.00 each

Shareholders

:

Mehmet Can Yavuz

Deniz Başaran

Burak Vardal

Volkan Biçer

Mehmet Ayan

Yunus Emre Gönül

Directors

:

Volkan Biçer (Chairperson of the Board)

Mehmet Ayan (Vice-Chairperson)

Auditors

:

PwC YMM A.Ş.

Accounting reference date

:

31 December

Tax residency

:

Turkey

 


 

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Schedule 3Closing Arrangements

Part 1
Sellers’ Closing Obligations

The Sellers shall on Closing:

1.

Procure the meetings of the Board at which:

(a)

the Transaction be approved;

(b)

the registration of the Purchaser as the owners of the Closing Shares in the share ledger of the Company be approved;

(c)

the Employee Seller Employment Agreements and the Key Employee Employment Agreements shall be entered into by and between the Company and the relevant Employee Seller and the relevant Key Employee (as applicable);

(d)

the general assembly meeting of the Company shall be convened to resolve on (i) the amendment to the articles of association of the Company; (ii) appointment of the members of the board of directors nominated by the Purchaser and the Employee Sellers; and (iii) releasing the incumbent members of the board of directors for their actions until immediately prior to Closing which shall in no case give detriment to the indemnification obligations of the Purchaser (“Closing General Assembly”);

2.

or, if the ordinary general assembly meeting of the Company for the financial year 2019 (“Ordinary General Assembly”) has not been convened before the Closing, the Closing General Assembly shall be convened as the Ordinary General Assembly to resolve on, inter alia, approving the balance sheet, and profit and loss statement of 2019;

3.

Execute and deliver to the Purchaser the Escrow Agreement, the Termination Agreement, the Employee Seller Employment Agreements and the Key Employee Employment Agreements and procure the execution and delivery of those documents;

4.

Execute and deliver to the Purchaser the Updated Disclosure Letter, if any;

5.

Deliver to the Purchaser or the Purchaser’s Lawyers:

(a)

all necessary documents, duly executed, to enable title to the Closing Shares to pass fully and effectively in the name of the Purchaser or such other person as the Purchaser may nominate;

(b)

a certified copy of the Board resolution of the Company at which the entry into the Transaction Documents and the Transaction are approved;

(c)

the duly endorsed share certificates (in paper form) for the Closing Shares together with printed copies (in paper form) of the share certificates for the Closing Shares;

(d)

completed relevant IRS Forms (including W-8 forms) from the Sellers in order for the Purchaser to pay the Escrow Amount in the Escrow Account;

(e)

a certified copy of each power of attorney, as the case may be, under which any document to be delivered to the Purchaser has been executed;

(f)

a certified copy of the minutes of the meetings of the Board and Closing General Assembly referred to in Part 1, paragraph 1 and Part 3, paragraph 3; and

(g)

subject to Disclosure Letter Update, a certificate signed by the Sellers confirming that the Operational Warranties are true and accurate in all material respects as of the Closing Date, and

 

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that 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 Closing Date.

6.

Deliver to the Purchaser or such other person as the Purchaser may nominate:

(a)

the Statutory Books (written up to but not including the Closing Date), certificate of incorporation (including all certificates of incorporation on change of name (if any) and common seal (if any) of the Company;

(b)

written resignations in the agreed terms to take effect from Closing immediately after the Closing General Assembly of all the directors of the Company (other than such persons who, as agreed with the Purchaser, will remain in office) in each case executed as a deed and relinquishing any right (past, present or future) against the Company;

(c)

statements from the banks at which each the Company maintain an account giving the balance as at the close of business on the last Business Day prior to the Closing;

(d)

the cash book balances each of the Company with statements reconciling the cash book balances with the bank statements in paragraph 4.3 above;

(e)

evidence as to the repayment of any existing loans, advances or capital contributions granted by the Company to Employee Sellers, if any; and

(f)

copies of written agreements replacing any verbal arrangements entered into by the Company and continuing to exist immediately prior to Closing in relation to game production and collaboration agreements with respect to the current games.

 

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Part 2
Purchaser’s Closing Obligations

On Closing the Purchaser shall:

1.

procure that the amounts due to the Sellers as determined in accordance with Clause 4.2 shall be transferred to each such Seller’s Designated Bank Account by electronic transfer in immediately available cleared funds;

2.

pay the Escrow Amount into the Escrow Account;

3.

execute and deliver to the Sellers or the Sellers’ Lawyers a counterpart Escrow Agreement; and

4.

deliver to the Sellers or the Sellers’ Lawyers a certified copy of the minutes of the meeting of the board and/or supervisory board (as necessary to provide valid authorisation) of directors of the Purchaser authorising the execution of this Agreement and the Escrow Agreement.


 

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Part 3
Sellers’ and Purchaser’s Joint Closing Obligations

On Closing the Purchaser and Sellers shall:

1.

procure that the Board resolves on:

(a)

the Business Plan;

(b)

the authority distribution among the board members; and

(c)

the cancellation of the signature authorities of the Company and appointment of the new signature authorities in line with this Agreement, and notification to İstanbul Trade Registry of the fact that the Buyer has become a shareholder of the Company in accordance with the Article 198 of the TCC;

2.

hold the Closing General Assembly and resolve on the agenda as agreed in paragraph 1(d) of Part 1 of this Schedule; and

3.

have the Company apply to the İstanbul Trade Registry for the registration of the resolutions in paragraph 1 of this Schedule 3.


 

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Part 4
Employee Sellers’ Step-In Closing Obligations

At each relevant Step-In Closing the Employee Sellers shall deliver to the Purchaser or the Purchaser’s Lawyers:

1.

all necessary documents, duly executed, to enable title to the Step-In Shares (as applicable to the relevant Step-In Closing) to pass fully and effectively in the name of the Purchaser or such other person as the Purchaser may nominate;

2.

the duly endorsed share certificates (in paper form) for the Step-In Shares (as applicable to the relevant Step-In Closing); and

3.

such waivers, consents and other documents in the relevant jurisdiction as the Purchaser may require, to enable the Purchaser, or such other person as the Purchaser may nominate, to be registered as holder of the Step-In Shares in accordance with the provisions of Clause 2 (Sale and Purchase).


 

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Part 5
Purchaser’s Step-In Closing Obligations

At each relevant Step-In Closing the Purchaser shall:

1.

procure that the amounts due to the Employee Sellers as determined in accordance with Clauses 5.2, 5.4 and 5.6 shall be transferred to each such Employee Seller’s Designated Bank Account as by electronic transfer in immediately available cleared funds; and

2.

cause the Sellers to be issued the Purchaser’s Common Stock in the amounts as determined in accordance with Clause 4.5 in consideration for the purchase of the Step-In Shares, if applicable.

 

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Schedule 4

Warranties

Part 1
Fundamental Warranties

1.

Incorporation and Authority

1.1

To the extent applicable, none of the Sellers is bankrupt or insolvent or unable to pay its debts under the insolvency laws of the jurisdiction of its incorporation nor has stopped paying debts as they fall due. No order has been made, petition presented or resolution passed for the winding‑up of any of the Sellers. No administrator, receiver, manager or equivalent officer has been appointed by any person in respect of any of the Sellers or all or any of their assets, no steps have been taken to initiate any such appointment and no voluntary arrangement has been proposed relating to any of the Sellers.

1.2

Each of the Sellers has full power and authority to enter into and perform this Agreement and each other Transaction Document to which it is a party (together, the “Documents”), each of which is valid and legally binding and constitutes (when executed) valid and legally binding obligations on it in accordance with the Documents’ respective terms.  The execution, delivery and performance by, respectively, each of the Documents will not constitute a breach of any laws or regulations in any relevant jurisdiction or result in a breach of or constitute a default or otherwise be prohibited under (i) any provision of its articles of association, by‑laws or equivalent constitutional documents; (ii) any order, judgment, decree or decision of any court or governmental authority in any jurisdiction; or (iii) any agreement or instrument to which the Company is a party or by which it is bound.

1.3

The execution, delivery and performance by each of the Sellers of its obligations under the Documents will not require it nor the Company to obtain any consent, waiver or approval of, or give any notice to or make any registration or filing with, any governmental, regulatory, other authority or other person which has not been obtained or made at the date of this Agreement on a basis both unconditional and which cannot be revoked, provided that this paragraph 3 shall not extend to those consents, waivers or approvals referred to in the Conditions in Clause 3.

2.

The Company Shares and the Company

2.1

The Company has been duly incorporated or formed and is validly existing under the laws of its place of incorporation or formation and has full power to carry on its business as it is carried on at the date of this Agreement.

2.2

Each of the Sellers is the sole legal and beneficial owner of, and has the right to exercise all voting rights over, all of the Company Shares set opposite its name in Schedule 1 (The Sellers).  The Company Shares are free from all Encumbrances and there is no agreement or commitment to give or create any Encumbrance over or affecting the Company Shares. Other than as listed in Schedule 1 (The Sellers), there are no rights to acquire any shares of capital stock in the Company.

2.3

The Company Shares constitute the entire allotted and issued share capital of the Company and are fully paid up.

2.4

The Company does not have any Subsidiary Undertakings.

2.5

None of the Sellers or the Company is a party to any contract or arrangement granting subscriptions, options, warrants, puts, calls, rights of first refusal, pre-emptive rights, claims,

 

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or other commitments or rights of any type relating to the issuance, sale or transfer of any securities of the Company, nor are there outstanding any securities that are convertible into or exchangeable other than by private contract between a shareholder in the Company and a person other than a Seller or any of their affiliates for any shares or securities of the Company.

2.6

There are no agreements or commitments outstanding which give to any person the right to call for the issue, transfer or purchase of any shares, debentures or other securities of the Company.

2.7

The Company does not act or carry on business together with any other person in partnership or otherwise save for the agreements listed in item 1 of the Disclosure Letter and Data Room folder Project Rock - Zynga / Due Diligence List / 14. Material Agreements / Studio Contracts.

2.8

The articles of association, by-laws or equivalent constitutional documents of the Company are complete and accurate.

2.9

The Company does not have any branch or agency in any jurisdiction, other than Rollic Games Oyun Yazılım ve Pazarlama A.Ş. Ankara Şubesi.

2.10

The Company does not own any legal or beneficial interest in any shares, securities or participation interests of any kind in any undertaking.

2.11

The Statutory Books have been properly kept in accordance with the applicable laws, are up-to-date and contain complete and accurate details of all matters required by applicable laws to be entered in them.  No notice or indication that any of them is incorrect or should be rectified has been received.

Part 2
Operational Warranties

1.

Information

1.1

The particular of each Seller set out in Schedule 1 (The Sellers) are complete, accurate and up to date in all respects.  The Company Shares are free from all Encumbrances and there is no agreement or commitment with the Company to give or create any Encumbrance over or affecting the Company Shares. There are no rights to acquire any shares of capital stock in the Company. The Company Shares constitute the entire allotted and issued share capital of the Company and are fully paid up.

1.2

The particulars of the Company set out in Schedule 2 (The Company) are complete, accurate and up to date in all respects.

1.3

The information contained in this Agreement is complete and accurate in all material respects and not misleading.

1.4

The information made available to the Purchaser in the Data Room was and remains complete and accurate in all material respects and not misleading.

2.

Accounts

2.1

The Management Accounts have been prepared in accordance with the Applicable Accounting Standards.

2.2

The Management Accounts give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company at the Accounts Date and in the financial periods to which they relate.

2.3

No significant change has been made to the accounting policies or to any other accounting treatment (including, for the avoidance of doubt, any estimation techniques or approaches to

 

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the exercise of accounting discretion or judgment) of the Company for at least three (3) years prior to the Accounts Date.

2.4

The Management Accounts include full provision or full disclosure for all liabilities (whether actual, contingent, unquantified or disputed) all outstanding capital commitments and all bad and doubtful debts.

2.5

The Management Accounts are not affected by any unusual or non‑recurring item or by any other factor that makes the Management Accounts unusual or misleading in any respect.

2.6

The accounting and other records of the Company are up‑to‑date and have been fully, properly and accurately maintained in each case, in all material respects and are in the possession of the Company.

2.7

The Management Accounts have been prepared on a basis consistent with the management accounts of the Company prepared since 1 January 2020 immediately preceding the date hereof and with all due care and attention. The Management Accounts give a fair view of the assets, liabilities and profit or loss and cash flow of the Company and are not inaccurate or misleading in any material respect.

3.

Events Since the Accounts Date

3.1

Since the Accounts Date:

 

(a)

the Business of the Company has been conducted in the ordinary course;

 

(b)

there has been no material adverse change in the financial or trading position or prospects of the Company;

 

(c)

the Company has neither: (i) allotted or issued or agreed to allot or issue any share or  loan capital or any other security any rise to a right over its capital; nor (ii) redeemed or purchased or agreed to redeem or purchase any of its share capital, in each case to or in favor of any person;

 

(d)

no asset of a value in excess of fifty thousand dollars (US$ 50,000) has been acquired or disposed of by the Company other than in the ordinary course of business, nor has there been any agreement to acquire or dispose of any such asset;

 

(e)

no liability (actual or contingent) has been incurred by or arisen in relation to the Company which is either unquantifiable or of an amount in excess of fifty thousand dollars (US$ 50,000) other than in the ordinary course of business;

 

(f)

no dividend or other distribution has been, or has agreed to be, declared, made or paid by the Company;

 

(g)

the Company has not made any investment in or loan any other person;

 

(h)

The Company has not made advance payment to any other person other than ordinary course of business;

 

(i)

the Company has not borrowed or raised any money and no individual item of capital expenditure, or series of connected items of capital expenditure, has been incurred in an amount in excess of hundred thousand dollars (US$ 100,000) other than in the ordinary course of business; and

 

(j)

the Company has not issued or agreed to issue any share or loan capital or other similar interest.

3.2

All book debts contained in the Management Accounts have been realised for an amount not less than that stated or reflected in the Accounts, no debts or other receivables have been

 

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factored, sold or agreed to be sold and no indication has been received that any debt owing to the Company is bad or doubtful.

3.3

There are no debts of the Company which have been outstanding for a period in excess of one hundred and eighty (180) days as at the date of this Agreement.

4.

Contracts

4.1

In this paragraph 4.1, references to “contract” include any agreement, arrangement, obligation, understanding or commitment, whether in writing or not, and references to “material” shall mean material to the Business, prospects, profits or assets of the Company.

Complete and accurate copies (including of any amendment, variation or extension of any such contract) are contained in Data Room folder Project Rock - Zynga / Due Diligence List / 14. Material Agreements and 2. Facilities, Properties, and Leases and item 2, 3, 4, 5, 6, 7 and 8 of the Disclosure Letter of any contract to which the Company is a party which:

 

(a)

involves revenue or expenditure in excess of five thousand (US$ 5,000) per annum (including pursuant to the terms of such contract or the course of dealing in the prior twelve (12) months;

 

(b)

involves the development of a Business Product;

 

(c)

has an unexpired term of twelve (12) months or longer;

 

(d)

can be terminated or amended upon a change in the direct or indirect ownership or control of the Company or whose terms, in the event of such a change of ownership or control, are or could be different from those which apply prior to such event;

 

(e)

is a licensing agreement;

 

(f)

involves publishing of advertisements, insertion orders, user acquisition campaigns and/or other marketing arrangements;

 

(g)

is an oral or verbal contract of a type identified in paragraphs 4.1(a) to (g) above.

4.2

The Company is not party to any contract which:

 

(a)

is of an unusual or exceptional nature or is not in the ordinary course of business;

 

(b)

cannot readily be performed by it on time except with undue effort or unusual expenditure;

 

(c)

restricts the Company’s ability to carry on the whole or any part of its business in any part of the world or to use or exploit any of its material assets;

 

(d)

is an agency, distribution, franchise, licensing, management, joint venture, consortium, partnership, association (other than a bona fide trade association) or shareholders’ agreement or a sale and purchase agreement relating to shares, a business or any material asset;

 

(e)

is otherwise a material contract;

 

(f)

is an agreement with a director of the Company;

 

(g)

is an agreement with a member of a Seller’s Group or a Connected Person of such a member;

 

(h)

is a collective bargaining agreement, works council agreement or similar agreement with any Employee Representatives; or

 

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(i)

is an agreement which provides for Change of Control Payments; or

 

(j)

is a sale or purchase or option or similar arrangement affecting an asset owned, occupied, possessed or used by the Company; or

 

(k)

is a bid or offer which, if accepted, would give rise to a contract falling within paragraphs 4.2(a) to (k) above.

4.3

Each of the contracts to which the Company is a party is in full force and effect.  No party is in breach of any such contract nor has any allegation of any breach or invalidity been made or received by any Seller or the Company.  No notice of termination of any such contract has been served or received by any Seller or the Company, to the knowledge of the Sellers, there are no grounds for the termination, rescission, avoidance or repudiation of any such contract and there has been no allegation in writing of any such grounds.

4.4

Save for those listed in item 8 of the Disclosure Letter, each of the contracts to which the Company is a party is in writing.

4.5

The Company is not, or since its incorporation has not been, a party to a contract which is, or was, not entirely of an arm’s length nature and the Company has not transferred or has agreed to transfer any assets except at market value.

4.6

The Company is not a party to or has any liability (actual or contingent) under any guarantee, indemnity or letter of credit, or any leasing, rental, hire purchase or credit sale agreement.

4.7

No person is entitled to receive from the Company any finder’s fee, brokerage or commission in connection with any of the transactions contemplated by this Agreement.

5.

Trading

5.1

No customer, contractor or supplier of the Company which accounts for five per cent. (5%) or more by value of the Company’s annual sales, as the case may be, has during the twelve (12) months immediately preceding the date of this Agreement ceased, reduced or indicated an intention to cease or reduce, or changed the terms of or indicated an intention to change the terms of, its trading with the Company.

5.2

The Company does not carry on business under any name other than its own corporate name.

6.

Shareholder Arrangements

6.1

Other than the Existing Shareholders’ Agreement and the Transaction Documents, none of the Sellers or any of its Connected Persons has entered into an agreement, binding arrangement or understanding (save for the Existing Shareholders’ Agreement) in respect of shares in the Company or exercise of rights attached thereto.

6.2

None of the Sellers has breached its obligations under the Existing Shareholders’ Agreement and the articles of association of the Company that may have an adverse impact on the Company.

7.

Compliance with Laws and Litigation

7.1

The Company has carried out its business and dealt with its assets in accordance with all applicable laws and regulations in any relevant jurisdictions in all material respects.

7.2

Neither the Company and, with respect to the Business, or any Seller, nor any of the Companies’ respective directors, officers, employees, (each, an “Associated Person”) has, in connection with the Business, breached any Anti‑Bribery Laws or any applicable anti‑money laundering law, rule or regulation or any books and records offences relating directly or indirectly to a bribe.

 

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7.3

Without limiting the foregoing, to the Knowledge of the Sellers, the Company has at all times been in compliance in all material respects with all applicable U.S. laws governing the export, re-export, import and transfer of products, software, technical data, services and technologies, and the export-related activities of United States persons (collectively, the “Trade Control Laws”).  To the Knowledge of the Sellers, there is no event, fact or circumstance that has occurred or exists that is reasonably likely to result in a finding of non-compliance with any Trade Control Law.  The Company has never been subject to any inquiries and investigations with respect to Trade Control Laws.

7.4

Neither the Company nor any director or employee (in each case, past or present) of the Company, is the subject of any formal or informal, internal or external investigation, enquiry or enforcement proceedings by any governmental or other body, no formal or informal, internal or external investigations, e