EXHIBIT 10.11
SECURITIES EXCHANGE AGREEMENT
This SECURITIES EXCHANGE AGREEMENT (this "Agreement") is made and entered
into as of this 13th day of December, 2005 by and among Global Traffic Network,
Inc., a Delaware corporation (the "Company"), The Australia Traffic Network Pty
Limited, an Australian proprietary company registered under the Corporations Act
of Australia ("ATN"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇ III ("▇▇▇"), ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Questcom Media Brokerage, Inc., a
Maryland corporation ("Questcom"), and Metro Networks Communications, Inc., a
Maryland corporation ("Metro"), as the holders of all of the outstanding
ordinary shares of ATN (collectively, the "Shareholders," each a "Shareholder").
RECITALS
WHEREAS, the Shareholders collectively hold 135,453 ordinary shares of ATN
(the "ATN Shares") which constitute all of the issued and outstanding shares of
ATN;
WHEREAS, upon the terms and subject to the conditions of this Agreement,
the Company, ATN and the Shareholders desire that the Shareholders exchange the
ATN Shares for an aggregate of 4,000,000 shares of the Company's common stock
(the "GTN Shares") in accordance with Schedule I attached hereto and an
aggregate of One Million Four Hundred Thousand Dollars ($1,400,000) in
promissory notes in accordance with Schedule II attached hereto (the "Exchange
Notes"), such that ATN becomes a wholly-owned subsidiary of the Company prior to
the consummation of the proposed initial public offering of the Company's common
stock in the United States (the "IPO");
WHEREAS, ATN, Yde, ▇▇▇▇▇▇▇▇ and Questcom are parties to that certain
Agreement dated September 29, 1997, as amended by a First Amendment dated April
30, 1998 (the "1997 Agreement") and wish to terminate the 1997 Agreement;
WHEREAS, ATN, Yde, Gilligan, Questcom and Metro are parties to that
certain Share Subscription and Option Agreement dated May, 1998 (the "1998
Agreement") and wish to terminate the 1998 Agreement; and
WHEREAS, in connection with this Agreement, the Company, as the future
sole shareholder of ATN, desires that Yde, ▇▇▇▇▇▇▇▇ and Questcom each waive and
release any and all claims held by such party against ATN in connection with the
1997 Agreement and that Yde, Gilligan, Questcom and Metro each waive and release
any and all claims held by such party against ATN in connection with the 1998
Agreement.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
ARTICLE I
EXCHANGE OF SHARES
1.1 Transaction. The Shareholders hereby agree to tender the ATN Shares
to the Company and, in exchange therefor, the Company shall issue to the
Shareholders in a transaction exempt from the registration and prospectus
delivery requirements of the Securities Act of 1933, as amended (the
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"Securities Act"), the GTN Shares in accordance with Schedule I attached hereto
and the Exchange Notes in accordance with Schedule II attached hereto.
1.2 Consideration. In consideration and exchange for the GTN Shares and
the Exchange Notes to be issued by the Company, each Shareholder shall surrender
to GTN all of his, her or its interest in and to the ATN Shares held by such
Shareholder as set forth on Schedule I attached hereto.
1.3 Exchange Notes. The Company shall deliver to each Shareholder an
Exchange Note, substantially in the form attached hereto as Exhibit A, in the
original principal amount set forth on Schedule II opposite such Shareholder's
name, which shall bear no interest and shall be due and payable on the closing
date of the IPO.
1.4 Exchange of Certificates.
(a) Shareholders to Deliver ATN Shares. Simultaneously with the
execution of this Agreement, each Shareholder shall deliver to the Company, in
exchange for the GTN Shares, all of the certificates representing his, her or
its ATN Shares duly endorsed for transfer to the Company, to be held in escrow
by the Company until the earlier of (i) the date of execution of the
Underwriter's Agreement by and between the Company and Feltl and Company (either
on behalf of Feltl and Company or as representative of several underwriters) or
its representative, with respect to the IPO (the "Effective Date") or (ii) the
termination of this Agreement pursuant to Section 5.1. In the event of a
termination pursuant to Section 5.1, the Company shall return the certificates
to each Shareholder within ten (10) days of any such termination.
(b) Company to Deliver GTN Shares. In exchange for the ATN Shares,
the Company shall deliver to each Shareholder a certificate representing his,
her or its GTN Shares within five (5) days of the Effective Date.
1.5 Restrictions on Transfer; Legends. The GTN Shares will not be
transferable except (1) pursuant to an effective registration statement under
the Securities Act of 1933, as amended (the "Securities Act") or (2) upon
receipt by the Company of a written opinion of counsel, reasonably satisfactory
to the Company, that is knowledgeable in securities laws matters to the effect
that the proposed transfer is exempt from the registration requirements of the
Securities Act and relevant state securities laws. Restrictive legends must be
placed on all certificates representing the GTN Shares, substantially as
follows:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
STATE, AND ARE BEING OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THESE
SECURITIES MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT OR SUCH OTHER LAWS."
Each Shareholder understands and acknowledges that the Company has not agreed to
register the GTN Shares for distribution in accordance with the Securities Act
or state law, and that the Company has not agreed to comply with any exemption
under the Securities Act or state law for the resale of the GTN Shares. Each
Shareholder understands and acknowledges that the Company has no obligation to
undertake or complete a public offering of its securities and that even if a
public offering is undertaken
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and successfully completed, the GTN Shares received hereby will remain subject
to the restrictions on transferability described in this Agreement. If no public
offering is undertaken and completed, the Shareholders may never be able to sell
their GTN Shares pursuant to Rule 144 under the Act. Each Shareholder further
understands and acknowledges that the Company currently does not file periodic
reports with the Securities and Exchange Commission pursuant to the requirements
of Sections 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and
may not be obligated to file such reports at any time in the future. Therefore,
the Shareholders may never be able to sell their shares pursuant to Rule 144
under the Act.
ARTICLE II
TERMINATION OF SHAREHOLDER AGREEMENTS
2.1 Current Shareholders. Each Shareholder hereby represents that
Schedule I accurately represents the current ownership of all issued and
outstanding shares of ATN held by such party, and that to such party's knowledge
it has no other shares, or rights to acquire shares, of ATN outstanding or
rights with respect to the ATN Shares relating to the voting or disposition
thereof, except, in the case of Yde and ▇▇▇▇▇▇▇▇, for the Amendment to Option
Agreement by and between Yde and ▇▇▇▇▇▇▇▇ dated November 18, 2005 or as
referenced herein.
2.2 The 1997 Agreement. Effective on the Effective Date, ATN, Yde,
▇▇▇▇▇▇▇▇ and Questcom hereby terminate the 1997 Agreement. Each party to the
1997 Agreement hereby forever, fully and unconditionally waives, releases and
discharges each other party and its predecessors, successors, parent entities,
subsidiaries, affiliates, agents, attorneys, officers, employees, directors,
shareholders, members and assigns (in their roles as such but not individually
unless expressly a party hereto, the "Parties") from all obligations, offsets,
actions, suits, debts, sums of money, contracts, covenants, agreements,
promises, legal rights, claims, counterclaims, causes of action, demands,
damages, costs, compensation, liabilities, losses and expenses of any nature or
of any kind, whether known or unknown, asserted or unasserted, liquidated or
unliquidated, absolute or contingent, accrued or nonaccrued, which any of the
parties ever had, now have, hereafter may have or claim to have, whether
grounded in law or equity, in contract or in tort, by statute or otherwise
against the Parties with respect to the 1997 Agreement.
2.3 The 1998 Agreement. Effective on the Effective Date, ATN, Yde,
Gilligan, Questom and Metro hereby terminate the 1998 Agreement. Each party to
the 1998 Agreement hereby forever, fully and unconditionally waives, releases
and discharges the Parties from all obligations, offsets, actions, suits, debts,
sums of money, contracts, covenants, agreements, promises, legal rights, claims,
counterclaims, causes of action, demands, damages, costs, compensation,
liabilities, losses and expenses of any nature or of any kind, whether known or
unknown, asserted or unasserted, liquidated or unliquidated, absolute or
contingent, accrued or nonaccrued, which any of the parties ever had, now have,
hereafter may have or claim to have, whether grounded in law or equity, in
contract or in tort, by statute or otherwise against the Parties with respect to
the 1998 Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Each of the Shareholders hereby represents and warrants to the Company
that:
3.1 Title. Such Shareholder is the lawful owner of the ATN Shares set
forth adjacent to its name on Schedule I, free and clear of all liens, charges,
encumbrances and claims of every kind, and the delivery of such ATN Shares by
Shareholder to the Company under this Agreement will transfer to the Company
valid title to the ATN Shares, free and clear of all liens, charges,
encumbrances and claims of
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every kind. There are no actions, suits or proceedings against Shareholder
affecting Shareholder's title to the ATN Shares or the right of Shareholder to
execute, deliver and perform its obligations under this Agreement.
3.2 Authority.
(a) Such Shareholder has the full legal right, power and capacity
to execute and deliver this Agreement and to consummate the transactions
provided for herein or contemplated hereby. This Agreement has been duly and
validly executed and delivered by, and constitutes the valid and binding
agreement of Shareholder, enforceable in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws relating to, or affecting generally the enforcement of, creditors'
rights and remedies or by other equitable principles of general application.
(b) Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will conflict with or
result in a breach of any of the terms, conditions or provisions of any
agreement or instrument to which Shareholder is a party or by which Shareholder
is bound, or constitute a default under the foregoing or violate any law, rule,
regulation, judgment or decree by which Shareholder is bound.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with any court, administrative agency or
commission or other governmental authority or instrumentality is required by or
with respect to such Shareholder in connection with the execution, delivery and
performance of this Agreement.
3.3 Investment Representations. Such Shareholder is remitting its ATN
Shares in exchange for GTN Shares for his, her or its own account, for
investment purposes only and not with a view towards or in connection with the
public re-sale or distribution thereof in violation of the Securities Act.
3.4 Confidentiality. Such Shareholder hereby agrees not to disclose to
any unauthorized persons, use for such Shareholder's own account, or use for any
third party's benefit, any confidential information relating to the Company or
the IPO (including without limitation the status, from time to time, of the IPO)
that the Shareholder obtains pursuant to this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Shareholders that:
4.1 Organization of the Company. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; has the corporate power and authority to own,
lease and operate its assets and property and to carry on its business as now
being conducted; and is duly qualified to do business and in good standing.
4.2 Capital Structure. The authorized capital stock of the Company
consists of 100,000,000 shares of Common Stock, par value $0.001 per share, of
which there are 4,500,000 shares issued and outstanding as of the date hereof.
All outstanding shares of the capital stock of the Company are duly authorized,
validly issued, fully paid and non-assessable, were issued in compliance with
applicable securities laws and are not subject to preemptive rights created by
statute, the Company's articles of incorporation, bylaws or any agreement or
document to which the Company is a party or by which it is bound.
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4.3 Authority.
(a) The Company has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action on the part of the Company.
(b) This Agreement constitutes the valid and binding agreement of
the Company, enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws relating to, or affecting generally the enforcement of, creditors' rights
and remedies or by other equitable principles of general application.
(c) Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will conflict with or
result in a breach of any of the terms, conditions or provisions of any
agreement or instrument to which the Company is a party or by which the Company
is bound, or constitute a default under the foregoing or violate any law, rule,
regulation, judgment or decree by which the Company is bound.
(d) No consent, approval, order or authorization of, or
registration, declaration or filing with any court, administrative agency or
commission or other governmental authority or instrumentality is required by or
with respect to the Company in connection with the execution, delivery and
performance of this Agreement.
4.4 Valid Issuances. The GTN Shares, when issued by the Company to the
Shareholders in accordance with the provisions of this Agreement, will be duly
authorized, validly issued, fully paid and nonassessable, and the delivery of
such GTN Shares to the Shareholders will transfer to the Shareholders valid
title to the GTN Shares, free and clear of all liens, charges, encumbrances and
claims of every kind. The GTN Shares, when issued by the Company to the
Shareholders in accordance with the provisions of this Agreement, will not be
subject to preemptive rights, and will be exempt from the registration
requirements of the Securities Act and applicable state blue sky laws.
ARTICLE V
TERMINATION AND AMENDMENT
5.1 Termination. This Agreement may be terminated at any time prior to
the Effective Date by written consent of all of the parties hereto. Unless
extended by written agreement of all of the parties hereto, this Agreement shall
terminate on March 31, 2006 in the event that the Effective Date has not
occurred by such date. Notwithstanding the foregoing provisions of this
Agreement, if the closing of the IPO has not occurred within ten days following
the Effective Date (as may be extended by the written agreement of all of the
parties hereto), then the transactions contemplated by this Agreement, including
without limitation the issuance of the Exchange Notes pursuant to Section 1.3
and the exchange of ATN Shares for GTN Shares pursuant to Section 1.4, shall be
deemed null and void.
5.2 Amendment. This Agreement may not be amended by the parties hereto
except by execution of an instrument in writing signed on behalf of the Company,
ATN and each Shareholder.
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ARTICLE VI
GENERAL PROVISIONS
6.1 Lock Up Agreement. Upon request by the Company, each of the
Shareholders hereby agrees to execute and deliver a lock up agreement
substantially in the form attached hereto as Exhibit B with respect to the GTN
Shares set forth adjacent to its name on Schedule I and received pursuant to
this Agreement, and any and all shares of the Company held by such Shareholder
at the time of the request.
6.2 Entire Agreement. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof.
6.3 Severability. In the event that any provision of this Agreement, or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
6.4 Governing Law; Venue. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware, without regard
to its conflicts-of-law provisions. All disputes related to or arising under
this Agreement shall be subject to the exclusive jurisdiction of the federal and
state courts located in ▇▇▇▇▇ County, Nevada with each party consenting to the
exclusive jurisdiction of such courts and hereby waiving any personal
jurisdiction defenses. Each party hereby (i) waives any objection which it might
have now or hereafter to the foregoing venue of any such litigation, action or
proceeding, (ii) irrevocably submits to the exclusive jurisdiction of any such
court set forth above in any such litigation, action or proceeding, and (iii)
waives any claim or defense of inconvenient forum.
6.5 Attorney's Fees. In the event of any controversy, claim, or dispute
between the parties hereto, arising out of or relating to this Agreement or the
breach thereof, the prevailing party shall be entitled, in addition to such
other relief as may be granted, to a reasonable sum as and for attorney's fees
in such litigation, which shall be determined by the court in such litigation or
in a separate action brought for the purpose.
6.6 Counterparts. This Agreement may be executed in one or more
counterparts, including via facsimile, all of which together shall be considered
one and the same agreement.
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
GLOBAL TRAFFIC NETWORK, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇ III
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇ III
Title: President and Chief Executive Officer
THE AUSTRALIAN TRAFFIC NETWORK PTY. LIMITED
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇ III
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇ III
Title: President and Chief Executive Officer
THE SHAREHOLDERS:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇ III
--------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇ III
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
QUESTCOM MEDIA BROKERAGE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
METRO NETWORKS COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Title: CFO
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SCHEDULE I
SHAREHOLDER ATN SHARES GTN SHARES
----------- ---------- ----------
▇▇▇▇▇▇▇ ▇. ▇▇▇ III 47,038 1,389,057
▇▇▇▇ ▇. ▇▇▇▇▇▇ 40,037 1,182,314
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 16,000 472,489
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1,500 44,296
Questcom Media Brokerage, Inc. 6,334 187,046
Metro Networks Communications, Inc. 24,544 724,798
---------- ----------
TOTAL 135,453 4,000,000
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SCHEDULE II
SHAREHOLDER PRINCIPAL AMOUNT OF
----------- EXCHANGE NOTES
-------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇ III $ 486,170.00
▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 413,810.00
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 165,371.00
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 15,504.00
Questcom Media Brokerage, Inc. $ 65,466.00
Metro Networks Communications, Inc. $ 253,679.00
-------------------
TOTAL $ 1,400,000.00
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EXHIBIT A
Attached hereto is the form of Exchange Note
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EXHIBIT B
Attached hereto is the form of Lock Up Agreement
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