Item 1.01. Entry into a Material Definitive Agreement.
Pursuant to that certain letter agreement announced by eBay Inc., a Delaware
corporation ("eBay"), on June 24, 2021, on June 30, 2021, following the approval
of the Bank of Korea, eBay, eBay KTA (UK) Ltd., a private company limited by
shares incorporated under the laws of the United Kingdom and a wholly owned
subsidiary of eBay ("Seller"), Emerald SPV Co., Ltd., a joint stock company
(chusik hoesa) incorporated under the laws of Korea and a wholly owned
Subsidiary of Purchaser Guarantor ("Purchaser"), and, solely for the purposes
set forth therein, E-mart Inc., a joint stock company (chusik hoesa)
incorporated under the laws of Korea ("Purchaser Guarantor"), entered into a
Securities Purchase Agreement (the "Purchase Agreement") pursuant to which (i)
Purchaser will acquire 80.01% of the outstanding equity interests of eBay Korea
LLC, a limited liability company incorporated under the laws of Korea and a
wholly owned subsidiary of eBay KTA ("eBay Korea"), pursuant to the terms and
conditions of the Purchase Agreement, in exchange for KRW 3,440,430,000,000 in
cash, subject to certain adjustments specified therein for indebtedness, cash,
working capital, transaction expenses and certain transaction taxes and (ii)
Seller will retain 19.99% of the outstanding equity interests of eBay Korea (the
"Transaction"). Purchaser Guarantor has agreed to guarantee the obligations of
Purchaser under the Purchase Agreement.
Each party's obligation to consummate the Transaction is subject to certain
closing conditions as set out in the Purchase Agreement, including, among
others, (i) subject to certain exceptions, the accuracy of the representations
and warranties of the parties; (ii) performance in all material respects by each
of the parties of its covenants and agreements; (iii) the receipt of required
regulatory clearance; and (iv) the absence of any law or order from any
government entity prohibiting consummation of the Transaction.
Pursuant to the Purchase Agreement, the parties will enter into certain
ancillary agreements at the closing of the Transaction, including agreements
relating to transition services and certain arrangements with respect to eBay's
governance and liquidity rights in eBay Korea.
The Purchase Agreement contains customary representations, warranties and
covenants, including with respect to certain post-closing employee compensation
and benefits matters, by each party that are subject to specified exceptions and
qualifications set forth in the Purchase Agreement.
The Purchase Agreement also includes certain termination rights, including (i)
by either eBay or Purchaser, if the Transaction is not consummated on or before
March 30, 2022, subject to one automatic three-month extension if all conditions
to the closing of the Transaction, other than certain conditions relating to
regulatory approvals, have been satisfied or waived on such date, and if after
the first extension, the required regulatory approvals still have not been
obtained, eBay will have the right to one additional three-month extension if
all conditions to the closing of the Transaction, other than certain conditions
relating to regulatory approvals, have been satisfied or waived on such date;
(ii) by either eBay or Purchaser, if any law or order from a governmental entity
permanently prohibits consummation of the Transaction; (iii) by either eBay or
Purchaser, if the other party is in material breach of its respective
representations and warranties or covenants under the Purchase Agreement such
that a closing condition is not satisfied (subject to a cure period); and (iv)
by eBay, if Purchaser fails to consummate the Transaction after all closing
conditions have been satisfied. The Purchase Agreement provides that, in
connection with the termination of the Purchase Agreement by eBay under certain
circumstances, including as a result of the parties' failure to obtain
regulatory approvals or the events described in the foregoing clauses (iii) and
(iv), eBay will be entitled to receive a termination fee of KRW 344,000,000,000.
The foregoing description of the Purchase Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
form of Purchase Agreement, which is attached hereto as Exhibit 2.1 to this
Current Report on Form 8-K and incorporated herein by reference. The Purchase
Agreement has been included to provide eBay's stockholders with information
regarding its terms. It is not intended to provide any other information about
eBay or Purchaser or their respective subsidiaries and affiliates. The Purchase
Agreement contains representations and warranties by each of eBay and Purchaser.
These representations and warranties were made solely for the benefit of the
parties to the Purchase Agreement and (i) may have been used for purposes of
allocating risk between the respective parties rather than establishing matters
as facts; (ii) may have been qualified in the Purchase Agreement by confidential
disclosure schedules that were delivered to the other party in connection with
the signing of the Purchase Agreement, which disclosure schedules may contain
information that modifies, qualifies and creates exceptions to the
representations, warranties and covenants set forth in the Purchase Agreement;
(iii) may be subject to a contractual standard of materiality applicable to the
parties that differs from what a stockholder may view as material; and (iv) may
have been made only as of the date of the Purchase Agreement or as of another
date or dates as may be specified in the Purchase Agreement, and information
concerning the subject matter of the representations and warranties may change
after the date of the Purchase Agreement, which subsequent information may or
may not be fully reflected in eBay's public disclosures, if at all. Accordingly,
stockholders should not rely upon the representations and warranties contained
in the Purchase Agreement or any descriptions thereof as characterizations of
the actual state of facts or condition of eBay or Purchaser or their respective
subsidiaries and affiliates.
Cautions Regarding Forward Looking Statements
Certain statements herein are "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such
forward-looking statements are often identified by words such as "anticipate,"
"approximate," "believe," "commit," "continue," "could," "estimate," "expect,"
"hope," "intend," "may," "outlook," "plan," "project," "potential," "should,"
"would," "will" and other similar words or expressions. Such forward-looking
statements reflect eBay's current expectations or beliefs concerning future
events and actual events may differ materially from historical results or
current expectations. The reader is cautioned not to place undue reliance on
these forward-looking statements, which are not a guarantee of future
performance and are subject to a number of uncertainties, risks, assumptions and
other factors, many of which are outside the control of eBay. The
forward-looking statements in this document address a variety of subjects
including, for example, the closing of the Transaction and the potential
benefits of the Transaction. The following factors, among others, could cause
actual results to differ materially from those described in these
forward-looking statements: the possibility that regulatory and other approvals
and conditions to the Transaction are not received or satisfied on a timely
basis or at all; the possibility that eBay may not fully realize the projected
benefits of the Transaction; changes in the anticipated timing for closing the
Transaction; business disruption during the pendency of or following the
Transaction; diversion of management time on Transaction-related issues; the
reaction of customers and other persons to the Transaction; and other events
that could adversely impact the completion of the Transaction, including the
ongoing COVID-19 pandemic and other industry or economic conditions outside of
our control. In addition, actual results are subject to other risks and
uncertainties that relate more broadly to eBay's overall business, including
those more fully described in eBay's filings with the Securities and Exchange
Commission ("SEC"), including its annual report on Form 10-K for the fiscal year
ended December 31, 2020 and subsequent quarterly reports on Form 10-Q. The
forward-looking statements in this document speak only as of this date. We
undertake no obligation to revise or update publicly any forward-looking
statement, except as required by law.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following materials are attached as exhibits to this Current Report on Form
8-K:
Exhibit
Number Description
2.1 Securities Purchase Agreement, dated as of June 30, 2021, by and
among eBay Inc., eBay KTA (UK) Ltd., Emerald SPV Co., Ltd. and,
solely for the purposes set forth therein, E-mart Inc.*
104 The cover page from this Current Report on Form 8-K formatted in
Inline XBRL (included as Exhibit 101).
*Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of
Regulation S-K. The registrant agrees to furnish supplementally a copy of any
omitted schedule or exhibit to the U.S. Securities and Exchange Commission upon
request.
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