GetSwift Announces Letter of Intent with Stage Equity Partners for Sale of GetSwift Assets

GetSwift Technologies Limited ("GetSwift" or the "Corporation"; NEO: “GSW”) is pleased to announce the signing of a non-binding letter of intent with Stage Equity Partners (“Stage”) for the acquisition of all of GSW’s SaaS business (the “Business”) at an enterprise value of $10 million.

Transaction Consideration

Stage proposes to acquire all of the assets associated with the Business at an enterprise value of $10 million (the “Purchase Price”) on a debt free and excess-cash free basis with adequate working capital, to be paid at close. Prior to the transaction being completed, the final Purchase Price and terms shall be agreed by both GSW and Stage and a term sheet must be accepted and signed off on by GSW. Stage contemplates a delayed signing and closing to enable Seller (and Seller’s ultimate parent company, as applicable) to obtain any necessary stockholder and stock exchange approval. The “drop dead” date for the closing will be 6 months after the signing of the definitive agreements (the “Drop Dead Date”).

Deal Terms

1. $1M paid on closing, less the amount of any outstanding Bridge Loan (as defined below).
2. Up to $1.2M A/P of the Business will be assumed. No other liabilities will be assumed.
3. $4.5M senior secured Seller’s note:
   1. 5-year term.
   2. 6% interest (compounded annually) in Year 1, waived if seller’s note paid within 12 months of closing.
   3. 10% interest (compounded annually) commencing in Year 2.
   4. Principal and interest payable only at maturity, prepayment permitted.
   5. Stage retains the right to secure the Business with up to $2M of additional senior secured debt on a pari passu basis with the Seller’s note, subject to consultation rights in favor of the Seller.
   6. Customary limitations on distributions to Buyer’s equity holders, other than tax distributions.
4. Common membership interests (“Common Units”) representing 30% of the new entity (the “Buyer”) (as of the closing) on account of the balance of the Purchase Price (the “Rollover Units”). For so long as Seller holds at least 75% of the Rollover Units, Seller shall be entitled to appoint a member of the board of managers (or analogous governing body) of Buyer. For so long as Seller holds any Rollover Units, Seller shall be entitled to (i) customary tag-along (co-sale) rights, and shall be subject to customary drag along obligations, (ii) participate on a pro rata basis in any future issuances of securities of Buyer (subject to customary exceptions), (iii) piggy-back registration rights, and (iv) certain limited pre-approval rights which are customary for minority common equity holders in a private company, including (A) relating to changes or amendments to the constituent documents of the Buyer that adversely affect the holders of Common Units in a manner different from the holders of any other class or series of membership interest of Buyer, (B) the issuance or declaration of any dividends or distributions (subject to the Preferred Return (as defined below) in certain limited circumstances), unless the holders of Common Units are entitled to participate in such dividend or distribution on a pro rata basis, (C) the entering into of any transaction involving the Buyer and any affiliate of Buyer on non-arm’s length terms, and (D) until such time as Stage’s Initial Capital Commitment (as defined below) is fully paid, issuing any additional membership interests, subject to customary limited exceptions. The parties hereto acknowledge and agree that the purpose of the foregoing clause (D) is that Seller’s 30% equity interest in the Buyer shall not be subject to dilution from additional investment capital by any issuance of additional membership interests or other securities of the Buyer (subject to certain customary exceptions, including, without limitation, with respect to compensatory equity awards to employees, consultants, and other service providers) until Stage’s Initial Capital Commitment has been fully paid(1). The Buyer’s constituent documents shall provide that the membership interests issued to Stage (the “Preferred Units”), representing the remaining 70% of the outstanding membership interests (as of the closing), shall be entitled to receive distributions, in priority to the Common Units, in an amount equal to Stage’s aggregate capital contributions to Buyer(2). Stage’s initial capital commitment to Buyer shall be $5M (“Stage’s Initial Capital Commitment”), inclusive of the amounts set out in (1) and (2) above, to be contributed when and as requested by the board of managers of the Buyer. The Preferred Units will be entitled to participate pro rata on all distributions in excess of the Preferred Return.

Bridge Loan