THE SHARES OF COMMON STOCK OF PRIMIX SOLUTIONS INC. ISSUABLE HEREUNDER HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"). SUCH SHARES ISSUED TO NON-U.S. PERSONS MAY NOT BE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE SECURITIES ACT,
PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS INVOLVING SUCH SHARES MAY NOT
BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
SHARE PURCHASE AGREEMENT
BETWEEN
PRIMIX SOLUTIONS INC.
AND
THE OWNERS OF
PRIMANT AB
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TABLE OF CONTENTS
PAGE
1. DEFINITIONS....................................................1
2. SALE AND PURCHASE OF SHARES....................................3
3. PURCHASE PRICE AND PAYMENT OF THE PURCHASE PRICE...............3
4. CONDITIONS PRECEDENT...........................................7
5. CLOSING........................................................8
6. REPRESENTATIONS AND WARRANTIES OF THE WARRANTORS...............9
7. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER...............19
8. COVENANTS.....................................................19
9. INDEMNIFICATION...............................................21
10. SPECIFIC INDEMNITIES.........................................23
11. RELATED AGREEMENTS...........................................23
12. MISCELLANEOUS................................................24
13. GOVERNING LAW AND ARBITRATION................................26
SHARE PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of the 28th day of May, 2000
by and between
Primix Solutions Inc., a company duly incorporated and organised under the laws
of the state of Delaware, USA, having its principal office in Boston , MA,
hereinafter called the "Purchaser",
and
the persons specified in SCHEDULE A, hereinafter jointly called the "Sellers".
WITNESSETH:
WHEREAS, the Sellers are the holders of all shares, numbered from 1 to 6,000,
each having a par value of SEK 100, of the issued capital stock of Primant AB, a
company duly incorporated and organised under the laws of Sweden, hereinafter
called the "Company"; and
WHEREAS, the Sellers are desirous of selling to the Purchaser and the Purchaser
is desirous of purchasing from the Sellers, subject to the terms and conditions
contained herein, all of the above 6,000 shares.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings set
forth herein and in the Schedules hereto, the parties agree as follows:
1. DEFINITIONS
In this Agreement, the following terms and expressions shall have the following
meanings:
"AGREEMENT" means this Share Purchase Agreement by and between the Sellers and
the Purchaser, as it may be amended from time to time.
"CLOSING" means the closing of the sale and purchase of the Shares pursuant to
this Agreement.
"CLOSING DATE" means the day occurring three (3) business days after all of the
conditions precedent set forth in Section 4 have been fulfilled.
"CLOSING STOCK PRICE" has the meaning set forth in Section 9.2.
"COMPANY" means Primant AB, reg no 556550-8826.
"TARSAP SHARES" means three hundred thousand (300,000) shares of the Purchaser's
common stock to be paid to certain of the Sellers and employees as set forth in
Section 3.2
"FINANCIAL STATEMENTS" means the audited balance sheet and profit and loss
account of the Company, the audited balance sheet and profit and loss account of
the Subsidiary and the audited consolidated balance sheet and profit and loss
account of the Company and the Subsidiary.
"GAAP" means the generally accepted accounting principles in Sweden.
"INTELLECTUAL PROPERTY" means patents, trademarks, registered designs,
applications for any of the foregoing, copyrights, and registerable business
names and any similar rights in any country, and all rights under licences and
consents in relation to any of the foregoing.
"INTER-COMPANY RELATIONS" means any and all agreements, undertakings,
arrangements or other relations between the Company and the Subsidiary on the
one hand and any of the Sellers on the other hand.
"KNOW-HOW" means inventions, any information which is kept confidential by the
Company or the Subsidiary, customer lists and other information relating to
customers.
"LEASED PROPERTY" means all real property and premises that are being leased by
the Company or the Subsidiary.
"LOSS" means any direct or indirect claims, losses, deficits, damages, costs,
liabilities and expenses incurred by the Purchaser, the Company or the
Subsidiary including, without limitation, settlement costs and any reasonable
legal, accounting and other expenses for investigation or defending any actions
or threatened actions.
"MATERIAL AGREEMENT" means each contract, agreement, commitment, lease, purchase
order, sales order, proposal or other understanding, whether written or oral,
involving rights or obligations in excess of an amount equivalent to SEK
400,000, and/or having a validity period of more than six (6) months.
"OPTIONS" means the options held by employees of the Company and entitling in
aggregate to the subscription of 700 shares in the Company, each having a par
value of SEK 100.
"OPTION SHARES" means 700 of the shares, numbered from 6,001 to 6,700, of the
capital stock of the Company, each having a par value of SEK 100 issued through
the conversion of the Options.
"PERSONAL PROPERTY" means all items of equipment and other tangible property and
assets owned by the Company or the Subsidiary.
"PRINCIPALS" means ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and Per-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
"PURCHASER" means Primix Solutions Inc.
"RESTRICTED SHARES" means 895,522 shares of the Purchaser's common stock pledged
and restricted as set forth in Schedule 3.1.3.
"SELLERS" means the persons specified in Schedule A.
"SHARES" means all of the shares, numbered from 1 to 6,000, of the capital stock
of the Company, each having a par value of SEK 100.
"SUBSIDIARY" means the wholly owned Danish company Primant A/S.
"WARRANTORS" means the Principals, Fata Morgana Holdings Ltd, Dolce Vida
Holdings Ltd and Begonia Assets Holdings Inc.
Where any statement in this Agreement is qualified by the expression "to the
best of the Sellers' knowledge" or any similar expression, it shall be deemed to
include an additional statement that it has been made after reasonable and
diligent enquiry within the Company and the Subsidiary.
2. SALE AND PURCHASE OF SHARES
Upon the terms and subject to the conditions set forth in this Agreement, each
of the Sellers shall sell and transfer full and unencumbered ownership to its
part of the Shares as specified in SCHEDULE 2 to the Purchaser and the Purchaser
shall purchase and accept full and unencumbered ownership of the Shares from the
Sellers.
3. PURCHASE PRICE AND PAYMENT OF THE PURCHASE PRICE
3.1 THE RESTRICTED SHARES
3.1.1 The fixed purchase price for the Shares shall be the Restricted Shares.
3.1.2 A document issued by Boston Equiserve L.P., the Purchaser's transfer
agent, shall be delivered by the Purchaser, such document evidencing that
the Restricted Shares have been issued in book entry form in the names of
the respective Seller before 11.59 p.m. Swedish time on the Closing Date.
3.1.3 From and after the Closing Date and until such time as the Restricted
Shares become vested in accordance with the "Vesting Schedule" set forth
in SCHEDULE 3.1.3, none of the Restricted Shares issued at Closing to the
Sellers shall be sold, assigned, transferred, pledged, hypothecated, given
away or in any other manner disposed of or encumbered ("Transfer"),
whether voluntarily or by operation of law. Any attempted disposition of
Restricted Shares not in accordance with the terms and conditions of this
Section 3.1.3 shall be null and void, and Purchaser shall not reflect on
its records any change in record ownership of any Restricted Shares as a
result of any such Transfer, shall otherwise refuse to recognise any such
Transfer and shall not in any way give effect to any such Transfer of any
Restricted Shares. Subject to the foregoing general provisions, Restricted
Shares may be transferred pursuant to Section 3.1.5. Certificates
representing any unvested Restricted Shares shall bear appropriate legends
to the effect that such shares are subject to restrictions on transfer as
stated herein.
3.1.4 In case any of the Principals should terminate his employment with the
Company or the Company should terminate the employment of any of the
Principals for cause, excluding termination for lack of work (Sw
arbetsbrist) in accordance with the Employment Protection Act - lag
(1982:80) om anstallningsskydd - (a "Termination Event"), the unvested
Restricted Shares held or controlled by such departing Principal shall be
subject to a right of Repurchase (as defined below). Upon the occurrence
of a Termination Event of the Principal, the Purchaser or its assigns
shall have the right and option to repurchase all or any portion of the
unvested Restricted Shares held by the Principal or any Permitted
Transferee (as defined in Section 3.1.5) as of the date of such
Termination Event as provided below. The per share purchase price (the
"Repurchase Price") of the unvested Restricted Shares subject to the
Repurchase shall be the Closing Stock Price (subject to adjustment for
stock splits, stock dividends, stock combinations, recapitalizations or
the like). The purchase and sale arrangements contemplated by the
preceding sentences of this Section 3.1.4 are referred to herein as the
"Repurchase" and shall be subject to the terms and conditions set forth
below:
(i) CLOSING PROCEDURE. The Purchaser or its assigns shall effect the
Repurchase (if so elected) by delivering or mailing to the Principal
(and/or, if applicable, any Permitted Transferees) written notice
within six (6) months after the Termination Event, specifying a date
within such six-month period in which the Repurchase shall be
effected. Upon such notification, the Principal and any Permitted
Transferees shall promptly surrender to the Purchaser any
certificates, if any, representing the unvested Restricted Shares
being purchased, together with a duly executed stock power for the
transfer of such unvested Restricted Shares to the Purchaser or the
Purchaser's assignee or assignees or provide appropriate instruments
of transfer of such unvested Restricted Shares to the Purchaser.
Upon the Purchaser's or its assignee's receipt of the certificates
or instruments of transfer from the Principal or any Permitted
Transferees, the Purchaser or its assignee or assignees shall
deliver to him or them a check for the Repurchase Price of the
Restricted Shares being purchased, PROVIDED, HOWEVER, that the
Purchaser may pay the Repurchase Price for such shares by offsetting
and cancelling any indebtedness then owed by the Principal to the
Purchaser. At such time, the Principal and/or any holder of the
Restricted Shares shall deliver to the Purchaser the Restricted
Shares so repurchased, free and clear of any liens or encumbrances,
by delivery of certificates representing such shares together with
duly executed stock powers or appropriate instruments of transfer,
as applicable. Certificates representing any unvested Restricted
Shares shall bear appropriate legends to the effect that such shares
are subject to the right of Repurchase as stated herein.
(ii) REMEDY. Without limitation of any other provision of this Agreement
or other rights, in the event that the Principal, any Permitted
Transferees or any other person or entity is required to sell the
Principal's Restricted Shares pursuant to the provisions of this
Section 3.1.4 and in the further event that he refuses or for any
reason fails to deliver to the designated purchaser of such
Restricted Shares the certificate or certificates evidencing such
Restricted Shares together with a related stock power, such
designated purchaser may deposit the Repurchase Price for such
Restricted Shares with a bank designated by the Purchaser, or with
the Purchaser's independent public accounting firm, as agent or
trustee, or in escrow, for the Principal, any Permitted Transferees
or other person or entity, to be held by such bank or accounting
firm for the benefit of and for delivery to him, them or it, and/or,
in its discretion, pay such purchase price by offsetting any
indebtedness then owed by the Principal as provided above. Upon any
such deposit and/or offset by the designated purchaser of such
amount and upon notice to the person or entity who was required to
sell the Restricted Shares to be sold pursuant to the provisions of
this Section 3.1.4, such Restricted Shares shall at such time be
deemed to have been sold, assigned, transferred and conveyed to such
purchaser, the holder thereof shall have no further rights thereto
(other than the right to withdraw the payment thereof held in
escrow, if applicable), and the Purchaser shall record such transfer
in its stock transfer book or in any appropriate manner.
(iii) SALE OF THE PURCHASER. In the event of a Sale Event in which the
Purchaser's assets or stock are acquired or exchanged solely for
stock consideration, the provisions of this Agreement, including the
Repurchase provisions and the vesting schedule set forth herein,
shall remain applicable to the shares of such stock consideration
received by the Principal and any Permitted Transferees. The
Purchaser shall have the right, exercisable in its discretion in
connection with any Sale Event or otherwise, to accelerate vesting
of the Restricted Shares issued hereunder.
3.1.5 Notwithstanding Sections 3.1.3 and 3.1.4 hereof, the Sellers may Transfer
Restricted Shares as set forth below:
(i) TRANSFERS TO PERMITTED TRANSFEREES. The Sellers may Transfer any or
all of the Restricted Shares to Permitted Transferees (as
hereinafter defined); PROVIDED, HOWEVER, that such Permitted
Transferee(s) shall, as a condition to any such Transfer, agree to
be subject to the terms and conditions of this Section 3.1.3 and
shall have delivered a written acknowledgement to that effect to
Purchaser. As used herein a "Permitted Transferee" shall mean any of
the following to whom such Seller may transfer Restricted Shares
hereunder: the Seller's spouse, children (natural or adopted),
stepchildren or a trust for their sole benefit of which the Grantor
is the settlor; PROVIDED, HOWEVER, that any such trust does not
require or permit distribution of any Shares during the term of this
Agreement unless subject to its terms; and
(ii) TRANSFERS UPON DEATH. Upon the death of a Seller or any Permitted
Transferee the Restricted Shares may be transferred by operation of
law to the estate, legal representatives, executors and
administrators of such Seller or any such Permitted Transferee, and
any unvested Restricted Shares shall immediately be vested excluding
the right for the Purchaser to repurchase the Restricted Shares as
set forth above.
3.1.6 ESCROW. In order to carry out the provisions of Section 3.1.4 of this
Agreement more effectively, the Purchaser shall hold the Restricted Shares
in escrow together with separate stock powers executed by the Principal in
blank for transfer, and any Permitted Transferee shall, as an additional
condition to any transfer of Shares, execute a like stock power as to such
Shares. The Purchaser shall not dispose of the Restricted Shares except as
otherwise provided in this Agreement. In the event of any Repurchase, the
Purchaser is hereby authorised by the Principal and any Permitted
Transferee, as the Principal's and each such Permitted Transferee's
attorney-in-fact, to date and complete the stock powers necessary for the
transfer of the Restricted Shares being purchased and to transfer such
Shares in accordance with the terms hereof. At such time as any Restricted
Shares become vested in accordance with Schedule 3.1.3, the Purchaser
shall, at the written request of the Principal, deliver to the Principal
(or the relevant Permitted Transferee) a certificate representing the
Vested Shares with the balance of the Shares to be held in escrow pursuant
to this Section 3.1.6.
3.1.7 In the event any of the Principal's employment is terminated by the
Company other than as a result of a Termination Event, such Principal's
unvested Restricted Shares shall immediately be vested excluding the right
for the Purchaser to repurchase the Restricted Shares as set forth above.
3.2 THE TARSAP SHARES
3.2.1 The Purchaser shall issue to certain of the Sellers and employees named on
SCHEDULE 3.2.1 (a) the TARSAP Shares under the conditions set forth in
SCHEDULE 3.2.1 (b) AND pursuant to a Restricted Stock Agreement in
substantially the form attached hereto as SCHEDULE 3.2.1 (c).
3.3 LEGENDS
Any certificate(s) representing the Restricted Shares and the TARSAP
Shares shall carry substantially the following legend:
"THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK
REPRESENTED HEREBY ARE SUBJECT TO THE RESTRICTIONS, TERMS AND CONDITIONS
(INCLUDING REPURCHASE AND RESTRICTIONS AGAINST TRANSFERS) CONTAINED IN A
CERTAIN SHARE PURCHASE AGREEMENT AND/OR A CERTAIN RESTRICTED STOCK
AGREEMENT BETWEEN THE CORPORATION AND THE HOLDER OF THIS CERTIFICATE (A
COPY OF WHICH IS AVAILABLE AT THE OFFICES OF THE CORPORATION FOR
EXAMINATION).
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE. THE SHARES MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM REGISTRATION.
THE SHARES OF ACQUIROR STOCK ISSUED TO NON-U.S. PERSONS MAY NOT BE
TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER
THE SECURITIES ACT, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS
INVOLVING SUCH SHARES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT."
4. CONDITIONS PRECEDENT
4.1 The validity of this Agreement is conditioned upon the fulfilment of any
or each of the following:
(i) THAT the related agreements set forth in Section 11 have been
entered into
(ii) THAT the employment agreement with certain managers have been
amended to correspond to the managers' actual positions attached as
SCHEDULE 4.1(ii);
(iii) THAT the Sellers have terminated, or have caused the Company and the
Subsidiary to terminate, all Inter-company Relations and arranged
for the release of all other inter-company guarantees, liabilities
and obligations between the Sellers and the Company and the
Subsidiary;
(iv) THAT the Company has provided a plan of action to obtain written
agreements from each of its customers, such plan of action being
subject to the prior approval by the Purchaser;
(v) THAT the holders of the Options and the Purchaser have entered into
agreements obligating all of the holders of the Options to convert
all seven hundred (700) options under the option schemes existing in
the Company to the Option Shares and that each of the employees
holding Option Shares shall be obligated to exchange such shares for
shares in the Purchaser on the terms set forth in SCHEDULE 4.1((v));
(vi) THAT the Sellers shall have held an extra-ordinary general meeting
deciding inter alia to accelerate the possible time of converting
the Options to Option Shares so to enable the holders of the Options
to convert these to shares immediately after the signing of this
Agreement and further that all decisions taken at such general
meeting have been duly registered with the Swedish Patent and
Registration Office ("PRO");
(vii) the Sellers have demonstrated that any shareholders' agreement or
similar agreement between the Sellers and or any third party
affecting the ownership or voting of the Shares or the business of
the Company or the Subsidiary has been terminated;
(viii) the parties have complied with all regulatory requirements,
obtained all necessary corporate, governmental and third party
approvals, received all relevant opinions and certificates, and
related documents will have been executed and delivered by all
relevant parties; and
(ix) the board of directors of the Purchaser has accepted the terms and
conditions of the Agreement.
4.2 Both the Purchaser and the Sellers shall use their best efforts to
safeguard the fulfilment of the conditions precedent set forth in Section
4.1 above
4.3 If Closing has not occurred by July 1, 2000, due to the non-fulfilment of
the conditions described in Section 4.1 above, this Agreement shall, upon
the expiry of the said period, and provided that the parties do not agree
otherwise in writing, terminate and become null and void without any party
having any liability towards the other, provided, however, that if the
Closing has not duly occurred by reason of either party's breach of its
obligations hereunder, the non-defaulting party may terminate the
Agreement and such termination shall be without prejudice to the rights of
the non-defaulting party to recover damages and/or, in its discretion to
obtain, any other available remedies, such as specific performance.
5. CLOSING
The Closing shall take place on the Closing Date at the offices of ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ in Malmo, Sweden. At the Closing, each party shall do or procure to be
done all acts necessary in order to consummate the transactions contemplated by
this Agreement including, but not limited to, the following:
(a) The Sellers shall deliver to the Purchaser the share certificates
evidencing the Shares, duly endorsed in favour of the Purchaser and shall
submit the share ledger of the Company evidencing that the Purchaser has
been entered as the rightful owner of the Shares therein;
(b) The Sellers shall demonstrate that (i) a shareholders' meeting has been
held at which, INTER ALIA IT WAS RESOLVED that the possible time of
converting the Options to Option Shares has been accelerated enabling the
holders of the Options to convert these to shares and (ii) that all
decisions taken at such general meeting have been duly registered with
PRO; and
(c) The Sellers shall procure that a shareholders' meeting is held at which,
inter alia it is resolved THAT the directors of the Company and the
Subsidiary listed on SCHEDULE 5 (b) shall be removed from office without
such directors having any claims for compensation of any kind on the
Company, the Subsidiary, or the Purchaser, and that the individuals
nominated by the Purchaser are appointed directors of the Company and the
Subsidiary.
(d) The Purchaser shall deliver a document issued by Boston Equiserve L.P.,
such document evidencing that the Restricted Shares have been issued in
book entry form in the names of the respective Seller.
6. REPRESENTATIONS AND WARRANTIES OF THE WARRANTORS
The Warrantors jointly and severally represent and warrant that on and as of the
Closing Date that:
CORPORATE
6.1 Each of the Sellers which is not an individual has full corporate power
and authority, and each of the Sellers who is an individual has the legal
capacity, to execute and deliver this Agreement and each other document or
instrument delivered in connection herewith and to consummate the
transactions contemplated hereby.
6.2 Any documents or instruments executed by any Seller in connection with
this Agreement have been duly authorised and constitute binding
obligations of, and are enforceable against, such Seller in accordance
with their respective terms.
6.3 The execution of this Agreement or any documents or instruments executed
in connection therewith, the consummation of the transactions provided for
herein and the fulfilment of the terms hereof will not violate or result
in a breach of any judgement decree or order of any court or governmental
body, or applicable law or the Articles of Association of the Company.
6.4 The Shares constitute the entire issued capital stock of the Company and
are legally and validly issued and fully paid. Each of the Sellers
lawfully owns its part of the Shares, free and clear of any liens, claims,
options and restrictions whatsoever. Each of the Sellers has good and
transferable title to its part of the Shares and has the absolute right,
power and capacity to sell, assign and deliver such part of the Shares to
the Purchaser in accordance with the terms of this Agreement, free and
clear of all liens, claims, options and restrictions whatsoever. Each of
the Sellers further represents and warrants that no officer, director or
affiliate of the Purchaser has a direct or indirect interest in the
ownership or control of the Shares held by such Seller.
6.5 The Company and the Subsidiary are duly organised and validly existing
under the laws of the country of domicile and have full corporate power
and all necessary licences, permits and authorisations to carry on their
business as now conducted and to own, lease and operate the assets and
properties used in connection therewith.
6.6 Copies of the Company's and the Subsidiary's Articles of Association,
certificate of registration and share register are enclosed as SCHEDULE
6.6, which copies are true and complete and fully and completely set forth
all actions taken and/or required to be recorded therein. The Company has
not granted any outstanding power of attorney to any third person. The
corporate record books of the Company accurately record all
corporate action taken by its stockholders and board of directors and
committees. The copies of the corporate records of the Company have been
provided to counsel to the Purchaser for review, are true and complete
copies of the originals of such documents. The Company has provided true
and correct copies of all documents referred to in this Section or in the
Schedules delivered to counsel to the Purchaser pursuant to this
Agreement.
FINANCIAL
6.7 Except for the Subsidiary, which is owned to 100 per cent by the Company
lawfully and free and clear of any liens, claims, options and restrictions
whatsoever and to which the representations and warranties contained in
this Article 6 shall apply, the Company has no other subsidiaries and does
not own any interest, directly or indirectly, in any corporation or
partnership and does not have any branch office in any country.
6.8 Annexed hereto as SCHEDULE 6.8 are the consolidated Financial Statements
of the Company and the Subsidiary for the financial years ended on April
30, 1999 and on April 30, 2000.
The foregoing Financial Statements:
(a) give a true and fair view of the financial position and results of
the operations of the Company and the Subsidiary as of said dates
and for said periods and have been prepared from and in accordance
with the books and records of the Company and the Subsidiary;
(b) are in conformity with law and Swedish GAAP, applied on a basis
consistent with that of preceding periods; and
(c) contain and reflect such reserves as were necessary and required by
the laws, principles and rules referred to under (b) above to be
reflected in such statements as of said dates for all liabilities -
actual, contingent or accrued - and for all reasonably anticipated
losses and costs (in excess of expected receipts) and for all
warranty claims, discounts or refunds with respect to services
and/or products already rendered or sold, such reserves being based
upon events or circumstances in existence or likely to occur in the
future with respect to any contracts or commitments of the Company
or the Subsidiary.
6.9 All of the Company's and the Subsidiary's losses carried forward have been
listed in SCHEDULE 6.9. The losses carried forward are valid and can be
utilised for tax deduction purposes as set forth in Schedule 6.9.
6.10 Neither the Company nor the Subsidiary has received or will receive any
conditional shareholders' contributions.
6.11 Neither the Company nor the Subsidiary has pledged any assets, have any
commitments or contingent liabilities in excess of the pledges,
commitments and
contingent liabilities disclosed in SCHEDULE 6.11, and the Company and the
Subsidiary have full and exclusive title to all assets in the balance
sheets of the Company and the Subsidiary, and the assets are not the
subject of any encumbrances or restrictions of whatever nature except as
stated in Schedule 6.11.
6.12 The activities of the Company and the Subsidiary during the period from
April 30, 2000 to the date hereof have been conducted in the ordinary
course of business with a view to maintaining their respective businesses
as a going concern and there has not occurred or arisen since April 30,
2000 with respect to either of the Company or the Subsidiary:
(a) any material adverse change in their financial conditions or in the
operations of their respective businesses; or
(b) any obligations, commitments or liabilities, liquidated or
unliquidated, contingent or otherwise, except obligations,
commitments and liabilities arising in the ordinary course of
business and which are not material in relation to their respective
businesses; or
(c) any amendment or termination, or any agreement to amend or terminate
any Material Agreement, save in the ordinary course of business; or
(d) any extraordinary event or any extraordinary loss suffered or any
waiver of any debts, claims, rights under any Material Agreement, or
other rights representing a value in excess of SEK 100,000; or
(e) any damage, destruction, or loss or any other event or condition,
whether covered by insurance or not, materially and adversely
affecting their respective properties and businesses representing
loss to property in the aggregate in excess of SEK 100,000; or
(f) any sale, assignment, transfer, pledge, lease or other disposal of
any individual asset with a value in excess of SEK 100,000; or
(g) any increase in the rates of compensation (including bonuses)
payable or to become payable to any officer, employee, agent,
independent contractor or consultant other than increases made in
the ordinary course of business (which increases have not exceeded
in the aggregate five per cent of all amounts so payable as of 31
March 2000), or acceleration in the rate at which any such
compensation accrues; or
(h) any change or accounting methods, principles or practices; or
(i) any investment in fixed assets that exceed individually SEK 100,000
or in the aggregate SEK 250,000; or
(j) any transaction other than in the ordinary course of business;
and neither the Company nor the Subsidiary has agreed or arranged to
do any of the foregoing.
6.13 Except as provided for in the 1998/99 Financial Statements, no dividends
or interim dividends have been declared or paid by the Company or the
Subsidiary since the formation thereof. All dividends declared have been
paid prior to April 30, 2000.
6.14 All accounts receivable of whatsoever nature appearing in the accounts of
the Company and the Subsidiary are fully collectible and will be fully
paid up to the book value on the date each accounts receivable falls due.
6.15 The budgets and forecasted result for the Company and the Subsidiary for
the period from January 1, 2000 to December 31, 2001, SCHEDULE 6.15, have
been prepared with all reasonable care and there is no reason to assume
that the budgets and forecasted result of the Company and the Subsidiary
are not accurate.
PROPERTY AND ASSETS
6.16 No Leased Property, including installations and improvements thereon,
owned, leased or occupied by the Company or the Subsidiary, is the subject
of any official complaint or notice of violation of any applicable zoning,
building or environmental protection code, and no such violation is known
to exist; there is no zoning, building or environmental protection code or
any other restrictions of whatever nature in regard of use or occupancy,
which is likely to preclude or impair the use and occupancy of that Leased
Property, including installations and improvements thereon, after the
Closing Date for the purposes for which they are presently used.
6.17 All Personal Property of the Company and the Subsidiary are usable to the
benefit of their respective businesses and are in good physical repair and
condition, ordinary wear and tear excepted.
6.18 All liquid assets such as, but not limited to, bank accounts and cash are
upon Closing available free and clear of any restriction or condition and
without withholding or deduction for any taxes or other charges.
6.19 All assets, properties and rights, whether or not recorded on the books of
the Company or the Subsidiary, that heretofore have been used in the
Company's and the Subsidiary's respective businesses, have been included
in the transfer to the Purchaser under the terms of this Agreement.
ENVIRONMENTAL
6.20 The Company's and the Subsidiary's operations at any time have been
carried out in full compliance with any approvals, permits and consent as
well as any applicable environmental laws.
6.21 All registrations and other information required to be provided by the
Company or the Subsidiary and all records and data required to be
maintained by the Company or
the Subsidiary in accordance with any environmental laws and any
approvals, permits and consent has been provided and maintained.
AGREEMENTS
6.22 Except for those listed on SCHEDULE 6.22 hereto, the Company and the
Subsidiary do not have any Material Agreements. The Company and the
Subsidiary have performed or have taken all action reasonably necessary to
enable them to perform when due all obligations under such Material
Agreements. Except as disclosed in Schedule 6.22, the execution of this
Agreement, the consummation of the transactions provided for herein, and
the fulfilment of the terms hereof will not result in a breach of any of
the terms and provisions of, or constitute a default under, or conflict
with any agreement to which the Sellers, the Company or the Subsidiary is
a party or by which either of them is bound, and, to the best of the
Sellers' knowledge, no such third party intends to terminate any such
Material Agreement. No such Material Agreement is impaired or in jeopardy
of cancellation for any other reason.
6.23 NO DEFAULT. Neither the Company nor the Subsidiary is
(i) in default under any provision of any contract, commitment,
agreement, letter of intent, lease or service arrangement to which
any of them is a party or by which any of them is bound, which
default would materially adversely affect their respective
businesses, properties or condition, financial or otherwise, and no
event has occurred which - but for the passage of time or giving of
notice - would constitute such a default;
(ii) a party to or bound by any contract, commitment, agreement, lease,
service arrangement, order or letter of intent not made in the
ordinary course of their respective businesses;
(iii) a party to any contract containing provisions for material price
redeterminations or price revision, or
(iv) a party to any contract containing any terms or conditions not
consistent with fair market terms, conditions and prices.
6.24 PRICING. Prices and payment terms on all contracts, bids and sales order
(order backlog) and purchase orders of the Company and the Subsidiary
which are presently outstanding have been entered into by the Company and
the Subsidiary on a basis consistent with their prior practice with
respect to profits and profit margins which were estimated substantially
in accordance with their prior practice.
6.25 WARRANTIES. The Company and the Subsidiary have not granted or offered any
other warranties for services provided than as disclosed in SCHEDULE 6.25,
and no warranty costs will be incurred in excess of the reserve therefor.
U.S. SECURITIES LAW REPRESENTATIONS AND COVENANTS
6.26 With respect to U.S. Securities Law
(i) Each Seller is a non-U.S. person ("Non-U.S. Person") within the
meaning of Regulation S of the Securities Act of 1933, as amended
(the "Securities Act"), represents that he or it is not acquiring
the Restricted Shares or TARSAP Shares issuable hereunder for the
account or benefit of any U.S. person;
(ii) Each Seller agrees to: (i) transfer the Restricted Shares or TARSAP
Shares issued hereunder only in accordance with the provisions of
Regulation S promulgated under the Securities Act, pursuant to
registration under the Securities Act, or pursuant to an available
exemption from registration; and (ii) not to engage in hedging
transactions with regard to the Restricted Shares and TARSAP Shares
unless in compliance with the Securities Act; and
(iii) The Purchaser hereby covenants not to register any transfer of the
Restricted Shares or TARSAP Shares not made in accordance with the
provisions of Regulation S, pursuant to registration under the
Securities Act, or pursuant to an available exemption from
registration.
INTELLECTUAL PROPERTY AND KNOW-HOW
6.27 With respect to Intellectual Property and Know-How:
(i) All Intellectual Property which are used in, or are necessary for,
the business of the Company or the Subsidiary, whether registered or
not, are owned by or licensed to the Company or the Subsidiary as
described in SCHEDULE 6.27 ((i)) indicating ownership or license
rights and are not subject to any liens or encumbrances.
(ii) Neither the Sellers nor the Company or the Subsidiary has any notice
of any infringement by any third party of any Intellectual Property
owned by or licensed to the Company or the Subsidiary.
(iii) The registrations of all registered Intellectual Property are in
force and the renewal fees for all such registrations have
heretofore been paid.
(iv) There has not been presented to the Company or the Subsidiary any
claim, whether for infringement, damages or otherwise, made by any
third party which relates to the use of Intellectual Property or
Know-How by the Company or the Subsidiary.
(v) Neither the Company nor the Subsidiary is in breach of any license
or other agreement relating to the Intellectual Property or
Know-How.
(vi) Neither the Company nor the Subsidiary has granted, or is obliged to
grant, any license or assignment in respect of any Intellectual
Property or Know-How owned or used by it, or is obliged to disclose
any Intellectual Property or Know-How to any person, other than to
the Company or the Subsidiary, as the case may be.
(vii) The Company and the Subsidiary fully own, in addition to the
Intellectual Property above, all other Know-How used in the
businesses of the Company and the Subsidiary, and no payments have
to be made to third parties therefor, and no third party has any
licence to use the same, except as stated in Schedule 6.27.
(viii) The Company has required all professional and technical employees,
and other employees having access to valuable non-public information
of the Company, to execute agreements under which such employees are
required to convey to the Company ownership of all inventions and
developments conceived or created by them in the course of their
employment and to maintain the confidentiality of all such
information of the Company. The Company has not made any such
information available to any person other than employees of Company
except pursuant to written agreements requiring the recipients to
maintain the confidentiality of such information and appropriately
restricting the use thereof. The Company has required all
independent contractors who performed work on or relating to the
Company's products, services or Intellectual Property or Know-How to
execute agreements under which such employees are required to convey
to the Company ownership of all inventions and developments
conceived or created by them in the course of their work for the
Company. The Company has no knowledge of any infringement by others
of any Intellectual Property rights of the Company.
(ix) To the Sellers' knowledge, the Company is not making unauthorised
use of any confidential information or trade secrets of any person,
including without limitation, any former employer of any past or
present employee of Company. Neither the Company nor, to the
Sellers' knowledge, any of its employees have any agreements or
arrangements with any persons other than the Company related to
confidential information or trade secrets of such persons or
restricting any such employee's ability to engage in business
activities of any nature. The activities of the Company's employees
on behalf of the Company do not violate any such agreements or
arrangements known to the Company.
(x) To the Sellers' knowledge, the present and contemplated business,
activities and products of the Company do not infringe any
Intellectual Property of any other person.
BUSINESS
6.28 The Company and the Subsidiary have conducted their respective businesses
at all times in accordance with and have complied with applicable national
and local laws relating to their respective operations and businesses, and
are not a party to or subject to any judgement, decree or order entered in
any suit or proceeding brought by any governmental agency or authority or
any other person or party enjoining or otherwise restraining or
restricting the Company or the Subsidiary with respect to any business
activity or practice in the conduct of business which is related to
necessary or incidental to the businesses conducted by them and will not
be, in respect of circumstances, existing before or upon Closing Date or
related thereto; there is no controversy or investigation pending or
threatened with respect to the Company's or the Subsidiary's respective
businesses by any governmental agency or authority or any other person or
party.
6.29 The Company and the Subsidiary are not and will not be liable, due to
circumstances existing before or upon Closing Date or related thereto, to
compensate for damages caused to the environment, or third parties by
products sold or otherwise in excess of what has been provided for in the
accounts.
6.30 Annexed hereto as SCHEDULE 6.30 is a schedule of insurance. Said schedule
contains a brief description of all insurance policies presently in force
naming the Company and the Subsidiary as assured. The Company and the
Subsidiary maintain policies of fire, product and general liability, use
and occupancy and other forms of insurance with reputable and sound
insurers covering its properties and assets in amounts and against such
losses and risks as are generally maintained for comparable business and
properties, and valid policies for such insurance are now and will be
outstanding and duly in force on the Closing Date and for 30 days
thereafter.
6.31 All documents of the Company and the Subsidiary such as, but not limited
to, stock ledgers, minutes of the Board of Directors' meetings and
shareholders' meetings, contracts, commitments, permits and licences exist
and are safely kept and are correct, and all registrations and
applications related thereto have been fulfilled, and all applicable fees
have been paid.
6.32 The Sellers have informed the Purchaser in writing of all matters and
circumstances that may materially affect the businesses of the Company and
the Subsidiary and the financial results thereof.
OFFICERS AND EMPLOYEES
6.33 In SCHEDULE 6.33 are shown the names and salaries and other benefits of
all key employees of the Company and the Subsidiary.
6.34 There is no cause to assume that any key employee of the Company or the
Subsidiary will leave his/her employment.
6.35 There are no collective bargaining agreements or deferred compensation
agreements, pension, profit sharing, severance pay or retirement plans,
agreements or arrangements presently in force with respect to any of the
employees or former employees other than as set forth in SCHEDULE 6.35
attached hereto. Full reservations have been made in the Financial
Statements for all present and/or future liabilities in respect of
pensions and other payments related to compensations to be paid to
employees. There is no cause to assume that any labour strike or other
work force disturbance will occur in the Company or the Subsidiary.
6.36 Except as set forth on SCHEDULE 6.36 attached hereto, the Company does not
maintain and has never maintained an employee benefit plan which is
subject to any governmental regulations or oversight. Except as set forth
in SCHEDULE 6.36, the Company has no other stock option plans, bonus or
incentive award plans, severance pay policies or agreements, deferred
compensation agreements, supplemental income arrangements, vacation plans,
or other employee benefit plans, agreements, or arrangements. True and
correct copies of all plans and arrangements set forth on SCHEDULE 6.36
have been provided to Buyer. For purposes of this Section 6.36, an entity
"maintains" an employee benefit plan if such entity sponsors, contributes
to, or provides (or has promised to provide) benefits under such employee
benefit plan, or has any obligation (by agreement or under applicable law)
to contribute to or provide benefits under such employee benefit plan, or
if such employee benefit plan provides benefits to or otherwise covers
employees of such entity, or their spouses, dependants or beneficiaries.
6.37 Neither the Sellers nor the Company or the Subsidiary, or any relatives of
any of the foregoing owns, directly or indirectly, individually or
collectively, any interest in any corporation, company, partnership,
entity or organisation which is in a business similar or competitive to
the businesses of the Company and the Subsidiary or which has any existing
undisclosed contractual relationship with the Company or the Subsidiary.
6.38 Annexed hereto as SCHEDULE 6.38 is a list of all employees, together with
a list of all other persons being authorised to sign for the Company
and/or the Subsidiary, including all persons authorised to operate any
bank accounts and safe deposits. Schedule 6.38 also includes those
employees holding credit cards for the Company or Subsidiary.
6.39 The Sellers and the members of the Board of Directors of the Company and
the Subsidiary have no claims for compensation of any nature whatsoever.
6.40 Neither the Company nor the Subsidiary has violated any labour
legislation, regulation or agreement in any relevant jurisdiction
including the Swedish "lagen (1976:580) om medbestammande i arbetslivet"
(MBL).
LITIGATION AND INVESTIGATIONS
6.41 Neither the Company nor the Subsidiary has been served with any law suit
or notice to arbitrate, and there is no suit, administrative, arbitration
or other legal proceedings
pending or threatened against them, their businesses, properties or
assets, and there is no such suit or proceedings pending or threatened by
the Company or the Subsidiary against any person or party.
TAXES AND OTHER CHARGES
6.42 With respect to taxes and other charges:
(i) All necessary tax and other returns and reports required to be filed
prior to the Closing Date by the Company or the Subsidiary have been
duly filed with the appropriate authorities and are true and
correct;
(ii) All tax assessed or due by the Company or the Subsidiary on or
before the Closing Date has, where applicable, been fully paid, or
full reserve therefor has been made on the books;
(iii) No deficiency in tax payment or any additional assessment of tax in
respect of the period up to and including the Closing Date, will be
claimed or made by any tax authority for any year or part thereof in
respect of the Company or the Subsidiary, not provided for in the
audited balance sheet dated April 30, 2000 included as part of the
Financial Statements;
(iv) All amounts required to be paid by the Company or the Subsidiary for
the purpose of social security, insurance, pensions and the like
have been duly and punctually paid and all amounts required to be
deducted from moneys paid to employees for the purposes of social
security, insurance, pensions and the like have been deducted and
have been accounted for to the appropriate authority or person, and
there is no dispute on any issue in respect of any of the foregoing;
(v) There are no tax audits currently pending nor has there been any tax
audits conducted at any time with respect to the Company or the
Subsidiary; and
(vi) Full reserves or provisions have been made in the books for all
liabilities in respect of pensions to be paid to employees or former
employees of the Company or the Subsidiary.
6.43 SCHEDULE 6.43 attached hereto sets forth each customer (whether pursuant
to a commission, royalty or other arrangement) which accounts for more
than 10% of the sales of the Company for the twelve (12) months ended
April 30, 2000 (collectively, the "Customers"). The relationships of the
Company with its Customers are good commercial working relationships. No
Customer has cancelled, materially modified, or otherwise terminated its
relationship with the Company, or has during the last twelve months
decreased materially its usage or purchase of the services or products of
the Company, nor to the knowledge of Company, does any Customer have any
plan or intention to do any of the foregoing.
INFORMATION
6.44 No representation or warranty herein, and no document heretofore or
hereafter provided to the Purchaser by or on behalf of the Sellers or the
Company, contained or will contain any untrue statement of a material fact
or omitted or will omit to state a material fact necessary to make the
statements contained herein or therein not misleading.
6.45 Neither the Sellers nor, to the best of the Sellers' knowledge, any of the
Company or the Subsidiary is aware of any facts or circumstances relating
to the affairs of the Company or the Subsidiary which have not been
disclosed might reasonably have been expected to influence the decision of
the Purchaser to purchase the Shares on the terms contained in this
Agreement.
6.46 All original copies and other relevant documentation relating to the
agreements entered into by the Company or the Subsidiary, including
historical records, are true, accurate and complete in all respects and
kept in good order and are in the direct or indirect possession of the
Company or the Subsidiary.
The warranties and representations given above shall be separate and
independent.
No representation or warranty of the Sellers set forth in this Agreement shall
be deemed waived or otherwise affected by any commercial or financial analysis,
or any inquiry or investigation which the Purchaser, its advisors, auditors or
representatives may make with respect to the Company or the Subsidiary or their
respective businesses and accordingly the Purchaser's or its advisors',
auditors' or representatives' actual knowledge shall in no way affect the
validity or enforceability of the representations and warranties.
7. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants that it is duly organised and validly
existing as a corporation under the laws of the State of Delaware, USA, that it
has all requisite corporate power to enter into this Agreement and each other
document or instrument delivered concurrently herewith or pursuant hereto, that
it has taken all actions required by law, its Articles of Incorporation or
otherwise to authorise the entering into of this Agreement and such documents
and instruments and the consummation of all transactions contemplated hereby.
Schedule 7 attached hereto contains certain information regarding the
Purchaser's operating statistics and financial conditions.
8. COVENANTS
8.1 PUBLICITY
No announcement concerning the transaction contemplated by this Agreement or any
matter ancillary thereto shall be made by either party hereto, without the prior
written consent of the other party, provided that nothing herein shall prevent
either party from making, in consultation
with the other party, any announcement or filing required by law, regulations or
by the rules and regulations of any stock exchange on which it is listed.
8.2 DISCHARGE OF DIRECTOR LIABILITY
The Purchaser shall, provided that the auditors so recommend, discharge or
procure the discharge of all directors of the Company and the Subsidiary in
office immediately prior to Closing from their personal liability for the period
from May 1, 2000 to the Closing on the next annual general meetings in the
Company and the Subsidiary, which discharges shall not in any way limit or
restrict or be construed to limit or restrict the Purchaser's rights against the
Sellers under this Agreement.
8.3 NON-COMPETITION
From the Closing Date and for a period of three (3) years thereafter, the
Warrantors agree not to engage, directly or indirectly, in any part of the world
where the Purchaser, the Company or the Subsidiary carries out business
activities in any business which, directly or indirectly competes with the
business activities presently or in the future carried out by, engaged in or
actively planned by the Purchaser, the Company or the Subsidiary. In case of any
breach against the foregoing undertaking by any of the Warrantors, the
Warrantors shall, in addition to any other relief that may be available to the
Purchaser, jointly and severally pay to the Purchaser the actual damage
resulting from such breach but in no case an amount being less than SEK one
million for each claim, regardless of the Warrantors' income and cost connected
therewith. The period of validity of this Section 8.3 as set forth above shall
immediately lapse for the Principal in question should such Principal's
employment be terminated other than as a result of a Termination Event.
8.4 EXECUTION OF THE RESTRICTED STOCK AGREEMENTS
The Warrantors undertake to see to it that Restricted Stock Agreements are
executed by all the persons specified in Schedule 3.2.1 as soon as possible (but
in any event no later than the fifth (5th) business day after the Closing Date).
8.5 NON-SOLICITATION
From the date hereof and for a period of three (3) years after the Closing Date
the Warrantors undertake to refrain from offering or negotiating employment with
any of the employees of the Purchaser, the Company or the Subsidiary without the
prior written consent of the Purchaser. The Warrantors further undertake not to
in any way solicit any customers of the Purchaser, the Company or the
Subsidiary. In case of any breach against the foregoing undertaking by any of
the Warrantors, the Warrantors shall, in addition to any other relief that may
be available to the Purchaser, jointly and severally pay to the Purchaser the
actual damage resulting from such breach but in no case an amount being less
than SEK one million for each claim, regardless of the Sellers' income and cost
connected therewith.
8.6 REGISTRATION OF RESTRICTED SHARES AND TARSAP SHARES
The Restricted Shares and TARSAP Shares to be issued hereunder will be issued in
a transaction exempt from registration under the Securities Act of 1933, as
amended (the "Securities Act"), by
reason of Section 4(2) thereof and/or Regulation D promulgated thereunder and/or
pursuant to Regulation S promulgated under the Securities Act and may not be
re-offered or resold other than in conformity with the registration requirements
of the Securities Act and such other laws or pursuant to an exemption therefrom.
The certificates issued by the Purchaser with respect to Restricted Shares or
TARSAP Shares issued hereunder shall be legended to the effect described above
and shall include such additional legends as necessary to comply with applicable
U.S. Federal securities laws and state Blue Sky laws. The Purchaser shall
prepare and file on or before November 1, 2000 a registration statement with the
Securities and Exchange Commission (the "SEC") covering the resale of all
Restricted Shares and TARSAP Shares which may vest on or prior to the first
anniversary of the Closing Date and the Purchaser shall use commercially
reasonable efforts to cause such registration statement to become effective as
promptly as practicable after filing and to keep such registration statement
effective until the first anniversary of the Closing Date. Purchaser's
obligation in the preceding sentence to file the registration statement within
30 business days is subject to the condition that the Sellers provide Purchaser
promptly, but in no event more than ten business days after the proposed filing
date, all information relating to them for inclusion in the Registration
Statement as reasonably requested by Purchaser. The Purchaser may postpone the
filing of any registration statement required hereunder for a reasonable period
of time, not to exceed ninety (90) days in the aggregate, during any
twelve-month period, if the Purchaser's Board of Directors determines reasonably
and in good faith it would be seriously detrimental to the Purchaser and its
stockholders for such registration to be effected at such time. Each Seller
agrees that upon notice from the Purchaser that a registration statement filed
in accordance with this Section 8.5 contains an untrue statement of material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, such Seller shall discontinue any further
disposition of Restricted Shares or TARSAP Shares pursuant to such registration
statement until such time as the Purchaser is able to take reasonable action to
rectify such situation; PROVIDED that any action which the Purchaser's Board of
Directors determines reasonably and in good faith would be seriously detrimental
to the Purchaser and its stockholders shall not be deemed to be reasonable for
such purpose.
9. INDEMNIFICATION
9.1 INDEMNIFICATION BY THE WARRANTORS
Subject to the following provisions of this Article 9, the Warrantors shall be
jointly and severally liable and shall indemnify and hold the Purchaser harmless
from and against all Losses arising out of misrepresentation, breach of warranty
or failure to perform a covenant or any other breach of this Agreement on the
part of the Warrantors. The Warrantors shall be responsible for the full amount
of any Loss notwithstanding the fact that they have not been the actual owners
of all of the capital stock of the Company.
9.2 COMPENSATION FOR LOSSES
Compensation for Losses shall at the discretion of the Purchaser be paid to the
Purchaser, the Company or the Subsidiary insofar as the Company or the
Subsidiary is affected by the misrepresentation, breach of warranty or covenant.
Without prejudice to any right granted to the
parties herein, compensation for Losses, as defined, shall be considered a
reduction of the Purchase Price. In respect of a Loss resulting from a breach of
a covenant, the Loss shall primarily be indemnified by a remedy of the Loss by
the Warrantors, or, if the Purchaser so elects, by the Warrantors' payment of
compensation. The Warrantors shall be entitled but not obligated to pay, instead
of in cash, any Losses through repayment of Restricted Shares or TARSAP Shares,
whereby the value of each such share shall be determined to a price equal to the
average closing price of a share of the Purchaser's Common Stock as quoted on
the Nasdaq National Market for the 10-day period ending three business days
prior to the Closing Date (the "Closing Stock Price").
9.3 RIGHT TO SET-OFF
For the avoidance of any doubt it is hereby clarified that the Purchaser shall
be entitled to set off any claims under this Section 9 or under Section 10
against the unvested Restricted Shares.
9.4 LIMITATION OF INDEMNIFICATION
(a) The liability of the Warrantors under this Article 9 shall remain valid
until February 28, 2002. If a claim, loss, damage, liability or expense
has occurred before such date but the amount thereof cannot be quantified,
the Purchaser may claim compensation, provided that the claim is made
before February 28, 2002 and a quantified claim is made as soon as
information is available of the amount.
(b) Irrespective of the time limits above the Purchaser may, after February
28, 2002, claim compensation for
(1) damages to the environment pursuant to Sections 6.20-6.21,
(2) claims regarding product liability pursuant to Section 6.29,
(3) taxes, social charges and other liabilities pursuant to Section 6.41,
(4) breach of the warranties in Sections 6.1-6.5.
Claims in the first and second case may be made until the claims for
damages have become barred by statute. Compensation for taxes and social
charges may be made within three months from the date such taxes and
social charges have been finally and irrevocably determined. For breach of
the warranties in Sections 6.1-6.5 no time limit shall exist.
(c) The Purchaser shall only be indemnified under the provisions of this
Article 9 if the aggregate amount of such Losses equals or exceeds an
amount of USD fifty thousand ($50,000); provided, however, that in the
event the Loss equals or exceeds the said amount, the Purchaser without
prejudice to Section 9.5, is entitled to be indemnified for the full
amount of the Loss. Notwithstanding anything to the contrary, the Sellers'
total liability according to this Section 9 shall never exceed an amount
corresponding to the Closing Stock Price multiplied by the number of
Restricted Shares (895,522). The limitation in this Sub-section (c) shall
not apply to compensation for breach of any of the warranties in Sections
6.1-6.5 or any of the covenants of Section 8.
(d) Any claim of the Purchaser shall - if the loss is actually tax deductible
for such party, for the Company or the Subsidiary or decrease taxable
income for the Purchaser, the Company or the Subsidiary - be reduced
accordingly, provided that such tax deduction can be utilised by the
Purchaser, the Company or the Subsidiary.
9.5 NOTIFICATION
In the event that the Purchaser shall demand indemnification hereunder, the
Purchaser shall notify the Warrantors without undue delay, but the Purchaser's
failure to do so shall in no event preclude the Purchaser from receiving
indemnification from the Sellers hereunder.
9.6 TRANSFER OF ACCOUNTS RECEIVABLE
In the event any of the accounts receivable of the Company or the Subsidiary
exceeding SEK one hundred thousand (100,000) are not collected within one
hundred and eighty (180) days of the Closing Date, the Purchaser shall be
entitled to assign or cause to be assigned to the Warrantors all rights, claims,
actions or causes of action which the Company or the Subsidiary may have
relating to such unpaid receivable. The Purchaser, the Company or the Subsidiary
shall in case of such assignment receive the full outstanding amount including
any interest accrued.
9.7 CLAIMS
In the event of any claim being made against the Warrantors, the Warrantors
undertake not to make any claim against the Company or the Subsidiary, or
against any director or employee of the Company or the Subsidiary, on which the
Warrantors may have relied when entering into the Agreement.
10. SPECIFIC INDEMNITIES
10.1 Notwithstanding any knowledge of the Purchaser, the Warrantors hereby
agree to indemnify and hold the Purchaser harmless from any and all tax
liabilities for the Company or the Purchaser related to the option schemes
adopted in the Company, with the exclusion of any tax liabilities
referable to the fact that the Options have been accelerated.
10.2 The Warrantors hereby agree to indemnify and hold the Purchaser harmless
from any and all costs and damages related to the fact that the employment
agreements of certain of the management cannot be effectuated due to the
fact that no further subsidiaries will be established as foreseen in the
employment agreements.
10.3 Sections 10.1 and 10.2 shall apply without regard to restrictions on
indemnification set forth in Section 9.
11. RELATED AGREEMENTS
11.1 The Company and ▇▇▇▇ ▇▇▇▇▇▇ have entered into the employment agreement
attached hereto as SCHEDULE 11.1.
11.2 The Company and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ have entered into the employment
agreement attached hereto as SCHEDULE 11.2.
11.3 The Company and Per-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ have entered into the employment
agreement attached hereto as SCHEDULE 11.3.
12. MISCELLANEOUS
12.1 AMENDMENTS
No amendment to this Agreement shall be effective against any party to this
Agreement unless made in writing and signed by such party.
12.2 WAIVER
The failure of any party to insist upon strict adherence to any term of this
Agreement on any occasion shall not be considered a waiver of any right
hereunder, nor shall it deprive that party of the right thereafter to insist
upon the strict adherence to that term or any other terms of this Agreement.
12.3 PARTIES IN INTEREST
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and may not be assigned by the Sellers to any other party, without the
prior written consent of the other party.
12.4 COSTS
The Purchaser shall bear its own legal, accounting, brokerage and other
transaction advisory fees in connection with the transactions contemplated
hereby. The Purchaser shall further bear all reasonable costs and fees incurred
by the Company and the Sellers. However, such costs for the Sellers' transaction
advisory fees shall not exceed USD seventy-five thousand ($75,000). The Sellers
hereby represent and warrant that neither the Company nor any Seller has
incurred or become liable for any broker's commission or finder's fee relating
to or in connection with the transactions contemplated by this Agreement.
12.5 NOTICES
All notices, requests, demands and other communications shall be in writing by
post or telefax and shall be addressed as follows:
If to the Sellers to: c/o ▇▇▇▇ ▇▇▇▇▇▇ (on behalf of the Sellers)
Trollsjovagen 135
▇▇-▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇
If to the Purchaser to: Primix Solutions
One Arsenal Marketplace - 2nd floor
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
U.S.A.
Attention Chief Financial Officer
Fax: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: + ▇ ▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ Swartling
▇▇ ▇▇▇ ▇▇▇▇
▇▇-▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq
Fax: ▇▇▇ ▇▇ ▇▇ ▇▇ ▇▇
or to such other address or to such other person as any party hereto shall have
last designated by notice to the other party.
12.6 CONFIDENTIALITY
Unless otherwise agreed to in writing by the Purchaser, each of the Sellers and
their respective agents, advisors and representatives (including, without
limitation, financial advisors, attorneys and accountants) (collectively
"Representatives") shall keep all Proprietary Information (as hereinafter
defined) confidential, shall not disclose or reveal any Proprietary Information
to any person and shall not use Proprietary Information for any purpose. Each of
the Sellers shall be responsible for any breach of the terms of this provision
by it or its Representatives. The provisions of this Section shall survive the
Closing indefinitely. All confidential information about the Purchaser, the
Company and the Subsidiary (collectively, "Primix") and all Intellectual
Property and Know-How of the foregoing is referred to herein as "Proprietary
Information." Proprietary Information shall not include, however, information
which: (i) at the time of disclosure or thereafter is generally available to the
public (other than as a result of a disclosure directly or indirectly by a
Seller or its Representatives in violation thereof), (ii) is or becomes
available to a Seller on a non-confidential basis from a source other than
Primix, provided that, to such Seller's knowledge with no duty of inquiry, such
source was not prohibited from disclosing such information to such Seller by a
legal, contractual or fiduciary obligation owed to Primix, or (iii) a Seller can
establish is already in such Seller's possession.
12.7 EXECUTION IN COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which shall constitute one and the same
document.
13. GOVERNING LAW AND ARBITRATION
13.1 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of
Sweden without giving effect to the choice of law principles thereof.
13.2 ARBITRATION
Any dispute, controversy or claim arising out of or in connection with this
Agreement, or the breach, termination or invalidity thereof, shall be settled by
arbitration in accordance with the Rules of the Arbitration Institute of the
Stockholm Chamber of Commerce. The arbitral tribunal shall be composed of three
arbitrators. The place of arbitration shall be Malmo, Sweden. The language of
the arbitration shall be English and all written material submitted in the
course of the arbitral proceedings shall be written in or translated into that
language.
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[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
PRIMIX SOLUTIONS INC.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
/s/ Per-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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Per-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
FATA MORGANA HOLDINGS LTD, DOLCE VIDA HOLDINGS LTD
[signature illegible] [signature illegible]
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BEGONIA ASSETS HOLDINGS INC
[signature illegible] /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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/s/ ▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ Haagendal
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Ulf ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Haagendal
/s/ Per-▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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