Exhibit 10.22
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STOCK EXCHANGE AGREEMENT
by and between
▇▇▇▇▇▇.▇▇▇ LTD.
and
VISIONIK HOLDING ApS
ASSOCIATED MANAGEMENT SERVICES A/S
(Shareholders of Visionik A/S)
and
J0RGEN ▇▇▇▇▇▇
S0REN ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇
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Dated November 3, 1999
STOCK EXCHANGE AGREEMENT
STOCK EXCHANGE AGREEMENT (the "Agreement") dated November 3, 1999 by and
between ▇▇▇▇▇▇.▇▇▇ LTD., a corporation organized under the laws of the State of
Delaware (the "Purchaser"); VISIONIK HOLDING ApS, a corporation organized under
the laws of Denmark ("VH") and its sole shareholder J0RGEN ▇▇▇▇▇▇ ("▇▇▇▇▇▇"),
ASSOCIATED MANAGEMENT SERVICES A/S, a corporation organized under the laws of
Denmark ("AMS") and S0REN ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ ("Hougaard") who is a shareholder of
AMS. VH, ▇▇▇▇▇▇, AMS and Hougaard are hereinafter collectively referred to as
the "Stockholders" and each as a "Stockholder").
W I T N E S S E T H :
WHEREAS, the Stockholders are the owners of all of the outstanding shares
(the "Shares") of VISIONIK A/S, a corporation organized under the laws of
Denmark (the "Company");
WHEREAS, the Stockholders desires to sell, and the Purchaser desires to
purchase 100% of the Shares, pursuant to the provisions of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties do hereby
agree as follows:
ARTICLE I
SALE OF STOCK
Section 1.1 Sale of the Shares. Subject to the terms and conditions
herein stated, each of VH and AMS agrees to sell, assign, transfer and
deliver to the Purchaser on the Closing Date (as defined in Section 2.2), and
the Purchaser agrees to purchase from such Stockholder on the Closing Date,
the number of Shares set forth opposite such Stockholder's name on Exhibit A
hereto. Share certificates have not been issued by Visionik A/S, and
therefore the transfer of all shares from the Stockholders to the Purchaser
shall be notified to Visionik A /S in the form set out on Exhibit A-1 hereto,
which shall be accepted by Visionik A/S at closing.
ARTICLE II
PURCHASE PRICE AND CLOSING
Section 2.1 Purchase Price. In full consideration for the purchase by
the Purchaser of the Shares,
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the purchase price (the "Purchase Price") shall be paid by the Purchaser to VH
and AMS as follows, in each case allocated between VH and AMS as set forth on
Exhibit A hereto:
Section 2.1.1 Closing Payment. At closing, certificates, registered in
the name of the respective Stockholders representing an aggregate of 572,000
shares of Purchaser's Common Stock, par value $0.001 per share (the
"Purchaser Stock") will be delivered by the Purchaser to VH and AMS.
Section 2.2 Closing. The Closing under this Agreement (the "Closing")
is taking place simultaneously with the execution and delivery of this
Agreement, at the offices of Plesner & Gronborg, 34 ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇. Such date is herein referred to as the "Closing Date".
ARTICLE III
REPRESENTATIONS OF THE STOCKHOLDERS
The Stockholders, jointly and severally, hereby represent, warrant and
agree to and with the Purchaser as follows:
Section 3.1 Execution and Validity of Agreements; Restrictive
Documents.
Section 3.1.1 Execution and Validity. Each Stockholder has the full
power and capacity, or the full corporate power and authority, as the case
may be, to enter into this Agreement and to perform its obligations
hereunder. The execution and delivery of this Agreement and the performance
of the transactions contemplated hereby have been duly authorized by all
required corporate action on the part of the corporate Stockholders. This
Agreement has been duly and validly executed and delivered by each
Stockholder and, assuming due authorization, execution and delivery by the
Purchaser, constitutes a legal, valid and binding obligation of each of the
Stockholders, enforceable against each of them in accordance with its terms.
Section 3.1.2 Stock Ownership. VH and AMS are the true and lawful owner
of all of the Shares and all of such Shares have been duly and validly
authorized and issued and are fully paid, nonassessable and free of
preemptive rights, with no personal liability attaching to the ownership
thereof, and such ownership is free and clear of all mortgages, liens,
security interests, encumbrances, claims, charges and restrictions of any
kind or character (collectively, "Liens").
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Section 3.1.3 No Options. Except as set forth on Schedule 3.1.3 hereto,
there are no outstanding subscriptions, options, rights, warrants, calls,
commitments or arrangements of any kind to acquire any Shares owned by the
Stockholders and there are no agreements or understandings with respect to
the sale or transfer of such Shares.
Section 3.1.4 No Restrictions. There is no suit, action, claim,
investigation or inquiry by any administrative agency or governmental body,
and no legal, administrative or arbitration proceeding pending or, to the
knowledge of the Stockholders, threatened against the Stockholders or any of
the Shares, with respect to the execution, delivery and performance of this
Agreement or the transactions contemplated hereby or any other agreement
entered into by the Stockholders in connection with the transactions
contemplated hereby.
Section 3.1.5 Non-Contravention. The execution, delivery and
performance by the Stockholders of their respective obligations hereunder and
the consummation of the transactions contemplated hereby, will not (a) result
in the violation by any Stockholder of any statute, law, rule, regulation or
ordinance (collectively, "Laws"), or any judgment, decree, order, writ,
permit or license (collectively, "Orders"), of any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality
of the United States or Denmark, any foreign country or any domestic or
foreign state, county, city or other political subdivision (a "Governmental
or Regulatory Authority"), applicable to the Stockholders or any of the
Shares, or (b) if the consents and notices set forth in Schedule 3.1.6 are
obtained or given, conflict with, result in a violation or breach of,
constitute (with or without notice or lapse of time or both) a default under,
or (except as set forth in Schedule 3.1.6) require the Stockholders to obtain
any consent, approval or action of, make any filing with or give any notice
to, or result in or give to any Person any right of payment or reimbursement,
termination, cancellation, modification or acceleration of, or result in the
creation or imposition of any lien upon any of the Shares, under any of the
terms, conditions or provisions of any note, bond, mortgage, security
agreement, indenture, license, franchise, permit, concession, contract, lease
or other instrument, obligation or agreement of any kind (collectively,
"Instruments") to which any Stockholder is a party or by which any
Stockholder or any of the Shares is bound.
Section 3.1.6 Approvals and Consents. Except as disclosed on Schedule
3.1.6, no consent, approval or action of, filing with or notice to any
Governmental or Regulatory Authority or other public or private third party
is necessary or required under any of the terms, conditions or provisions of
any Law or Order of any Governmental or Regulatory Authority or any
Instrument to which any Stockholder is a party or by which any of the Shares
is bound for the execution and delivery of this Agreement by the
Stockholders, the performance by the Stockholders of their obligations
hereunder or the consummation of the transactions contemplated hereby.
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Section 3.2 Existence and Good Standing. The Company is duly organized,
validly existing and in good standing under the laws of Denmark, with the
full corporate power and authority to own its property and to carry on its
business all as and in the places where such properties are now owned or
operated or such business is now being conducted. The Company is duly
qualified, licensed or admitted to do business and is in good standing in
those jurisdictions set forth on Schedule 3.2, which are the only
jurisdictions in which the ownership, use or leasing of its assets and
properties, or the conduct or nature of its business, makes such
qualification, licensing or admission necessary, except for those
jurisdictions in which a failure by the Company to be qualified, licensed or
admitted and in good standing can in the aggregate be corrected without
material cost or expense by the Company.
Section 3.3 Subsidiaries and Investments; Capital Stock.
Section 3.3.1 Subsidiaries and Investments. The term "Subsidiary" as
used in this Agreement in the case of the Company, shall mean any Person in
which the Company, directly or indirectly through subsidiaries or otherwise,
beneficially owns or controls fifty percent or more of either the equity
interests in, or the voting control of, such Person. Schedule 3.3 contains a
true and complete list of all of the Company's Subsidiaries. Except as set forth
in Schedule 3.3, neither the Company nor any Subsidiary owns any capital stock
or other equity or ownership or proprietary interest in any Person (other than
investments of publicly traded debt and equity securities held for investment).
Schedule 3.3 also sets forth the name, jurisdiction of organization and number
of outstanding shares of each of the Subsidiaries, and a list of all of the
shareholders of each Subsidiary (indicating the number of shares owned by each
such shareholder). The Company owns of record and beneficially and has valid
title to that percentage of the issued and outstanding shares of capital stock
of each Subsidiary as set forth on Schedule 3.3, free and clear of any Liens.
Each Subsidiary is a corporation and is duly incorporated or formed and
organized, validly existing and in good corporate and tax standing under the
laws of its jurisdiction of organization, with the full corporate power and
authority to own its properties and to carry on its business all as and in the
places where such properties are now owned or operated or such business is now
being conducted. Schedule 3.3 sets forth the jurisdictions in which each
Subsidiary is duly qualified, licensed or admitted to do business, which are the
only jurisdictions in which the ownership, use or leasing of its assets or
properties, or the conduct or nature of its business, makes such qualification,
licensing or admission necessary. Each Subsidiary is in good standing in each
state, or other jurisdiction, in which it is qualified to do business as a
foreign corporation or foreign branch as set forth on Schedule 3.3. Except as
set forth on Schedule 3.3, neither the Company nor any Subsidiary has a branch,
agency, place of business or permanent establishment outside of Denmark. All of
the outstanding shares of capital stock of or equity interest in each Subsidiary
have been duly authorized and validly issued and are fully paid and
non-assessable, and have not been issued in violation of any preemptive rights
of shareholders or other equity interest holders. Except as set forth on
Schedule 3.3.1, there are no (a) outstanding Options obligating the Company or
any
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Subsidiary to purchase, issue or sell any shares of the capital stock of any
Subsidiary or other entity in which the Company or one of its Subsidiaries owns
an equity interest or outstanding agreement or commitment to grant, extend or
enter into any Option with respect thereto or (b) voting trusts, proxies or
other commitments, understandings, restrictions or arrangements in favor of any
Person other than the Company or a Subsidiary with respect to the voting of or
the right to participate in dividends or other earnings on any capital stock of,
or any other equity interest in, any Subsidiary.
Section 3.3.2 Capital Stock. The Company has an authorized capital of
500,000 Danish kroner consisting of 500 shares in the amount of 1,000 Danish
kroner or multiples hereof, of which all shares (the "Shares") have been issued
and are outstanding and owned by the Stockholders. All of the Shares which are
issued and outstanding have been validly issued and have not been issued in
violation of any preemptive rights of stockholders. All issued and outstanding
Ordinary Shares are fully paid up and no other class of capital stock of the
Company is authorized or outstanding. Except as set forth on Schedule 3.3.1,
there are no outstanding options, warrants, rights, calls, commitments,
conversion rights, rights of exchange, plans or other agreements of any
character (collectively "Options") providing for the purchase, issuance or sale
of any shares of the capital stock of the Company or the Subsidiaries. All
repurchases or redemptions of shares of capital stock of the Company or the
Subsidiaries were properly completed in compliance with all applicable
regulations and corporate requirements; and no further monies or other
obligations will be due by the Company, the Subsidiaries or the Stockholders in
respect thereof.
Section 3.4 Financial Statement and No Material Changes. Schedule 3.4
sets forth (a) audited balance sheets of the Company and its Subsidiaries as
at December 31, 1997 and December 31, 1998 and the related consolidated and
consolidating audited statements of income, retained earnings and cash flow
for the calendar year then ended according to GAAP, as reported on by ▇▇▇▇▇
▇▇▇▇▇▇▇▇ Danmark, certified public accountants, and (b) a reviewed balance
sheet of the Company and its Subsidiaries as at September 30, 1999 (the
"Balance Sheet") and the related unaudited consolidated and consolidating
statements of income, retained earnings and cash flow for the 9 months then
ended, according to GAAP, and (c) audited balance sheets of the Company and
its subsidiaries as at June 30, 1999 and the related consolidated and
consolidating audited statements of income, retained earnings and cash flow
for the fiscal year then ended, as reported on by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Danmark,
certified public accountants, in accordance with generally accepted
accounting principles consistently applied and as applied in Denmark ("Danish
GAAP") throughout the periods indicated. The Balance Sheet fairly presents
the financial condition of the Company and its Subsidiaries at the date
thereof and fairly presents all claims against and all debts and liabilities
of the Company and its Subsidiaries, fixed or contingent, as at the date
thereof, required to be shown thereon under GAAP, and the related statements
of income, retained earnings and cash flow accurately present the results of
operations of the Company and its Subsidiaries, retained earnings and the
cash flow for the period indicated. Except as set forth on Schedule 3.23,
since September 30, 1999 (the "Balance Sheet Date"), there has been no
material adverse change in the properties,
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financial condition, business or results of operation of the Company and its
Subsidiaries taken as a whole.
Section 3.5 Books and Records. All accounts, books, ledgers and
official and other records material to the business of the Company and its
Subsidiaries have been properly and accurately kept and completed in all
material respects, and there are no material inaccuracies or discrepancies of
any kind contained or reflected therein. Except as set forth on Schedule 3.5,
neither the Company nor any of its Subsidiaries has any of its records,
systems, controls, data or information recorded, stored, maintained, operated
or otherwise wholly or partly dependent on or held by any means (including
any electronic, mechanical or photographic process, whether computerized or
not) which (including all means of access thereto and therefrom) are not
under the exclusive ownership and possession of the Company or such
Subsidiary. The Stockholders have delivered to the Purchaser complete and
correct copies of the Articles of Incorporation and By-Laws of the Company
and each Subsidiary, with all amendments thereto, currently in effect, and
its minute book and stock transfer records.
Section 3.6 Tangible Personal Property; Encumbrances. Except as set
forth on Schedule 3.6, the Company and each of its Subsidiaries has good and
valid title to, or enforceable leasehold interests in or valid rights under
contract to use all the properties and assets owned or used by it (real and
personal, tangible and intangible), including, without limitation (a) all the
properties and assets reflected in the Balance Sheet, and (b) all the
properties and assets purchased or otherwise contracted for by the Company
and such Subsidiary since the Balance Sheet Date (except for properties and
assets reflected in the Balance Sheet or acquired or otherwise contracted for
since the Balance Sheet Date that have been sold or otherwise disposed of in
the ordinary course of business), except for those properties and assets
which, individually and in the aggregate, are not material to the business of
the Company and its Subsidiaries, in each case free and clear of all Liens,
except for Liens set forth on Schedule 3.6. The property, plant and equipment
owned or otherwise contracted for by the Company and each of its Subsidiaries
are in a state of good maintenance and repair (ordinary wear and tear
excepted) and are adequate and suitable in all material respects for the
purposes for which they are presently being used.
Section 3.7 Real Property.
Section 3.7.1 Owned Real Property. Neither the Company nor any of its
Subsidiaries owns any real property or any option or right of first refusal
or first offer to acquire real property, and neither the Company nor any of
its Subsidiaries is obligated by contract or otherwise to purchase any real
property.
Section 3.7.2 Leased Real Property. Schedule 3.7.2 contains an
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accurate and complete list of all real property leases to which the Company or
any of its Subsidiaries is a party (as lessee, lessor, sublessee or sublessor),
including, without limitation, leases which the Company has subleased or
assigned to a third party and as to which the Company remains liable. Each real
property lease set forth on Schedule 3.7.2 (or required to be set forth on
Schedule 3.7.2) (a) is valid, binding and in full force and effect; (b) all
rents and additional rents and other sums, expenses and charges due on each such
lease have been paid; (c) the lessee has been in peaceable possession since the
commencement of its original possession under such lease; (d) no waiver,
indulgence or postponement of the lessee's obligations thereunder has been
granted by or is required from the lessor; (e) there exists no default or event
of default by the Company or any of its Subsidiaries or, to the knowledge of the
Stockholders, by any other party; (f) there exists no occurrence, condition or
act (including the purchase of the Shares hereunder) which, with the giving of
notice, the lapse of time or the happening of any further event or condition,
would become a default or event of default by the Company or any of its
Subsidiaries; and (g) there are no outstanding claims of breach or
indemnification or notice of default or termination. Except as set forth on
Schedule 3.7.2, (h) the Company or its Subsidiary, as the case may be, holds the
leasehold estate in all the real property leases free and clear of all Liens,
(i) the Company or such Subsidiary is in physical possession and actual and
exclusive occupation of the whole of each of its leased properties. Except as
clearly set forth on Schedule 3.7.2, the Company or its Subsidiary(ies) utilizes
all real property leases in full compliance with law, including building
permits, fire protection legislation, planning law and workers environment
legislation. Neither the Company nor any of its Subsidiaries owes any brokerage
commission with respect to any such real property leases.
Section 3.8 Contracts. Schedule 3.8 hereto contains an accurate and
complete list of the following agreements to which the Company or any of its
Subsidiaries is a party or by or to which the Company is bound: (a) all
employee benefit plans; (b) any personal property lease with a fixed annual
rental of $20,000 or more; (c) any contract relating to capital expenditures
which involve payments of $30,000 or more in any single transaction or series
of related transactions; (d) any contract relating to the making of a loan or
advance to, or investment in, any other Person in an amount exceeding
$10,000; (e) any contract evidencing or relating in any way to indebtedness
for money borrowed or to be borrowed, whether directly or indirectly, by way
of loan, purchase money obligation, guarantee (other than the endorsement of
negotiable instruments for collection in the ordinary course of business),
conditional sale, purchase or otherwise, which in any case involves $10,000
or more; (f) any management service, employment, consulting or any other
similar type of contract which is not cancelable by the Company or such
Subsidiary without penalty or other financial obligation within 30 days, (g)
any contract limiting its freedom to engage in any line of business or to
compete with any other Person, including agreements limiting the ability of
the Company, its Subsidiaries or any of its affiliates to take on competitive
accounts during or after the term thereof; (h) any collective bargaining or
union agreement, (i) any contract with any of its officers or directors
(including indemnification agreements), provided that provisions contained in
the Company's or such Subsidiary's charter documents or by-laws do not need
to be set forth on Schedule 3.8, (j) any secrecy or confidentiality agreement
(other than standard confidentiality agreements in
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computer software license agreements or agreements with clients entered into in
the ordinary course of business), (k) any contract or license with respect to
Intellectual Property (as defined in Section 3.14 below), other than "shrink
wrap" and similar end-user licenses; (l) any agreement with a client which
generates annual revenues of $20,000 or more; and (m) any joint venture
agreement involving a sharing of profits not covered by (a) through (l) above;
and (n) any contract (not covered by another subsection of this Section 3.8)
which is material to the business of the Company or its Subsidiaries or which
involves $20,000 or more over the unexpired term thereof and is not cancelable
by the Company or such Subsidiary without penalty or other financial obligation
within 30 days. Notwithstanding the foregoing, (x) commitments to media and
production expenses which are fully reimbursable from clients, and (y) estimates
or purchase orders given in the ordinary course of business relating to the
execution of projects, do not have to be set forth on Schedule 3.8. Each
contract set forth on Schedule 3.8 (or required to be set forth on Schedule 3.8)
is in full force and effect, and there exists no default or event of default by
the Company or its Subsidiary, as the case may be, or to the knowledge of the
Stockholders, by any other party, or occurrence, condition, or act (including
the purchase and/or transfer of the Shares hereunder) which, with the giving of
notice, the lapse of time or the happening of any other event or condition,
would become a default or event of default thereunder by the Company or its
Subsidiary, as the case may be, or would be a cause for premature termination,
and there are no outstanding claims of breach or indemnification or notice of
default or termination of any such contracts.
Section 3.9 Non-Contravention; Approvals and Consents.
Section 3.9.1 Non-Contravention. The execution, delivery and
performance by the Stockholders of its obligations hereunder and the
consummation of the transactions contemplated hereby, will not (a) violate,
conflict with or result in the breach of any provision of the Articles of
Incorporation or By-Laws (or other comparable corporate charter documents) of
the Company or any Subsidiary, or (b) result in the violation by the Company
or any Subsidiary of any Laws, or Orders, of any Governmental or Regulatory
Authority, applicable to the Company or such Subsidiary or any of its assets
or properties, or (c) if the consents and notices set forth in Schedule 3.9.2
are obtained or given, conflict with, result in a violation or breach of,
constitute (with or without notice or lapse of time or both) a default under,
or (except as set forth in Schedule 3.9.2) require the Company or any
Subsidiary to obtain any consent, approval or action of, make any filing with
or give any notice to, or result in or give to any Person any right of
payment or reimbursement, termination, cancellation, modification or
acceleration of, or result in the creation or imposition of any lien upon any
of the assets or properties of the Company or any of its Subsidiaries, under
any of the terms, conditions or provisions of any Instruments to which the
Company is a party or by which the Company or any of Subsidiaries or any of
its/their assets or properties is bound.
Section 3.9.2 Approvals and Consents. Except as disclosed on
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Schedule 3.9.2, no consent, approval or action of, filing with or notice to any
Governmental or Regulatory Authority or other Person is required under any of
the terms, conditions or provisions of any Law or Order of any Governmental or
Regulatory Authority or any Instrument to which the Company or any of its
Subsidiaries is a party or its assets or properties are bound for the execution
and delivery of this Agreement by the Stockholders, the performance by the
Stockholders of their obligations hereunder or the consummation of the
transactions contemplated hereby.
Section 3.10 Litigation. Except as set forth on Schedule 3.10, there is
no action, suit, proceeding at law or in equity by any Person, or any
arbitration or any administrative or other proceeding by or before (or to the
knowledge of the Stockholders, any investigation by) any governmental or
other instrumentality or agency, pending or, to the knowledge of the
Stockholders, threatened, against the Company or any of its Subsidiaries with
respect to this Agreement or the transactions contemplated hereby, or against
or affecting the Company or any of its Subsidiaries or its/their properties
or rights; and no acts, facts, circumstances, events or conditions occurred
or exist which are a basis for any such action, proceeding or investigation.
Neither the Company nor any of its Subsidiaries is subject to any Order
entered in any lawsuit or proceeding.
Section 3.11 Taxes. The Company and its Subsidiaries have timely filed,
or caused to be filed, taking into account any valid extensions of due dates,
completely and accurately, all federal, state, local and foreign tax or
information returns (including estimated tax returns) required under the
statutes, rules or regulations of such jurisdictions to be filed by the
Company and/or such Subsidiaries. The term "Taxes" means taxes, duties,
charges or levies of any nature imposed by any Governmental or Regulatory
Authority, including without limitation income, gains, capital gains, surtax,
capital, franchise, capital stock, value-added taxes, taxes required to be
deducted from payments made by the payor and accounted for to any tax
authority, employees' income withholding, back-up withholding, withholding on
payments to foreign Persons, social security, national insurance,
unemployment, worker's compensation, payroll, disability, real property,
personal property, sales, use, goods and services or other commodity taxes,
business, occupancy, excise, customs and import duties, transfer, stamp and
other taxes (including interest, penalties or additions to tax in respect of
the foregoing), and includes all taxes payable by the Company and/or its
Subsidiaries pursuant to joint taxation arrangements or any similar
provisions of state, local or foreign law. All Taxes shown on said returns to
be due and all additional assessments received prior to the date hereof have
been paid or are being contested in good faith, in which case, such contested
assessments are set forth on Schedule 3.11. The Company and its Subsidiaries
have collected all sales, use, goods and services or other commodity Taxes
required to be collected, and have withheld all amounts required to be
withheld on account of Taxes for amounts paid to employees, directors,
officers and residents and non-residents; and in each case has remitted or
will remit the same to the appropriate taxing authority within the prescribed
time periods. The amount set up as an accrual for Taxes on the Balance Sheet
is sufficient for the payment of all unpaid Taxes of the Company and its
Subsidiaries, whether or not disputed, for all periods ended on and prior to
the date thereof.
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Since the Balance Sheet Date, neither the Company nor any of its Subsidiaries
has incurred any liabilities for Taxes other than in the ordinary course of
business. The Stockholders have delivered to the Purchaser correct and complete
copies of all income tax returns filed with respect to the Company and its
Subsidiaries for all taxable periods since its inception. None of the tax
returns of the Company has ever been audited by any Governmental or Regulatory
Authority. Neither the Company nor its Subsidiaries has received notice of any
audit or examination currently in progress, or of any proposed audit or
examination. No deficiency in the payment of Taxes by the Company for any period
has been asserted in writing by any taxing authority and remains unsettled at
the date of this Agreement. Neither the Company nor any of its Subsidiaries is a
party to any tax allocation or tax sharing agreement nor does it have any
contractual obligation to indemnify any other person with respect to Taxes.
Neither the Company nor its Subsidiaries will be required as a result of a
change in accounting method for any period ending on or before the Closing Date
to include any adjustment in income for any period ending after the Closing
Date.
Section 3.12 Liabilities. Except as set forth in the Balance Sheet or
reflected in the notes thereto, neither the Company nor any of its
Subsidiaries has any outstanding claims, liabilities or indebtedness of any
nature whatsoever (collectively in this Section 3.12, "Liabilities"), whether
accrued, absolute or contingent, determined or undetermined, asserted or
unasserted, and whether due or to become due, other than (a) Liabilities
specifically disclosed in any Schedule hereto; (b) Liabilities under
contracts, purchase orders and other agreements, arrangements and commitments
of the type required to be disclosed by the Stockholders on any Schedule but
because of the dollar amount or other qualifications are not required to be
listed on such Schedule; (c) Liabilities incurred in the ordinary course of
business and consistent with past practice since the Balance Sheet Date and
(d) liabilities to the extent covered by insurance maintained by the Company
and/or its Subsidiaries. Schedule 3.8 sets forth a list of all current
arrangements of the Company and its Subsidiaries for borrowed money and all
outstanding balances as of the date hereof with respect thereto. Except as
set forth on Schedule 3.12, neither the Company nor any of its Subsidiaries
is in default in respect of the terms or conditions of any borrowings.
Section 3.13 Insurance. Schedule 3.13 is a schedule of all insurance
policies (including life insurance) or binders maintained by the Company
and/or its Subsidiaries. All such policies are in full force and effect and
all premiums that have become due have been currently paid. Neither the
Company nor any of its Subsidiaries has received any notice of cancellation
or non-renewal of any such policy or binder. Except as set forth on Schedule
3.13, within the last two years neither the Company nor any of its
Subsidiaries has filed for any claims exceeding USD $15,000 against any of
its insurance policies, exclusive of automobile policies.
Section 3.14 Intellectual Properties.
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3.14.1. Representations. The registrations of Intellectual Property listed
on Schedule 3.14 are valid and subsisting, all necessary registration or renewal
fees in connection with such registrations have been made and all necessary
documents and certificates in connection with such registrations have been filed
with the relevant patent, copyright and trademark authorities for the purposes
of maintaining such registrations. Except as set forth on Schedule 3.14, (a) no
Person has any rights to use any Intellectual Property of the Company or any of
its Subsidiaries; (b) the Company has not granted to any Person, nor authorized
any Person to retain, any rights in any Intellectual Property of the Company or
any of its Subsidiaries. Except as set forth on Schedule 3.14 and except for
"shrink wrap" and similar commercial end-user licenses, the Company and each of
its Subsidiaries owns and has exclusive title to each item of Intellectual
Property of the Company to use or operate under, all other Intellectual Property
of the Company. To the knowledge of the Stockholders, the operation of the
business of the Company as it is currently conducted does not infringe the
Intellectual Property of any other Person and neither the Company nor any of its
Subsidiaries has received notice from any Person that the operation of its
business infringes the Intellectual Property of any Person. There are no
contracts or agreements between the Company or any of its Subsidiaries and any
other Person with respect to Intellectual Property of the Company or any of its
Subsidiaries in respect of which there is any dispute known to the Stockholders
regarding the scope of such agreement, or performance under such contract,
including with respect to any payments to be made or received by the Company or
any of its Subsidiaries. To the knowledge of the Stockholders, no Person is
infringing or misappropriating any of the Intellectual Property of the Company
or any of its Subsidiaries. Except as disclosed on Schedule 3.14, all employees,
agents, consultants or contractors who have contributed to or participated in
the creation or development of any copyrightable, patentable or trade secret
material on behalf of the Company, any Subsidiary, or any predecessor in
interest thereto, either: (i) is a party to a "work-for-hire" agreement under
which the Company or such Subsidiary (or predecessor in interest), as
applicable, is deemed to be the original owner/author of all property rights
therein; or (ii) has executed a valid assignment or agreement to assign in favor
of the Company or Subsidiary (or predecessor in interest), as applicable, all
right, title and interest in such material.
Section 3.14.2 Definitions. For purposes of this Agreement, the term
"Intellectual Property" shall mean any or all of the following and all rights
associated therewith: (a) all patents and applications therefor and all
reissues, divisions, renewals, extensions, continuations and
continuations-in-part thereof; (b) all inventions (whether patentable or
not), invention disclosures, improvements, trade secrets proprietary
information, know-how, technology, technical data and customer lists, rights
of privacy and publicity, and all documentation relating to any of the
foregoing; (c) all copyrights, copyright registrations and applications
therefor and other rights corresponding thereto; (d) all mask works, mask
work registrations and applications therefor; (e) all industrial designs and
any registrations and applications therefor; (f) all trade names, logos,
common law trademarks and service marks; trademark and service ▇▇▇▇
registrations and applications therefor and all goodwill associated
therewith; and (g) all computer software including all source code, object
code, firmware, development tools, files, records and data, all media on
which any of the foregoing is recorded and all documentation related to any
of the foregoing. "Intellectual Property of the Company" shall
11
mean any Intellectual Property (h) that is owned by, or exclusively licensed to,
the Company or any of its Subsidiaries; or (i) which is necessary to the
operation of the Company or any of its Subsidiaries, including the design,
manufacture, use and sale of the products or delivery of the services of the
Company as it is currently operated or is reasonably anticipated to be operated
in the future and all Intellectual Property currently owned by the Company or
any of its Subsidiaries, but shall specifically not include any rights in or to
materials created for clients as "work-for-hire" or which are subject to an
exclusive assignment or license in favor of clients of the Company or any of its
Subsidiaries.
Section 3.14.2 With respect to the trademark "Visionik", this
trademark belongs to the Company, and upon closing the Stockholders will
cease to use this trademark. Within 10 days after closing date, the name of
VH will be changed with the authorities.
Section 3.15 Compliance with Laws; Licenses and Permits.
Section 3.15.1 Compliance. The Company and each of its Subsidiaries is,
and its business has been conducted, in compliance with all applicable Laws
and Orders, except in each case where the failure to so comply would not
reasonably be expected to have a material adverse effect on the financial
condition, results of operations, assets, properties or business of the
Company and its Subsidiaries taken as a whole (a "Material Adverse Effect"),
including without limitation, (a) all Laws and Orders promulgated by any
Governmental or Regulatory Authority; (b) all environmental Laws and Orders;
and (c) all Laws and Orders relating to labor, civil rights, and occupational
safety and health laws, worker's compensation, employment and wages, hours
and vacations, or pay equity. Neither the Company nor any of its Subsidiaries
has been charged with, or, to the knowledge of the Stockholders threatened
with or under any investigation with respect to, any charge concerning any
violation of any Laws or Orders.
Section 3.15.2 Licenses. The Company and each of its Subsidiaries has
all licenses and permits and other governmental certificates, authorizations
and approvals (collectively, "Licenses") required by a Governmental or
Regulatory Authority for the operation of its business and the use of its
properties as presently operated or used, except where the failure to have
such Licenses would not reasonably be expected to have a Material Adverse
Effect. All of the Licenses are in full force and effect and no action or
claim is pending, nor to the knowledge of the Stockholders is threatened, to
revoke or terminate any of such Licenses or declare any such License invalid
in any material respect.
Section 3.16 Client Relations. Schedule 3.16 sets forth for the Company
and each of its Subsidiaries (a) the twenty largest clients (measured by fees
generated) as at December 31, 1998 and the fees from each such client and
from all clients (in the aggregate) for the year ended December 31, 1998 and
(b) the clients projected to be the twenty largest clients (measured by fees)
based on the
12
Company's and each of its Subsidiary's current 1999 profit plan for the year
ending December 31, 1999, together with the estimated fees for each such client
and all clients (in the aggregate) for such fiscal year. Except as set forth in
Schedule 3.16, no client of the Company or any of its Subsidiaries has advised
the Company, such Subsidiary or any Stockholder (a) that it is prematurely
terminating or considering the premature termination of the handling of its
business by the Company or such Subsidiary, as a whole or in respect of any
particular product, project or service or (b) that it will not use the Company's
services in the future.
Section 3.17 Accounts Receivable; Work-in-Process; Accounts Payable.
The amount of all work-in-process, accounts receivable, unbilled invoices
recorded on the books of account of the Company or any of its Subsidiaries
and reflected on the Balance Sheet (including without limitation unbilled
invoices for services and out-of-pocket expenses) and other debts due or
recorded in the records and books of account of the Company or such
Subsidiary as being due to the Company or such Subsidiary and reflected on
the Balance Sheet will be good and collectible in full (less the amount of
any provision, reserve or similar adjustment therefor reflected on the
Balance Sheet). Except as set forth on Schedule 3.17, there has been no
material adverse change since the Balance Sheet Date in the amount or aging
of the work-in-process, accounts receivable or other debts due to the Company
or any of its Subsidiaries or the reserves with respect thereto, or accounts
payable of the Company or any of its Subsidiaries.
Section 3.18 Employment Relations. (a) Neither the Company nor any of
its subsidiaries is engaged in any unfair labor practice; (b) no unfair labor
practice complaint against the Company is pending before any Governmental or
Regulatory Authority; (c) there is no organized labor strike, dispute,
slowdown or stoppage actually pending or to the knowledge of the Stockholders
threatened against or involving the Company or any of its Subsidiaries; (d)
there are no labor unions representing or, to the knowledge of the
Stockholders, attempting to represent the employees of the Company or any of
its Subsidiaries; (e) no claim or grievance nor any arbitration proceeding
arising out of or under any collective bargaining agreement is pending and to
the knowledge of the Stockholders, no such claim or grievance has been
threatened; (f) no collective bargaining agreement is currently being
negotiated by the Company or any of its Subsidiaries; (g) neither the Company
nor any of its Subsidiaries has experienced any work stoppage or similar
organized labor dispute during the last three years; and (h) all employees of
the Company and each of the Subsidiaries is party to an employment contract
or employment certificate complying with Danish law. There is no legal
action, suit, proceeding or claim pending or, to the knowledge of the
Stockholders, threatened between the Company or any of its Subsidiaries and
any of its employees, former employees, agents, former agents, job applicants
or any association or group of any of their employees, except as set forth on
Schedule 3.10.
13
Section 3.19
[Intentionally left blank]
Section 3.20 Interests in Customers, Suppliers, Etc. Except as set
forth on Schedule 3.20, neither (x) the Stockholders nor (y) to the knowledge
of the Stockholders (without making any special inquiry of the Related Group,
as hereinafter defined), any officer, director, or employee of the Company or
any of its Subsidiaries (collectively, the "Related Group"),:
(i) owns, directly or indirectly, any interest in (excepting less than
1% stock holdings for investment purposes in securities of publicly
held and traded companies), or received payments from, or is an
officer, director, employee or consultant of, any Person which is, or
is engaged in business as, a competitor, lessor, lessee, supplier,
distributor, sales agent, customer or client of the Company;
(ii) owns, directly or indirectly (other than through the ownership of
stock or other securities of the Company), in whole or in part, any
tangible or intangible property (including, but not limited to
Intellectual Property) that the Company or any of its Subsidiaries uses
in the conduct of business; or
(iii) has any cause of action or other claim whatsoever against, or
owes any amount to, the Company or any of its Subsidiaries, except for
claims in the ordinary course of business such as for accrued vacation
pay, accrued benefits under employee benefit plans, and similar matters
and agreements existing on the date hereof (including but not limited
to loans and accrued interest thereon made by the Stockholders or such
Stockholders to the Company or any of its Subsidiaries as reflected in
the books and records of the Company).
Section 3.21 Bank Accounts and Powers of Attorney. Set forth in
Schedule 3.21 is an accurate and complete list showing (a) the name of each
bank in which the Company or any of its Subsidiaries has an account, credit
line or safe deposit box and the names of all Persons authorized to draw
thereon or to have access thereto, and (b) the names of all Persons, if any,
holding powers of attorney from the Company or any of its Subsidiaries and a
summary statement of the terms thereof.
Section 3.22 Compensation of Employees. Schedule 3.22 is an accurate
and complete list showing (a) the names and positions of all salaried
employees of and exclusive consultants to the Company or any of its
Subsidiaries, together with a statement of the current annual salary or fees,
and the bonus and incentive compensation paid or payable with respect to
calendar years 1998 and 1999, and any material fringe benefits of such
employees or exclusive consultants; (b) the names of all retired employees,
if any, of the Company and each of its Subsidiaries who are receiving or
entitled to receive any healthcare or life insurance benefits or any payments
from the Company or any Subsidiary not covered by any pension plan to which
the
14
Company or such Subsidiary is a party, their ages and current unfunded pension
rate, if any; and (c) a description of the normal severance benefits of the
Company and each of its Subsidiaries. With respect to exclusive consultants, the
list is limited to physical persons, who have undertaken work for the Company
for more than 15 hours per week.
Section 3.23 No Changes Since the Balance Sheet Date. Since the Balance
Sheet Date except as specifically stated on Schedule 3.23 neither the Company
nor any of its Subsidiaries has (i) incurred any liability or obligation of
any nature (whether accrued, absolute, contingent or otherwise), except in
the ordinary course of business, (ii) permitted any of its assets to be
subjected to any lien, (iii) sold, transferred or otherwise disposed of any
assets except in the ordinary course of business, (iv) made any capital
expenditure or commitment therefor which individually or in the aggregate
exceeded $20,000, (v) declared or paid any dividends or made any
distributions on any shares of its capital stock, or redeemed, purchased or
otherwise acquired any shares of its capital stock or any option, warrant or
other right to purchase or acquire any such shares, (vi) made any bonus or
profit sharing distribution, (vii) increased or prepaid its indebtedness for
borrowed money, except current borrowings under credit lines listed on
Schedule 3.8 from banks in the ordinary course of business or made any loan
to any Person, (viii) written down the value of any work-in-process, or
written off as uncollectible any notes or accounts receivable, except
write-downs and writeoffs in the ordinary course of business, none of which
individually or in the aggregate, is material to the Company and its
Subsidiaries, taken as a whole, (ix) except as set forth on Schedule 3.22,
granted any increase in the rate of wages, salaries, bonuses or other
remuneration of any employee who, whether as a result of such increase or
prior thereto, receives aggregate compensation from the Company or any of its
Subsidiaries at an annual rate of USD $40,000 or more, or except in the
ordinary course of business to any other employees, (x) canceled or waived
any claims or rights of material value, (xi) made any change in any method of
accounting procedures, (xii) otherwise conducted its business or entered into
any transaction, except in the usual and ordinary manner and in the ordinary
course of its business, (xiii) amended in any material respect or terminated
any agreement which is material to its business, (xiv) renewed, extended or
modified any lease of real property or except in the ordinary course of
business any lease of personal property, (xv) adopted, amended or terminated
any Plan or (xvi) agreed, whether or not in writing, to do any of the
foregoing.
Section 3.24 Corporate Controls. Neither the Company, any of its
Subsidiaries, or the Stockholders, or, to the knowledge of the Stockholders,
any officer, authorized agent, employee or any other Person while acting on
behalf of the Company or any of its Subsidiaries, has, within the period
covered by any applicable statute of limitations, directly or indirectly:
used any corporate fund for unlawful contributions, gifts, or other unlawful
expenses relating to political activity; made any unlawful payment to foreign
or domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds; established or
maintained any unlawful or unrecorded fund of corporate monies or other
assets; made any false or fictitious entry on its books or records; made any
bribe, rebate, payoff, influence payment, kickback, or other unlawful
payment, or other
15
payment of a similar or comparable nature, to any Person, private or public,
regardless of form, whether in money, property, or services, to obtain favorable
treatment in securing business or to obtain special concessions, or to pay for
favorable treatment for business secured or for special concessions already
obtained, and neither the Company nor any of its Subsidiaries has participated
in any illegal boycott or other similar illegal practices affecting any of its
actual or potential customers.
Section 3.25 Year 2000 Compliance.
Section 3.25.1. Definition. The term "Y2K Compliant" shall mean: (a)
the functions, calculations and other computer processes of all computer
hardware, software and systems, including but not limited to internal and
outsourced management information systems and embedded computer features
within other systems of the Company or any of its Subsidiaries (collectively,
"Processes"), perform properly in a consistent manner regardless of the date
in time on which the Processes are actually performed and regardless of the
date of input to the software, whether before, on or after January 1, 2000
and whether or not the dates are affected by leap years; (b) the computer
hardware, software and systems accept, calculate, compare, sort, extract,
sequence and otherwise process data inputs and date values, and return and
display date values, in a consistent manner regardless of the dates used,
whether before, on or after January 1, 2000; (c) the computer hardware,
software and systems will function properly without interruptions or
extraordinary manual intervention caused by the date in time on which the
Processes are actually performed or by the date of input to the software,
whether before, on or after January 1, 2000; (d) the computer hardware,
software and systems accept and respond to two-digit year data input in the
Processes in a manner that resolves any ambiguities as to the century in a
defined, predetermined and appropriate manner; and (e) the computer hardware,
software and systems store and display data in the Processes in ways that are
unambiguous as to the determination of the century.
Section 3.25.2. Computer Systems. The Company and each of its
Subsidiaries has used its reasonable commercial efforts so that, to its
knowledge, the current computer hardware, software and systems, and
accompanying documentation, of the Company and each of its Subsidiaries will
be Y2K Compliant, in a full production version, with accompanying
documentation, no later than December 15, 1999. The Company and each of its
Subsidiaries has and will continue to use its reasonable commercial efforts
so that, to its knowledge, the receipt of Y2K Compliant computer hardware,
software, and systems will be provided to the Company and each of its
Subsidiaries in a timely manner under current supplier contracts or standard
maintenance and support plans without additional fee or charge of any kind
(including any installation, freight, or other costs or fees) to the Company
and each of its Subsidiaries.
Section 3.25.3 Other Products and Services. The Company and each of its
Subsidiaries has and will continue to use its reasonable commercial efforts
so that, to its knowledge, (a) its products will be delivered and its
services will be scheduled and performed in a timely manner without material
interruptions caused by the date in time on which the product is ordered or
is actually delivered or the services are scheduled or actually performed
under normal procedures in the ordinary course, whether before, on or after
January 1, 2000, and (b) its essential
16
suppliers of products and services, including the suppliers of its
infrastructure systems, have Y2K compliance programs in place to avoid
interruptions in the supplier-customer trading relationship which could have a
Material Adverse Effect whether before, on or after January 1, 2000.
Section 3.26 Brokers. No broker, finder, agent or similar intermediary
has acted on behalf of the Stockholders or the Company or any of the
Subsidiaries in connection with this Agreement or the transactions
contemplated hereby, and no brokerage commissions, finder's fees or similar
fees or commissions are payable by the Company, any of its Subsidiaries, or
the Stockholders in connection therewith based on any agreement, arrangement
or understanding with any of them.
Section 3.27 Copies of Documents. The Stockholders have caused to be
made available for inspection and copying by the Purchaser and its advisers,
true, complete and correct copies of all documents referred to in this
Article III or in any Schedule. Summaries of all material oral contracts
contained in Schedule 3.8 are complete and accurate in all material respects.
ARTICLE IV
REPRESENTATIONS OF THE PURCHASER
The Purchaser, represents, warrants and agrees to and with the
Stockholders as follows:
Section 4.1 Existence and Good Standing. The Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, with full corporate power and authority to own its
property and to carry on its business all as and in the places where such
properties are now owned or operated or such business is now being conducted.
Section 4.2 Execution and Validity of Agreement. The Purchaser has the
full corporate power and authority to make, execute, deliver and perform this
Agreement and the transactions contemplated hereby. The execution and
delivery of this Agreement by the Purchaser and the consummation of the
transactions contemplated hereby have been duly authorized by all required
corporate action on behalf of the Purchaser and this Agreement has been duly
and validly executed and delivered by the Purchaser and assuming due
authorization, execution and delivery by the Stockholders constitutes a
legal, valid and binding obligation of the Purchaser, enforceable against it
in accordance with its terms.
Section 4.3 Non-Contravention; Approvals and Consents.
17
Section 4.3.1 Non-Contravention. The execution, delivery and
performance by the Purchaser of its obligations hereunder and the
consummation of the transactions contemplated hereby, will not (a) violate,
conflict with or result in the breach of any provision of the certificate of
incorporation or by-laws (or other comparable corporate charter documents) of
the Purchaser, or (b) result in the violation by the Purchaser of any Laws or
Orders of any Governmental or Regulatory Authority, applicable to the
Purchaser or any of its assets or properties, except as would not reasonably
be expected to have a Material Adverse Effect, or (c) conflict with, result
in a violation or breach of, constitute (with or without notice or lapse of
time or both) a default under, or require the Purchaser to obtain any
consent, approval or action of, make any filing with or give any notice to,
or result in or give to any Person any right of payment or reimbursement,
termination, cancellation, modification or acceleration of, or result in the
creation or imposition of any Lien upon any of the assets or properties of
the Purchaser, under any of the terms, conditions or provisions of any
Instruments to which the Purchaser is a party or by which the Purchaser or
any of its assets or properties are bound.
Section 4.3.2 Approvals and Consents. Except as set forth on Schedule
4.3.2, no consent, approval or action of, filing with or notice to any
Governmental or Regulatory Authority or other public or private third party
is necessary or required under any of the terms, conditions or provisions of
any Law or Order of any Governmental or Regulatory Authority or any
Instrument to which the Purchaser is a party or by which the Purchaser or any
of its assets or properties is bound for the execution and delivery of this
Agreement by the Purchaser, the performance by the Purchaser of its
obligations hereunder or the consummation of the transactions contemplated
hereby.
Section 4.4 Financial Statements. Schedule 4.4 sets forth (a) an audited
balance sheet of the Purchaser as at December 31, 1998 and the related audited
statements of income, retained earnings and cash flow for the year then ended,
as reported on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent public accountants, and (b)
an unaudited balance sheet of the Purchaser as at September 30, 1999 and the
related unaudited statements of income, retained earnings and cash flow for the
three months then ended, and (c) an unaudited pro forma balance sheet of the
Purchaser as at September 30, 1999 (the "Purchaser Balance Sheet") to give
effect to the acquisitions by Purchaser of Interactive Solutions Incorporated,
Eagle River Interactive Inc. and Twinspark Interactive People B.V. as if each of
these acquisitions had occurred on January 1, 1999 and the related unaudited pro
forma statements of income, retained earnings and cash flow for the 9 months
then ended. Except as indicated on Schedule 4.4.1 hereto, such financial
statements, including (in the case of the audited statements) the footnotes
thereto, have been prepared in accordance with U.S. GAAP throughout the periods
indicated. The Purchaser Balance Sheet fairly presents in all material respects
the pro forma financial condition of the Purchaser at the date thereof and
fairly presents in all material respects all pro forma claims against and all
pro forma debts and liabilities of the Purchaser, fixed or contingent, as at the
date thereof, required to be shown thereon under U.S. GAAP, and the related pro
forma statements of income, retained earnings and cash flow fairly present in
all
18
material respects the pro forma results of operation of the Purchaser. Except as
set forth on Schedule 4.4.2, since September 30, 1999 (the "Purchaser Balance
Sheet Date") there has been no material adverse change in the properties,
financial condition, business or results of operations of the Purchaser.
Section 4.5 Brokers. No broker, finder, agent or similar intermediary
has acted on behalf of the Purchaser or its affiliates in connection with
this Agreement or the transactions contemplated hereby, and no brokerage
commissions, finders' fees or similar fees or commissions are payable by the
Purchaser or its affiliates in connection therewith based on any agreement,
arrangement or understanding with any of them.
Section 4.6 Capitalization. As of October 30, 1999 the Purchaser has an
authorized capitalization consisting of [ ] shares of common stock, $0.001 par
value per share, of which as of the Closing Date [ ] shares are issued and
outstanding, an aggregate of [ ] shares are allocated to the 1999 ▇▇▇▇▇▇.▇▇▇
Stock Option/Stock Issuance Plan., and an aggregate of 7,400,000 shares are
subject to issuance upon the exercise of certain warrants; in addition, there
are [ ] shares subject to the issuance of options under the Interactive
Solutions and Quadris Option Plans which were assumed by the Purchaser in April
1999. No other class of capital stock or series of any class of capital stock or
securities convertible into capital stock of Purchaser is authorized or
outstanding. There are no (a) outstanding subscriptions, options, warrants,
rights (including "phantom" stock rights), calls preemptive rights, or other
contracts, commitments, understandings or arrangements, including any right of
conversion or exchange under any outstanding security, instrument, plan or
agreement (collectively, "Options"), obligating Purchaser to issue or sell any
shares of the capital stock of Purchaser, or to grant, extend or enter into any
Option with respect thereto, or (b) outstanding Options providing for settlement
in cash.
Section 4.7 Purchaser's Common Stock. The shares of Purchaser's Common
Stock, when issued and delivered to the Stockholders pursuant to the provisions
of this Agreement, will be validly issued and outstanding, fully-paid and
non-assessable, free and clear of all liens other than restrictions on resale
arising by the lock-up agreement, exhibit E, or by virtue of Federal and state
securities laws of the United States (and to the extent applicable the
provisions of the Investment Representation Certificate to be delivered by VH
and AMS at the Closing), and will not be subject to any preemptive right of
shareholders of Purchaser. The shares of Purchaser's Common Stock issued to the
Stockholders together with 68,000 additional shares of Purchaser's Common Stock
to be included in the Option Program described in Schedule 3.1.3, represent
[1.8%] of the Applicable Purchaser Shares, as calculated and defined in Schedule
4.7 hereto (the "Stockholders Closing Percentage").
ARTICLE V
ACTIONS AT CLOSING BY THE STOCKHOLDERS
Simultaneously herewith:
19
Section 5.1 Required Approvals, Notices and Consents. The Stockholders
have obtained or given, at no expense to the Purchaser and there have not
been withdrawn or modified, any notices, consents, approvals or other actions
listed on Schedules 3.1.6 or 3.9.2 hereof (including without limitation,
obtaining all consents, approvals and/or waivers required under the contracts
listed on Schedule 3.8 in order to permit the consummation of the
transactions contemplated by this Agreement without causing or resulting in a
default, event of default, acceleration event or termination event under any
of such documents and without entitling any party to any of such documents to
exercise any other right or remedy adverse to the interests of the Purchaser
or the Company thereunder). Each such consent or approval was in form
reasonably satisfactory to counsel for the Purchaser. The same applies to the
approval required pursuant to section 7.3 herein.
Section 5.2 Good Standing Certificates. The Stockholders delivered to
the Purchaser: (a) a copy of the Company's and the Subsidiaries' Articles of
Incorporation, including all amendments, certified by attorney ▇▇▇▇ ▇▇▇▇▇▇;
(b) a certificate from the Erhvervs- og Selskabsstyrelsen to the effect that
the Company and the subsidiaries are in good standing.
Section 5.3 Surrender of Certificates, Stock Records and Protocols. The
Stockholders delivered to the Purchaser such other documents and instruments,
if any, as may be necessary to permit the Purchaser to acquire the Shares
free and clear of any and all Liens or voting or other restrictions of any
kind whatsoever adverse to the Purchaser. The Stockholders further delivered
the stockholder book (Aktiebog), the General Assembly Protocol
(generalforsamlingsprotokollen), the Board Meeting Protocol
(bestyrelsesprotokollen) and the Auditors Protocol (revisionsprotokollen) of
the Company and each Subsidiary. The closing is also conditional upon the
Stockholders and Visionik A/S's signing of Exhibit A-1.
Section 5.4 Employment Agreements. ▇▇▇▇▇▇ has entered into an
Employment Agreement with the Company, in the form and to the effect of
Exhibit B-1 hereto.
Section 5.5 [Intentionally left blank]
Section 5.6 Non-Solicitation Agreements. Each of ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
have entered into a Non-Solicitation Agreement with the Company, in the form
and to the effect of Exhibit C-1 and Exhibit C-2 hereto.
20
Section 5.7 Certified Resolutions. The Stockholders delivered to the
Purchaser a copy of the resolutions of the General Assembly of AMS
authorizing the execution, delivery and performance of the Agreement.
Section 5.8 Investment Representation Certificate. Each of the
Stockholders executed and delivered to the Purchaser and Investment
Representation Certificate as to the Shares in the form and to the effect of
Exhibit D hereto.
Section 5.9 Lockup Agreement. Each of the Stockholders shall have
entered into a Lockup Agreement with Purchaser in the form of Exhibit E
hereto.
Section 5.10 Repayment of Loans. All indebtedness of the Stockholders to
the Company, together with interest thereon from the date of inception, was
repaid in full, other than routine travel expense advances in the ordinary
course of business and consistent in amount with past practice, and the
Stockholders delivered to Purchaser a certificate, dated the Closing Date, to
such effect.
Section 5.11 Proceedings. All proceedings to be taken in connection
with the transactions contemplated by this Agreement and all documents
incident thereto were reasonably satisfactory in form and substance to the
Purchaser and its counsel, and the Purchaser received copies of all such
documents and other evidences as it or its counsel may reasonably request in
order to establish the consummation of such transactions and the taking of
all proceedings in connection therewith.
ARTICLE VI
ACTIONS AT CLOSING BY THE PURCHASER
Simultaneously herewith:
Section 6.1 Certified Resolutions. The Purchaser delivered to the
Stockholders a copy of the resolutions of the Board of Directors of the
Purchaser authorizing the execution, delivery and performance of this
Agreement and the transactions and other agreements contemplated hereby,
certified to by an officer of the Purchaser.
Section 6.2 Proceedings. All proceedings to be taken in connection with
the transactions contemplated by this Agreement, and all documents incident
thereto were reasonably satisfactory in form and substance to the
Stockholders, the
21
Company and their counsel and the Company received copies of all such documents
and other evidences as it or its counsel may reasonably request in order to
establish the consummation of such transaction and the taking of all proceedings
in connection therewith.
ARTICLE VII
OTHER AGREEMENTS
Section 7.1 Holding Period of Purchased Shares. Purchaser agrees that it
will not, prior to the third anniversary of the Closing Date, sell, assign,
transfer or otherwise dispose of the purchased Shares (a "Prohibited Transfer"),
except that a Prohibited Transfer shall not be deemed to occur upon the sale or
public offering of the capital stock of Purchaser or upon any (i) merger or
consolidation of Purchaser with or into another Company; (ii) sale, transfer or
disposition of the purchased Shares to an Affiliate; or (iii) sale or transfer
or other disposition of all or any portion of the capital stock, business or
assets of the Subsidiaries or either of them provided, however, that prior to
carrying out any of the transactions listed under (i), (ii) and (iii) above
prior to the third anniversary of the Closing, the Purchaser will in cooperation
with VH use best endeavors to obtain the approval of the Danish tax authorities,
if necessary for VH to maintain the qualifications of this Stock Exchange
Agreement as a tax-free exchange of shares, and, in this connection, the
Purchaser will favorably consider any proposals from VH to restructure or amend
any transaction then being contemplated, and further provided, that until the
first anniversary of the Closing, the Purchaser undertakes to indemnify VH for
USD 750,000 of the taxes incurred, if any, as a result of such transaction,
unless the transaction is beyond the control of the Purchaser.
Section 7.2 Nomenclature/Branding.
Immediately after close, the company will be renamed "▇▇▇▇▇▇.▇▇▇ : Copenhagen,"
or such other name as shall be accepted by the Danish Commerce and Companies
register if said name is unavailable. The Company maintains all rights to the
name "Visionik".
Section 7.3 IT Plus Reorganization. The Purchaser acknowledges and
agrees that the Stockholders have acquired the shares of IT+ A/S previously
held by the Company for a price of DKK 660,000. This will result in a taxable
gain of the Company in the amount of approximately DKK 100,000. The
shareholders will at closing present documentation to the effect that the
other shareholder in IT+ A/S accept this transfer.
Section 7.4 Employee Stock Option Program. Certificates representing
options to acquire an aggregate of 68,000 shares of Purchaser's Common Stock
will issued by Purchaser pursuant to the Option Program described in Schedule
3.1.3 within two weeks after closing.
22
ARTICLE VIII
SURVIVAL; INDEMNITY
Section 8.1 Survival. Notwithstanding any right of any party hereto
fully to investigate the affairs of any other party, and notwithstanding any
knowledge of facts determined or determinable pursuant to such investigation
or right of investigation, each party hereto shall have the right to rely
fully upon the representations, warranties, covenants and agreements of the
other parties contained in this Agreement and the Schedules, if any,
furnished by any other party pursuant to this Agreement, or in any
certificate delivered at the Closing by any other party. Subject to the
limitations set forth in Section 8.5, the respective representations,
warranties, covenants and agreements of the Stockholders and the Purchaser
contained in this Agreement shall survive the Closing.
Section 8.2 Obligation of the Stockholders to Indemnify.
Section 8.2.1 General Indemnity. Subject to the limitations contained
in Section 8.5 the Stockholders hereby agree, jointly and severally, to
indemnify the Purchaser and its officers, directors, employees, agents and
its affiliates (individually a "Purchaser Indemnified Party" and
collectively, the "Purchaser Indemnified Parties") against, and to protect,
save and keep harmless the Purchaser Indemnified Parties from, and to assume
liability for, payments of all liabilities (including liabilities for Taxes),
obligations, losses, damages, penalties, claims, actions, suits, judgments,
settlements, out-of-pocket costs, expenses and disbursements (including
reasonable costs of investigation, and reasonable attorneys', accountants'
and expert witnesses' fees) of whatever kind and nature, net of any tax
benefit actually realized by the Indemnified Party (it being understood that
any such benefit shall be paid in the first instance by Indemnifying Parties
and refunded by the Indemnified Party upon the realization of the benefit) to
the extent not covered by insurance the benefits of which will inure to the
applicable Indemnified Parties (as defined below) (collectively, "Losses"),
that may be imposed on or incurred by any Purchaser Indemnified Party or the
Company (collectively, the "Group") as a consequence of or in connection with
(i) any inaccuracy or breach of any representation or warranty contained in
Article III hereof or (ii) any breach of or failure by any Stockholder to
comply with or perform any agreement or covenant contained in this Agreement.
The term "Losses" as used herein is not limited to matters asserted by third
parties against the Group but includes Losses incurred or sustained by the
Group in the absence of third party claims.
Section 8.2.2 Special Indemnity. Prior to the Closing, the Company will
enter into an obligation to pay an amount not to exceed DKK 3,500,000 to
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ in accordance with Exhibits C-1 and C-2. The amount will
be paid to ▇▇▇▇▇▇ and Hougaard two weeks after the closing in consideration
of their covenants given pursuant
23
to their Non-Solicitation/Non-Servicing Agreements being entered into
simultaneously herewith, as well as in consideration of the untimely termination
of ▇▇▇▇▇▇'▇ employment contract. However, subject to withholding taxes, the
amount will be taxed as personal income under Danish tax law. It is the parties'
intent that the Company's obligations with respect to any third party loan
obtained to enable the Company to pay the amount, shall be limited solely to the
repayment thereof to the third-party lender, and that any additional Losses that
may be imposed or incurred by Purchaser or the Company with respect thereto,
including, without limitation, the disallowance by any tax authority of said
consideration to ▇▇▇▇▇▇ and Hougaard as a deductible business expense of the
Company, shall be fully indemnified by the Stockholders and shall not be subject
to the limitations contained in Section 8.5 below.
Section 8.3 Obligation of the Purchaser to Indemnify. Subject to the
limitations set forth in Section 8.5 hereof, the Purchaser hereby agrees to
indemnify the Stockholders and their respective officers, directors,
employees and agents (individually a "Stockholder Indemnified Party" and
collectively the "Stockholder Indemnified Parties"; the Purchaser Indemnified
Parties and the Stockholders Indemnified Parties are sometimes collectively
referred to as the "Indemnified Parties") against, and to protect, save and
keep harmless the Stockholder Indemnified Parties from and to assume
liability for any and all Losses that may be imposed on or incurred by the
Stockholder Indemnified Parties as a consequence of or in connection with (i)
any inaccuracy or breach of any representation or warranty contained in
Article IV hereof or (ii) any breach of or failure by the Purchaser to comply
with or perform any agreement or covenant by the Purchaser contained in this
Agreement.
Section 8.4 Indemnification Procedures.
Section 8.4.1 Notice of Asserted Liability. The Indemnified Party shall
promptly give notice (the "Claims Notice") to the party or parties required
to pay any amount in respect of Losses under Section 8.2 or 8.3
(collectively, the "Indemnifying Party"), of any demand, claim or
circumstances which in good faith it believes gives rise, or with the lapse
of time would or might give rise to a claim or the commencement (or
threatened commencement) of any action, proceeding or investigation that may
result in any Losses (an "Asserted Liability") without regard to the
limitations on indemnification set forth in Section 8.5 below. The Claims
Notice shall describe the Asserted Liability in reasonable detail, shall
indicate the amount (estimated, if necessary, and to the extent feasible) of
the Losses that have been or may be suffered by an Indemnified Party.
Section 8.4.2 Defense of Asserted Liability. The Indemnifying Party may
elect to compromise, settle or defend, at its own expense and by its own
counsel (such counsel to be reasonably satisfactory to the Indemnified
Party), any Asserted Liability. If the Indemnifying Party elects to
compromise, settle or defend such Asserted Liability, it shall within 30 days
(or sooner, if the nature of the Asserted Liability so requires) notify the
Indemnified Party in writing of its intent to do so and the Indemnified Party
shall cooperate, at the request and expense of the
24
Indemnifying Party, in the settlement or compromise of, or defense against, such
Asserted Liability. If the Indemnifying Party elects not to compromise, settle
or defend the Asserted Liability, or fails to notify the Indemnified Party of
its election as herein provided, the Indemnified Party may pay, compromise,
settle or defend such Asserted Liability at the expense of the Indemnifying
Party and the Indemnifying Party shall be bound by the results obtained by the
Indemnified Party with respect to such third party claim. Notwithstanding the
foregoing, the Indemnifying Party may not settle or compromise any claim without
the prior written consent of the Indemnified Party, if such settlement or
compromise does not include an unconditional release from all liability without
future obligation or prohibition on the part of the Indemnified Party. If an
Indemnified Party objects to a bona fide offer of settlement which provides
solely for a monetary payment and includes an unconditional release from all
liability without future obligation or prohibition on the part of the
Indemnified Party, which the Indemnifying Party wishes to accept, the
Indemnified Party may continue to pursue such matter, free of any participation
by the Indemnifying Party, at the expense of the Indemnified Party. In such
event, the obligation of the Indemnifying Party shall be limited to the amount
of the offer of settlement which the Indemnified Party refused to accept plus
the costs and expenses of the Indemnified Party incurred prior to the date the
Indemnifying Party notified the Indemnified Party of the offer of settlement.
The Indemnified Party shall have the right to employ its own counsel in any case
with respect to an Asserted Liability, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (a) the employment of
such counsel shall have been authorized in writing by the Indemnifying Party in
connection with the defense of such action, (b) such Indemnifying Party shall
not have, as provided above, promptly employed counsel reasonably satisfactory
to such Indemnified Party to take charge of the defense of such action, or (c)
such Indemnified Party shall have reasonably concluded that there may be one or
more legal defenses available to it which are different from or additional to
those available to such Indemnifying Party, in any of which events such
reasonable fees and expenses shall be borne by the Indemnifying Party and the
Indemnifying Party shall not have the right to direct the defense of such action
on behalf of the Indemnified Party in respect of such different or additional
defenses. If the Indemnifying Party chooses to defend any claim, the Indemnified
Party shall make available to the Indemnifying Party any books, records or other
documents within its control that are necessary or appropriate for such defense.
The parties hereto agree to cooperate fully with one another in the defense,
compromise or settlement of any Asserted Liability.
Section 8.4.3 Control by the Purchaser. All decisions and
determinations to be made by the Purchaser and/or a Purchaser Indemnified
Party under this Article VIII shall be made by the Purchaser in the name of
and on behalf of the Purchaser or such other Purchaser Indemnified Party and
all such decisions and determinations shall be binding upon the parties
hereto and such Purchaser Indemnified Party.
25
Section 8.5 Limitations on Indemnification.
Section 8.5.1 Indemnity Cushion. No claim, action or other Asserted
Liability with respect to Losses arising out of any of the matters referred
to in clause (i) of Section 8.2 may be asserted until such time as claims,
actions or other Asserted Liabilities with respect to Losses arising out of
any of the matters referred to in clause (i) of Section 8.2 shall exceed
$40,000 in the aggregate (in which case the Stockholders shall be liable for
all Losses in excess of $40,000); provided, however, that this Section 8.5.1
shall not apply to Losses relating to a breach of a representation or
warranty contained in Section 3.26, or pursuant to Section 8.2.2.
Section 8.5.2 Termination of Indemnification Obligations of the
Stockholders.
(a) The obligation of the Stockholders to indemnify under Section
8.2.1 hereof shall terminate on June 30, 2002 except (i) as to matters as to
which the Purchaser Indemnified Party has made a claim for indemnification or
given a Claims Notice under Section 8.4 hereof on or prior to such date and,
(ii) with respect to any claim for Losses pertaining to a misrepresentation or a
breach of representation or warranty under Section 3.11 or any other Section of
Article III of this Agreement relating to Taxes or pursuant to Section 8.2.2
hereof. The obligation to indemnify referred to in:
(A) the preceding clause (i) shall survive the expiration of such
period until such claims are finally resolved and any obligations with
respect thereto are fully satisfied; and
(B) the preceding clause (ii) shall terminate 60 days after the
expiration of the relevant statute of limitations, except as to matters as
to which any Indemnified Party has made a claim for indemnification or
given a Claims Notice under Section 8.4 on or prior to such date, in which
case the right to indemnification with respect thereto shall survive the
expiration of any such period until such claim is finally resolved and any
obligations with respect thereto are fully satisfied.
Section 8.5.3 Termination of Indemnification Obligations of the
Purchaser. The obligation of the Purchaser to indemnify under clause (i) of
Section 8.3 hereof shall terminate on June 30, 2002 except as to matters as
to which any Stockholders Indemnified Party has made a claim for
indemnification or given a Claims Notice under Section 8.4 hereof on or prior
to such date, in which case the right to indemnification with respect thereto
shall survive until the related claim for indemnification has been finally
resolved and any obligations with respect thereto are fully satisfied.
Section 8.5.4 Treatment. Any indemnity payments by an Indemnifying
Party to an Indemnified Party under this Article VIII shall be treated by the
parties as an adjustment to the Purchase Price.
26
8.5.5 Cap on indemnification. The liability of each of the Stockholders
with respect to losses arising out of any of the matters in this Agreement shall
not exceed (a) 100% of the Purchaser's shares of Common Stock issued to such
Stockholder pursuant to Section 2.1.1, or (b) USD 4,500,000 with respect to VH
and ▇▇▇▇▇▇ and USD 1,500,000 with respect to AMS and Hougaard, whichever the
lower. The Stockholders are jointly and severally liable up till the
aforementioned pro rata liability. As of June 30, 2001, the liability shall be
reduced to 50% of the shares or amounts mentioned. The Stockholders shall have
the option as to whether to satisfy its indemnification obligations in cash, in
shares of Purchaser's Common Stock, or in a combination thereof, and each share
of Purchaser's Common Stock shall be valued at its then-current value.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Expenses. The parties hereto shall pay all of their own
expenses relating to the transactions contemplated by this Agreement,
including, without limitation, the fees and expenses of their respective
counsel and financial advisers.
Section 9.2 Governing Law. The interpretation and construction of this
Agreement, and all matters relating hereto, shall be governed by the laws of
Denmark without reference to its conflict of laws provisions.
Section 9.3 "Person" Defined. "Person" shall mean and include an
individual, a company, a joint venture, a corporation, a limited liability
company, a limited liability partnership, a trust, an unincorporated
organization and a government or other department or agency thereof.
Section 9.4 "Knowledge" Defined. Where any representation and warranty
contained in this Agreement is expressly qualified by reference to the
knowledge of a party, such party confirms that it has made such due and
diligent inquiry as to the matters that are the subject of such
representations and warranties as shall be reasonable under the circumstances.
Section 9.5 "Affiliate" Defined. As used in this Agreement, an
"affiliate" of any Person, shall mean any Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is
under common control with such Person.
27
Section 9.6 Captions. The Article and Section captions used herein are
for reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 9.7 Publicity. Subject to the provisions of the next sentence,
no party to this Agreement shall, and the Stockholders shall insure that no
representative of the Company shall, issue any press release or other public
document or make any public statement relating to this Agreement or the
matters contained herein without obtaining the prior approval of the
Purchaser, the Company and the Stockholders. Notwithstanding the foregoing,
the foregoing provision shall not apply to the extent that Purchaser is
required to make any announcement relating to or arising out of this
Agreement by virtue of the federal securities laws of the United States or
the rules and regulations promulgated thereunder or other rules of the
National Association of Securities Dealers or other stock exchange on which
the securities of the Purchaser may then be traded, or any announcement by
any party or the Company pursuant to applicable law or regulations.
Section 9.8 Notices. Unless otherwise provided herein, any notice,
request, instruction or other document to be given hereunder by any party to
any other party shall be in writing and shall be deemed to have been given
(a) upon personal delivery, if delivered by hand, (b) three days after the
date of deposit in the mails, postage prepaid, if mailed by certified or
registered mail, or (c) the next business day if sent by facsimile
transmission (if receipt is electronically confirmed) or by a prepaid
overnight courier service, and in each case at the respective addresses or
numbers set forth below or such other address or number as such party may
have fixed by notice:
If to the Purchaser, addressed to:
▇▇▇▇▇▇.▇▇▇ Ltd.
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇.▇▇▇ Ltd.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Stockholders to the address set forth on Exhibit A;
28
Section 9.9 Parties in Interest. This Agreement may not be transferred,
assigned, pledged or hypothecated by any party hereto, other than by
operation of law. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
Section 9.10 Severability. In the event any provision of this Agreement
is found to be void and unenforceable by a court of competent jurisdiction,
the remaining provisions of this Agreement shall nevertheless be binding upon
the parties with the same effect as though the void or unenforceable part had
been severed and deleted.
Section 9.11 Counterparts. This Agreement may be executed in two or
more counterparts, all of which taken together shall constitute one
instrument.
Section 9.12 Entire Agreement. This Agreement, including the other
documents referred to herein and the Exhibits and Schedules hereto which form
a part hereof, contains the entire understanding of the parties hereto with
respect to the subject matter contained herein and therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
Section 9.13 Amendments. This Agreement may not be amended,
supplemented or modified orally, but only by an agreement in writing signed
by the Purchaser and the Stockholders.
Section 9.14 Third Party Beneficiaries. Each party hereto intends that
this Agreement shall not benefit or create any right or cause of action in or
on behalf of any person other than the parties hereto and their respective
successors and assigns as permitted under Section 9.9.
Section 9.16 Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or any breach hereof, shall be settled by
arbitration in accordance with Danish law, including the Danish Arbitration
Act (Voldgiftsloven). The arbitration panel shall consist of three
arbitrators, one nominated by Purchaser, one nominated by the Stockholders
and the third to be selected by the other two. In the event the three
arbitrators shall not have been nominated within 30 days following a notice
by either Purchaser or the Stockholders to the other(s) of its intention to
arbitrate, an arbitrator for the party who has not nominated an arbitrator
(if applicable) and the third arbitrator shall be chosen by the Det Danske
Voldgiftsinstitut (the Danish Arbitration Institute) pursuant to its rules
and regulations. The determination of the arbitrators shall be not
inconsistent with the terms of this Agreement and shall be final and binding
upon the parties to the arbitration without the right of appeal. The
arbitration shall be held in Copenhagen, Denmark in the
29
English language. The costs and expenses of the arbitrators shall be paid by the
non-prevailing party or parties to the arbitration proceeding. No party to this
Agreement shall be precluded from applying to a proper court for injunctive
relief by reason of the prior or subsequent commencement of an arbitration
proceeding as herein provided.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, on
the day and year first above written.
▇▇▇▇▇▇.▇▇▇ LTD.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
THE CORPORATE STOCKHOLDERS
VISIONIK HOLDING ApS
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
ASSOCIATED MANAGEMENT SERVICES A/S
In pursuance of General Assembly
resolution:
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇
------------------------------------
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇
30
Exhibits
Exhibit A: Shares; Addresses; Allocation of Purchase Price
Exhibit A-1: Notification signed by Visionik A/S concerning share exchange
Exhibit B1-1: Employment Agreement
Exhibit C-1: Non-Solicitation Agreement with ▇▇▇▇▇▇
Exhibit C-2: Non-Solicitation Agreement with Hougaard
Exhibit D-1: Investment Representation Certificate with ▇▇▇▇▇▇
Exhibit D-2: Investment Representation Certificate with Hougaard
Exhibit E-1: Lockup Agreement with ▇▇▇▇▇▇
Exhibit E-2: Lockup Agreement with Hougaard
Schedules
--------------------------------------------------------------------------------
Schedule 3.1.3 Description of Employee Option Scheme
--------------------------------------------------------------------------------
Schedule 3.1.6 List of Consents and Approvals
--------------------------------------------------------------------------------
Schedule 3.2 List of Jurisdictions of business
--------------------------------------------------------------------------------
Schedule 3.3. List of the Visionik A/S's Subsidiaries
--------------------------------------------------------------------------------
Schedule 3.3.1 Description of outstanding Options etc.
--------------------------------------------------------------------------------
Schedule 3.4. Copies of Balance Sheets
--------------------------------------------------------------------------------
Schedule 3.5 List of Information not in the possession of Visionik A/S
--------------------------------------------------------------------------------
Schedule 3.6 List of Liens on Tangible Personal Property
--------------------------------------------------------------------------------
Schedule 3.7.2 List of Real Property Leases
--------------------------------------------------------------------------------
Schedule 3.8 List of Contracts, including current money arrangements etc.
--------------------------------------------------------------------------------
Schedule 3.9.2 List of Consents and approvals
--------------------------------------------------------------------------------
Schedule 3.10 List of litigation, claims and administrative proceedings
--------------------------------------------------------------------------------
Schedule 3.11 List of contested tax assessments
--------------------------------------------------------------------------------
Schedule 3.12 List of defaults in respect of borrowed money
--------------------------------------------------------------------------------
Schedule 3.13 List of insurance policies
--------------------------------------------------------------------------------
Schedule 3.14 Lists of registrations of Intellectual Property and Licenses
--------------------------------------------------------------------------------
Schedule 3.16 List of the largest clients
--------------------------------------------------------------------------------
Schedule 3.17 List of Material adverse changes after September 30, 1999
--------------------------------------------------------------------------------
Schedule 3.20 Lists of interest in Customers, suppliers etc.
--------------------------------------------------------------------------------
Schedule 3.21 List of Bank Accounts and Powers of Attorney etc.
--------------------------------------------------------------------------------
Schedule 3.22 List of Compensation of Employees and exclusive consultants
--------------------------------------------------------------------------------
Schedule 3.23 List of Material adverse changes after September 30, 1999
--------------------------------------------------------------------------------
Schedule 4.3.2 List of Consents and Approvals
--------------------------------------------------------------------------------
Schedule 4.4 Financial Statements of Purchaser
--------------------------------------------------------------------------------
Schedule 4.4.1 US GAAP
--------------------------------------------------------------------------------
Schedule 4.4.2 List of Material adverse changes with respect to Purchaser
--------------------------------------------------------------------------------
Schedule 4.7 Stockholders Closing Percentage
--------------------------------------------------------------------------------
31
EXHIBIT A
Shares; addresses; allocation of purchase price
Visionik Holding ApS (registration no. ApS 240920 -- SE no. 20483288),
Hollaendervej 17, 3. th., DK-1855 Frederiksberg C, disposes of 375 shares in the
Company of a nominal value of DKK 375,000, and receives 429,000 shares of
Purchaser Common Stock.
Associated Management Services A/S (registration no. A/S 156640 -- SE no.
73684919), Lovvaenget 3, DK-2960 Rungsted Kyst, disposes of 125 shares in the
Company at a nominal value of DKK 125,000, and receives 143,000 shares of
Purchaser Common Stock.
EXHIBIT A-1
Notification signed by Visionik A/S concerning share exchange
In accordance with Article 25(b) of the Companies Act (Aktieselskabsloven) it is
hereby notified that the ownership to all shares issued by Visionik A/S (DKK
375,000 held by Visionik Holding ApS and DKK 125,000 held by Associated
Management Services A/S) have been transferred irrevocably to ▇▇▇▇▇▇.▇▇▇ Ltd.,
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇, as of this date.
Copenhagen, November 3, 1999
Visionik Holding ApS:
by:
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
Associated Management Services A/S:
by:
----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇
▇▇▇▇▇▇.▇▇▇ Ltd.:
by:
----------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
***
Visionik A/S hereby acknowledges that we have been informed of the above
transfer on November 3, 1999.
Visionik A/S:
by:
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇
The authenticity and authority as well as the date of the signatures above on
behalf of Visionik Holding ApS, Associated Management Services A/S and Visionik
A/S are hereby certified.
by:
----------------------------------
▇▇▇▇ ▇▇▇▇▇▇
Attorney of law,
Copenhagen
2