Exhibit 10.1

 

DATE January 29, 2015     Angelo Muscarella (1)     Coord3 Industries s.r.l. (2)
    and       Perceptron CMM, LLC (3)

 

 

 

Agreement

 

  for the purchase of  

100% of the business of

 

  Coord3 Industries s.r.l.  

 

 

 

  

TABLE OF CONTENTS

 

SECTIONS

 

Section 1 Introduction and Exhibits – Interpretation – Certain definitions 1    
  Section 2 The Transaction 3       Section 3 Establishment of NewCo 3      
Section 4 Contribution in Kind 4       Section 5 Sale and purchase of the Shares
5       Section 6

Purchase Price - Purchase Price Adjustment

6       Section 7 Completion – Conditions to Completion 8       Section 8

Pre-Completion Date Covenants

10       Section 9 Due Diligence 14       Section 10 Representations and
warranties 14       Section 11 Indemnification 14       Section 12 Further
covenants and specific indemnities of the Sellers 17       Section 13
Restrictive Covenants 19       Section 14 Indemnity Holdback Account 20      
Section 15 The Service Agreements 21       Section 16 Termination 21      
Section 17 Miscellaneous 22       Section 18 Governing Law - Arbitration 25

 

LIST OF THE EXHIBITS

 

Exhibit A:   description of the Target Business           Exhibit 1.03:  
Certain definitions           Appendix A:   Appraisal Financial Situation      
    Appendix B:   Indemnity Matters           Exhibit 7.02(a)(i)(cc):  
Director’s resignation form           Exhibit 7.02(a)(i)(ii)   Sellers Release  
        Exhibit 10.01:   Buyer’s representations and warranties          
Exhibit 10.02:  

Sellers’ representations and warranties 

          Exhibit 15(a):   the Muscarella Service Agreement  

 

 

 

 

agreement

 

This agreement (the “Agreement”) is entered into on Janaury 29, 2015

 

by and amongst

 

(1)         Angelo Muscarella, Italian national, born in [ ], on [ ], domiciled
at [ ], tax registration number [ ] (“Muscarella”)

 

(2)         Coord3 Industries s.r.l., a company established under the laws of
Italy, with registered offices at corso Siccardi 11bis, Torino, Italy,
registered with the Company Registry of Torino, Italy, registration and tax
registration number 09061500014, issued and subscribed share capital equal to
EUR 110,000, fully paid, for the purposes of this Agreement represented by
Angelo Muscarella, in his capacity as sole director (“Coord3”)

 

(hereinafter jointly “Sellers”),

 

and

 

(3)         Perceptron CMM, LLC, a company established under the laws of the
State of Michigan, United States of America, with offices at 47827 Halyard
Drive, Plymouth, Michigan 48170, United States of America, State of Michigan ID
no. E5614M, for the purposes of this Agreement represented by Jeffrey M.
Armstrong, in his capacity as President and Chief Executive Officer (“Buyer”),

 

(the Sellers and the Buyer when jointly referred to “Parties” and each of them
when generically and individually referred to “Party”)

 

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INTRODUCTION

 

A.           Coord3 is the sole legal and beneficial owner of the business as a
going concern formed by the assets (both tangible and intangible) and the
liabilities, the contracts, utilities, licenses and permits, the employment
agreements with the employees and all other elements listed in Exhibit A
(“Target Business”), through which Coord3 carries out its business activity.

 

B.           The share capital of Coord3 is entirely owned by Muscarella and his
son, Riccardo Muscarella, [ ], in the following proportions:

 

(i)          Muscarella: shares of total par value of EUR 108,900, representing
99% of Coord3’s issued share capital;

 

(ii)         Riccardo Muscarella: shares of total par value of Eur 1,100,
representing 1% of Coord3’s issued share capital.

 

C.           Coord3 is managed by Muscarella in his capacity as sole director,
with broad powers and authority to run both the ordinary and extraordinary
course of the business.

 

D.           On November 7, 2011, Muscarella and Mr. Keith Mills, a British
national, born in [ ], on [ ], domiciled at [ ], (“Mills”) entered into a Master
Share Purchase Agreement and a Share Purchase Agreement whereby Muscarella
agreed to sell to Mills and Mills agreed to purchase shares equal to 25% of
Coord3’s share capital, upon the occurrence of certain conditions provided for
therein (“November 2011 Agreements”); Mills has waived any and all rights
relating to and deriving from November 2011 Agreements.

 

E.           The Buyer is a non-contact vision and metrology company with a long
established experience in laser-based technology and applications.

 

F.           The Buyer is interested in acquiring the Target Business, upon the
terms and conditions set forth in this Agreement.

 

G.           The Sellers declared that they are interested and willing to
transfer and to cause the transfer of the Target Business to the Buyer, upon the
terms and conditions set forth in this Agreement.

 

Now therefore,

 

the Parties agree as follows:

 

SECTION 1

 

Introduction and Exhibits - Interpretation – Certain definitions

 

1.01 Introduction, Exhibits, Appendices and Annexes

 

The Introduction, the Exhibits, the Appendices and Annexes form an integral and
essential part of this Agreement, as amended from time to time as provided in
Section 17.03(b).

 

1.02 Interpretation

 

In this Agreement, unless the context otherwise requires:

 

(a)          reference to “this Agreement” shall include its Introduction, all
of its Exhibits, Appendices and Annexes;

 

(b)          reference to the term “control”, “controlling” and “controlled”
shall be interpreted according to article 2359 of the Italian Civil Code;

 

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(c)          the term “person” includes individuals, firms, companies,
corporations, unincorporated associations, governments, public agencies as well
as any association or partnership or joint venture (whether or not having a
separate full legal capacity).

 

1.03 Certain definitions

 

In addition to terms elsewhere defined in this Agreement and unless otherwise
provided herein, the terms and expressions listed in Exhibit 1.03 shall have the
meanings indicated therein and grammatical variations of such terms shall have
corresponding meanings.

 

SECTION 2

 

The Transaction

 

(a)          The Buyer acknowledges that, for the purposes of the transaction
contemplated in this Agreement (“Transaction”), the Sellers will cause Coord3
to:

 

(i)          establish a new, wholly owned limited liability subsidiary company,
under the laws of Italy, on the terms set forth in Section 3 (“NewCo”);

 

(ii)         contribute the Target Business to NewCo in exchange for shares, on
the terms set forth in Section 4 (“Contribution in Kind”).

 

(b)          In light of paragraph (a) above, the Parties agree that the
Transaction shall entail the acquisition by the Buyer of 100% of the share
capital of NewCo (“Shares”), following the Contribution in Kind by Coord3 to
NewCo, so that, upon Completion, the Buyer will be the sole legal and beneficial
owner of and will have full title to the Shares, free and clear of any
Encumbrances, and NewCo will be the legal and beneficial owner of and will have
full title to the Target Business, free and clear of any Encumbrance.

 

(c)          The Parties acknowledge that, in the interest of the Buyer:

 

(i)          the Target Business after Completion would benefit if it could
receive – whether directly or indirectly - Muscarella’s continuous support and
dedication to the Target Business so as to secure an orderly and smooth hand
over of the same business to the Buyer;

 

(ii)         36 months from the Completion Date is a sufficient time to
guarantee an orderly and smooth hand over of the Target Business;

 

(iii)        therefore, the Service Agreements are an essential part of the
Transaction and the services thereunder shall be provided until the third
anniversary of the Completion Date, without prejudice to the Buyer’s right to
terminate with notice as indicated in the same Service Agreements.

 

(d)          The Sellers represent and warrant that no clause or covenant of any
of the November 2011 Agreements may prevent the Transaction from being completed
or may be an obstacle to Completion. In any case, by signing this Agreement, the
Sellers hereby waive any right which arises from any of the November 2011
Agreements and which may prevent the Transaction from being completed or may be
an obstacle to Completion and waive the right to activate any clause or covenant
thereof which may prevent the Transaction from being completed or may be an
obstacle to Completion.

 

SECTION 3

 

Establishment of NewCo

 

With respect to the establishment of NewCo, the Parties agree and the Sellers
agree to procure that:

 

(i)NewCo shall be established by Coord3 as sole shareholder in the form of an
Italian limited liability company (società a responsabilità limitata);

 

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(ii)         the notary deed for the establishment of NewCo (“Deed of
Establishment”) shall be executed at least 10 (ten) days prior to Completion and
before notary Giovanna Ioli, with offices in Torino, Italy, via Alfieri 17
(“Designated Notary”);

 

(iii)        the contents and all of the terms and conditions of the Deed of
Establishment and of NewCo’s by-laws shall be agreed upon with the Buyer prior
to the execution of the Deed of Establishment;

 

(iv)        NewCo’s initial share capital, to be injected and fully paid by
Coord3 upon NewCo’s establishment, shall be Eur 10,000 (ten thousand);

 

(v)         upon the establishment of NewCo, Muscarella shall be appointed as
sole director and he shall waive the right to any director’s fees, until the
sole director will be replaced by a board of directors upon Completion.

 

SECTION 4

 

Contribution in Kind

 

4.01 General

 

The Parties acknowledge that, to complete the Contribution in Kind, the
following actions are required:

 

(i)          appointment by Coord3 of an appraiser (“Appraiser”) for the
appraisal of the Target Business for the purposes of and pursuant to article
2465 of the Italian civil code (“Appraisal”);

 

(ii)         preparation of an accurate financial situation of the Target
Business as at a date which shall not be earlier than 4 (four) months prior to
the Completion Date, to be attached to the Appraisal;

 

(iii)        increase of NewCo’s share capital to be subscribed for by Coord3
through the Contribution in Kind;

 

(iv)        execution of a notary deed of contribution of the Target Business in
exchange for shares (“Deed of Contribution”).

 

4.02 Appraisal and the financial situation

 

(a)          The Sellers represent that Coord3 has already appointed Mr. Guido
Franco, with offices at Corso Giuseppe Siccardi 11 bis, 10122 Torino, Italy, as
the Appraiser and that the Appraiser was entrusted with the following tasks:

 

(i)          to prepare the Appraisal;

 

(ii)         to work closely with the Parties and Coord3’s management to prepare
a financial situation of the Target Business as at the Reference Date, which, in
any case, shall not be earlier than 4 (four) months prior to the Completion
Date, a draft of which is attached hereto as Appendix A to Exhibit 1.03
(“Appraisal Financial Situation”);

 

(iii)        to deliver the Appraisal and the Appraisal Financial Situation to
the Parties prior to the Completion Date.

 

(b)          The costs of the Appraisal shall be borne by NewCo.

 

4.03 NewCo’s Share Capital Increase

 

The Parties shall procure that an increase of NewCo’s share capital is approved
as follows (“Share Capital Increase”):

 

(i)          the resolution for the Share Capital Increase shall be approved on
a day which is not later than 10 (ten) days prior to the Completion Date;

 

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(ii)         the Share Capital Increase shall be subscribed for by Coord3, in
its capacity as sole shareholder of NewCo, by way of the Contribution in Kind;

 

(iii)        the resolution to approve the Share Capital Increase shall allow
also for a partial subscription pursuant to article 2481bis 3rd paragraph of the
Italian civil code;

 

(iv)        the final term for the subscription of the Share Capital Increase
shall be set on a day which is 10 (ten) days after the Completion Date, though
without prejudice to Section 4.04;

 

(v)         the amount of the Share Capital Increase shall be Eur 990,000 (nine
hundred ninety thousand), provided that the value of the Target Business as
resulting from the Appraisal in excess of such amount of the Share Capital
Increase shall constitute and shall be accounted for as a share premium reserve.

 

4.04 The Contribution in Kind

 

(a)          The Sellers shall procure that Coord3 subscribes for the entire
Share Capital Increase by effecting the Contribution in Kind and, for these
purposes, that the Deed of Contribution is duly executed by Coord3 as
contributor and NewCo as recipient of the Contribution in Kind on the Completion
Date, before the Designated Notary on the Completion Date. Upon the execution of
the Deed of Contribution, NewCo shall acquire full title to and ownership of the
Target Business, free and clear of any Encumbrance.

 

(b)          The contents and all of the terms and conditions of the Deed of
Contribution shall be agreed upon with the Buyer prior to the execution of the
same deed. In any case, the Deed of Contribution shall provide for
representations and warranties given by Coord3 as contributor of the Target
Business for the benefit of NewCo as recipient of the Contribution in Kind which
are the same as those given by the Sellers to the Buyer under this Agreement, as
applicable. It is understood that no duplication for breach of warranties shall
be allowed. Therefore, if a claim for an event which constitutes a breach of a
representation or warranty is raised under this Agreement, no claim for the same
event which constitutes also a breach of a representation or warranty under the
Deed of Contribution may be raised pursuant to the latter.

 

(c)          The costs, duties and notary fees relating to the execution of the
Deed of Contribution and the filing of the same with the Company Registry shall
be borne by NewCo.

 

SECTION 5

 

Sale and purchase of the Shares

 

(a)          Upon the terms and subject to the conditions set forth in this
Agreement, the Sellers agree to procure the sale of the Shares by Coord3 to the
Buyer and the Buyer agrees to buy the Shares, on the Completion Date.

 

(b)          On the Completion Date, Coord3 and the Buyer shall enter into and
execute the Notary Deed of Transfer immediately after the execution of the Deed
of Contribution. The Sellers shall procure that Coord3 executes the Notary Deed
of Transfer. The Parties agree that the Notary Deed of Transfer shall be subject
to this Agreement and therefore, they shall ensure that any claim however
relating to the sale of the Shares is raised under this Agreement.

 

(c)          Upon fulfillment of all other formalities as required by Section
7.02 and fulfillment (or waiver) of all the conditions provided for in Section
7.03, the Buyer shall acquire full title to and ownership of the Shares, free
and clear of any Encumbrance, together with all rights attached thereto. The
Parties agree that the Buyer shall benefit from all the economic effects of the
sale of the Shares as contemplated by this Agreement as from the Completion
Date.

 

(d)          The Parties further acknowledge that the Buyer shall be entitled to
appoint a third party legal entity directly or indirectly controlled by,
controlling or under common control with the Buyer, pursuant to article 1401
Italian civil code, which will acquire the Shares. Should the Buyer wish to
appoint such third party legal entity, it may do so up to the Completion Date,
by notice in writing to the Sellers. All of the Buyer’s rights and obligations
arising from this Agreement shall inure to the benefit of such third party. In
any event, the Buyer will remain jointly liable together with such third party
for the performance of the obligations arising from this Agreement. The
execution by such third party and Coord3 of the Notary Deed of Transfer shall be
deemed as notice of the appointment, acceptance by the Sellers and acceptance of
the appointment by such third party.

 

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SECTION 6

 

Purchase Price – Purchase Price Adjustment

 

6.01 Purchase Price

 

(a)          The Parties agree that the purchase price in consideration of the
transfer to the Buyer of full title to and ownership of the Shares, free and
clear of any Encumbrances, shall be paid by the Buyer to Coord3 and it shall
comprise of:

 

(i)          a provisional purchase price to be paid upon Completion as follows:

 

(aa)         Eur 2,000,000 (two million) in cash (“Provisional Purchase Price”);

 

and it shall be subject to Sections 6.02 (the Provisional Purchase Price, as
adjusted pursuant to Section 6.02 “Purchase Price”).

 

(b)          In addition to the truthfulness of the representations and
warranties of the Sellers pursuant to this Agreement, and to the other covenants
of the same, the Purchase Price is determined on the basis of the following
essential assumptions:

 

(i)          the Completion Date Net Working Capital is equal to or greater than
zero (the “Target Net Working Capital”);

 

(ii)         upon the Completion Date, NewCo’s Financial Debt is not greater
than Eur 2,100,000 (two million one hundred thousand) (“Target Financial Debt”);

 

(iii)        Muscarella’s full-time services to the Buyer or NewCo pursuant to
Section 15 continue at least until the third anniversary of the Completion Date.

 

6.02 Purchase Price Adjustment and Determination of the Purchase Price

 

(a)          The Parties agree that the Purchase Price shall be:

 

(i)          decreased by an amount equal to amount by which the Completion Date
Net Working Capital is less than the Target Net Working Capital, if any,
(“Notional Net Working Capital Adjustment”), and;

 

(ii)         further decreased by an amount equal to the amount by which the
Completion Date Debt exceeds the Target Financial Debt, if any (“Debt
Adjustment”),

 

(the adjustments pursuant to this paragraph (a) hereinafter collectively
“Purchase Price Adjustment”).

 

(b)          If there is a Purchase Price Adjustment, the Purchase Price shall
be determined by decreasing the Provisional Purchase Price pursuant to Section
6.02(a) and shall therefore be the result of the following formula:

 

Provisional Purchase Price

 

-amount of the Notional Net Working Capital Adjustment

 

-amount of the Debt Adjustment

 

     

 

=Purchase Price

 

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(c)          The Parties agree that no adjustment shall be made, and no payment
shall be made under Section 6.04(c), in the event the Purchase Price Adjustment
is less then Eur 25,000 (twenty-five thousand).

 

6.03 Completion Date Balance-Sheet

 

(a)          Within 30 (thirty) Business Days following the Completion Date, the
Buyer shall prepare and deliver to the Sellers the Completion Date Balance-Sheet
and its determination of the Completion Date Net Working Capital and the
Completion Date Financial Debt and therefore of the Purchase Price Adjustment.

 

(b)          The Sellers shall review the Completion Date Balance-Sheet, the
Completion Date Net Working Capital, the Completion Date Financial Debt and the
determination of the Purchase Price Adjustment, as delivered pursuant to
paragraph (a) above. Should the Sellers disagree with the determination of any
of the Completion Date Net Working Capital or the Completion Date Financial Debt
and therefore on the determination of the Purchase Price Adjustment as delivered
pursuant to paragraph (a) above, the Sellers’ Representative shall notify the
Buyer within 30 (thirty) Business Days (the “Objection Period”) following the
date of delivery pursuant to paragraph (a) above, by way of a written notice
whereby the Sellers’ Representative indicates the matters on which they disagree
(“Disputed Matters”). If the Sellers’ Representative does not deliver a notice
of disagreement within the Objection Period, the Completion Date Balance-Sheet,
the Completion Date Net Working Capital, the Completion Date Financial Debt, or
the Purchase Price Adjustment, as applicable, shall become final and binding on
Buyer, Sellers and the Sellers’ Representative.

 

(c)          In the event of a Disputed Matter pursuant to paragraph (b), the
Buyer and the Sellers’ Representative shall negotiate in good faith in order to
reach a mutually acceptable, final and binding agreement on the determination of
the Purchase Price Adjustment.

 

(d)          Should the Buyer and the Sellers’ Representative fail to reach an
agreement on the Disputed Matters pursuant to paragraph (c) above within 15
(fifteen) Business Days following the Sellers’ Representative’s notice indicated
in paragraph (b) above, the Buyer and the Sellers agree to submit the Disputed
Matters to KPMG S.p.A. (provided that, when its services are required, KPMG
S.p.A. is independent from the Parties) (“Expert”), and the following shall
apply:

 

(i)          the Expert shall settle the Disputed Matters. In the case of
Section 6.03(a), the Expert shall determine the Purchase Price Adjustment and in
doing so it shall (aa) take into account and reflect any agreement between the
Parties; (bb) be limited to deciding each such Disputed Matter in an amount
which shall be equal to or in between the amounts proposed by the Sellers’
Representative and the Buyer, and no more and no less; (cc) use those items or
amounts not disputed by the Sellers’ Representatives in the notice of
disagreement; (dd) determine the Completion Date Net Working Capital or the
Completion Date Financial Debt (depending on the Disputed Matter) by applying
the Agreed Accounting Principles; (ee) apply the terms of this Agreement and in
particular Section 6.02; (ff) justify in writing its determinations with respect
to each of the Disputed Matters;

 

(ii)         the Parties, each to the extent within their control, shall allow
the Expert to have access to Coord3’s and NewCo's books and records;

 

(iii)        the Expert shall deliver its determinations to the Parties in
writing within thirty (30) Business Days from the acceptance of the assignment;

 

(iv)        the determinations of the Expert prepared and delivered in
accordance with this paragraph (d) shall be final and binding upon the Parties.
Hence, the Purchase Price Adjustment, calculated on the basis of the Expert’s
decision shall be final and binding upon the Parties;

 

(v)         all fees and disbursements of the Expert shall be equally borne by
the Parties, unless the Expert confirms the determinations of one Party, in
which case the fees and disbursements shall be entirely borne by the other
Party;

 

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(vi)        the Expert shall act as an expert (and not as an arbitrator)
pursuant to article 1349 1st paragraph of the Italian Civil Code; and

 

(vii)       should the Expert decline the appointment or not be independent from
the Parties when its services are required or fail to deliver its determinations
within the term indicated in paragraph (d)(iii) above, each Party shall be
entitled to request the Chairman of the Ordine dei Commercialisti of Torino to
appoint any other audit firm of international repute, which is not in conflict
of interest with any of the Parties. The audit firm appointed pursuant to this
sub-paragraph (vii) shall act as the Expert in accordance with this paragraph
(d).

 

(e)          The Parties agree that the Completion Date Balance-Sheet shall be
prepared and the Completion Date Net Working Capital and the Completion Date
Financial Debt shall be determined by applying the Agreed Accounting Principles.

 

6.04 Payment of the Purchase Price

 

(a)          The payments of all portions of the Purchase Price to be paid in
cash shall be made by the Buyer to Coord3 by bank wire transfers to Coord3’s
bank account the details of which shall be indicated by the Sellers in writing
at least 7 (seven) Business Days prior to each date on which payments fall due,
as indicated in the following clauses of this Section 6.04.

 

(b)          The Provisional Purchase Price shall be paid to Coord3 upon the
execution of the Notary Deed of Transfer as follows:

 

(i)          as to Eur 1,700,000 (one million seven hundred thousand), to
Coord3’s bank account as indicated in paragraph (a) above.

 

(ii)         as to Eur 300,000 (three hundred thousand), to be credited in the
Buyer’s financial records as an Indemnity Holdback Account and paid to Coord3 as
set forth in Section 14.

 

(c)          The amount of the Purchase Price Adjustment shall be paid by the
Sellers to the Buyer if a decrease in the Purchase Price within 10 (ten)
Business Days from the date on which the Purchase Price Adjustment has been
finally determined, pursuant to Sections 6.02 and 6.03.

 

(d)          No interest shall accrue on any of the amounts to be paid by either
Party pursuant to paragraphs (b) and (c) above, if timely paid.

 

SECTION 7

 

Completion – Conditions to Completion

 

7.01 Completion Date

 

(a)          Completion shall occur on February 27, 2015 or any other date as
agreed between the Parties, subject to the conditions to Completion indicated in
Section 7.03 being satisfied or waived by the interested Parties in writing on
or before the Completion Date.

 

(b)          The Completion session and the execution of the Notary Deed of
Transfer shall take place at the office of notary Giovanna Ioli in Torino,
Italy, via Alfieri 17 or any other place as agreed between the Parties.

 

7.02 Completion

 

(a)          The Parties, each to the extent within its control, shall
consummate or procure the consummation of all of the following actions and
transactions, on or before the Completion Date, as follows:

 

(i)          the Sellers shall cause the following to occur or have occurred:

 

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(aa)         subscription of the Share Capital Increase and execution of the
Deed of Contribution, to be effective on the Completion Date;

 

(bb)         delivery to the Buyer of a notary certificate which confirms the
execution of the Deed of Contribution and that the same is effective on the
Completion Date;

 

(cc)         Muscarella’s resignation from the office of sole director of NewCo
with effect as from the Completion Date together with a statement (in the agreed
form attached hereto as Exhibit 7.02(a)(i)(cc)) whereby he declares to have no
and waives any and all rights or claims vis-à-vis NewCo in relation to his role
and duties as director;

 

(dd)         delivery to the Buyer of a copy of the resignation letter and
statement indicated in sub-paragraph (cc) above;

 

(ee)         approval of a shareholders’ resolution of NewCo (on the Completion
Date prior to the execution of the Notary Deed of Transfer) for the purpose of:

 

(aaa)        appointing the new directors of NewCo as designated by the Buyer to
replace the sole director who will have resigned pursuant to paragraph (aa);

 

(bbb)        determining the new directors’ remuneration as agreed with the
Buyer;

 

(ff)         delivery to the Buyer of a written statement whereby the Sellers
warrant to the Buyer that, as from the date hereof:

 

(aaa)        the Target Business has been conducted in accordance with the
provisions of Section 8.01;

 

(bbb)        NewCo has not traded nor transacted any business or assumed any
liability or undertaken any obligation;

 

(gg)         delivery to the Buyer of a written statement whereby the Sellers
warrant that the representations and warranties given by the Sellers and
referred to in Section 10.02, Section 2(d), and Section 9(b) are accurate, true
and correct as at the Completion Date and as if given at the Completion Date,
and also with respect to NewCo;

 

(hh)         delivery to the Buyer of a copy of an agreement signed by Riccardo
Muscarella and AFS which contemplates the terms and conditions indicated in
Section 13(c);

 

(ii)         delivery to the Buyer of a written statement with the release of
all claims from Sellers in the form attached as Exhibit 7.02(a)(i)(ii);

 

(jj)         delivery to the Buyer of a written statement whereby all Sellers
agree to and confirm the restrictive covenants provided for in Section 13;

 

(kk)         delivery to the Buyer of a statement whereby Coord3 acknowledges
receipt of the Provisional Purchase Price;

 

(ll)         delivery to the Buyer of the Fire Department Clearance (Certificato
Prevenzione Incendi) concerning the Property;

 

(mm)         delivery to the Buyer of a certified copy of Coord3’s shareholders’
resolution which approved Coord3’s financial statements as at December 31, 2013.

 

(nn)         Coord3’s Subsidiaries and Coord3 China Ltd shall sell all of their
assets to Buyer or its Affiliates for nominal consideration.

 

(oo)         delivery of the waiver from Mills of any right which arises from
any of the November 2011 Agreements, assignment to Coord3 of all domain names
used by Coord3 in Mills name and a release signed by Mills in a form similar to
Exhibit 7.02(a)(i)(ii).

 

(ii)         the Buyer shall:

 

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(aa)         deliver to the Sellers evidence of the payment, by bank wire
transfer, of the Provisional Purchase Price to be paid at the Completion Date.

 

(iii)        the Sellers and the Buyer shall, each to the extent within their
control:

 

(aa)         cause a resolution of the board of directors of NewCo to be validly
approved on the Completion Date with the newly appointed directors, for the
purpose of appointing NewCo’s chairman and managing director and of vesting them
with the necessary powers to run and manage NewCo’s business;

 

(bb)         cause the execution by the Buyer and Coord3 of the Notary Deed of
Transfer;

 

(cc)         cause the Service Agreements to be entered into and duly executed
by the relevant parties;

 

(b)          Completion shall be deemed to have occurred when all of the actions
and transactions indicated in Section 7.02(a) above shall have been duly
consummated or waived by the interested Party.

 

7.03 Conditions to Completion

 

(a)          Completion is subject to the following conditions to Completion
which shall have occurred or shall have been satisfied or waived by the
interested Party by the Completion Date:

 

(a1)conditions in favor of each of the Buyer and the Sellers: all actions and
transactions provided for in Section 7.02 shall have been consummated or waived
by the interested Party in writing;

 

(a2)conditions in favor of the Buyer:

 

(i)          the Target Business, all of its assets and the Shares are free and
clear of any Encumbrances;

 

(ii)         no Material Adverse Change in Coord3, NewCo or the Target Business
since the Reference Date;

 

(iii)        the Buyer (or one of its affiliated companies) has acquired full
title to and ownership of the Czech Shares, free and clear of any Encumbrances;

 

(iv)        Receipt of Required Consents and the lease agreement between AGO and
BNP Paribas Lease Group relating to the Property;

 

(v)         Zeiss has not withdrawn its waiver of its right of pre-emption nor
asserted a right to manufacture under the Cooperation Agreement between Coord3
and Zeiss;

 

(vi)        no legal proceedings are pending which are aimed at preventing the
Transaction (or any portion thereof) from completing.

 

(b)          Should any of the conditions indicated in paragraph (a) above not
be satisfied or waived by the interested Party by the Completion Date, the
Parties shall be released from the obligation to complete the acquisition of the
Shares contemplated by this Agreement, which shall be deemed terminated.

 

(c)          Should any of the conditions to Completion provided for in this
Section 7.03 not be met or satisfied by the Completion Date due to one of the
Parties’ failure to provide its utmost co-operation for the purpose of the
satisfaction of such conditions or to fulfil the obligations provided for in
Section 7.02, termination of this Agreement pursuant to Section 7.03(b) shall be
without prejudice to any remedy the other Party may have under the law or
pursuant to this Agreement.

 

SECTION 8

 

Pre-Completion Date Covenants

 

8.01 Management and conduct of NewCo and of the Target Business

 

(a)          From the date hereof and until the Completion Date, unless
otherwise contemplated by this Agreement or approved by the Buyer in writing,
the Sellers shall cause Coord3 to:

 

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(i)          conduct the Target Business (including managing the working
capital, the collection of accounts receivable, the payment of accounts payable)
with due care and diligence in the ordinary and usual course, consistent with
past practice as disclosed to the Buyer;

 

(ii)         continue to insure all insured assets which are part of the Target
Business, whether owned or leased, and use, operate, maintain and repair all
such assets in accordance with past practice;

 

(iii)        preserve its relationships with the employees, self-employed
persons, distributors, agents, representatives, suppliers and customers;

 

(iv)        refrain from acting or omit to act in such way as to cause a
material breach of any material agreement, contract, commitment or obligation of
Coord3 which is part of the Target Business;

 

(v)         keep the facilities, machinery and equipment which are part of the
Target Business in normal operating conditions and repair, except for ordinary
wear and tear;

 

(vi)        duly and timely comply in all material respects with all of its
obligations, including the obligations arising from any loan or other financial
commitment;

 

(vii)       give the Buyer reasonable direct access to management, legal and
financial advisors, auditors and documents of the Target Business.

 

(viii)      continue to maintain its books and records in accordance with all
applicable laws and the Italian Accounting Principles.

 

(ix)         provide to Buyer financial statements for each month prepared by
Coord3 for its internal use or for delivery to third parties, if any, promptly
following their preparation, but in no event later than the 20th day following
the end of the month.

 

(b)          The Parties agree (and the Sellers agree to procure) that, from the
date hereof and until the Completion Date, decisions by Coord3 concerning the
matters listed below shall not be made and shall not be implemented without the
Buyer’s prior written consent (such consent not to be unreasonably denied or
delayed):

 

(i)          sale or disposal of any assets;

 

(ii)         granting of any rights (including in rem securities) in respect of
any of Coord3’s assets or the charging of any of said assets with any
Encumbrances;

 

(iii)        decisions to incur any indebtedness or to borrow any money (except
within the limits of the facilities currently available to Coord3 as disclosed
to the Buyer), or to enter into any factoring or invoice discount agreement;

 

(iv)        extension of the terms of payment of any payables or other
liabilities or of any receivables or discount any receivables;

 

(v)         transactions (including share capital increase or decrease) which
affect the share capital of Coord3;

 

(vi)        the granting of any rights (including in rem security rights) on any
of the shares of NewCo or any further share to be issued by NewCo and issuance
of any bond or other securities;

 

(vii)       decisions to undertake any capital commitment (purchase or financial
/ capital lease of fixed or other assets);

 

(viii)      decisions to enter into any partnership, consortium, association,
joint venture agreements;

 

(ix)         change of the remuneration of or benefits provided to any of the
employees or managing director, other than increases required by the law or by
the applicable collective bargaining agreements;

 

(x)          recruitment of any new dirigente or quadro or promotion of any
employee to such levels;

 

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(xi)         any redundancy plan or the dismissal of any dirigente or quadro;

 

(xii)        acquisition or disposal of equity interests in other entities or of
businesses as going concerns or any branches thereof;

 

(xiii)       agreements with customers or suppliers (including purchase orders)
which are outside of the ordinary course of business or (aa) which have each a
value greater than EUR 150,000 as to customers contracts and EUR 150,000 as to
suppliers, or (bb) whereby the counterpart may withdraw or terminate without
cause, or (cc) whereby the counterpart may withdraw or terminate for change of
control, or (dd) which provide for restrictions to Coord3’s or any of Coord3’s
present or future affiliates’ freedom to operate in the market, or (ee) whereby
Coord3 must give unusual warranties or guarantees, or (ff) which contemplate
unusual payment terms if compared with standard market practice;

 

(xiv)      agreements with related parties (including shareholders, directors or
employees of Coord3 or relatives of the shareholders or of the directors or
employees);

 

(xv)       change in accounting methods, policies or procedures or presentations
of accounts; declaration and distribution of dividends;

 

(xvi)      settlements of disputes when the overall value exceeds EUR 150,000;

 

(xvii)     guarantees to secure the obligations of a third party;

 

(xviii)    liquidation; dissolution; mergers, de-mergers and restructurings;

 

(xix)       real estate leases;

 

(xx)        permitting the lapse or forfeiture of intellectual property rights
or other intangible assets;

 

(xxi)       fail to file any tax returns or any other report to any authority as
required under the law or any contract by its applicable due date or fail to pay
any taxes that first become due and payable after the date hereof, as and when
they first became due and payable;

 

(xxii)      negotiations for the settlement or compromise, settlements or
compromise of any tax liability;

 

(xxiii)     Enter into or amend any agreement, except for acceptance or
placement of purchase orders in the ordinary course of business;

 

(xxiv)    pay any dividend or distribution;

 

(xxv)     terminate any material agreement;

 

(xxvi)    taking any action that would make any of the representations and
warranties hereof untrue or failing to take any action that would prevent any of
the representations and warranties from becoming untrue.

 

8.02 NewCo

 

From the date of its establishment and until the Completion Date, unless
otherwise contemplated by this Agreement or approved by the Buyer in writing,
the Sellers shall cause NewCo to refrain from trading and transacting any
business and they shall ensure that it will not assume any liability or
undertake any obligation.

 

8.03 Site visits

 

The Sellers, prior to Completion Date, shall ensure that representatives of the
Buyer are allowed to visit the Property and the manufacturing facilities of
Coord3, upon Buyer’s reasonable request, which shall be made in writing (also
via email) at least 2 Business Days before the date of the visit; in any event,
the Buyer hereby acknowledges that the visit on site shall be carried on in a
manner which will not unreasonably disrupt the normal and ordinary activity of
Coord3, its directors, managers and employees.

 

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8.04 Tax Certificate

 

(a)          The Parties acknowledge that, within the context of the
Transaction, the Buyer will request the issuance of a Tax Certificate relating
to Coord3.

 

(b)          The Sellers shall ensure that, upon the Buyer’s request and within
2 (two) days from receipt of such request, Coord3:

 

(i)          grants its consent – if necessary – for the Buyer to file a request
with the competent authorities to obtain the Tax Certificate relating to Coord3;

 

(ii)         signs and delivers to the Buyer whatever document or form is
necessary for the purposes of paragraph (i).

 

8.05 Consultation process pursuant to art. 47 law 29.12.1990 no. 428

 

(a)          The Parties acknowledge that the transfer of title to and ownership
of the Target Business upon the Contribution in Kind as contemplated by this
Agreement requires that a consultation process with the trade unions and the
work councils of Coord3 is conducted pursuant to art. 47 law 29.12.1990 no. 428
(and subsequent amendments).

 

(b)          The Parties agree:

 

(i)          to provide their utmost mutual cooperation so that the consultation
process is fulfilled in accordance with all statutory provisions of law:

 

(ii)         that all phases and steps of this process shall be carried out by
mutual consent before the Completion Date. In particular, the contents of the
notice to be given to the trade unions and work councils to open the
consultation process as well as the contents of the agreement at the end of the
process (if any) shall be agreed upon between the Parties beforehand.

 

8.06 Other Pre-Completion Date Covenants

 

(a)          The Sellers shall ensure that, from the date hereof until the
Completion Date, the Buyer will have access to Coord3’s and NewCo’s books,
records, contracts and personnel, upon its reasonable request which shall be
made in writing (also via email) at least 2 Business Days before the date of the
relevant access, being agreed and understood that such access shall be carried
on in a manner which will not unreasonably disrupt the normal and ordinary
activity of Coord3, its directors, managers and employees.

 

(b)          The Sellers shall take all necessary actions to obtain the Required
Consents, so that they are delivered prior to the Completion Date.

 

(c)          During the term of this Agreement, the Sellers will not, and will
cause their respective officers, directors, employees, legal counsel,
accountants, advisors or other consultants or agents to not directly or
indirectly, solicit or enter into any agreement or negotiations with, or furnish
information to, any person with respect to any proposal to acquire any of the
share capital or a substantial portion of the assets of Coord3 or to merge or
consolidate with Coord3. If the Sellers receive any such proposals, or inquiries
regarding the same, the Sellers shall promptly notify the Buyer of the terms of
such proposals or inquiries and the identity of the parties making the same.

 

8.07 Next Metrology

 

Coord3 acknowledges and agrees that it does not have a legally binding right to
require Next Metrology to permit it to sell, license, or distribute TouchDMIS or
other software owned by Next Metrology. This Section 8.07 shall survive the
termination of this Agreement.

 

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SECTION 9

 

Due diligence

 

(a)          Prior to the execution of the Agreement, the Buyer has conducted a
full legal, economic, financial, accounting, commercial, tax, employment, social
security, corporate and environmental due diligence on the Target Business (“Due
Diligence”). Without prejudice to any other term and condition contemplated by
this Agreement, on the basis of the outcome of the Due Diligence, the Buyer has
agreed to enter into this Agreement.

 

(b)          The Sellers warrant and represent that all information and data
which the Sellers, the directors, employees or advisors of Coord3 provided to
the Buyer during the Due Diligence process and the negotiations prior to the
execution of the Agreement are complete, accurate, truthful and fairly reflect
the financial, economic and business situation of the Target Business and no
relevant document and information has been withheld.

 

SECTION 10

 

Representations and warranties

 

10.01 Buyer’s representations and warranties.

 

The Buyer gives the Sellers the representations and warranties indicated in
Exhibit 10.01 and hereby acknowledges that each of such representations and
warranties is material and essential to the Sellers, who are relying on such
representations and warranties in entering into this Agreement. For the
avoidance of any doubt, it is agreed that the Buyer’s representations and
warranties shall not be affected, limited or diminished by any knowledge by the
Sellers of the matters covered by the representations and warranties.

 

10.02 Sellers’ representations and warranties.

 

The Sellers give the Buyer the representations and warranties indicated in
Exhibit 10.02, and hereby acknowledge that each of such representations and
warranties is material and essential to the Buyer, who is relying on such
representations and warranties in entering into this Agreement. For the
avoidance of any doubt, it is agreed that the Sellers’ representations and
warranties shall not be affected, limited or diminished by any investigation
(including the Due Diligence) up to this date or hereafter made by the Buyer
(directly and through its advisors) with respect to NewCo, the Shares, the
Target Business, its assets, liabilities and properties or by any knowledge by
the Buyer of the matters covered by the representations and warranties. As of
the date of this Agreement, the Buyer’s representatives, Jeffrey Armstrong or
Keith Marchiando, do not have actual conscious awareness of any mistake,
inaccuracy or breach of the representations and warranties of Sellers in this
Agreement.

 

SECTION 11

 

Indemnification

 

11.01 Sellers’ indemnification obligation

 

(a)          General

 

(i)          The Sellers shall indemnify the Buyer from and against any and all
liabilities, reduced value of the assets, losses, damages, costs, penalties,
deficiencies, of the Target Business or incurred in or suffered by NewCo
resulting or deriving from any mistake, inaccuracy or breach of any of the
representations and warranties made or given by the Sellers in Section 10,
Section 2(d) and Section 9(b) or confirmed by the Sellers at the Completion Date
pursuant to Section 7.02(a)(i)(gg) (“Losses” and each a “Loss”).

 

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(ii)         The indemnification obligation provided for in this Section 11.01
shall extend to all costs, expenses (including reasonable attorney’s fees and
experts’ costs) and disbursements incurred by the Buyer in enforcing its rights
in respect of a claim under this Agreement and/or by NewCo in enforcing its
rights and in resisting any Third Party Claim.

 

(iii)        The amount of a Loss shall be reduced by the amount of any specific
provision made in the Completion Date Net Working Capital against the risk which
resulted in the relevant Loss.

 

(iv)        The Parties agree that any payments due by the Sellers as
indemnification shall be made by the Sellers directly to the Buyer, unless the
Buyer gives instructions to the Sellers to make such payments directly to NewCo.

 

(v)         The Sellers shall be under no obligation to indemnify the Buyer
under this Section 11.01 for any Loss in relation to which, by the time the
payment by the Sellers is due, either the Buyer or NewCo receives compensation,
indemnification or reimbursement by third parties (including insurance
companies), without recourse, to the extent of such compensation,
indemnification or reimbursement.

 

(vi)        The Sellers and the Buyer expressly agree (aa) that the direct and
strict object of the sale contemplated by this Agreement is the Shares
themselves rather than the underlying net assets of NewCo; (bb) hence, the
provisions of Section 10 (Representations and Warranties), Section 2(d), Section
9(b) and Section 11 (Indemnification) are autonomous representations, warranties
and indemnities.

 

(b)          Limitations to the Sellers’ liability

 

(i)          The Sellers shall only be liable to the Buyer under this Section
11.01 for any Losses if the aggregate amount of the Losses exceeds Eur 50,000
(fifty thousand), in which case the Sellers shall be liable only for the excess
amount.

 

(ii)         The Sellers shall be liable to the Buyer under this Section 11.01
for Losses up to a maximum aggregate amount equal to Eur 600,000 (six hundred
thousand) (the “Indemnity Cap”).

 

(iii)        The limitation to the Sellers’ liability provided for in paragraphs
(b)(i) and (b)(ii) above shall not apply to Losses resulting or deriving from
any mistake, inaccuracy or breach of any of the representations and warranties
relating to authority, good standing, title to the shares and the Target
Business, regulatory compliance, damages to public authorities/entities (danno
erariale), Encumbrances or Coord3 Income Taxes.

 

(iv)        The Parties agree that any event or circumstance disclosed by the
Sellers in Exhibit 10.02 will exclude the Sellers’ liability under this Section
11.01 as to the Losses which specifically relate to the disclosure.

 

(c)          Time limits to Sellers’ liability

 

The Sellers shall not be liable to the Buyer under this Section 11.01 in respect
of any Loss if the relevant Indemnification Claim is notified to the Sellers
after:

 

(aa)         the 20th (twentieth) Business Day after the date of expiration of
the relevant statute of limitation (termine di prescrizione), as to Losses
referred to in paragraph (b)(iii) above;

 

(bb)         the 20th (twentieth) Business Day after the 3rd (third) anniversary
of the Completion Date, for Losses relating to any employment matters;

 

(cc)         the 20th (twentieth) Business Day after 18 months from the
Completion Date, for Losses relating to any matters other than those indicated
in sub-paragraphs (aa) and (bb).

 

11.02 Buyer’s indemnification obligation

 

(a)           The Buyer shall indemnify the Sellers from and against all losses,
damages, costs and penalties incurred in, or suffered by the Sellers, resulting
or deriving from any mistake, inaccuracy or breach of any of the representations
and warranties made or given by the Buyer in or pursuant to Section 10.

 

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(b)          The provisions of Section 11.01 (including those concerning
liability limitations) shall apply to the indemnification obligations of the
Buyer herein, as applicable.

 

11.03 Indemnification procedure

 

(a)          Whenever an event or circumstance which could give rise to an
Indemnification Claim (including a Third Party Claim) (“Indemnity Event”) occurs
for which a Party may seek indemnification under this Section 11, the Party
seeking indemnification (“Indemnified Party”) shall notify in writing the Party
from which indemnification is sought (“Indemnifying Party”) (and, for a Third
Party Claim, within 120 (one hundred twenty) days after the Indemnified Party
has actual knowledge of the Indemnity Event) (“Notice of Claim”). The Notice of
Claim shall specify relevant facts known to the Indemnified Party giving rise to
the Indemnification Claim, the amount of the Loss and the request for
indemnification. The Parties agree that in case an indemnification is requested
by the Buyer to the Sellers, Notice of Claim may also be validly served by
NewCo.

 

(b)          Notwithstanding the above, no claim shall be made by the
Indemnified Party against the Indemnifying Party under this Agreement in respect
of any matter or liability to the extent that:

 

(i)          it has been paid or satisfied on or before the Completion Date
where that payment or satisfaction is reflected in the Completion Date Net
Working Capital;

 

(ii)         to the extent that provision or reserve was made for it in the
Completion Date Balance-Sheet;

 

(iii)        it would not have arisen or occurred but solely by reason of an
action or omission of the Indemnifying Party specifically required to be taken
by them under this Agreement;

 

(iv)        it would not have arisen or occurred but solely for an act, omission
or transaction of the Indemnified Party or any of its respective directors,
employees or agents;

 

(v)         it would not have arisen or would have been reduced (to the extent
of the relevant reduction) or eliminated but solely for the failure or omission
on the part of the Indemnified Party to make any claim, election, surrender or
disclaimer or to give any notice or consent or to do any other thing under the
provisions of any relevant legislation.

 

(c)          If the Indemnity Event is a Third Party Claim against NewCo, the
following shall apply:

 

(i)          the Buyer shall cause NewCo to diligently take all reasonable
defensive steps;

 

(ii)         in the defense against the Third Party Claim, the Buyer shall cause
NewCo to consult with the Sellers’ Representative;

 

(iii)        NewCo’s management and/or the Buyer shall inform the Sellers about
the status of the relevant matter and about any developments in connection with
the Third Party Claim;

 

(iv)        in any event, the Buyer shall not agree to any settlement of the
Third Party Claim or to any waiver related thereto, without the prior written
consent of the Sellers, not to be unreasonably withheld or delayed and which
shall be considered as granted absent response within 30 (thirty) Business Days
(or such shorter term required by the circumstances) following written request
from the Buyer to the Sellers. Should the Sellers deny their approval, as a
condition to the effectiveness of such denial, (aa) they shall specify the
reasons for the denial in writing, and (bb) they shall be liable for the
relevant Loss, including the immediate payment of all costs incurred to defend
such Third Party Claim as they are incurred by Indemnified Party.

 

(v)         the relevant indemnification obligations shall survive until the
Third Party Claim has been finally resolved.

 

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(d)          Payments of all amounts due by the Indemnifying Party pursuant to
this Section 11 shall be made as follows:

 

(i)          if the Indemnity Event is a Third Party Claim against NewCo,
payments shall be made within 15 (fifteen) Business Days from receipt of the
Buyer’s written request, which shall bear a copy:

 

(aa)         of the enforceable decision, award or order, whether final or
provisional, served upon NewCo and which ascertains or determines the Loss; or

 

(bb)         of the settlement agreement entered into by NewCo which determines
a Loss.

 

In any event, if either the Buyer or NewCo elect to settle the matter related to
a Third Party Claim notwithstanding the timely denial in writing of the Sellers
of the approval of such settlement as provided above, no obligation of payment
shall arise for the Sellers;

 

(ii)         in case of an Indemnity Event other than a Third Party Claim
against NewCo, within 10 (ten) Business Days from receipt of the Notice of
Claim; provided that Sellers have not objected in writing to such Notice of
Claim within such 10 (ten) Business Day period (“Notice of Objection). Any such
Notice of Objection shall state the nature and basis of any such objection and
the monetary amount of the claim in dispute. Payment of such claim shall be made
by Sellers, together with interest thereon from the date of the original Notice
of Claim until the date paid, at the interest rate set forth in Section 17.12,
within 15 (fifteen) business days from receipt of the Buyer’s written request,
which shall bear:

 

(aa)         a certified copy of an award (whether final or provisions) by the
arbitral tribunal referred to in Section 18.02 which ascertains or determines
that the Sellers are liable for the claim; or

 

(bb)         a copy of the settlement agreement entered into between Buyer and
Sellers which determines the amount that Sellers must pay relating to the claim.

 

SECTION 12

 

Further covenants and specific indemnities of the Sellers

 

12.01 General

 

The Parties agree that:

 

(i)          for the avoidance of any doubt, the Sellers’ indemnification
obligations provided for in this Section 12 shall not be subject to Section 11
nor to the same restrictions, limitations and procedure therein, except as
otherwise specifically provided herein;

 

(ii)         any payments due by the Sellers pursuant to this Section 12 shall
be made by the Sellers directly to the Buyer, unless the Buyer gives
instructions to the Sellers to make such payments directly to NewCo.

 

12.02 Sole Director’s Claims

 

The Sellers shall indemnify and hold the Buyer and NewCo harmless from and
against any claim (and any consequence thereof) by the sole director of NewCo
who was in office at any time up to Completion, in relation to matters relating
to the period up to Completion.

 

12.03 Subsidiaries – China

 

(a)       The Sellers shall indemnify and hold the Buyer and NewCo harmless from
and against any liabilities, reduced assets, losses, damages, costs, penalties,
deficiencies, incurred in or suffered by NewCo or any claim (and any consequence
thereof) deriving from or however connected to the interests and shares held by
Coord3 in any of the Subsidiaries (including as a consequence of any claim
raised by any third party or any of their employees against any such Subsidiary)
or to Coord3’s being a party to any agreement with the other shareholders of the
Subsidiaries, if any.

 

17

 

  

(b)       The Sellers shall indemnify and hold the Buyer and NewCo harmless from
and against any liabilities, reduced assets, losses, damages, costs, penalties,
deficiencies, incurred in or suffered by NewCo or any claim (and any consequence
thereof) deriving from or however connected to Coord3’s operations in the
People’s Republic of China (including those however connected to Coord3’s
Chinese representative office or prior joint venture with Purein Ltd).

 

12.04 Coord3

 

(a)       If, after Completion, any third party (including public authorities or
government agencies) raises any claim, demand any payment or asserts any right
against Coord3, whether prior to or during a liquidation process should Coord3
undergo such a process, the Sellers shall:

 

(i)        immediately and, in any case, within 5 (five) Business Days from
receipt of the claim, inform the Buyer in writing and they shall provide the
Buyer with all relevant information regarding the nature of the claim, the
amount, the third party’s asserted grounds for the claim and any possible
counterargument or counterclaim;

 

(ii)       at their own costs and expenses, ensure that Coord3 resists against
the claim as necessary;

 

(iii)      fund Coord3 so that it can timely and duly fulfil any obligations
arising from such claims;

 

(iv)      cause Coord3 to timely and duly fulfil any obligations arising from
such claims.

 

(b)       Should Coord3 lack the financial resources to fulfil any obligations
arising from any of the claims referred to in paragraph (a) above, the Buyer may
elect, at its own discretion, to assume the liability and pay the relevant third
party or cause NewCo or any other of its affiliated companies to do so.

 

(c)       The Sellers shall indemnify the Buyer (or NewCo or any other of its
affiliated companies as the case may be and as directed by the Buyer) of any
amount paid by the Buyer (or NewCo or any other of its affiliated companies as
the case may be) pursuant to paragraph (b) above and against any losses,
damages, costs suffered or incurred as a consequence thereof. For the avoidance
of any doubt, the Sellers’ indemnification obligations provided for in this
Section 12.04 shall not be subject to Section 11 nor to the same restrictions,
limitations and procedure therein.

 

(d)       The Sellers shall indemnify Buyer (or NewCo or any other of its
affiliated companies, as the case may be, and as directed by the Buyer) for any
liability incurred by it for Coord3’s Taxes, including, but not limited to,
Coord3 Income Taxes, other than the Government Debt or Taxes included in
Completion Date Net Working Capital.

 

12.05 Trade-names, trademarks and other intellectual or industrial property

 

(a)       The Sellers shall cause Coord3 to change its name as soon as
practically possible after the Completion Date and, in any case, within 15
(fifteen) days thereafter, so as to remove any reference to “Coord3”; and, at
the written request of Buyer, to cause its Subsidiaries to remove reference to
“Coord3” in their names; provided that Buyer shall permit Coord3 to continue to
use its name and the names of its Subsidiaries to the extent reasonably required
by Coord3 and its Subsidiaries to collect any accounts receivable they retain
and to wind up their business activities.

 

(b)       The Sellers shall not use or attempt to use, in the course of any
business on their own account or in conjunction with or on behalf of any person
or in any other manner whatsoever, directly or indirectly, the trade-names,
trademarks, service marks, brand names, designs or logos, domain names and any
other similar intellectual property, whether registered or not, or any other
trade-name, trademark, service mark, brand name, design or logo similar to such
trade-names, trademarks service marks, brand names, designs, logos, domain names
or other similar intellectual property of NewCo (including the name Coord3
whether used as a standalone name or in association with other names).

 

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12.06 Apportionments

 

(a)       All rents, rent charges, leasing expenses, rates, insurance premiums,
gas, water, electricity and telephone charges, royalties and any other costs and
expenses of any nature whatsoever relating to or payable or accruing in respect
of the Target Business shall be borne by Coord3 through to the date of
contribution and shall be borne by NewCo as from the date of contribution. All
the above items shall, as appropriate, be apportioned accordingly between Coord3
and NewCo.

 

(b)       All salaries, wages and other emoluments and all contributions in
respect of the Target Business for which Coord3 is liable as an employer in
respect of any employee, agent or consultant under any contractual or statutory
obligation shall be borne by Coord3 through to the date of contribution and
shall be borne by NewCo as from the date of contribution.

 

(c)       The Parties agree that any payment made by third parties to a Coord3
bank account relating to the Target Business after the date of contribution
shall be forwarded to NewCo within 15 (fifteen) Business Days after the actual
cash is received by Coord3. Similarly, any payment made by third parties to a
NewCo bank account relating to Coord3’s activities after the date of
contribution shall be forwarded to Coord3 within 5 Business Days after the
actual cash is received by NewCo.

 

12.07 Further indemnities

 

(a)       The Sellers shall indemnify and hold the Buyer harmless against any
liabilities, losses, damages, costs which are the consequence of any claim
indicated on Appendix B to Exhibit 1.03.

 

(b)       Payments of the Sellers’ indemnification obligations provided for in
this Section 12.07 shall be subject to the restrictions, limitations and
procedures set forth in Section 11, including being included in the calculation
of the Indemnity Cap, to the extent provided for therein.

 

SECTION 13

 

Restrictive Covenants

 

(a)       The Sellers agree that, as from the Completion Date and for a period
of 3 (three) years thereafter (or in the case of Muscarella, for the period of
time until the expiration date of any restrictive covenants provided for in
their relevant Service Agreements, if shorter), in their capacity as sellers of
the Shares and irrespective and without prejudice to any other restrictive
covenant they have agreed or will agree to, they shall not:

 

(i)          either on their own account or in conjunction with or on behalf of
any person, carry on, engage, be concerned or interested (directly or indirectly
and whether as principals, shareholders, directors, employees, agents,
distributors, consultants, partners or otherwise) in the business of designing,
engineering, manufacturing, marketing, selling, installing, servicing and
maintaining CMMs and laser-based and other technology, software and applications
used in connection with CMMs;

 

(ii)         either on their own account or in conjunction with or on behalf of
any person, solicit or endeavour to entice away from the Target Business or the
Company any person who, at the Completion Date, is an officer, manager,
employee, self-employed person, consultant of Coord3 and who is in any manner
whatsoever associated to the Target Business, whether or not such person would
commit a breach of contract by reason of leaving service or office;

 

(iii)        either on their own account or in conjunction with or on behalf of
any person, endeavour to entice away from the Target Business or the Company any
person who, at the Completion Date of this Agreement, is a customer of Coord3,
whether or not such customer would be in breach of its contract with Coord3 or –
after Completion – with the Company as a result thereof; and

 

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(iv)        either on their own account or in conjunction with or on behalf of
any person, endeavour to entice away from the Target Business or the Company any
person who, at the Completion Date, is a supplier of Coord3, whether or not such
supplier would be in breach of its contract with Coord3 or – after Completion –
with the Company as a result hereof;

 

(v)         either on their own account or in conjunction with or on behalf of
any person, carry on, engage, be concerned or interested (directly or indirectly
and whether as principals, shareholders, directors, employees, agents,
distributors, consultants, partners or otherwise) in any business conducted by
the Company at the Completion Date, or in any business involving the design,
development, manufacture, sale or servicing of CMMs.

 

(b)          The Sellers and the Buyer represent to each other and acknowledge
that the provisions contained in Section 13(a) are necessary for the protection
of the Buyer’s and the Target Business’ interests and goodwill. Should any such
restriction or undertaking be void or voidable but would be valid and
enforceable if some part or parts of the restriction or undertaking were deleted
or modified, such restriction or undertaking shall apply with such deletion or
modification as may be necessary to make it valid and enforceable. The
consideration for the Sellers’ fulfilment of the obligations contained in this
Section 13 has been included in the Purchase Price.

 

(c)          The foregoing restrictive covenants shall not prohibit Riccardo
Muscarella from owning and operating AFS srl (“AFS”); provided that (i) Riccardo
Muscarella and AFS agree, in writing, that during the term of the restrictive
covenants set forth above, they shall (A) comply with the restrictive covenants
set forth in Section 13(a) as though they were Sellers, and (B) they shall limit
their business activities to activities which are not in competition with the
activities currently conducted by the Buyer and its Affiliates and,
particularly, may engage in business activities relating to servicing,
retrofitting, refurbishing and commercialising used CMMs and related equipment
and to calibrating CMMs and (ii) Muscarella is not interested in AFS, directly
or indirectly and whether as a principal, shareholder, director, employee,
agent, distributor, consultant, partner or otherwise.

 

SECTION 14

 

Indemnity Holdback Account

 

(a)          The Buyer shall credit, by book entry only, to an escrow ledger
account (“Indemnity Holdback Account”) maintained by Buyer a portion of the
Provisional Purchase Prices equal, in the aggregate, to Eur 300,000 (three
hundred thousand) (“Indemnity Holdback Amount”). The Indemnity Holdback Amount
shall serve the purpose to secure the Sellers’ timely fulfillment of all of
their obligations as arising from this Agreement (including the indemnification
obligations provided for in Sections 11 and 12, the indemnification obligations
deriving from any breach of the obligations arising from Section 13 (as
confirmed pursuant to Section 7.02(a)(i)(jj)) and the obligation to refund the
amount paid by the Buyer in excess, pursuant to Section 6.04(c)).

 

(b)          Any remaining balance in the Indemnity Holdback Account shall be
paid by Buyer to Coord3 (or pro-rata to its shareholders in the event that the
liquidation process of Coord3 is already completed at the date on which the
payment of the Indemnity Holdback Account falls due) upon expiration of the
Indemnity Holdback Account, provided that, if claims which may trigger Seller’s
obligations to indemnify are pending upon the expiration date:

 

(aa)         the term will be extended until these claims are resolved;

 

(bb)         an amount equal to the lower of the balance of the Indemnity
Holdback Account and the aggregate amount of the outstanding claims upon the
expiration of the Indemnity Holdback Account will be frozen in the Indemnity
Holdback Account until these claims are resolved.

 

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(c)          Except as otherwise provided in Section 14(b), the Indemnity
Holdback Account shall expire on the 20th Business Day after the eighteen month
anniversary of the Completion Date.

 

(d)          The following amounts shall be credited against and so reduce the
Indemnity Holdback Account:

 

(i)          amounts mutually agreed upon by the Buyer and Coord3;

 

(ii)         amounts set forth in a certified copy of any award (whether final
or provisional) by the arbitral tribunal referred to in Section 18.02 which
orders the Sellers to indemnify the Buyer (or NewCo), but only to the extent of
the amount to be paid by the Sellers as indicated in the relevant award;

 

(iii)        at the written request of the Buyer, within 10 (ten) days following
the final determination of the Purchase Price Adjustment, an amount equal to any
Purchase Price Adjustment payable by the Sellers.

  

SECTION 15

 

The Service Agreements

 

(a)          For the purposes indicated in Section 2(c), Muscarella agrees to
provide his full-time services to the Company (as agreed between the Parties)
until at least the third anniversary of the Completion Date upon the terms and
conditions of the agreement attached herewith in agreed form as Exhibit 15(a)
(“Muscarella Service Agreement”).

 

(b)          The Parties, each to the extent within their control, shall cause
the Service Agreements to be entered into and duly executed by the relevant
parties on the Completion Date.

 

SECTION 16

 

Termination

 

(a)          The Parties acknowledge that any material breach by the Sellers of
any of the obligations provided for in Section 8.01 or any breach of Sections
8.02, 8.03, 8.04, 8.05, or 8.06, which shall be deemed material, shall entitle
the Buyer to terminate this Agreement with immediate effect by way of written
notice.

 

(b)          The Buyer shall further be entitled to terminate this Agreement
with immediate effect by way of written notice:

 

(i)          in case any material breach of any of the representations and
warranties given by the Sellers pursuant to this Agreement occurs prior to or on
the Completion Date;

 

(ii)         in case either Party receives an order or other enforceable
instrument issued by any Governmental Authority which enjoins that Party to
refrain from executing any document or taking any action required for Completion
pursuant to this Agreement or the law.

 

(iii)        if the amount of the Government Debt exceeds Eur 7,100,000.

 

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SECTION 17

 

Miscellaneous

 

17.01 Compliance

 

(a)          The Parties acknowledge that, as from the Completion Date, NewCo
shall adopt and implement organisational and internal audit and control models
and procedures in compliance with those applied by the group to which the Buyer
belongs, including its ethical rules, compliance, anti-bribery, anti-corruption
and anti-money laundering regulations. The Sellers shall provide their utmost
assistance and support in the process which will be required to implement such
models and procedures so as to guarantee as swift an integration of the Target
Business into the Buyer’s group as possible after Completion.

 

(b)          Furthermore, the Parties acknowledge that in due course after the
Completion Date, NewCo shall adopt and apply an organizational model which shall
comply with Italian Legislative Decree 231/2001.

 

17.02 Confidentiality

 

(a)          Each of the Sellers and the Buyer shall at all times keep strictly
confidential and, as applicable, each of the Sellers and the Buyer shall procure
that their respective officers, employees and professional advisers keep
strictly confidential any information pertaining to this Agreement (including
but not limited to the Purchase Price and terms of sale) and the financials,
business operations, marketing practices or policies, litigation, identity of
customers as well as any other confidential aspect of the Target Business,
except for such information relating to this Agreement which Buyer and its
Affiliates may be required to disclose in connection with reporting and
disclosures requirements of the Buyer and its Affiliates under applicable law or
the rules of The Nasdaq Stock Market and except for any such information which:

 

(i)          at the time of disclosure is publicly available or becomes publicly
available otherwise than, directly or indirectly, through the breach by any of
the Sellers or the Buyer of this Section 17.02 or the failure of any officer,
employee or professional adviser referred to above to keep the same
confidential; or

 

(ii)         is required to be disclosed by any other applicable law or by any
supervisory or regulatory body, in which case the Party shall inform, to the
extent reasonably practicable, the other Party that such disclosure is required,
and the Parties shall use their reasonable efforts to agree in good faith on the
content of such disclosure prior to it being made.

 

(b)          The Sellers acknowledge that an Affiliate of the Buyer is listed on
The Nasdaq Stock Market and its stock is registered with the Securities and
Exchange Commission and is therefore subject to strict regulatory obligations in
relation to the disclosure of any information and data concerning transactions
similar to the Transaction. Therefore, the Sellers agree that any public
disclosure of any information or data concerning the Transaction, including any
press release, shall be made only at such time and in such form and substance as
acceptable to the Buyer.

 

17.03 Entire agreement and amendments

 

(a)          This Agreement is the sole and entire agreement between the Parties
governing the Transaction as contemplated herein and supersedes all prior verbal
and/or written agreements between the Parties concerning its subject matter.

 

(b)          The amendments to this Agreement shall be valid and effective if
agreed upon by the Parties in writing.

 

17.04 Successors - Assignment

 

This Agreement and all of the provisions hereof shall be binding upon and shall
inure to the benefit of the Parties and their respective permitted assignees,
heirs or successors. Neither this Agreement nor any of the rights, interests or
obligations hereunder may be assigned by one Party without the prior written
consent of the other, without prejudice to the Buyer’s appointment pursuant to
Section 5(d) and the consequences thereof and except for any assignment to any
of that Party’s Affiliates or to a party who acquires all or substantially all
of the assets of NewCo or Buyer, provided that such assignment shall not relieve
Buyer of its obligations under this Agreement without the prior written consent
of the Sellers’ Representatives.

 

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17.05 The Sellers’ Representative

 

The Sellers hereby appoint Muscarella as their representative (“Sellers’
Representative”) to act in the name and on behalf of each of them for the
purpose of receiving any communication or notification under this Agreement. Any
notice to be made to the Sellers and any appointments, approvals, consents to be
made by the Buyer under or in relation to this Agreement (including the service
of any judicial deed, the Notice of Claim, the notices required to be made for
the purposes of Sections 6.03) shall be validly made to all Sellers also if made
to the Sellers’ Representative at the address indicated in Section 17.06 or at
any other address indicated by the Sellers’ Representative in accordance with
Section 17.06. For the purposes herein, all Sellers elect domicile at the
Sellers’ Representative’s address as indicated in Section 17.06. It is agreed
that “the Sellers” shall be construed as meaning the “Sellers’ Representatives”
for any notice to be received under this Agreement.

 

17.06 Notices

 

Any communication or notice required or permitted to be given under this
Agreement shall be made in writing and in the English language by way of either
registered mail or telefax, addressed, in each case, to the addresses indicated
below (or to such other address as each Party may hereafter provide to the other
by written notice as provided herein) and with a copy by e-mail and it shall be
deemed to have been duly and validly given: (i) in case of notice sent by
registered mail, upon receipt of the same; and (ii) in case of notice sent by
telefax, upon acknowledgement of successful and complete transmission by the fax
machine of the sender:

 

if to Buyer:

 

c/o Perceptron, Inc.

47827 Halyard Drive

Plymouth, MI 48170

U.S.A.

 

Fax No. +1-734-414-4800

Attention: Jeffrey M. Armstrong, President

e-mail: armstrong@perceptron.com

 

with a copy (which shall not constitute notice) to:

 

Thomas S. Vaughn

Dykema Gossett PLLC

400 Renaissance Center

Detroit, MI 48243

U.S.A.

 

Fax No.: +1-313-568-6915

e-mail: tvaughn@dykema.com

 

if to the Sellers:

to the Sellers’ Representative:

 

Angelo Muscarella

c/o

Avv. Luca Mastromatteo, Esq.

Gianni, Origoni, Grippo, Cappelli & Partners

Corso Vittorio, Emanuele II, 83

10128 Torino, Italy.

 

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Fax: +39-011 5185932

lmastromatteo@gop.it

 

with a copy (which shall not constitute notice) to:

 

Avv. Luca Mastromatteo, Esq.

Gianni, Origoni, Grippo, Cappelli & Partners

Corso Vittorio, Emanuele II, 83

10128 Torino, Italy.

 

Fax: +39-011 5185932

lmastromatteo@gop.it

 

17.07 Language

 

This Agreement is entered into in the English language. The Parties hereby
acknowledge to have fully understood its content and all of its terms and
conditions.

 

Il presente contratto è stipulato in lingua inglese. Le Parti dichiarano di aver
pienamente compreso il suo contenuto e tutti i suoi termini e condizioni.

 

17.08 Severability

 

If any provision of this Agreement is held to be illegal, invalid, or
unenforceable under present or future laws effective during the term of this
Agreement, such provision shall be fully severable. This Agreement shall be
construed and enforced as if such illegal, invalid, or unenforceable provision
had never comprised a part of this Agreement and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of each such illegal, invalid, or unenforceable
provision, a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable
shall be added automatically, as a part of this Agreement.

 

17.09 Fees and expenses

 

(a)          Except as otherwise expressly provided for by this Agreement, all
legal and other advisors’ fees, costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be borne by the
Party incurring such fees, costs or expenses.

 

(b)          All stamp duties, registration taxes and notary fees relating to
the transfer of the Shares pursuant to Section 5(b) shall be borne by the Buyer.

 

17.10 Obligations of the Sellers: general clause

 

(a)          All of the obligations and covenants of the Sellers under this
Agreement are undertaken and all representations and warranties are given by
them both jointly and severally.

 

(b)          Muscarella hereby agrees to cause Coord3 to duly and timely fulfill
all of the obligations arising from this Agreement.

 

17.11 Set-off

 

(a)          The Buyer shall be entitled to offset any portion of the Purchase
Price which is unpaid at any time and any amount otherwise due to any of the
Sellers under this Agreement against any amount due by any of the Sellers to the
Buyer (or to NewCo) under this Agreement. The exercise in good faith of such
right of setoff by Buyer will not constitute a breach or default under any
agreement, including this Agreement, pursuant to which such payment is due.
Neither the exercise of nor the failure to exercise such right of setoff will
constitute an election of remedies or limit Buyer in any manner in the
enforcement of any other remedies that may be available to it. As a condition to
any assignment by any Seller of its rights under this Agreement, such assignee
must agree that Buyer may continue to exercise its right of set off against any
portion of the Purchase Price assigned to assignee for claims by Buyer against
Sellers arising under this Agreement.

 

24

 

  

(b)          Any amount collected by NewCo after Completion on NewCo trade
accounts receivable outstanding on the Completion Date in excess of the amount
of such trade account receivable as used in calculating the Completion Date Net
Working Capital (net of any specific allowance for uncollectibility of the
account included in the calculation of the Completion Date Net Working Capital),
up to Eur 300,000 (three hundred thousand), (the “Collected Receivables Amount”)
shall be offset by the Buyer against amounts otherwise due by the Sellers to
Buyer under Sections 11 or 12 of this Agreement, but in no event shall Buyer be
required to pay Sellers any such Collected Receivables Amounts.

 

17.12 Interest Rate

 

Should any payment due under this Agreement by either Party not be made on or
before the agreed term for payment, annual interest equal to EURIBOR 3 months
plus 500 basis points (or the maximum percentage allowed by anti-usury laws and
regulations from time to time, if lower) will accrue from the date of expiration
of the payment term until the actual payment is provided.

 

SECTION 18

 

Governing Law – Arbitration

 

18.01         Governing Law

 

This Agreement shall be governed by and construed in accordance with the laws of
the Republic of Italy, without regard to the provisions governing conflicts of
laws.

 

18.02         Arbitration

 

(a)          Any dispute arising out of or related to this Agreement shall be
settled by arbitration under the Rules of Arbitration of the International
Chamber of Commerce of Paris, by three arbitrators, appointed in accordance with
such rules, who shall be fluent in the English language.

 

(b)          The place of the arbitration shall be Paris, France. The language
of the arbitration shall be English.

 

(c)          Any dispute arising out of this Agreement and any comparable
dispute arising out of the Czech Agreements shall be heard and decided together
in a single arbitration proceeding.

 

[Signature Page Follows]

 

25

 

  

SIGNED by ANGELO MUSCARELLA

 

Signature : /s/ Angelo Muscarella

 

SIGNED by COORD3 INDUSTRIES S.R.L.

 

Angelo Muscarella

Sole director

 

Signature : /s/ Angelo Muscarella

 

SIGNED by PERCEPTRON CMM, LLC

 

Jeffrey M. Armstrong

President and Chief Executive Officer

 

Signature : /s/ Jeffrey M. Armstrong

 

26

 

  

EXHIBIT 1.03

 

Certain Definitions

 

“2013 Financial Statements” shall mean the financial statements of Coord3 as at
December 31, 2013 as finally approved by the shareholders.     “Affiliates”
shall mean persons controlling, controlled by or under common control with the
person.     “AGO” shall mean AGO Renewables s.p.a.     “AFS” shall have the
meaning indicated in Section 13(c).     “Agreed Accounting Principles”

shall mean the Italian Accounting Principles and, to the extent properly
applied, consistent with past application thereof by Coord3.

 

“Agreement” shall mean this agreement, inclusive of the Exhibits, Appendices and
Annexes.     “Annexes” shall mean all annexes, as listed above in the table of
contents.     “Appendices” shall mean all appendices, as listed above in the
table of contents.      “Appraiser” shall have the meaning indicated in Section
4.01(i).     “Appraisal” shall have the meaning indicated in Section 4.01(i).  
  “Appraisal Financial Situation” shall have the meaning indicated in Section
4.02(a)(ii).     “Business Day/s” shall mean each calendar day other than
Saturdays, Sundays and any other days on which banks are closed for business in
the City of Torino, Italy.     “Buyer” shall have the meaning indicated in the
headings of this Agreement.     “Collected Receivables Amount” shall have the
meaning indicated in Section 17.11(b).     “Company” shall mean the Buyer, NewCo
and their Affiliates.

 

 

 

  

“Completion” shall mean the consummation of all of the actions and transactions
indicated in Section 7.02 (unless waived by the interested Party) and the
completion of the transfer of full title to and ownership of the Shares to the
Buyer as contemplated in this Agreement.     “Completion Date” shall mean the
date upon which Completion will take place, as specified in Section 7.01(a).    
“Completion Date Balance-Sheet” shall mean the balance-sheet of NewCo as at the
Completion Date, after the acquisition of the Target Business, to be prepared in
accordance with the Agreed Accounting Principles.     “Completion Date Financial
Debt” shall mean the Financial Debt of NewCo as at the Completion Date, after
the acquisition of the Target Business.    

“Completion Date Net Working Capital”

shall mean the Notional Net Working Capital of NewCo as at the Completion Date,
after the acquisition of the Target Business, to be determined in accordance
with the Agreed Accounting Principles.     “Contribution in Kind” shall have the
meaning indicated in Section 2(a)(ii).     “CMM” means coordinate measuring
machine and equipment.     “Coord3” shall have the meaning indicated in the
headings of this Agreement.     “Coord3 Income Taxes” shall mean Taxes based
upon or related to Coord3’s income, production or value added taxes, not yet
subject to installment agreements with the Italian government, including, but
not limited to IRES and IRAP for 2013 and 2014.     “Current Business” shall
have the meaning indicated in Section 34 of Exhibit 10.02.     “Czech
Agreements” means the Stock Purchase Agreements between Perceptron, Inc. and
each of Keith Mills and Angelo Muscarella, dated even date with the Agreement.  
  “Czech Shares” shall mean 100% of Next Metrology’s share capital.     “Debt
Adjustment” shall have the meaning indicated in Section 6.02(a)(ii).     “Deed
of Contribution” shall have the meaning indicated in Section 4.01(iv).

 

1

 

  

“Deed of Establishment” shall have the meaning indicated in Section 3(ii).    
“Designated Notary” shall have the meaning indicated in Section 3(ii).    
“Disputed Matters” shall have the meaning indicated in Section 6.03(b).     “Due
Diligence” shall have the meaning indicated in Section 9(a).     “Encumbrance”
shall mean any mortgage, charge, pledge, lien, security interest or attachment
of any nature whatsoever, options, title retention, third party rights
(including in rem rights) or other securities or de facto situations attached to
a certain object or asset or share and limiting the rights thereupon.
“Encumbrances” shall be construed accordingly.     “Environmental Law” shall
mean all applicable international treaties, laws, conventions, EU directives or
regulations, statutes, regulations, subordinate legislation (in particular any
regional, provincial municipal and other local law and/or regulation),
applicable in Italy, which from time to time relate to Environmental Matters and
Environmental Licences and all enforceable orders or other instruments and other
requirements of or issued by any competent public authority, court or agency,
concerning the protection of the environment or the prevention, limitation,
mitigation or remediation of harm to the environment or relating to
Environmental Matters.     “Environmental License” shall mean any permit,
licence, authorization, consent or other approval, registration, notification or
communication required by any Environmental Law for the operations of Coord3 or
NewCo or of its business or in relation to the ownership, lease, occupation or
use of the properties used for the operations of the Company or of its business.
    “Environmental Matters” shall mean all or any of the following: air
(including all layers of atmosphere), water and land (including, without
limitation, any of the foregoing within buildings and other material or man-made
structures above or below the ground) as well as all organic and inorganic
matter and living organisms and the systems supported by or including any of the
components of the foregoing; the disposal, spillage, deposit, escape, discharge,
leek, emission or presence of, contact with and exposure of, any person to
Hazardous Materials or Waste, as well as the creation of any noise, vibration,
radiation, nuisance or other adverse impact on the environment, maintenance of
human health and safety, and any other matters relating to the condition,
protection, maintenance, restoration or replacement of the environment or any
part of it. “Environmental” shall be interpreted accordingly.     “Exhibit/s”
shall mean all exhibits, as listed above in the table of contents.

 

2

 

  

“Expert”

shall have the meaning indicated in Section 6.03(d).

 

    “Financial Debt” shall mean all financial debts, inclusive of any bank debt,
invoice discounting facility, loan, borrowing, overdraft, shareholders’ loan,
financial (capital) lease.     “Government Debt” shall mean the total of all
amounts owed by Coord3 to various Italian government tax or social security
authorities or agencies; including amounts owed under so called installment
agreements and all other amounts owing that have not yet been formalized into
agreements (including interest and penalties); including both short term and
long term amounts owed, other than Coord3 Income Taxes.     “Governmental
Authority” means any foreign, European Union, or Italian national, regional or
local governmental authority, quasi-governmental authority, court, or any
regulatory, administrative or other agency, or any subdivision, department or
branch of any of the foregoing.     “Governmental Authorization” means any
consent, permit, concession, license, registration, approval, authorization,
order, exemption, certificate, franchise, or variance issued, granted, given, or
otherwise made available by or under the authority of any Governmental Authority
or pursuant to any applicable law.     “Hazardous Substance/s” shall mean any
substance which is defined to be hazardous, dangerous, toxic or harmful under
any Environmental Law.     “Indemnification Claim” shall mean a claim raised by
the Indemnified Party in accordance with Section 11.03 to claim indemnification
against a Loss.     “Indemnified Party” shall have the meaning indicated in
Section 11.03(a).     “Indemnifying Party” shall have the meaning indicated in
Section 11.03(a).     “Indemnity Cap” shall have the meaning indicated in
Section 11.01(b)(ii).     “Indemnity Holdback Account” shall have the meaning
indicated in Section 14(a).     “Indemnity Holdback Amount” shall have the
meaning indicated in Section 14(a).     “Indemnity Event” shall have the meaning
indicated in Section 11.03(a).

 

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“Intellectual Property” shall have the meaning indicated in Section 11(i) of
Exhibit 10.02.     “Inventories” shall mean remainders of raw material, work in
progress and finished goods as indicated in Article 2424 of the Italian Civil
Code, in the section “assets”, letter C). “Inventory” shall be construed
accordingly.     “IT System” shall have the meaning indicated in Section 27(i)
of Exhibit 10.02.     “Italian Accounting Principles” shall mean the provisions
established by the Italian Civil Code as well as the accounting principles
recommended by the National Council of Licensed Accountants and Bookkeepers
(“Consiglio Nazionale degli Ordini dei Dottori Commercialisti e dei Ragionieri”)
and modified by the Italian Accounting Body (“Organismo Italiano di Contabilià –
O.I.C.) as well as those directly issued by the latter.     “Losses” and “Loss”
shall have the meaning indicated in Section 11.01(a)(i).     “Material Adverse
Change” shall mean any change or effect that is materially adverse to the
financial situation, financial performance, business, prospects, assets,
liabilities, key people or value of the net assets of the Target Business,
impacting the value of the Target Business to Buyer by greater than Eur
1,000,000; but excluding any change or effect arising out of general economic
conditions or conditions affecting companies generally in the industry in which
Coord3 operates.     “Muscarella” shall have the meaning indicated in the
headings of this Agreement.     “Muscarella Service Agreement” shall have the
meaning indicated in Section 15(a).     “Mills” shall mean Keith Mills, British
national, born in [ ] on [ ], domiciled at [ ]. UK passport no. [ ]     “NewCo”
shall have the meaning indicated in Section 2(a)(i).     “Next Metrology” shall
mean Next Metrology Software, s.r.o., a company established under the laws of
the Czech Republic.     “Notary Deed of Transfer” the notary deed of transfer to
be executed on the Completion Date, pursuant to Article 2470 of the Italian
Civil Code, before and by the Designated Notary, to effect the transfer of full
title to and ownership of the Shares to the Buyer.

 

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“Notice of Claim” shall have the meaning indicated in Section 11.03(a).    
“Notice of Objection” shall have the meaning indicated in Section 11.03(d)(ii).
    “Notional Net Working Capital” shall mean the net balance of the following
accounts as maintained under Agreed Accounting Principles and identified on the
Contribution in Kind, (a) short term assets; (i) cash including investments in
cash equivalent securities that have a life of less than one year, (ii) Trade
Accounts Receivable, net of reserves for uncollectible accounts, (iii)
Inventories net of agreed reserves, (iv) Prepaid Expenses with life less than
one year, less (b) short term liabilities; (i) Trade Accounts Payable, (ii)
Deposits/Advances from Customers, (iii) Accrued Expenses and Other Deferred
Income, (iv) Amounts due to Banks (including amounts due to overdraft
facilities, and bank notes including accrued interest and fees), (v) Accrued
Payroll, Payroll taxes, holiday and vacation and relevant Payroll Taxes accruals
(but excluding “Fondi TFR”)     “Notional Net Working Capital shall have the
meaning indicated in Section 6.02(a)(i). Adjustment”       “November 2011
Agreements” shall have the meaning indicated in Introduction D.     “Objection
Period” shall have the meaning indicated in Section 6.03(b).     “Parties” shall
mean the Sellers and the Buyer.     “Party” shall mean each of the Sellers
jointly and the Buyer, when individually and generically referred to.    
“Property” means the property situated at Bruzolo, Strada Statale 25 n. 3, used
by Coord3 to carry out its business.     “Provisional Purchase Price” shall have
the meaning indicated in Section 6.01(a)(i).     “Purchase Price” shall have the
meaning indicated in Section 6.01(a).     “Purchase Price Adjustment” shall have
the meaning indicated in Section 6.02(a).     “Real Estate Impositions” shall
have the meaning indicated in Section 9(ix) of Exhibit 10.02.     “Real Property
Permit” means any certificate of occupancy, building permits, licenses,
franchises, consents, approvals and authorizations as well as any other
Governmental Authorization concerning real estate properties.

 

5

 

  

“Required Consents” shall have the meaning indicated in Section 1 of Exhibit
10.02.     “Reference Date” shall mean November, 30 2014.     “Sellers” shall
have the meaning indicated in the headings of this Agreement.     “Sellers’
Representative” shall have the meaning indicated in Section 17.05.     “Service
Agreements” shall mean the Muscarella Service Agreement.     “Share Capital
Increase” shall have the meaning indicated in Section 4.03.     “Shares” shall
have the meaning indicated in Section 2(b).     “Slow Moving Inventory” shall
mean any and all inventory items that are in excess of 360 days old as of the
Completion Date.     “Subsidiaries” shall mean the following subsidiaries of
Coord3, Coord3 Metrology India Private Limited, Coord3 Metrology, LLC and Coord3
Beijing Machinery Ltd.     “Target Business” shall have the meaning indicated in
Introduction A.     “Target Business Employees” shall have the meaning indicated
in Section 16(iii) of Exhibit 10.02.     “Target Financial Debt” shall have the
meaning indicated in Section 6.01(b)(ii).     “Target Net Working Capital” shall
have the meaning indicated in Section 6.01(b)(i).    

“Tax Certificate”

 

means the certificate issued by the tax authorities in accordance with Sect. 14
of the D.Lgs. no. 472 of December 19, 1977.     “Taxes” shall mean all taxes,
charges, fees, levies, deficiencies or other assessments of whatever kind or
nature imposed by any Government Authority, including income, receipts, sales,
use, ad valorem, transfer, franchise, profits, license, withholding, payroll,
employment, unemployment, social security, excise, estimated, stamp, property,
intangible or occupancy tax, including amounts owed under so called instalment
agreements and all other amounts owing that have not yet been formalized into
agreements (including interest and penalties), including both short term and
long term amounts owed.

 

6

 

  

“Tax Returns” shall mean any return (including any information return),
declaration, report, claim for refund or credit information return or statement,
and any amendment thereto, whether on a consolidated, combined unitary or
separate basis, or other document (including any related or supporting
information or schedule), filed or required to be filed with any Governmental
Authority in connection with the determination, assessment, collection or
payment of Taxes or the administration of any laws, regulations or
administrative requirements relating to Taxes.     “Third Party Claim” shall
mean a claim brought by any third party against NewCo.     “Transaction” shall
have the meaning indicated in Section 2(a).     “Waste” shall mean any waste as
defined or regulated by any Environmental Law.

 

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EXHIBIT 10.01

 

Buyer’s Representations and Warranties

 

1.Good standing – Authority

 

(a)          The Buyer is a limited liability company validly existing, duly
incorporated and in good standing under the laws of the State of Michigan,
United States of America.

 

(b)          The Buyer has full power and authority (including full corporate or
other entity power and authority) to execute and deliver this Agreement and to
perform its obligations under this Agreement. The Buyer does not need to give
any notice to, make any filing with, or obtain any authorization, consent, or
approval of any third party, or need to give any notice to, make any filing
with, or obtain any Governmental Authorization from, any Governmental Authority
in order for the it to consummate the transactions contemplated by this
Agreement, other than as otherwise specified in the Agreement.

 

(c)          Neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated by this Agreement shall: (i)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any Governmental
Authority, or court to which Buyer is subject; or (ii) conflict with, result in
a breach of, constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or cancel, or require
any notice under any contract, license, instrument, or other arrangement to
which Buyer is a party or by which it is bound or to which any of its assets is
subject.

 

(d)          All corporate actions taken and which will be taken in connection
with the Agreement have been duly authorized by all required corporate actions
and the Buyer has not taken any action that, in any respect, conflicts with,
constitutes a default under or results in any violation of any provision of its
articles of association or by-laws.

 

(e)          The Buyer’s authorized representative has all the necessary
corporate powers to enter into this Agreement.

 

2.No bankruptcy proceedings

 

The Buyer is not insolvent or subject to any insolvency or pre-insolvency
proceeding nor is it a party to or is negotiating any creditors’ arrangement of
any kind.

 

 

 

  

EXHIBIT 10.2

 

Sellers’ representations and warranties

 

1.Authority

 

(a)          Coord3 and the other Sellers have full power and authority
(including full corporate or other entity power and authority) to execute and
deliver this Agreement and to perform their obligations under this Agreement.
Coord3 and the other Sellers do not need to give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any third party, or
need to give any notice to, make any filing with, or obtain any Governmental
Authorization from, any Governmental Authority in order for the Parties to
consummate the transactions contemplated by this Agreement (including the
establishment of NewCo, the Contribution in Kind and the transfer of the Shares
by Coord3).

 

(b)          Non-contravention. Except as set forth in Annex 1 (the “Required
Consents”), neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated by this Agreement (including the
establishment of NewCo, the Contribution in Kind and the transfer of the Shares
by Coord3), shall: (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of any
Governmental Authority, or court to which Coord3 is subject; or (ii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any contract, license, instrument, or
other arrangement to which Coord3 is a party or by which it is bound or to which
any of its assets is subject (or result in the imposition of any Encumbrance
upon any of its assets, particularly the Target Business).

 

2.Good Standing

 

(a)          Good standing - Authority

 

(i)          Coord3 is a company limited by shares, validly existing, duly
incorporated and in good standing under the laws of Italy.

 

(ii)         No resolution has been passed or will be passed prior to Completion
to approve the winding up of Coord3 or of NewCo.

 

(iii)        Coord3 has all the necessary powers and authority to own, operate
or lease the Target Business and all of its assets and to carry on its business
activity as it has been and is currently carried on.

 

(iv)        All corporate actions taken and which will be taken, including the
establishment of NewCo, the Contribution in Kind and the transfer of the Shares
by Coord3, have been duly authorized and the Sellers and Coord3 have not taken
any action that, in any respect, conflicts with, constitutes a default under or
results in any violation of any provision of law or of its articles of
association or by-laws.

 

(b)          No insolvency proceedings

 

(i)          None of the Sellers is subject to any insolvency proceeding of any
kind nor does it satisfy the requirements for filing any insolvency procedure of
any kind. No liquidator, bankruptcy receiver, administrator or similar officer
has been appointed in respect of any of the Sellers. No action is currently
being taken with a view to file for any insolvency proceeding or to appoint any
such liquidator, bankruptcy receiver, administrator or similar officer.

 

(ii)         No arrangement with any of the Sellers’ creditors of any kind has
been entered into or is currently being negotiated.

 

(iii)        None of the Sellers has entered into any agreement for the
assignment of its assets (or any part of them) for the benefit of its creditors.

 

 

 

  

(iv)        None of the Sellers has filed any petition for the restructuring of
its debt.

 

(c)          Licenses, permits, authorizations

 

(i)          Coord3 has all licences, permits, authorizations and consents from
any person, authority or body which are necessary to carry on its business and,
in particular, to operate the Target Business. Coord3 has at all times been in
compliance with each Governmental Authorization. No event has occurred or
circumstance exists that could (with or without notice or lapse of time) (I)
constitute or result, directly or indirectly, in a violation of, or a failure on
the part of Coord3 to comply with, any Governmental Authorization, or (II)
result, directly or indirectly, in the revocation, suspension, cancellation,
termination, or modification of any Governmental Authorization.

 

(ii)         Coord3 has not received any notice or other communication (whether
oral or written) from any Governmental Authority or any other person regarding
(I) any actual, alleged, or potential violation of, or failure to comply with,
any Governmental Authorization, or (II) any actual, proposed, or potential
revocation, suspension, cancellation, termination, or modification of any
Governmental Authorization.

 

(iii)           All applications required to have been filed for the renewal or
reissuance of the Governmental Authorizations have been duly filed on a timely
basis with the appropriate Governmental Authorities;

 

(iv)          All other filings required to have been made with respect to such
Governmental Authorizations have been duly made on a timely basis with the
appropriate Governmental Authorities.

 

(ii)         All of such licences, permits, authorizations and consents are in
full force and effect and neither the Contribution in Kind nor the transfer of
the Shares contemplated by this Agreement will affect the validity and
effectiveness of any licences, permits, authorizations and consents.

 

(iii)        No violation exists in respect of any such licences, permits,
authorizations and consents and no proceeding is pending or, to the best of the
Sellers’ knowledge, threatened against Coord3 to revoke or materially limit any
such licences, permits, authorizations or consents.

 

3.Share Capital of Coord3

 

(i)          The issued and outstanding share capital of Coord3 is that
indicated in the headings of the Agreement. The issued share capital has been
duly authorized, and is fully subscribed and paid.

 

(ii)         Muscarella and Riccardo Muscarella are the sole registered, legal
and beneficial owners of 100% of the share capital of Coord3 in the proportions
set out in Introduction B of the Agreement.

 

(iii)        Coord3’s shares are free and clear from any Encumbrances.

 

(iv)        No resolution has been passed to approve any increase or decrease of
the share capital of Coord3 and there are no outstanding options, warrants,
agreements, conversion rights, pre-emption rights or other rights to subscribe
for, purchase or otherwise acquire any Shares or any further shares of Coord3’s
share capital.

 

(v)         Coord3 has issued no bonds or other securities.

 

4.Title to the Target Business

 

(i)          Coord3 is (and upon Completion NewCo will be) the sole legal and
beneficial owner of the Target Business.

 

(ii)         The Target Business and all of its assets are (and upon Completion
will be) free and clear of any Encumbrances and there are no outstanding
options, warrants, agreements, pre-emption rights or other rights to purchase or
otherwise acquire the Target Business, any portion thereof or any of its assets.

 

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5.Financial Statements

 

Each of the 2013 Financial Statements and the Appraisal Financial Situation: (i)
have been prepared in accordance with the Italian Accounting Principles and with
the valuation criteria and the methodologies of application of such accounting
principles, as consistently applied by Coord3 according to past practice; (ii)
are true and complete; (iii) fairly represent the assets, liabilities, the
financial position and the results of Coord3 respectively as at December 31,
2013 and at the Reference Date; and (iv) are in accordance with the books and
records of Coord3.

 

6.Undisclosed liabilities

 

(i)          As at December 31, 2013, Coord3 had suffered or incurred no loss,
cost, liability, asset deficiency, debt, third party claim or obligation of any
nature which is not shown or provided for in the 2013 Financial Statements.

 

(ii)         As at the Reference Date, Coord3 had suffered or incurred no loss,
cost, liability, asset deficiency, debt, third party claim or obligation of any
nature which is not shown or provided for in the Appraisal Financial Situation.

 

7.Inventories

 

All Inventory included in the Target Business consists of raw materials and
supplies, manufactured and purchased parts, goods in process, and finished
goods, all of which is merchantable and fit for the purpose for which it was
procured or manufactured, saleable in the normal course of business, and none of
which is Slow-Moving (except for specific reserves for such items set forth in
the relevant Appraisal Financial Situation), obsolete, damaged, or defective.
All such Inventories are owned free and clear of any Encumbrances. For the
purposes hereof, “Slow Moving” shall mean Inventory that Coord3 acquired more
than 360 days prior to the Completion Date, other than Inventory described on
Annex 7.

 

8.Accounts receivable

 

The accounts receivable of Coord3 included in the Target Business, after taking
into account any applicable reserve for returns, claims and bad debts shown in
the Appraisal Financial Situation or on Annex 8, are existing, valid and
legitimate and collectable.

 

9.Real estate properties

 

(i)          Coord3 carries out and operates the Target Business in the Property
only and it does not own, lease or otherwise use or occupy any other real estate
property (and NewCo upon Completion will carry out and operate the Target
Business in the Property only and will not own, lease or otherwise use or occupy
any other real estate property).

 

(ii)         Coord3 is entitled to use the Property, with no restriction
whatsoever, on the basis of the contract of Conditional Sale with AGO Renewables
(“AGO”) attached under Annex 9(ii) and of the side letter dated May 28, 2014
(also attached under Annex 9(ii)). Coord3 has duly and timely fulfilled all
obligations arising from such agreement. AGO is not entitled to terminate or
withdraw from the agreement referred to above as a consequence of the
consummation of the Transaction.

 

(iii)        To the best of Sellers’ knowledge, the Property:

 

(aa)         was built on the basis of and in compliance with lawful building
permits;

 

3

 

  

(bb)         complies with all laws and regulations (including without
limitation all building and zoning laws and regulations);

 

(cc)         has obtained the relevant licenses and permits (including without
limitation the Fire Department’s clearance and certificato di agibilità) which
are currently (and upon Completion will be) valid and effective; and

 

(dd)         may therefore be legitimately used to carry out Coord3’s business
(and NewCo’s business) as it is currently run and to operate the Target
Business.

 

(iii)        The Property is in good condition and repair and sufficient for the
operation of the Target Business. There are no structural deficiencies or latent
defects affecting any of the Property and there are no facts or conditions
affecting the Property which would, individually or in the aggregate, interfere
in any respect with the use or occupancy of the same or any portion thereof in
the operation of the Target Business as currently conducted thereon, except for
the solar plant located on the roof as better described under Annex 9(iii),
which does not interfere with the use or occupancy of the Property in the
operation of the Target Business as currently conducted thereon.

 

(iv)        There is no condemnation, expropriation, eviction, temporary taking
or other proceedings, pending or threatened, affecting any parcel of the
Property or any portion thereof or interest therein. There is no injunction,
decree, order, writ or judgment outstanding, or any claim, litigation,
administrative action or similar proceeding, pending or threatened, relating to
the ownership, lease, use or occupancy of the Property or any portion thereof,
or the operation of the Target Business as currently conducted thereon.

 

(v)         The Property is (and upon Completion will be) in compliance with all
laws and regulations, and the use and occupancy of the Property and operation of
the Target Business thereon do not (and upon Completion will not) violate any
laws or regulations. Coord3 has not received any notice of violation of any law
or regulations and, to the best of Sellers’ knowledge, there is no basis for the
issuance of any such notice or the taking of any action for such violation.

 

(vi)        The Property has (and upon Completion will have) direct vehicular
and pedestrian access to a public street adjoining the Property, and such access
is not (and upon Completion will not be) dependent on any land or other real
property interest that is not included in the Property.

 

(vii)       All water, oil, gas, electrical, steam, compressed air,
telecommunications, sewer, storm and waste water systems and other utility
services or systems for the Property have been installed and are operational and
sufficient for the operation of the Target Business as currently conducted
thereon and are fully compliant with all applicable laws and regulations.

 

(viii)      Coord3 has not received any notice from any Governmental Authority
or other entity having jurisdiction over the Property threatening a suspension,
revocation, modification or cancellation of any Real Property Permit and, to the
best of Sellers’ knowledge, there is no basis for the issuance of any such
notice or the taking of any such action. There is not Governmental Authorization
relating to the Real Property Permits or disclosure, filing of other action by
Coord3 (or by NewCo) relating thereto required in connection with the
Transaction.

 

(ix)         There are no Taxes, assessments, fees, charges or similar costs or
expenses imposed by any Governmental Authority, association or other entity
having jurisdiction over the Property (collectively, the “Real Estate
Impositions”) that are delinquent. There is no pending or, to the best of the
Sellers’ knowledge, threatened increase or special assessment or reassessment of
any Real Estate Impositions for the Property.

 

(x)          There is no amount due and payable to any architect, contractor,
subcontractor, materialman, or other person or entity for work or labor
performed for, or materials or supplies provided to, or in connection with, the
Property or portion thereof which is delinquent. There is no work or labor being
performed for, or materials or supplies being provided to, or in connection
with, the Property or portion thereof, or to be performed or supplied prior to
the Completion, other than routine maintenance and repair work.

 

4

 

  

(xi)         The Property has access to water resources necessary in the
operation of the Target Business as currently conducted thereon.

 

(xii)        Except as set forth on Annex 9(xii), there are no pending property
insurance claims with respect to the Property or any portion thereof

 

10.Fixed tangible assets (other than real estate properties)

 

(a)          Ownership

 

(i)          Coord3 has good title to and legal and beneficial ownership of the
assets listed in Annex 10(a)(i).

 

(ii)         The assets listed in Annex 10(a)(i) are free and clear of any
Encumbrances.

 

(b)          Capital Lease

 

Coord3 is not a party to any capital lease agreement (leasing). Coord3 has duly
and timely fulfilled all obligations arising from such capital lease agreements.

 

(c)          Operating Lease

 

Coord3 has no operating lease agreements in place for any asset, except for the
assets listed in Annex 10(c). Coord3 has duly and timely fulfilled all
obligations arising from such operating lease agreements.

 

(d)          General

 

(i)          Annex 10(a)(i) is a complete and accurate list of all assets owned
and used (as the case may be) by Coord3.

 

(ii)         To the best of the Sellers’ knowledge, all assets owned or however
used Coord3 comply with all laws and regulations.

 

(iii)        All assets owned or however used by Coord3 are in good operating
conditions and repair, subject to normal wear and tear, and usable in the
regular and ordinary course of the business.

 

(iv)        The assets listed in Annex 10(a)(i) are sufficient to allow Coord3
to properly operate the Target Business as currently conducted.

 

11.Intellectual property

 

(i)          Coord3 is the sole legal and beneficial owner of the trademarks,
trademark applications, industrial designs, manufacturing and trade secrets,
inventions, patents, patent applications, copyright, software know-how,
technology and drawings listed and described in Annex 11(i) (“Intellectual
Property”). Coord3 owns no intellectual property other than that listed in Annex
11(i).

 

(ii)         The trademarks applications if any are filed for registration in
the jurisdictions indicated in Annex 11(i).

 

(iii)        The Intellectual Property is free and clear from any Encumbrances.

 

(iv)        The Intellectual Property is used in good faith.

 

(v)         None of the items and assets of the Intellectual Property is
licensed to third parties or is part of a branch of a business as a going
concern (ramo d’azienda) which is leased to third parties or on which a third
party is entitled to the usufruct.

 

(vi)        All fees, taxes and duties for all the registrations and maintenance
of all Intellectual Property have been duly and timely paid by Coord3.

 

(vii)       Annex 11(i) lists any deadlines related to: (A) registration,
maintenance or renewal fees with respect to the Intellectual Property; and (B)
the filing of any documents, applications or certificates (including responses
to office actions) that are required within ninety (90) days of the Completion
Date to maintain any such Intellectual Property.

 

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(viii)      The Intellectual Property is sufficient to allow Coord3 to properly
operate the Target Business as currently conducted.

 

(ix)         To the best of the Sellers’ knowledge, the Intellectual Property
does not infringe any third party rights.

 

(x)          There are no proceedings (including opposition proceedings before
any authority or challenges) concerning the Intellectual Property which are
pending or, to the best of the Sellers’ knowledge, threatened, and Coord3 has
not entered into nor is it negotiating any settlement agreements regarding the
Intellectual Property. Coord3 is not obligated to pay any royalty, license fee,
charge or other amount with regard to any Intellectual Property.

 

(xi)         The Sellers are not aware of any actual or potential infringements
of the Intellectual Property by any third party.

 

(xii)        No director, officer, shareholder, employee, consultant,
contractor, agent or other representative of Coord3 owns or claims any rights in
(nor has any of them made application for) any Intellectual Property.

 

(xiii)       All research and development activities, drawings and
specifications, and know-how concerning the products currently manufactured by
Coord3 have been acquired or completed or fully developed by Coord3 and all
related costs have already been incurred.

 

(xiv)      Each software used by Coord3 has been and is duly licensed to it and
all relevant considerations for such licenses have been duly and timely paid by
Coord3.

 

(xv)       To the best of the Sellers’ knowledge, Coord3’s software does not
contain viruses, worms, time bombs, or backdoor access that could be used to
interfere with the functionality of such software.

 

(xvi)      No person has (or had) a copy of, or has (or had) the right to access
now or at some time in the future to any source code for material Software; and
there are no agreements under which Coord3 has placed or is required to place
into escrow any such source code.

 

(xvii)     No Intellectual Property was developed by Coord3 using (in whole or
in part) government funding or facilities nor was it obtained from any
Governmental Authority. Coord3 has not granted to any Governmental Authority,
either expressly, or by any act or omission of Coord3, any unlimited,
unrestricted or government purpose rights in the Intellectual Property.

 

(xviii)    No person other than the Seller has ownership of or rights to any
Intellectual Property, excluding that is the subject of a license.

 

(xix)       Coord3 has taken commercially reasonable actions to protect its
trade secrets included in the Intellectual Property from unauthorized use or
disclosure, and to maintain such trade secrets in confidence. To the best of the
Sellers’ knowledge, these trade secret policies comply (x) with all contracts
between Coord3 and customers or other third parties; and (y) with applicable
law. To the best of the Sellers’ knowledge, there have been no material breaches
or deviations from these trade secret policies, and no breach of any contract
between the Seller and customers or other third parties with respect to trade
secrets.

 

12.Debt

 

As of the date this representation is made, Coord3’s debt and accounts payable
are as indicated in Annex 12, plus accounts payable incurred after the date
hereof in the ordinary course of business consistent with the past practice.

 

13.Guarantees and securities

 

(i)          No guarantees or patronage letters or other securities have been
granted or created by third parties (including the Sellers) for the benefit of
Coord3.

 

6

 

  

(ii)         Coord3 has issued or granted no guarantees or patronage letters
and/or created securities in favor of any third party including any of the
Sellers.

 

(iii)        There are no off balance-sheet items in the books and records of
Coord3.

 

14.Books and records

 

(i)          All books and records of Coord3 (including all tax books) have been
fully, properly and accurately kept and completed in accordance with all
applicable laws and the Italian Accounting Principles and fairly reflect, in
reasonable detail, the transactions, the financial position and the assets and
liabilities of Coord3. All of such books and records are under the direct
control of Coord3 and have been kept for the duration prescribed by the
applicable civil and tax laws and regulations.

 

(ii)         The records of the resolutions of the board of directors and the
shareholders of Coord3 are accurate and accurately reflect all actions taken and
all resolutions passed by the board of directors and the shareholders of Coord3.

 

15.Litigation

 

(i)          There are no claims, actions, suits, proceedings or investigations
pending or threatened in writing or, to the best knowledge of the Sellers,
threatened other than in writing, before any court or governmental or regulatory
or administrative authority, domestic or foreign, or before any arbitrator of
any nature to which Coord3 is a party. To the best of the Sellers’ knowledge, no
facts or circumstances exist which may give rise to any claims, actions, suits,
proceedings or investigations.

 

16.Employment matters - Agents

 

(i)          Annex 16(i) lists the employees of Coord3 with their name,
employment level, seniority, duties, annual salary (net, gross and cost for the
employer), total accrued deferred salary/severance indemnity (TFR) and the other
statutory accrued entitlements and who are inherent in the Target Business and
whose employment contracts will be transferred to NewCo upon the Contribution in
Kind (“Target Business Employees”). The information contained in Annex 16(i) is
true, accurate and complete as of the date hereof.

 

(ii)         Coord3 has no employees other than the employees listed in Annex
16(i). No person other than the employees listed in Annex 16(i) may legitimately
claim that he/she has a subordinate employment relationship with Coord3.

 

(iii)        [intentionally left blank]

 

(iv)        No litigation, whether pending or threatened in writing or, to the
best knowledge of the Sellers, threatened but not in writing, exists between
Coord3 and any employee who is presently on its payroll as well as any former
employee.

 

(v)         Coord3 is not in breach of any obligation to pay to any of its
employees any wages, salaries, commissions, bonuses, benefits or other direct or
indirect compensation for any services performed to the date hereof or amount
required to be reimbursed to such employees, nor is it in breach of any other
obligation arising from the employment agreements with their employees.

 

(vi)        Coord3 has complied with all employment and social security
applicable laws and regulations and collective bargaining agreements (including
those executed with local/plant unions, if any) governing employment, as well as
with all employment practices, terms and conditions of employment, wages, hours
and benefits, including any provision relating to health and safety.

 

(vii)       Up to the date hereof no employee of Coord3 has actually performed
or actually performs tasks which are not substantially corresponding to those
prescribed by the relevant provisions of the collective bargaining agreements
and of his/her individual employment agreement.

 

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(viii)      There is no strike, slowdown or stoppage actually pending or
threatened in writing or, to the best knowledge of the Sellers, threatened but
not in writing, against or involving Coord3.

 

(ix)         There is no employee bonus, stock option, incentive, deferred
compensation, retiree medical or life insurance, supplemental retirement,
pension or severance plans (i) to which Coord3 is a party or (ii) which are
maintained, contributed to or sponsored by Coord3 for the benefit of the
employees, other than those provided for by the law or by the applicable
National Collective Bargaining Agreement.

 

(x)          Up to the date hereof the total accrued deferred salary / severance
indemnity (TFR) of each employee of Coord3 has been calculated and accrued
according to the applicable laws and/or other applicable contractual provisions.

 

(xi)         Except as set forth on Annex 16(xi) relating to the Government
Debt, Coord3 has: (1) paid to the competent authorities all compulsory social
welfare and social security funds and provided to such authorities any requested
document concerning the same; (2) fully paid or, as the case may be, posted in
the 2013 Financial Statements and in the Appraisal Financial Situation all
contributions (including interest, penalties and taxes, if applicable)
concerning wages paid or due; and (3) withheld and paid to the competent
authorities the total contributions and taxes to be withheld from the paid
wages.

 

(xii)        No employee of Coord3 is entitled to receive any payment of any
nature whatsoever as a consequence of the execution of this Agreement and/or of
the Completion as contemplated by this Agreement.

 

(xiii)       Coord3 applies the National Collective Bargaining Agreement for
Industrial Companies (“CCNL Industria Metalmeccanica”).

 

(xiv)      Coord3 has had access to cassa integrazione guadagni in the past and
it has always duly complied with all the related obligations. A procedure for
contratto di solidarietàis currently pending and the relevant terms are
summarized in Annex 16(xiv).

 

(xv)       Coord3 has not made any loan to any of its employees.

 

(xvi)      Coord3 has no workers on a project basis (collaboratori a progetto),
except for those listed under Annex 16(xvi).

 

(xvii)     Coord3 has no fixed term employees.

 

(xviii)    Coord3 has no self-employed workers (including collaboratori
coordinati e continuativi), except for those listed under Annex 16(xviii).

 

(xix)       Coord3 has duly and timely fulfilled all of its tax and social
security obligations in relation to the current and past members of the board of
directors.

 

(xx)        Coord3 has no commercial agents.

 

17.Insurances

 

(i)          The insurance policies entered into and maintained by Coord3 are
listed in Annex 17(i), which, for each insurance policy, lists the insurance
company, the risk covered, the date of execution of the policy, the premium, the
expiration date. Such policies are of the type and amount which are appropriate
for the conduct of Coord3’s business and, in particular, of the Target Business
and are sufficient for material compliance with all agreements to which they are
a party or by which they are bound.

 

(ii)         All premiums concerning the insurance policies have been paid at
the due dates. Such insurance policies are in full force and effect as of the
date hereof and are validly enforceable.

 

(iii)        No event relating to Coord3 or to the Target Business has occurred
which could reasonably be expected to result in a retroactive upward adjustment
in premiums under any such insurance policies or which (to the best of the
Sellers’ knowledge) is likely to result in a prospective upward adjustment in
such premiums or in any other adverse change in the terms of any policy of
insurance covering the Target Business.

 

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(iv)        The insurance policies shall continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms following the
consummation of the transactions contemplated by this Agreement; neither Coord3,
the other Sellers nor any other party to the insurance policies is in breach or
default, and no event has occurred which, with notice or the lapse of time,
would constitute such a breach or default, or permit termination, modification,
or acceleration, under the policy.

 

(v)         Coord3 has given notice to the insurer of all insured claims.

 

18.Environmental

 

(a)          Coord3 is not and has not been in breach of any applicable
Environmental Law.

 

(b)          No plants, factories, sheds, stores, warehouses, offices,
facilities and land owned or used by Coord3 contain, or have previously
contained, any Hazardous Substances, including, without limitation, asbestos,
petroleum or petroleum products (including gasoline, crude oil or any fraction
thereof), polychlorinated biphenyl’s, and urea-formaldehyde insulation, to be
considered Hazardous Substances, in amounts or concentrations that constitute or
constituted a violation of, or could give rise to any liability under, any
applicable Environmental Law.

 

(c)          Hazardous Substances have not been transported or disposed of from
any plant, factory, shed, store, warehouse, office or facility of Coord3, in
violation of, or in a manner or to a location which could give rise to any
liability under, any applicable Environmental Law, nor have any Hazardous
Substance been generated, treated, stored or disposed of at, on or under any of
the plants, factories, sheds, stores, warehouses, offices and facilities of
Coord3, in violation of, or in a manner that could give rise to any liability
under, any applicable Environmental Law.

 

(d)          All Environmental Licenses required for the operations of the
Target Business have been obtained, are in full force and effect and have been
complied with by Coord3.

 

(e)          Coord3 is not currently the subject of any claim, investigation or
inspection (including for liabilities for cleaning up, remediation or costs for
personal injury or property damages) under any applicable Environmental Law or
to the best of the Sellers’ knowledge for any breach, suspected breach or
alleged breach by Coord3 of any Environmental License, and to the best of the
Sellers’ knowledge no such claim, investigation or inspection is pending,
threatened or proposed and there are no facts or circumstances which may lead to
any such claims, investigations or inspections.

 

(f)          To the best of the Sellers’ knowledge, no expenditures are required
in connection with the business of Coord3 as presently conducted and/or plant
and/or facility of Coord3 in order to comply with any applicable Environmental
Law.

 

(g)          There are no judicial proceedings or governmental or administrative
actions pending, contemplated or threatened in writing or, to the best knowledge
of the Sellers, threatened but not in writing, under any presently applicable
and enacted Environmental Law to which Coord3 and/or their directors, officers,
agents or employees, as the case may be, is or will be named as a party with
respect to each relevant plant, factory, shed, store, warehouse, office and
facility, nor are there any decrees, administrative orders or other orders or
administrative or judicial requirements outstanding under any applicable
Environmental Law with respect to the relevant plant, factory, shed, store,
warehouse, office and facility.

 

(h)          There is no presence, discharge, spillage, emission or other
release of any Hazardous Substance in, onto, under or from any of the properties
used by Coord3 and, to the best of the Sellers’ knowledge, no claims or
complaints relating to any such occurrence are pending and the Sellers are not
aware of any circumstance which could result in any such claim or complaint
being received.

 

(i)          All Waste which is or has at any time been produced by Coord3 has
been disposed of in accordance with the requirements of all Environmental Laws
as from time to time, up to now, in force.

 

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(j)          Except for temporary storage of Waste prior to collection as
permitted pursuant to Environmental Laws as from time to time in force, no Waste
is or has ever been stored or disposed of on any of the properties used by
Coord3 in breach of any Environmental Law as from time to time in force or has
been disposed of or stored by Coord3 at any such property.

 

(k)          Except as provided in Annex 18(xi), all information provided by
Coord3 to any competent authority in accordance with the requirements of the
Environmental Laws as from time to time in force and all records and data
required to be maintained by Coord3 under the provisions of any applicable
Environmental Law regarding any processes currently carried on at or emissions,
discharges or Waste disposal from any of the properties used by Coord3 is
complete and accurate.

 

(l)          Neither Coord3, nor any of Coord3’s directors, officers, or
employees is in breach of or has incurred or become convicted of or become
subject to any civil or administrative or criminal liability under any
applicable Environmental Law or the terms of any Environmental License (other
than a liability to pay routine costs or charges under any required license) and
Coord3 has not received any notice or other communication or become aware of any
facts or circumstances from which it appears that they or any such other person
may be or is alleged to be in breach of or to have incurred any such liability
under any applicable Environmental Law or Environmental License.

 

19.Compliance with the law – Regulatory compliance

 

(i)          The operations of Coord3 have been conducted, in all material
respects, in compliance with all permits, applicable laws, regulations, orders
and other requirements of all courts and other governmental or regulatory
authorities having jurisdiction over Coord3, including any such laws,
regulations, orders or other requirements relating to product safety, accident
prevention, export control, money laundering, anti-corruption, international
sales and business ethics and health and safety on the work place.

 

(ii)         Coord3 has not received a notification of any violation of any such
law, regulation, order or requirement, or are in default with respect to any
order, writ, judgment, award, injunction or decree of any court or governmental
or regulatory authority or arbitrator applicable to Coord3, or any of its
assets, properties or operations.

 

(iii)        Neither Coord3 nor any of its directors, officers or employees has
committed any act or omission which may have caused any damage to any public
authority or entity (danno erariale).

 

(iv)        Coord3 has not adopted any organizational model in accordance with
Legislative Decree 231/2001. The Sellers represent and warrant that no action,
suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or
notice has been filed or commenced against Coord3 pursuant to Legislative Decree
231/2001, nor any action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice has been filed or commenced against any of
Coord3’s employees or directors which may result in an action pursuant to
Legislative Decree 231/2001 and no facts occurred and will occur prior to
Completion which could result in action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand pursuant to Legislative Decree
231/2001.

 

20.Contracts

 

(i)          Annex 20(i) lists all contracts to which Coord3 is a party and
which are part of the Target Business.

 

(ii)         In relation to the customers’ or suppliers’ contracts of which
Coord3 is a party, none of the customers or suppliers (as the case may be) is
entitled to terminate or withdraw from the relevant contracts referred to in
this paragraph (i) as a consequence of the Contribution in Kind or of the sale
of the Shares to the Buyer.

 

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(iii)        Coord3 has duly and timely fulfilled in all material respects all
of the obligations arising from all of the contracts referred to in paragraph
20(i) above.

 

(iv)        With respect to each contract entered into by Coord3 which is part
of the Target Business: (A) the contract is legal, valid, binding, enforceable,
and in full force and effect (or, as the case may be in relation to past
agreement expired or terminated, were legal, valid, binding and enforceable)
against Coord3 and, to the best of Sellers’ knowledge the other parties thereto;
(B) the contract shall continue to be legal, valid, binding, enforceable, and in
full force and effect on identical terms following the consummation of the
transactions contemplated by this Agreement; (C) neither Coord3, nor, to the
best of Sellers’ knowledge, any other party is in breach or default, and, to the
best of Sellers’ knowledge, no event has occurred that with notice or lapse of
time would constitute a breach or default, or permit termination, modification,
or acceleration, under such contract; (D) no party has repudiated any provision
of such contract; and (E) there is no renegotiation of, attempt to renegotiate,
or outstanding rights to renegotiate any such contracts with any person, and no
person has made written demand for such renegotiation; (F) no party is entitled
to withdraw from any contract without cause or as a consequence of the
consummation of the Transaction; (G) to the best of the Sellers’ knowledge, all
contracts to which Coord3 is a party and which should have been awarded through
a public tender process have been awarded in compliance with applicable laws and
regulations.

 

(v)         Since September 30, 2014, no supplier of Coord3 has indicated that
it shall stop, or materially decrease the rate of, supplying materials, products
or services to Coord3 or initiated or threatened litigation as a result of a
dispute nor has Coord3 refused to pay any such supplier due to quality
timeliness or other issues.

 

(vi)        Since September 30, 2014, no customer has indicated that it stop, or
materially decrease the rate of, purchasing products or services from Coord3,
refused to pay due to quality, timeliness or other issues or initiated or
threatened litigation as a result of a dispute. None of Coord3’s agreements with
its customers contain provisions which permit the customer to terminate their
arrangement with Coord3 as a result of the consummation of the transactions
contemplated hereby.

 

21.Product Liability and product warranty

 

(i)          No product liability claims are pending against Coord3.

 

(ii)         Coord3 has not received any order from any Governmental Authority
to recall any of the products manufactured and delivered. No event has occurred
or circumstance exists that (with or without notice or lapse of time) could
result in any such liability or recall. No product liability claims of Coord3
have been settled during the past two (2) years.

 

(iii)        There is not a standard form for product warranty issued by Coord3.
Each product manufactured, repaired, sold, leased, or delivered by Coord3 has
been in conformity with all applicable contractual commitments and all express
and implied warranties, and Coord3 has no liability (and, to the best of
Sellers’ knowledge, there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
it giving rise to any liability) for replacement or repair thereof or other
damages in connection therewith. No product manufactured, repaired, sold,
leased, or delivered by Coord3 is subject to any guaranty, warranty, or other
indemnity beyond the applicable standard terms and conditions of sale or lease.

 

(iv)        The products manufactured and delivered by Coord3 prior to the date
hereof do not have any material design or serial defects which may reasonably be
expected to result in any claim. Coord3 has no liability (and there is no basis
for any present or future action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand against it giving rise to any adverse
consequence) as a result of any defect or other deficiency (whether of design,
materials, workmanship, labelling, instructions, or otherwise) with respect to
any product designed, manufactured, repaired, sold, leased, licensed, or
delivered, or any service provided by Coord3 and pertaining to the Target
Business.

 

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22.Taxes

 

Except as set forth in Annex 22:

 

(i)          Coord3 complied with all obligations in respect of Tax. Annex 22(i)
sets forth the outstanding Government Debt.

 

(ii)         All tax returns, reports or other filings that are required to be
filed by Coord3 on or before the date this representation is being made with any
tax or social security authorities have been duly and timely filed. Such tax
returns, reports or other filings fully reflect the tax and social security
liabilities of Coord3, at the time of the filing, for the relevant tax period.
Coord3 currently is not the beneficiary of any extension of time within which to
file any Tax Return. No claim has ever been made by an authority in a
jurisdiction where Coord3 does not file Tax Returns that it is or may be subject
to taxation by that jurisdiction. There are no liens for Taxes (other than Taxes
not yet due and payable) upon the Target Business.

 

(iii)        All Taxes of Coord3: (i) payable on or before the date this
representation is made; or (ii) that are attributable to any relevant period up
to the date hereof, but are not yet due and payable as of the date this
representation is made, in each case have been timely and duly paid or
appropriate provisions have been made therefore in the Appraisal Financial
Situation.

 

(iv)        No claim for assessment or collection of Taxes has been asserted
against Coord3 and there are no such claims threatened in writing or, to the
best of the Sellers’ knowledge, threatened other than in writing against Coord3.
Neither Coord3 nor the other Sellers nor any director or officer (or employee
responsible for Tax matters) of Coord3 expects any Governmental Authority to
assess any additional Taxes for any period for which Tax Returns have been
filed.

 

(v)         Coord3 has withheld from its employees, independent contractors,
creditors, shareholders and third parties and timely paid to the appropriate
Governmental Authority proper and accurate amounts in all respects required to
have been withheld or paid over for all periods ending on or before the
Completion Date in compliance with all Tax withholding and remitting provisions
of applicable laws and have complied in all respects with all Tax information
reporting provisions of all applicable laws.

 

(vi)        Coord3 has not received any written or oral notice that it is in
violation (or with notice will be in violation) of any applicable law relating
to the payment or withholding of Taxes.

 

(vii)       Coord3 has not received any notice of a proposed Tax or social
security inspection or any other administrative proceeding or court proceeding
nor are any of the foregoing pending or threatened in writing, or to the best of
the Sellers’ knowledge, threatened but not in writing with regard to any Taxes
or Tax Returns.

 

(viii)      Coord3 is a party to no dispute with any tax authority in relation
to any Tax.

 

(ix)         Annex 22(ix) sets forth the amount of Coord3’s unpaid Taxes as of
the date the representation is being made, together with interest and penalties.

 

(x)          Annex 22(x) sets forth all of Coord3’s open tax audit years.

 

23.Public grants

 

Coord3 has never received nor benefitted from any public grants.

 

24.Privacy and personal data protection

 

(i)          Coord3 has complied with all laws and regulations governing the
protection of privacy and personal data.

 

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(ii)         Coord3 maintains policies and procedures regarding data security,
privacy, and personal information that are commercially reasonable and, in any
event, comply with all obligations to its employees, customers, suppliers and
data subjects, or others, and with all applicable laws and regulations. The
consummation of the Transaction will not violate any privacy policy, information
security policy, terms of use, customer agreements or any applicable laws or
regulations relating to the use, storage, treatment, dissemination or transfer
of any personal data or information or confidential information of a third
party.

 

25.Loans to or by the Sellers

 

There is no outstanding indebtedness or other liability (actual or contingent)
owed by Coord3 to the other Sellers, their Affiliates or to any director,
officer, or employee of Coord3 or any person related to a director, officer, or
employee as aforesaid, nor is there any indebtedness owed to Coord3 by any such
person.

 

26.Equity Interests; Branches

 

(i)          No interest in any legal entity is owned (whether directly or
indirectly) by Coord3 nor is Coord3 a member of any partnership, joint venture,
consortium or other incorporated or unincorporated association, except as
disclosed in Annex 26(i).

 

27.Information Technology

 

(i)          Coord3 has an information technology system (i.e. personal
computers, network, servers and connected devices and software, hereinafter “IT
System”) fully functioning and suitable to operate the Target Business in an
efficient manner.

 

(ii)         The IT System is suitable and works properly for the purpose of
supporting the management of the Target Business and allowing all its employees
to carry out their intended tasks and duties, including, but not limited to,
keeping the accounts and storing all relevant information.

 

(iii)        The IT System is suitable to run all programs and perform all
actions necessary for the specific business of the Target Business, including
but not limited to, design, simulation and calculation.

 

(iv)          Coord3 has acquired full title to and ownership of, or a
legitimate right to use, any and all third party software and/or intellectual
property used in the IT System.

 

(v)         To the best knowledge of the Sellers, the use of the software and
intellectual property relating to the IT Systems and use of the IT System itself
does not infringe any third party right or statutory provision.

 

(vii)       Coord3 has devised and implemented with the utmost care specific
procedures aimed at protecting the IT System from viruses and any other harm and
preserving the security of their IT System, data and intellectual property.

 

(viii)      Coord3 has taken all reasonable steps to safeguard the IT System
utilized in the operation of the Target Business, including the implementation
of procedures to ensure that such information technology systems are free from
any disabling codes or instructions, timer, copy protection device, clock,
counter or other limiting design or routing and any "back door," "time bomb,"
"Trojan horse," "worm," "drop dead device," "virus," or other software routines
or hardware components that in each case permit unauthorized access or the
unauthorized disablement or unauthorized erasure of data or other software by a
third party, and to date there have been no successful unauthorized intrusions
or breaches of the security of the information technology systems.

 

(ix)         The consummation of the Transaction (or any part thereof) will not
disrupt or discontinue the operation and functionality of the IT System.

 

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28.Subsequent Events

 

(a)           Since the Reference Date, the business of Coord3 has been
conducted in accordance with Section 8.01(a) of the Agreement and of all
applicable laws. Since the Reference Date, Coord3 has taken none of the
following actions:

 

(xxvii)   sale or disposal of any assets outside the ordinary course of
business;

 

(xxviii)    granting of any rights (including in rem securities) in respect of
any of Coord3’s assets or the charging of any of said assets with any
Encumbrances;

 

(xxix)      decisions to incur any indebtedness or to borrow any money (except
within the limits of the facilities currently available to Coord3 as disclosed
to the Buyer), or to enter into any factoring or invoice discount agreement;

 

(xxx)        extension of the terms of payment of any payables or other
liabilities or of any receivables, outside of ordinary course of business, or
discount any receivables;

 

(xxxi)      transactions (including share capital increase or decrease) which
affect the share capital of Coord3;

 

(xxxii)     the granting of any rights (including in rem security rights) on any
of the shares of NewCo or any further share to be issued by NewCo and issuance
of any bond or other securities;

 

(xxxiii)    decisions to undertake any capital commitment (purchase or financial
/ capital lease of fixed or other assets);

 

(xxxiv)     decisions to enter into any partnership, consortium, association,
joint venture agreements;

 

(xxxv)      change of the remuneration of any of the employees, other than
increases required by the law or by the applicable collective bargaining
agreements;

 

(xxxvi)     recruitment of any new dirigente or quadro or promotion of any
employee to such levels;

 

(xxxvii)    any redundancy plan or the dismissal of any dirigente or quadro;

 

(xxxviii)    acquisition or disposal of equity interests in other entities or of
businesses as going concerns or any branches thereof;

 

(xxxix)     agreements with customers or suppliers (including purchase orders)
which are outside the ordinary course of business or (aa) whereby the
counterpart may withdraw or terminate for change of control, (bb) which provide
for restrictions to the freedom to operate in the market; or (cc) which
contemplate unusual payment terms outside ordinary course of business if
compared with standard market practice;

 

(xl)         agreements with related parties (including shareholders, directors
or employees of Coord3 or relatives of the shareholders or of the directors or
employees);

 

(xli)        change in accounting methods, policies or procedures or
presentations of accounts; declaration and distribution of dividends;

 

(xlii)      settlements of disputes when the overall value exceeds EUR 30,000;

 

(xliii)     guarantees to secure the obligations of a third party;

 

(xliv)      liquidation; dissolution; mergers, de-mergers and restructurings;

 

(xlv)        real estate leases;

 

(xlvi)      permitting the lapse or forfeiture of intellectual property rights
or other intangible assets;

 

(xlvii)     fail to file any tax returns or any other report to any authority as
required under the law or any contract by its applicable due date or fail to pay
any taxes, as and when they first became due and payable;

 

(xlviii)    negotiation for the settlements or compromise, settlements or
compromise of any tax liability;

 

(xlix)      payment of dividends or distributions;

 

(l)          termination of any material agreement;

 

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(li)         enter into or amend any agreement, except for acceptance or
placement of purchase orders in the ordinary course of business.

 

(b)          As at the date this representation is made, Coord3 had suffered or
incurred no loss, cost, liability, asset deficiency, debt, third party claim or
obligation of any nature, except as shown or provided for in the Appraisal
Financial Situation or incurred in the ordinary course of business since the
Reference Date.

 

29.Material Adverse Change

 

No Material Adverse Change in Coord3 has occurred between the Reference Date and
the date this representation is made.

 

30.No Broker

 

The Sellers have entered into negotiations with the Buyer in relation to the
Transaction and have entered into this Agreement without using the services of
any broker.

 

31.No omission

 

No representation or warranty made by the Sellers and none of the Appendices and
Annexes contains or will contain any untrue statement of any fact, or omit any
fact, the omission of which would be misleading.

 

32.International Trade Sanctions

 

Neither Coord3, nor any other Sellers acting on its behalf, nor any of their
respective directors, officers, agents, employees or any other persons acting on
behalf of Coord3 has, in connection with the operation of Coord3 or the Target
Business, (i) used any corporate or other funds for unlawful contributions,
payments, gifts or entertainment, or made any unlawful expenditures relating to
political activity, to government officials, candidates or members of political
parties or organizations, or established or maintained any unlawful or
unrecorded funds in violation of Section 104 of the Foreign Corrupt Practices
Act of 1977, as amended, or any Italian applicable or other similar applicable
law relating to corruption, (ii) paid, accepted or received any unlawful
contributions, payments, expenditures or gifts, or (iii) violated or operated in
noncompliance with any export restrictions, anti-boycott regulations, embargo
regulations or other similar applicable law.

 

33.Affiliate Transactions

 

None of the Sellers, Coord3’s directors, officers or employees, their
Affiliates, and their relatives are a party to, or the beneficiary of, any
contract or material transaction relating to Coord3 or the Target Business,
including any contract providing for any loans, advances, the employment of,
furnishing of services by, rental of assets from or to, or otherwise requiring
payments to or from, any such persons.

 

34.No Other Business

 

Coord3 has never conducted any business or other operations other than the
current business of designing, engineering, manufacturing, marketing, selling,
installing, servicing and maintaining CMMs (the “Current Business”) and Coord3
has no liabilities or obligations, known, unknown, contingent or otherwise,
arising from previously disposed of or discontinued operations, or that are not
related to or did not arise from the operation of the Current Business.

 

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