Exhibit 10.4

 

  DATE January 29, 2015             Topmes s.r.o. (1)             and          
    Perceptron, Inc. (2)  

 

 

 

Share Purchase Agreement

 

Next Metrology Software s.r.o.

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

SECTIONS           Section 1 Introduction and Exhibits – Interpretation –
Certain definitions 3       Section 2 Sale and purchase of the Share 4      
Section 3 Purchase Price 5       Section 4 Completion – Conditions to Completion
5       Section 5

Pre-Completion Date Covenants 

8       Section 6 Due Diligence 11       Section 7 Representations and
warranties 11       Section 8 Indemnification 12       Section 9 Restrictive
Covenants 13       Section 10

Property 

14       Section 11 Termination 14       Section 12 Miscellaneous 15      
Section 13 Governing Law - Arbitration 17

 

LIST OF THE EXHIBITS           Exhibit 1.03:   Certain definitions      
Appendix A:   Agreed Accounting Principles       Exhibit 4.02(a)(i)(gg):  
Seller Release       Exhibit 4.02(a)(i)(nn):   Waiver of the Right of First
Refusal       Exhibit 7.01:   Buyer’s representations and warranties      
Exhibit 7.02:  

Seller’s representations and warranties

      Exhibit 10   Sublease Agreement       LIST OF THE EXHIBITS           Annex
1   Disclosed Documents

 

1

 

 

agreement

 

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

 

by and amongst

 

(1)Topmes s.r.o., a company established under the laws of the Czech Republic,
with offices at Štěrboholská 1307/44, Hostivař, 102 00 Prague 10, Company ID:
00541940, registered in the Company Register at Municipal Court of Prague,
Section C, File 210793, for the purposes of this agreement represented by Martin
Prokop, in his capacity as managing director (“Topmes” or the “Seller”)

 

and

 

(2)Perceptron, Inc., a company established under the laws of the State of
Michigan, with offices at 47827 Halyard Drive, Plymouth, MI 48170, State of
Michigan Id No. 272233, for the purposes of this agreement represented by
Margaret Mary Kaczmarek Nelson, in her capacity as Vice President, Human
Resources (“Buyer”),

 

(the Seller 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.The Seller owns 50% share in Next Metrology. Next Metrology's registered
capital as of the date hereof is CZK 200,000 (in words: two hundred thousand
Czech crowns) and is divided into the following three ownership interests
representing 100% of the participation and shareholding rights in Next
Metrology:

 

(i)Muscarella: ownership interest of total par value of CZK 50,000, representing
25% of Next Metrology’s registered capital (the “Muscarella Share”);

 

(ii)Mills: ownership interest of total par value of CZK 50,000, representing 25%
of Next Metrology’s registered capital (the “Mills Share”);

 

(iii)Topmes: ownership interest of total par value of CZK 100,000, representing
50% of Next Metrology’s registered capital (the "Share").

 

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

 

C.The Buyer is interested in acquiring the Share from the Seller, upon the terms
and conditions set forth in this Agreement.

 

D.The Seller declared that it is interested and willing to transfer and to cause
the transfer of the Share to the Buyer, upon the terms and conditions set forth
in this Agreement.

 

E.The Buyer is interested in acquiring only 100% participation in Next
Metrology, i.e., acquiring the Share together with the Mills Share and the
Muscarella Share.

 

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 12.02(b).

 

1.02 Interpretation

 

(a)In this Agreement, unless the context otherwise requires:

 

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

 

(ii)       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).

 

(c)Any reference to a statute, statutory provision or subordinate legislation
shall be construed as referring to that statute, statutory provision or
subordinate legislation as amended, modified, consolidated, re-enacted or
replaced and in force from time to time, whether before or after the date of
this Agreement and shall also be construed as referring to any previous statute,
statutory provision or subordinate legislation amended, modified, consolidated,
re-enacted or replaced by such statute, statutory provision or subordinate
legislation.

 

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(d)References to any Czech statutory provision or Czech legal term for any
action, remedy, method of judicial proceeding, document, legal status, court,
official or any other legal concept or thing shall, in respect of anybody
corporate incorporated in any jurisdiction other than the Czech Republic, be
deemed to refer to and include any equivalent or analogous action, remedy,
method of judicial proceeding, document, legal status, court, official or other
legal concept or thing or what most nearly approximates in that jurisdiction to
the Czech statutory provision or Czech legal term.

 

(e)The schedules to this Agreement shall for all purposes form part of this
Agreement.

 

(f)Any phrase introduced by the terms "including", "include", "in particular" or
any similar expression shall be construed as illustrative and shall not limit
the sense of the words preceding those terms.

 

(g)Notwithstanding that this Agreement is set forth in the English language
only, where in this Agreement a Czech term is given in italics and/or in
brackets after an English term or vice versa, the relevant provision relates to
circumstances governed by the respective Czech law and if there is any
inconsistency between the Czech term and the English term, the meaning of the
respective Czech term shall prevail.

 

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

 

Sale and purchase of the Share

 

(a)Upon the terms and subject to the conditions set forth in this Agreement, the
Seller agrees to sell the Share to the Buyer, and the Buyer agrees to buy the
Share, on the Completion Date.

 

(b)On the Completion Date, the Seller and the Buyer shall enter into and execute
an Ownership Interest Purchase Agreement (the “OITA”) by which Seller shall
transfer to the Buyer the Share. The Parties agree that the OITA shall be
subject to this Agreement and therefore, they shall not make any claim however
relating to the sale of the Share otherwise than under this Agreement.

 

(c)Upon fulfillment of all other formalities as required by Section 4.02 and
fulfillment (or waiver) of all the conditions provided for in Section 4.03, the
Buyer shall acquire full title to and ownership of the Share, 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
Share as contemplated by this Agreement as from the Completion Date.

 

(d)For the avoidance of any doubt, the Parties confirm that together with the
Share and under the OITA, the Seller shall transfer to the Buyer any and all
rights to the contribution outside the registered capital of Next Metrology
provided by the Seller to Next Metrology based on the Agreement on Additional
Capital Contribution contemplated in Section 4.02(a)(i)(aa)(v).

 

(e)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 which will acquire the Share. Should the
Buyer wish to appoint and, pursuant to Section 12.03, assign its rights and
obligations under this Agreement to, such third party legal entity, it may do so
up to the Completion Date, and the Seller undertakes to provide consent with
such assignment, while such consent may not be unreasonably withheld or delayed.
In any event, the Buyer will remain jointly liable together with such third
party for the performance of the obligations arising from this Agreement.

 

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SECTION 3

 

Purchase Price

 

3.01 Purchase Price

 

The Parties agree that the purchase price shall be paid by the Buyer to the
Seller upon Completion in consideration of the transfer to the Buyer of full
title to and ownership of the Share, free and clear of any Encumbrances, shall
be equal to EUR 500,000 (five hundred thousand) (the “Purchase Price”).

 

3.02 Payment of the Purchase Price

 

(a)The payment of the Purchase Price to be paid in cash shall be made by the
Buyer to the Seller by bank wire transfers to following Seller’s bank account:

 

[ ].

 

(b)The Purchase Price shall be paid to the Seller’s bank account as indicated in
paragraph (a) above upon the execution of the OITA.

 

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

 

(d)For the avoidance of any doubt, the Parties agree that once the amount
corresponding to the Purchase Price be credited to Seller’s bank account, the
Buyer shall have discharged its obligation to pay the Purchase Price in full.

 

SECTION 4

 

Completion – Conditions to Completion

 

4.01 Completion Date

 

(a)Completion shall occur on January 29, 2015 or any other date as agreed
between the Parties, subject to the conditions to Completion indicated in
Section 4.03 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 OITA shall take place at the
office of Squire Patton Boggs, v.o.s., advokátní kancelář, ID No. 256 38 882,
Václavské náměstí 57/813, 110 00 Prague 1, Czech Republic, or any other place as
agreed between the Parties.

 

4.02 Completion

 

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

 

(i)the Seller shall use its best efforts in order the following to occur or have
occurred:

 

(aa)delivery to the Buyer of the following documents relating to the
reorganization of matters between Next Metrology and Topmes:

 

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(i)a copy of a fully executed Confirmation Agreement entered into between Next
Metrology and Topmes in the form agreed by the Parties before or around the
signing of this Agreement;

 

(ii)a copy of a fully executed Equipment Purchase Agreement entered into between
Next Metrology and Topmes in the form agreed by the Parties before or around the
signing of this Agreement;

 

(iii)a copy of a fully executed License Agreement entered into between Next
Metrology and Mills in the form agreed by the Parties before or around the
signing of this Agreement;

 

(iv)a copy of a fully executed License Agreement entered into between Next
Metrology and Coord3 India in the form agreed by the Parties before or around
the signing of this Agreement;

 

(v)a copy of a fully executed Agreement on Additional Capital Contribution
entered into between Next Metrology and Topmes in the form agreed by the Parties
before or around the signing of this Agreement;

 

(vi)a copy of a fully executed Set-off Agreement entered into between Next
Metrology and Topmes in the form agreed by the Parties before or around the
signing of this Agreement;

 

(vii)consent of executives of Next Metrology with the provision of contribution
outside of the registered capital of Next Metrology pursuant to the Agreement on
Additional Capital Contribution contemplated in Section 4.02(a)(i)(aa)(vii) in
the form agreed by the Parties before or around the signing of this Agreement;

 

(viii)Consent from the following employees of Topmes regarding the TouchDMIS
Software in the form agreed by the Parties before or around the signing of this
Agreement:

 

a.Mr. Štěpán Hřivna;

b.Mr. Jaromír Pořízek;

c.Mr. Václav Jirkovský;

d.Mr. Jan Kryštůfek;

e.Mr. Jiří Králík;

 

(ix)Confirmation and Consent from the following employees of Topmes regarding
the TANGO Software in the form a agreed by the Parties before or around the
signing of this Agreement:

 

a.Mr. Štěpán Hřivna;

b.Mr. Jaromír Pořízek;

c.Mr. Václav Jirkovský;

d.Mr. Jan Kryštůfek;

e.Mr. Jiří Králík.

 

(bb)statements whereby Mills and Mr. Štěpán Hřivna declare to have no and waive
any and all rights or claims vis-à-vis Next Metrology in relation to their role
and duties as managing director;

 

(cc)delivery to the Buyer of a copy of the statement indicated in sub-paragraph
(bb) above;

 

(dd)delivery to the Buyer of a written statement whereby the Seller warrants
that the representations and warranties given by the Seller and referred to in
Section 7.02 are accurate, true and correct as at the Completion Date and as if
given at the Completion Date;

 

(ee)the execution of the Sublease Agreement and delivery to the Buyer of a copy
of such agreement;

 

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(ff)delivery to the Buyer of a certified copy of a power of attorney conferring
the authority of each person entering into an agreement or document on behalf of
the Seller, if applicable;

 

(gg)delivery to the Buyer of a written statement with the release of all claims
from the Seller in the form attached as Exhibit 4.02(a)(i)(gg);

 

(hh)delivery to the Buyer of Ownership Interest Transfer Agreements whereby Mr.
Štěpán Hřivna transferred his entire ownership interest in Topmes to the
remaining shareholders of Topmes or to any one of them;

 

(ii)delivery to the Buyer of an extract from the Commercial Register of Topmes
maintained by the Municipal Court in Prague dated as of a date as near as
practicable to the Completion Date;

 

(jj)delivery to the Buyer of an extract from the Commercial Register of Next
Metrology maintained by the Municipal Court in Prague dated as of a date as near
as practicable to the Completion Date;

 

(kk)delivery to the Buyer of a resolution of Topmes’s General Meeting:

 

(i)approving all documents under Sections 4.02(a)(i)(aa)(i) through
4.02(a)(i)(aa)(vi) and under Section 4.02(a)(i)(ee),

 

(ii)unanimously approving transfer of 100% of Topmes’s Share in Next Metrology
to the Buyer;

 

(ll)delivery to the Buyer of a resolution of all Topmes’s managing directors
unanimously approving transfer of 100% of Topmes’s Share in Next Metrology to
the Buyer;

 

(mm)delivery to the Buyer of a resolution of Next Metrology’s General Meeting:

 

(i)approving all documents under Sections 4.02(a)(i)(aa)(i) through
4.02(a)(i)(aa)(vi) and under Section 4.02(a)(i)(ee),

 

(ii)recalling Mills and Mr. Štěpán Hřivna from the office of managing directors
(in Czech: jednatel) of Next Metrology with effect as from the Completion Date,

 

(iii)appointing new managing directors of Next Metrology selected by the Buyer
and with effect as from the Completion Date (the Seller shall bear no liability
for the appointment and actions of the newly appointed managing directors),

 

(iv)unanimously approving transfer of the Share, of the Mills Share and of the
Muscarella Share to the Buyer (the resolution of Next Metrology’s General
Meeting in this regard shall be in the form of notarial deed);

 

(nn)delivery to the Buyer of waivers by the Seller in the form attached as
Exhibit 4.02(a)(i)(nn) by which the Seller waives its right of first refusal to
the Mills Share and of the Muscarella Share.

 

(ii)the Buyer shall deliver to the Seller evidence of the irrevocable payment,
by bank wire transfer, of the Purchase Price;

 

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

 

(aa)cause the execution by the Buyer and Seller of the OITA;

 

(bb)delivery to the Buyer of a copy of an agreement signed by the shareholders
of Topmes, except for Mr. Štěpán Hřivna, which contemplates the terms and
conditions indicated in Section 9(c).

 

(iv)All conditions to Completion under both the Muscarella SPA and the Mills
SPA, except for the consummation of the Completion action consisting of the
occurrence of Conditions to Completion under this Agreement, have occurred.

 

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(b)Completion shall be deemed to have occurred when all of the actions and
transactions indicated in Section 4.02(a) above shall have been duly consummated
or waived by the interested Party.

 

4.03 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 Seller: all actions and
transactions provided for in Section 4.02 shall have been consummated or waived
by the interested Party in writing;

 

(a2)conditions in favor of the Buyer:

 

(i)Next Metrology’s assets and the Share are free and clear of any Encumbrances;

 

(ii)no Material Adverse Change in Next Metrology since the Reference Date;

 

(iii)receipt of Required Consents;

 

(iv)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 Share
contemplated by this Agreement, which shall be deemed terminated.

 

(c)Should any of the conditions to Completion provided for in this Section 4.03
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 fulfill the obligations provided for in Section 4.02,
termination of this Agreement pursuant to Section 4.03(b) shall be without
prejudice to any remedy the other Party may have under the law or pursuant to
this Agreement as a result of a breach of a warranty and/or covenant under this
Agreement.

 

SECTION 5

 

Pre- and Post-Completion Date Covenants

 

5.01 Management and conduct of Next Metrology 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 Seller
shall use its best efforts to cause Next Metrology to:

 

(i)conduct Next Metrology’s 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 Next Metrology’s
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 Next Metrology;

 

(v)keep Next Metrology’s facilities, machinery and equipment in normal operating
conditions and repair, except for ordinary wear and tear;

 

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(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 Next Metrology;

 

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

 

(ix)prepare financial statements for each month, in accordance with the Agreed
Accounting Principles, and deliver them to Buyer by the 20th day following the
end of the month.

 

(b)From the date hereof and until the Completion Date, the Seller may not
approve or support any Next Metrology’s decision concerning the matters as
follows:

 

(i)sale or disposal of any assets;

 

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

 

(iii)decisions to incur any indebtedness or to borrow any money 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 Next Metrology;

 

(vi)the granting of any rights (including in rem security rights) on any of the
shares of Next Metrology or any further share to be issued by Next Metrology 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 any of the employees, other than increases
required by the law or by the applicable collective bargaining agreements;

 

(x)recruitment of any new registered managing director or any key manager;

 

(xi)any redundancy plan;

 

(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) (aa)
which have each a value greater than EUR 30,000 as to customers contracts and
EUR 30,000 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 Next
Metrology’s or any of Next Metrology’s present or future Affiliates’ freedom to
operate in the market, or (ee) whereby Next Metrology 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 Next Metrology 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 or capital funds;

 

(xvi)settlements of disputes;

 

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

 

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

 

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(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.

 

(c)The Seller agrees to use its best efforts to cause Next Metrology to take
such actions and to execute such certificates and other documents as from time
to time shall be reasonably requested by the Buyer to allow the Buyer to make
any tax election requested by the Buyer (including, without limitation, an
entity classification election under U.S. Treasury Regulation Section
301.7701-3(c)(1)(i) on Form 8832 with an effective date that is the day
immediately preceding the Completion).

 

5.02 Site visits

 

The Seller shall ensure, prior to Completion Date, that representatives of the
Buyer are allowed to visit the Property and the facilities of Next Metrology,
upon the 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 Next
Metrology, its directors, managers and employees.

 

5.03 Other Pre-Completion Date Covenants

 

(a)The Seller shall ensure that, from the date hereof until the Completion Date,
the Buyer will have access to Next Metrology’s books, records, contracts and
personnel, upon its reasonable request which shall be made in writing (also via
email) 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 Next Metrology, its directors, managers and
employees.

 

(b)The Seller shall take, and shall use its best efforts to cause Next Metrology
to take, all necessary actions to obtain the Required Consents, so that they are
delivered prior to the Completion Date.

 

(c)The Seller shall cause the representations and warranties referred to in
Section 7.02 and relating to the Seller to be accurate, true and correct as at
the Completion Date as if given at the Completion Date. The Seller shall use its
best efforts to cause Next Metrology to cause the representations and warranties
referred to in Section 7.02 and relating to Next Metrology to be accurate, true
and correct as at the Completion Date as if given at the Completion Date.

 

5.04 Confirmation of receipt of the Purchase Price

 

The Seller shall deliver to the Buyer a statement of the Seller whereby the
Seller acknowledges receipt of the Purchase Price. Such statement shall be
delivered by the Seller to the Buyer within 5 (five) calendar days from the day
of its receipt.

 

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SECTION 6

 

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 Next Metrology (“Due
Diligence”) and taking into account. the outcome of the Due Diligence, the Buyer
has agreed to enter into this Agreement and to acquire the Share for the
Purchase Price.

 

(b)The Buyer simultaneously declares to have checked and got familiar with the
legal, economic, financial and business situation of Next Metrology as on the
day of signing hereof as Disclosed in the documents listed in Annex 1 hereto
(hereinafter referred to as “Disclosed Documents”), which were Disclosed by the
Seller and Next Metrology for purposes of the Due Diligence. The Buyer declares
to have got acquainted with the Disclosed Documents and upon knowledge Disclosed
therein and based on the findings of the Due Diligence it hereby buys and
acquire the Shares for the Purchase Price.

 

SECTION 7

 

Representations and warranties

 

7.01 Buyer’s representations and warranties.

 

The Buyer represents and warrants to the Seller that the representations and
warranties indicated in Exhibit 7.01 are true, correct and not misleading as at
the date of this Agreement and hereby acknowledges that each of such
representations and warranties is material and essential to the Seller, who is
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 Seller of the matters covered by the representations and warranties.

 

7.02 Seller’s representations and warranties.

 

(a)The Seller represents and warrants to the Buyer that the representations and
warranties indicated in Exhibit 7.02 are true, correct and not misleading as at
the date of this Agreement, and hereby acknowledges 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 Seller’s 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 Next Metrology, the Share,
Next Metrology’s 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 inaccuracy or breach
of the representations and warranties of the Seller in this Agreement.

 

(b)Each of the representations and warranties made or given by the Seller in or
pursuant to Section 7.02 of this Agreement or confirmed by the Seller at the
Completion Date pursuant to Section 4.02(a)(i)(ee) shall be construed as a
separate and independent representation and warranty and, except where expressly
stated, shall not be limited or restricted by reference to or inference from the
terms of any other representations and warranties or any other provision of this
Agreement.

 

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(c)The rights and remedies of the Buyer in respect of any breach of the
representations and warranties made or given by the Seller in or pursuant to
this Agreement or confirmed by the Seller at the Completion Date pursuant to
Section 4.02(a)(i)(ee) shall not be affected by completion of the purchase of
the Share, by Buyer’s termination or failure to terminate this Agreement or by
any other event or matter whatsoever, except a specific and duly authorised
written waiver or release expressly referring to such breach.

 

(d)The Parties agree that provisions of the Czech Civil Code regarding liability
for defects, including, but not limited to, Sections 1914(2) through 1925 and
Sections 2099 through 2117 of the Czech Civil Code, shall not be applicable to
this Agreement.

 

SECTION 8

 

Indemnification

 

8.01 Seller’s indemnification obligation

 

(a)General

 

(i)In addition to any other remedies available to the Buyer under this
Agreement, the Seller shall indemnify, compensate and pay to the Buyer and/or to
Next Metrology the entire amount of any and all harm (in Czech: újma),
liabilities, reduced value of the assets, losses, damages, costs, penalties,
deficiencies, expenses, claims and demands, irrespective of the size of Seller’s
ownership interest in Next Metrology, of any such person (aa) resulting or
deriving from the fact that any of the representations and warranties made or
given by the Seller in or pursuant to Section 7.02 of this Agreement or
confirmed by the Seller at the Completion Date pursuant to Section
4.02(a)(i)(ee) are untrue or incorrect, (bb) resulting or deriving from any
discrepancy between the representations and warranties confirmed by the Seller
at the Completion Date pursuant to Section 4.02(a)(i)(ee) and the situation as
at the Completion Date, or (cc) resulting or deriving from any acts or omissions
of Next Metrology or Seller on or prior to the Completion Date (“Losses” and
each a “Loss”), provided however that the Buyer used its best efforts in order
to avoid or at least reduce such Losses or Loss and simultaneously allowed the
Seller to avoid or reduce such Losses or Loss well in advance.

 

(ii)The indemnification obligation provided for in this Section 8.01 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 Next Metrology in enforcing
its rights.

 

(iii)The Parties agree that any payments due by the Seller as indemnification
shall be made by the Seller directly to the Buyer, unless the Buyer gives
instructions to the Seller to make such payments directly to Next Metrology.

 

(iv)The Seller shall be under no obligation to indemnify the Buyer under this
Section 8.01 for any Loss in relation to which, by the time the payment by the
Seller is due, either the Buyer or Next Metrology receives compensation,
indemnification or reimbursement by third parties (including insurance
companies), without recourse, to the extent of such compensation,
indemnification or reimbursement.

 

(v)If any amount payable pursuant to this Section 8.01(a) is subject to tax,
that amount shall be increased so as to ensure that the net amount received by
the Buyer and/or Next Metrology shall, after tax, be equal to that which would
have been received had the payment and any increased payment not been subject to
tax.

 

(b)Limitations to the Seller’s liability

 

(i)The Seller shall be liable to the Buyer under this Agreement and / or the
OITA (including but not limited to Seller’s liability under this Section 8.01
for any Losses), but excluding Seller’s liability under Section 9 for any and
all losses up to a maximum amount equal to EUR 100,000 (one hundred thousand).

 

12

 

 

(ii)The limitation to the Seller’s liability provided for in paragraph (b)(i)
above shall not apply to Losses resulting or deriving from any inaccuracy or
breach of any of the representations and warranties relating to Authority set
forth under Section 1 of Exhibit 7.02., Good standing set forth under Section 2
of Exhibit 7.02., title to the Share or Affiliate Transactions set forth under
Section 11(a) of Exhibit 7.02.

 

(c)Time limits to Seller’s liability

 

The Seller shall not be liable to the Buyer under this Agreement and / or the
OITA (including but not limited to Seller’s liability under Section 8.01 in
respect of any Losses), but excluding Seller’s liability under Section 9 if the
relevant indemnification or another claim is notified to the Seller after:

 

(aa)the later of (i) the date of expiration of the relevant statute of
limitation or (ii) the 5th (fifth) anniversary of the Completion Date, as to
Losses referred to in paragraph (b)(ii) above;

 

(bb)36 months from the Completion Date, for any and all losses (including but
not limited to Losses relating to matters other than those indicated in
sub-paragraph (aa) above), but excluding Seller’s liability for any and all
losses resulting or deriving from any breach of Section 9.

 

8.02 Buyer’s indemnification obligation

 

(a)The Buyer shall indemnify, compensate and pay to the Seller the amount of all
losses, damages, costs and penalties incurred in, or suffered by the Seller,
resulting or deriving from any inaccuracy or breach of any of the
representations and warranties made or given by the Buyer in or pursuant to this
Agreement.

 

(b)The provisions of Section 8.01 (including those concerning liability
limitations) shall apply to the indemnification obligations of the Buyer herein
mutatis mutandis.

 

SECTION 9

 

Restrictive Covenants

 

(a)The Seller agrees that, as from the Completion Date and for a period of 3
(three) years thereafter, in its capacity as a seller of the Share and
irrespective and without prejudice to any other restrictive covenant it has
agreed or will agree to, it shall not:

 

(i)either on its 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 principal, shareholder, director, employee, agent, distributor, consultant,
partner or otherwise) in the business of (A) designing, engineering, or
manufacturing, CMMs and laser-based and other technology, software and
applications used in connection with CMMs, nor engaging others to do so on its
behalf, nor (B) further developing, enhancing, improving or revising the TANGO
software; provided that Topmes may continue its existing business of (i) acting
as a dealer for the marketing, selling, installing, servicing and maintaining of
CMMs designed, engineered and manufactured by persons other than Topmes and its
Affiliates, (ii) retrofitting CMMs designed, engineered and manufactured by
persons other than Topmes and its Affiliates, (iii) marketing, selling,
installing, servicing, and maintaining software and applications designed and
engineered by persons other than Topmes and its Affiliates used in connection
with CMMs, (iv) honoring its maintenance obligations for the TANGO software
under existing contracts and (v) licensing third party end users to use the
version of the TANGO software in existence on the date of this Agreement
(“Permitted Activities”);

 

13

 

 

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

 

(iii)except in connection with the Permitted Activities, either on its own
account or in conjunction with or on behalf of any person, endeavour to entice
away from the Company any person who, at the Completion Date of this Agreement,
is a customer of Next Metrology (directly or indirectly through software sales
by original equipment manufacturers, distributors and dealers), whether or not
such customer would be in breach of its contract with Next Metrology or – after
Completion – with the Company as a result thereof; and

 

(iv)except in connection with the Permitted Activities, either on its 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.

 

(b)The Seller and the Buyer represent to each other and acknowledge that the
provisions contained in Section 9(a) are necessary for the protection of the
Buyer’s and Next Metrology’s interests and goodwill. The geographical scope of
the Seller’s obligations contained in Section 9(a) shall be the entire world.
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 Seller’s fulfilment of the obligations contained in
this Section 9 has been included in the Purchase Price.

 

(c)The shareholders of Topmes, except for Mr. Štěpán Hřivna, shall enter into a
separate agreement with the Buyer agreeing to be bound by the foregoing
restrictive covenants as if they were the Seller.

 

SECTION 10

 

Property

 

The Seller agrees to procure that the Property be subleased to Next Metrology
for a period until at least the 6-months’ anniversary of the Completion Date,
upon the terms and conditions which are indicated in the draft sublease
agreement attached hereto in agreed form as Exhibit 9 (“Sublease Agreement”).

 

SECTION 11

 

Termination

 

The Parties, to the maximum extent allowed by Czech law, exclude all provisions
of the Czech Civil Code and other applicable regulations under which a Party
might be entitled to withdraw from or otherwise terminate this Agreement and /
or the OITA.

 

14

 

 

SECTION 12

 

Miscellaneous

 

12.01 Confidentiality

 

(a)Each of the Seller and the Buyer shall at all times keep strictly
confidential and, as applicable, each of the Seller 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 Next Metrology, 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 Seller
or the Buyer of this Section 12.01 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 Seller acknowledges 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 contemplated by this Agreement. Therefore, the Seller agrees
that any public disclosure of any information or data concerning the transaction
contemplated by this Agreement, including any press release, shall be made only
at such time and in such form and substance as acceptable to the Buyer.

 

12.02 Entire agreement and amendments

 

(a)This Agreement and the OITA shall together form 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. In the event of any inconsistency between this
Agreement and the OITA, this Agreement shall prevail. This Agreement shall
survive conclusion of OITA in its entirety with the exception of the obligation
of the Parties to enter into OITA under Section 4.02(a)(iii)(aa), which shall be
consumed by conclusion of the OITA.

 

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

 

12.03 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 Parties, while such consent might not be unreasonably
withheld or delayed; provided that Buyer may Assign its rights under this
Agreement to a party who acquires all or substantially all of the Assets of Next
Metrology, provided that such assignment shall not relieve the Buyer of its
obligations under this Agreement without the prior written consent of the
Seller.

 

12.04 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:

 

15

 

 

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

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

e-mail: tvaughn@dykema.com

 

if to the Seller:

 

By registered mail

 

TOPMES s.r.o.

Štěrboholská 1307/44

102 00 Praha 10 - Hostivař

The Czech Republic

Attention: Martin Prokop, Karel Pich

e-mail: mprokop@topmes.cz

e-mail: kpich@topmes.cz

 

12.05 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.

 

12.06 Severability

 

If any provision of this Agreement is held to be illegal, invalid, unenforceable
or deemed non-existent 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, unenforceable, or
non-existent 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, unenforceable or non-existent
provision or by its severance from this Agreement. Furthermore, in lieu of each
such illegal, invalid, unenforceable or non-existent provision, a provision as
similar in terms to such illegal, invalid, unenforceable or non-existent
provision as may be possible and be legal, valid and enforceable shall be added
automatically, as a part of this Agreement.

 

12.07 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.

 

16

 

 

(b)All stamp duties, registration taxes and notary fees relating to the transfer
of the Share pursuant to Section 2(b) shall be borne by the Buyer.

 

12.08 Interest Rate

 

Should any payment due under this Agreement by either Party not be made on or
before the agreed term for payment, an interest equal to 0,05% per day (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.

 

12.09 Waivers

 

(a)No delay, indulgence or omission in exercising any right, power or remedy
provided by this Agreement or by law shall operate to impair or be construed as
a waiver of such right, power or remedy or of any other right, power or remedy.

 

(b)The Seller agrees with the Buyer:

 

(i)to waive any claim or remedy or right which it may have as at Completion; and

 

(ii)that Next Metrology and any managing director, officer or employee of Next
Metrology shall have no liability whatsoever to the Seller on or after
Completion,

 

in respect of any misrepresentation, inaccuracy or omission in or from any
information or advice supplied or given by Next Metrology or a director, officer
or employee of Next Metrology for the purpose of assisting the Seller in giving
any warranty, representation, undertaking or covenant, in preparing due
diligence documents and in entering into this Agreement or any agreement or
document entered into pursuant to this Agreement.

 

12.10 Survival of the Agreement

 

The provisions of this agreement insofar as they have not been performed at
Completion shall remain in full force and effect notwithstanding Completion,
including conclusion of the OITA.

 

SECTION 13

 

Governing Law - Arbitration

 

13.01 Governing Law

 

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

 

13.02 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 or related to this Agreement and any comparable
dispute arising out of the Muscarella SPA and the Mills SPA shall be heard and
decided in a single arbitration proceeding.

 

17

 

 

SIGNED by TOPMES s.r.o.

 

Martin Prokop   Managing Director       Signature : /s/ Martin Prokop

 

SIGNED by Perceptron, Inc.

 

Margaret Mary Kaczmarek Nelson

Vice President

      Signature : /s/ Margaret Mary Kaczmarek Nelson

 

18

 

 

EXHIBIT 1.03

 

Certain Definitions

 

“2013 Financial Statements”   shall mean the financial statements of Next
Metrology 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. For purposes of this Agreement, “control” shall be
interpreted in accordance with Section 74 et seq. of Act No. 90/2012 Coll. of
the Czech Republic, Act on Business Companies and Cooperatives, as amended.    
  “Agreed Accounting Principles”  

shall mean the Czech Accounting Principles as applied by Next Metrology on a
consistent basis and used to prepare the 2013 Financial Statements, as amended
and integrated as indicated in Appendix A.

 

“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.       “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 and the City of Prague, Czech
Republic.       “Buyer”   shall have the meaning indicated in the headings of
this Agreement.       “Company”   shall mean the Buyer, Next Metrology and their
Affiliates.       “Completion”   shall mean the consummation of all of the
actions and transactions indicated in Section 4.02 (unless waived by the
interested Party) and the completion of the transfer of full title to and
ownership of the Share to the Buyer as contemplated in this Agreement.      
“Completion Date”   shall mean the date upon which Completion will take place,
as specified in Section 4.01(a).       “CMM”   means coordinate measuring
machine and equipment.

 

19

 

 

“Coord3 India”   shall mean Coord3 Metrology India Private Limited       “Czech
Accounting Principles”   shall mean Czech Republic generally accepted accounting
principles.       “Czech Civil Code”   Act No. 89/2012 Coll. of the Czech
Republic, Civil Code, as amended       "Disclosed"   means a matter that is
fully and fairly disclosed with sufficient detail and accuracy (as to its
nature, legal purpose and title and specific amount) so as to enable a
reasonable assessment of its impact on Next Metrology.        “Due Diligence”  
shall have the meaning indicated in Section 6.       “Encumbrance”   shall mean
any mortgage, charge, pledge, lien, security interest or attachment of any
nature whatsoever, note of the Cadastral Office indicating any potential or
actual change in the legal status of a property (in Czech: Plomba), options,
right of first refusal, easement (whether registered or unregistered), 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.      
“Exhibit/s”   shall mean all exhibits, as listed above in the table of contents.
      “Governmental Authority”   shall mean any foreign, European Union, or
Czech national, regional or local governmental authority, quasi-governmental
authority, court, or any regulatory, administrative or agency, or any
subdivision, department or branch of any of the foregoing.       “Governmental
Authorization”   shall mean any consent, permit, concession, license,
registration, approval, authorization, permit, order, exemption, certificate, or
variance issued, granted, given, or otherwise made available by or under the
authority of any Governmental Authority or required pursuant to any applicable
law.       “Losses” and “Loss”   shall have the meaning indicated in Section
8.01(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 or value of the net assets of Next
Metrology, but excluding any change or effect arising out of general economic
conditions or conditions affecting companies generally in the industry in which
Next Metrology operates.

 

20

 

 

“Mills”   Keith Mills, British national, born in [ ], on [ ], domiciled at [ ],
UK passport no. [ ].       “Mills Share”   shall have the meaning indicated in
Introduction A.       “Mills SPA”   shall mean the Agreement for the purchase of
the Mills Share by the Buyer dated January 29, 2015.       “Muscarella”   Angelo
Muscarella, Italian national, born in [ ], on [ ], domiciled at [ ], tax
registration number [ ].       “Muscarella Share”   shall have the meaning
indicated in Introduction A.       “Muscarella SPA”   shall mean the Agreement
for the purchase of the Muscarella Share by the Buyer dated January 29, 2015.  
    “Next Metrology”   shall mean Next Metrology Software s.r.o., a Czech
Republic company duly existing and organized under Czech law, with offices at
Štěrboholská 1307/44, 102 00 Prague 10, Czech Republic, Identification No.:
29129273, registered in the commercial register maintained by the Municipal
Court in Prague, Section C, Insert 202085,registered share capital equal to CZK
200,000.       “OITA”   shall have the meaning indicated in Section 2(b).      
“Parties”   shall mean the Seller and the Buyer.       “Party”   shall mean the
Seller and the Buyer, when individually and generically referred to.      
“Property”   means office No. 17 of area of 56,59 m² situated in building “K” on
plot no. 1350/2, which is registered in the cadastral area of Hostivař,
municipality of Prague, in title deed No. 139, used by Next Metrology to carry
out its business.       “Purchase Price”   shall have the meaning indicated in
Section 3.01.       “Reference Date”   shall mean December 31, 2014.      
“Required Consents”  

shall mean a consent by TESLA KARLÍN, a.s., a company with its registered seat
at Prague 10, V Chotejně 9/1307, Zip Code 10200, Czech Republic, ID No.: 452 73
758, with the sublease of the Property by Topmes to Next Metrology under the
Sublease Agreement.

 

 

21

 

 

“Seller”   shall have the meaning indicated in the headings of this Agreement.  
    “Share”   shall have the meaning indicated in Introduction A.      
“Sublease Agreement“   shall have the meaning indicated in Section 10.      
 “Transaction”   shall have the meaning indicated in Section 2(a).

 

22

 

 

EXHIBIT 7.01

 

Buyer’s Representations and Warranties

 

1.Good standing – Authority

 

(a)The Buyer is a corporation 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.

 

27

 

 

EXHIBIT 7.02

 

Seller’s representations and warranties

 

1.Authority

 

(a)The Seller 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. Except for approval of Next Metrology’s
general meeting and Filing at the Companies Register, the Seller 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 to transfer the Share to the Buyer.

 

(b)Non-contravention. The execution of this Agreement, shall not violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any Governmental Authority, or court to
which the Seller is subject.

 

2.Good standing

 

(a)Good standing - Authority

 

(i)Next Metrology and Topmes are each a limited liability company, validly
existing, duly incorporated and in good standing under the laws of the Czech
Republic.

 

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

 

(iii)All corporate actions taken and which will be taken by Topmes in connection
with this Agreement have been duly authorized and the Seller has 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 their articles of
association, by-laws or any other internal document.

 

(b)No insolvency proceedings

 

(i)The Seller is not subject to any insolvency proceeding of any kind nor does
it satisfy the requirements for filing any insolvency procedure of any kind,
including on the basis of threatening insolvency (in Czech: hrozící úpadek). No
liquidator, insolvency trustee, bankruptcy receiver, administrator or similar
officer has been appointed in respect of the Seller. No action in respect of the
Seller is currently being taken with a view to file for any such insolvency
proceeding or to appoint any such liquidator, insolvency trustee, bankruptcy
receiver, administrator or similar officer.

 

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

 

(iii)Neither Next Metrology nor the Seller has entered into any agreement for
the assignment of their assets (or any part of them) for the benefit of its
creditors.

 

(iv)The Seller has not filed any petition for the restructuring of its debt or
an insolvency or similar motion against themselves or Next Metrology. The Seller
is not aware that an insolvency or similar motion would have been filed against
it in any jurisdiction by any third person.

 

(v)No resolution has been passed to dissolve or liquidate Next Metrology or
Topmes.

 

3.Share Capital of Next Metrology

 

(a)The issued and outstanding registered capital of Next Metrology is that
indicated in the headings of the Agreement. The issued registered capital has
been duly authorized, and is fully subscribed and paid. The ownership interests
representing 100% of the registered capital of Next Metrology have been duly
issued.

 

(b)The Seller is the sole registered, legal and beneficial owner of an ownership
interest representing 50% of the registered capital of Next Metrology.

 

(c)Next Metrology’s ownership interest owned by the Seller is free and clear
from any Encumbrances except for the pre-emption rights of Mills and Muscarella.
.

 

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(d)No resolution has been passed to approve any increase or decrease of the
registered capital of Next Metrology, no contribution outside the registered
capital (in Czech: příplatek) of Next Metrology has been made, and there are no
outstanding options, warrants, agreements, conversion rights, pre-emption rights
or other rights to subscribe for, purchase or otherwise acquire the Share or any
further ownership interests of Next Metrology except for the pre-emption rights
of Mills and Muscarella, except for the Agreement on Additional Capital
Contribution contemplated in Section 4.02(a)(i)(aa)(v).

 

(e)Next Metrology has issued no bonds or other securities.

 

(f)No advance payment of dividends or any other distribution of any future
dividends has been approved or made.

 

(g)No person is a shadow managing director of Next Metrology and no other person
than the Seller, Mills and Muscarella exercises decisive influence or control
over Next Metrology.

 

4.Title to the Target Business

 

All of Next Metrology’s assets are 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 Next Metrology, any portion thereof or
any of its assets.

 

5.Loans to or by the Seller

 

Except for obligation of Next Metrology to pay to the Seller the amount of EUR
28.400,00 and CZK 44.194,00 and obligations set forth in Annex 5, there is no
outstanding indebtedness or other liability (actual or contingent) owed by Next
Metrology to the Seller, its Affiliates or to any director, officer, or employee
of Next Metrology or any person related to a director, officer, or employee as
aforesaid, nor is there any indebtedness owed to Next Metrology by any such
person.

 

6.Intellectual property

 

(i)Next Metrology has all rights (including the right to exercise economic
rights) and has been provided by all its employees, contractors and other
authors with consents allowing interference with moral rights to the maximum
extent permitted by applicable law in connection with all works protected by
copyright and copyright neighboring rights (including any and all literary,
artistic, science, musical, graphic, photography, software and copyright
database works) as listed and described in Annex 6.(i) and is the sole legal and
beneficial owner of the trademarks, trademark applications, industrial designs,
industrial design applications, manufacturing and trade secrets, inventions,
patents, patent applications, technology, know how, and databases, listed and
described in Annex 6.(i) (“Intellectual Property”). Next Metrology owns no
intellectual property other than that listed in Annex 6(i).

 

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

 

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

 

(iv)None of the items and assets of the Intellectual Property, or any of its
part, is licensed to third parties or is part of a branch of a business as a
going concern which is leased to third parties or has been assigned to third
parties or on which a third party is entitled to the usufruct, except for the
licences indicated in Annex 6(iv).

 

(vi)Except for the payment set forth in Annex 6 (vi), all fees, taxes and duties
for all the registrations and maintenance of all Intellectual Property have been
duly and timely paid by Next Metrology.

 

(vii)To the best of the Seller’s knowledge, the Intellectual Property does not
infringe any third party rights.

 

(viii)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 Seller’s knowledge, threatened, and Next Metrology has
not entered into nor is it negotiating any settlement agreements regarding the
Intellectual Property. Next Metrology is not obligated to pay any royalty,
license fee, charge or other amount with regard to any Intellectual Property.

 

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(ix)The Seller is not aware of any actual or potential infringements of the
Intellectual Property by any third party.

 

(x)Except for economic and moral rights of employees of the Seller and / or Next
Metrology who participated in creation and / or development of Intellectual
Property and who hold such rights by operation of law, no director, officer,
shareholder, employee, consultant, contractor, agent or other representative of
Next Metrology owns or claims any rights in (nor has any of them made
application for) any Intellectual Property.

 

(xi)Except for the item set forth in Annex 6 (xi), each software used by Next
Metrology has been and is duly licensed to it and all relevant considerations
for such licences have been duly and timely paid by Next Metrology.

 

(xii)Next Metrology has included a copyright notice on any product that embodies
a copyright owned by Next Metrology.

 

(xiii)To the best of the Seller’s knowledge, Next Metrology’s software do not
contain viruses, worms, trojan horses, time bombs, backdoor access or any other
adware, malware or spyware that could be used to interfere with the
functionality of such software.

 

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

 

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

 

(xvi)Next Metrology has taken all 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 knowledge
of Seller, these trade secret policies comply (x) with all contracts between
Next Metrology and customers or other third parties; and (y) with applicable
law. To the knowledge of Seller, 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.

 

(xvii)The source code for all material software is in a form: (A) that a
programmer of ordinary skill in the applicable programming language(s) is able
to print, display, and read; (B) that includes source code listings, object code
listings, design details, flow charts, and related material that permit the
software to be copied, maintained, updated, improved, and compiled; and (C) that
constitutes the preferred form of the source code for making modifications to
such source code.

 

(xviii)Except for the software set forth in Annex 6 (xviii), none of the
software owned by, or developed by or for the benefit of, Next Metrology
contains or requires use of any “open source” code, shareware or other software
that does or may require disclosure or licensing of any such software or any
other Intellectual Property owned by Next Metrology.

 

(xix)All Intellectual Property (or any information and documents containing or
materially relating to the Intellectual Property) is in a form that a person
skilled in the relevant art is able to use such Intellectual Property in any
manner permitted by applicable law and print, display and read such information
or documents.

 

(xx)With the exception set forth in Annex 6 (xx), Next Metrology has all rights
to the domain names listed and described in Annex 6(i) (the “Domain Names”). The
Domain Names were registered and are used in good faith, are free from any
Encumbrances and all fees, taxes, duties for all the registrations and
maintenance of the Domain Names have been duly and timely paid. The Domain Names
do not infringe on any third party rights (including any third party trademarks
or trade names) and Next Metrology is not aware of any actual or potential
infringements arising in connection with the Domain Names. There are no
proceedings (including arbitration) concerning the domain names before any
authority which are pending, or to the best of the Seller´s knowledge,
threatened, and Next Metrology has not entered into nor is it negotiating any
settlement agreements regarding the domain names. Next Metrology does not allow
any third party access to any of the domain names.

 

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7.Contracts

 

The contracts listed in Sections 4.02(a)(i)(aa)(i), 4.02(a)(i)(aa)(ii),
4.02(a)(i)(aa)(v), 4.02(a)(i)(aa)(vi) and 4.02(a)(i)(ee) of the Agreement are as
of the day of Closing legal, valid, binding, enforceable, and in full force and
effect against Topmes.

 

8.Material Adverse Change

 

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

 

9.No Broker

 

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

 

10.No omission

 

No representation or warranty made by the Seller 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.

 

11.Affiliate Transactions

 

(a)Except as set forth in Annex 11 and the contracts listed in Section 7(i) of
this Exhibit 7.02, none of the Seller and its Affiliates are a party to, or the
beneficiary of, any contract or material transaction relating to Next Metrology,
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.

 

(b)Except as set forth in Annex 11 and the contracts listed in Section 7(i) of
this Exhibit 7.02, to the best of the Seller’s knowledge, Next Metrology, its
directors, officers, employees or shareholders, their Affiliates, and their
relatives are a party to, or the beneficiary of, any contract or material
transaction relating to Next Metrology, 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.

 

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