Document:

Exhibit 10.2

 

Form of Fiscal Year 2013 Supplemental Performance Stock Unit Award Agreement

 

INTERNATIONAL RECTIFIER CORPORATION

2011 PERFORMANCE INCENTIVE PLAN

SUPPLEMENTAL PERFORMANCE STOCK UNIT AWARD AGREEMENT

 

	
Participant Name:
    	
 
    
	
 
    	
 
    
	
Number of Stock Units:
    	
(1)
    
	
 
    	
 
    
	
Vesting Schedule:
    	
See vesting provisions set forth in Exhibit A attached hereto(1)
    
	
 
    	
 
    
	
Award Date:
    	
June 27, 2013
    

 

(1) All share and unit numbers are subject to adjustment under the terms of the Plan.  The Stock Units are subject to acceleration and termination prior to vesting as provided herein.

 

THIS AGREEMENT is among INTERNATIONAL RECTIFIER CORPORATION, a Delaware corporation (the “Corporation”), and the employee named above (the “Participant”), an employee of the Corporation or one of its Subsidiaries, and is delivered under the International Rectifier Corporation 2011 Performance Incentive Plan (the “Plan”).

 

W  I  T  N  E  S  S  E  T  H

 

WHEREAS, the Compensation and Stock Option Committee of the Board has approved, and the Corporation has granted, effective as of the Award Date, to the Participant a restricted stock unit award under the Plan (the “Stock Unit Award” or “Award”), upon the terms and conditions set forth herein and in the Plan.

 

NOW THEREFORE, in consideration of services rendered by the Participant and the mutual promises made herein and the mutual benefits to be derived therefrom, the parties agree as follows:

 

1.             Defined Terms.  Capitalized terms used herein and not otherwise defined herein shall have the meaning assigned to such terms in the Plan.  For purposes of this Agreement, a “Stock Unit” means a non-voting unit of measurement which is deemed for bookkeeping purposes to be equivalent to one outstanding share of Common Stock of the Corporation.

 

2.             Grant.  Subject to the terms of this Agreement and the Plan, the Corporation grants to the Participant a Stock Unit Award with respect to an aggregate number of Stock Units set forth above.  The Corporation acknowledges that the consideration for the shares payable with respect to the Stock Units on the terms set forth in this Agreement shall be the services rendered to the Corporation and its Subsidiaries by the Participant prior to the applicable vesting date, the fair value of which is not less than the par value per share of the Corporation’s Common Stock.

 

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3.             Vesting.  The Stock Units subject to the Award shall become vested as set forth in Exhibit A attached hereto and incorporated herein by reference, subject to earlier termination or acceleration and subject to adjustment as provided herein.

 

4.             Continuance of Employment Required.  Except as otherwise provided herein, the vesting schedule applicable to the Stock Units requires continued service through the “Vesting Date” set forth in Exhibit A attached hereto as a condition to the vesting of the award and the rights and benefits under this Agreement.  Service for only a portion of the vesting period, even if a substantial portion, will not (except as otherwise expressly provided in Section 8) entitle the Participant to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or service.

 

5.             Limitations on Rights Associated with Units.  The Participant shall have no rights as a stockholder of the Corporation, no dividend rights  and no voting rights with respect to the Stock Units or any shares of Common Stock issuable in respect of such Stock Units, until shares of Common Stock are actually issued to and held of record by the Participant.  No adjustments will be made for dividends or other rights of a holder for which the record date is prior to the date of issuance of the stock certificate evidencing the shares.

 

6.             Restrictions on Transfer.  Prior to the time the Stock Units are vested and paid, neither the Stock Units comprising the Award nor any other rights of the Participant under this Agreement or the Plan may be transferred, except as expressly provided in Section 5.7 of the Plan.  No specific exception to the general transfer prohibitions set forth in Section 5.7 of the Plan has been authorized by the Administrator.

 

7.             Timing and Manner of Payment with Respect to Stock Units. Stock Units subject to this Agreement will be paid in an equivalent number of shares of Common Stock promptly after (and in all events within two and one-half months after) the vesting of such Stock Units in accordance with the terms hereof, subject to adjustment as contemplated by Section 9.  The Participant or other person entitled under the Plan to receive the shares shall deliver to the Corporation any representations or other documents or assurances required pursuant to Section 8.1 of the Plan.

 

8.             Effect of Termination of Employment or Change in Control.

 

(a)           Termination after Certain Events.  Subject to the next sentence, in the event the Participant ceases to be employed by the Corporation or one of its Subsidiaries, the Participant’s Stock Units shall be extinguished to the extent such Stock Units have not become vested prior to such termination of employment, and regardless of the reason for such termination of employment, whether with or without cause, voluntarily or involuntarily.  If the Participant incurs a permanent and total disability resulting in the Participant’s termination of employment with, or if the Participant dies while employed by, the Corporation or a Subsidiary and while the Participant’s Stock Units are outstanding, then: (i) any Stock Units subject to the Award that are outstanding and unvested and relate to a Performance Goal that was achieved on or before such termination of employment shall be vested as of such termination of employment; and (2) any Stock Units subject to the Award that are outstanding and unvested and relate to a Performance Goal that was not achieved on or before such termination of employment shall remain outstanding and shall be eligible to become vested on a prorated basis if that Performance Goal is attained in the one hundred and twenty-five (125) day period following such termination of employment (such that the number of such Stock Units that shall become vested on the date that such Performance Goal is attained shall equal (x) the number of such Stock Units that would have vested as of the Vesting Date as set forth in Exhibit A attached hereto with respect to that Performance Goal had the Participant’s employment continued through such Vesting Date, multiplied by (y) a fraction, the numerator of which shall be the number of days the Participant was employed by the Corporation or one of its subsidiaries during the applicable Calculation Period (as defined in Exhibit A) applicable to such Performance Goal, and the denominator of which shall be the number of days in such Calculation Period).  Any Stock Units that remain outstanding for such a 125-day period and as to which the related Performance Goal is not attained on or before the last day of such 125-day period shall be extinguished as of the last day of such 125-day period.).

 

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(b)           Termination of Stock Units.  If any Stock Units are extinguished hereunder, such unvested, extinguished Stock Units, without payment of any consideration by the Corporation or any Subsidiary, shall automatically terminate and be cancelled without any other action by the Participant, or the Participant’s beneficiary, as the case may be.

 

(c)           Determination of Vesting Upon Change in Control.  Notwithstanding anything contained in Section 7.2 of the Plan to the contrary or Exhibit A, should a Change in Control (as defined below) occur this Section 8(c) applies as to any Stock Units that are outstanding immediately prior to the Change in Control.

 

If, in connection with a Change in Control, the Administrator has made a provision for the substitution, assumption, exchange or other continuation of the Award, the vesting rules of Exhibit A shall continue following the Change in Control, subject to (1) the next sentence, (2) the other provisions of this Section 8, and (3) the adjustment provisions of Section 7.1 of the Plan.  In such circumstances, if any Performance Goal (as defined in Exhibit A) has not previously been achieved in accordance with the terms of this Agreement (allowing for the right of the Administrator or its designee to make such a determination within the 60 day period described in Exhibit A), the price paid per share of Common Stock pursuant to the terms of the Change in Control (or, if there is no such price, the fair market value of a share of Common Stock (as determined under Section 5.6 of the Plan) on the date of the Change in Control) shall be deemed the “Average Share Price” (as defined in Exhibit A attached hereto) for purposes of making the determination of whether any such Performance Goal has been achieved as of the date of the Change in Control.  For purposes of clarity, such special Average Share Price determination shall apply only as of the date of the Change in Control and the usual Average Share Price provisions of Exhibit A shall continue to apply as to any date following the Change in Control.

 

If, in connection with a Change in Control, the Award is to terminate upon (or immediately prior to) the Change in Control and the Administrator has not made a provision for the substitution, assumption, exchange or other continuation of the Award, this paragraph applies.  If any Performance Goal has not previously been achieved in accordance with the terms of this Agreement (allowing for the right of the Administrator or its designee to make such a determination within the 60 day period described in Exhibit A), the price paid per share of Common Stock pursuant to the terms of the Change in Control (or, if there is no such price, the fair market value of a share of Common Stock (as determined under Section 5.6 of the Plan) on the date of the Change in Control) shall be deemed the “Average Share Price” (as defined in Exhibit A attached hereto) for purposes of making the determination of whether any such Performance Goal has been achieved, and as to any Performance Goal that the Administrator determines has been achieved (based on such Average Share Price or otherwise achieved prior to the Change in Control), the Stock Units that relate to that Performance Goal shall vest (to the extent not previously vested) as of (or, as necessary to effect such acceleration, immediately prior to) the Change in Control and be paid in accordance with Section 7.  Any Stock Units that are outstanding immediately prior to the Change in Control and relate to a Performance Goal that has not been achieved in accordance with the terms hereof as of the Change in Control shall be extinguished upon the Change in Control.

 

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For purposes of this Agreement, “Change in Control” has the meaning assigned to such term in the Plan; provided, however, that for purposes of this Agreement, the percentages in paragraph (a) and in clause (2) of paragraph (c) of such definition shall be fifty percent (50%) instead of thirty percent (30%).

 

Determinations of Average Share Price pursuant to the preceding provisions of this Section 8(c) shall be determined by the Administrator by adding back any ordinary or extraordinary cash dividends (without interest) paid by the Corporation on the Common Stock at any time between the Award Date and the date of the applicable Change in Control.

 

(d)           Possible Acceleration Upon Change in Control and Termination of Employment.

 

To the extent the Award continues in effect following a Change in Control and is not fully vested, this Section 8(d) applies notwithstanding any provision of Section 8(a) or Exhibit A to the contrary (provided that the Stock Units remain subject to being extinguished as of the end of the Company’s fiscal year ending in June 2016 to the extent the applicable Performance Goals are not attained on or before the end of such fiscal year).

 

In the event the Participant’s employment with the Corporation or a Subsidiary is terminated by the Corporation or a Subsidiary other than for Cause (as defined below) (or the Participant resigns from his or her employment with the Corporation or a Subsidiary for Good Reason (as defined below)) upon or any time during a Protected Period (as defined below), then any portion of the Stock Units subject to the Award that were outstanding and not otherwise fully vested immediately prior to such termination of employment shall be deemed fully vested upon such termination of employment and shall be paid in accordance with Section 7.

 

For purposes of this Agreement, “Cause” means any one or more of the following committed (or omitted) by the Participant:  (i) conviction of, or guilty plea or plea of nolo contendre to, a felony crime; (ii) gross misconduct that is materially injurious to the Corporation and/or any of its Subsidiaries or affiliates; (iii) repeated failure to follow the reasonable and lawful directions of the Corporation after the Participant has received at least one written warning from the Corporation; (iv) any willful and/or intentional material violation of any written Corporation policy or procedure; or (v) a material breach of any agreement to which the Participant is a party with the Corporation or any of its Subsidiaries.  Whether or not Cause exists in clauses (ii) through (v) shall in each case be determined in good faith by the Corporation.  Notwithstanding the foregoing, the Participant shall not be deemed to have been terminated for “Cause” under clauses (ii) through (v) unless and until the Corporation shall provide the Participant with written notice detailing why the Corporation believes a Cause event has occurred and specifying the particulars thereof in detail.  The Corporation shall also provide the Participant with ten days after his/her receipt of such notice to cure the Cause event(s) (if curable) and the opportunity, together with the Participant’s counsel (if the Participant chooses to have counsel present at such meeting), to be heard before the Board (or, in the Board’s discretion, the Administrator or their delegates) during such ten day period.  Nothing herein will limit the right of the Participant to contest the validity or propriety of any such determination.

 

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For purposes of this Agreement, “Good Reason” means that any one or more of the following have occurred without the Participant’s prior written consent:  (i) the Participant has, except in connection with termination of employment for Cause or due to the Participant’s death or total disability, suffered a material diminution in the Participant’s job responsibilities as in effect immediately prior to the public announcement of a contemplated Change in Control (and where such Change in Control does occur); provided, however, that neither mere changes in title and/or reporting relationship, nor reassignment following a Change in Control to a position that is similar to the position held immediately prior to such public announcement of the contemplated Change in Control shall constitute a material diminution in job responsibilities; provided further, that if the Participant’s job title as of the Award Date is denoted as or is in effect an “Interim” or “Acting” position, then a subsequent reassignment to a position of the same level which the Participant held immediately prior to assuming such Interim or Acting position or to a higher level shall not constitute a Good Reason event; (ii) the Participant has incurred a material reduction in his or her annual rate of base pay or his or her annual target bonus opportunity; (iii) the Participant has been notified that his or her principal place of work will be relocated to a new location that is forty miles or more from the Participant’s principal work location as of immediately before the public announcement of a contemplated Change in Control (and where such Change in Control does occur); or (iv) the Corporation has materially breached any agreement to which the participant is a party.  Before “Good Reason” has been deemed to have occurred, the Participant must give the Corporation written notice detailing why the Participant believes a Good Reason event has occurred and such notice must be provided to the Corporation within sixty days of the initial occurrence of such alleged Good Reason event(s) or else such Good Reason event(s) will be deemed to have been irrevocably waived by the Participant.  The Corporation shall then have thirty days after its receipt of written notice to cure or remedy the items cited in the written notice so that “Good Reason” will not have formally occurred with respect to the event(s) in question.  If the Corporation does not timely remedy or cure the Good Reason events, then the Participant may terminate employment for “Good Reason” with respect to such event(s) only for a period of sixty days following the end of the Corporation’s thirty day cure period.

 

For purposes of this Agreement, “Protected Period” means the two-year period immediately following (and commencing on) a Change in Control.

 

9.             Adjustments in Case of Changes in Common Stock.  Upon the occurrence of certain events relating to the Corporation’s stock contemplated by Section 7.1 of the Plan (including, without limitation, an extraordinary cash dividend on such stock), the Administrator shall make adjustments in accordance with such section in the number of Stock Units then outstanding and the number and kind of securities that may be issued in respect of the Award.

 

10.          Tax Withholding.  Subject to Section 8.1 of the Plan, upon any distribution of shares of Common Stock in respect of the Stock Units, the Corporation shall automatically reduce the number of shares to be delivered by (or otherwise reacquire) the appropriate number of whole shares, valued at their then fair market value (with the “fair market value” of such shares determined in accordance with the applicable provisions of the Plan), to satisfy any withholding obligations of the Corporation or its Subsidiaries with respect to such distribution of shares at the minimum applicable withholding rates.  In the event that the Corporation cannot legally satisfy such withholding obligations by such reduction of shares, or in the event of a cash payment or any other withholding event in respect of the Stock Units, the Corporation (or a Subsidiary) shall be entitled to require a cash payment by or on behalf of the Participant and/or to deduct from other compensation payable to the Participant any sums required by federal, state or local tax law to be withheld with respect to such distribution or payment.

 

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11.          Notices.  Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal office located at 101 North Sepulveda Boulevard, El Segundo, California 90245, to the attention of the Assistant Secretary and to the Participant at the address given beneath the Participant’s signature hereto, or at such other address as either party may hereafter designate in writing to the other.

 

12.        Plan and Program.  The Award and all rights of the Participant with respect thereto are subject to, and the Participant agrees to be bound by, all of the terms and conditions of the provisions of the Plan, incorporated herein by reference, to the extent such provisions are applicable to awards granted to employees.  The Participant acknowledges receipt of a copy of the Plan, which is made a part hereof by this reference, and agrees to be bound by the terms thereof.  Unless otherwise expressly provided in other Sections of this Agreement, provisions of the Plan that confer discretionary authority on the Administrator do not (and shall not be deemed to) create any rights in the Participant unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Administrator so conferred by appropriate action of the Administrator under the Plan after the date hereof.

 

13.          No Service Commitment by Corporation.  Nothing contained in this Agreement or the Plan constitutes an employment commitment by the Corporation or any of its Subsidiaries, affects the Participant’s status as an employee at-will who is subject to termination without cause, confers upon the Participant any right to remain employed by the Corporation or any Subsidiary, interferes in any way with the right of the Corporation or any Subsidiary at any time to terminate such employment, or affects the right of the Corporation or any Subsidiary to increase or decrease the Participant’s other compensation.

 

14.          Entire Agreement.  This Agreement and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof.  The Plan and this Agreement may be amended pursuant to Section 8.6 of the Plan.  Such amendment must be in writing and signed by the Corporation.  The Corporation may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of the Participant hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof.

 

15.          Limitation on Participant’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Corporation as to amounts payable and shall not be construed as creating a trust.  The Plan, in and of itself, has no assets.  The Participant shall have only the rights of a general unsecured creditor of the Corporation (or applicable Subsidiary) with respect to amounts credited and benefits payable, if any, with respect to the Stock Units, and rights no greater than the right to receive the Common Stock (subject to adjustments) as a general unsecured creditor with respect to Stock Units, as and when payable hereunder.

 

16.          Section Headings.  The section headings of this Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.

 

17.          Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without regard to conflict of law principles thereunder.

 

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18.          Construction.  It is intended that the terms of the Award will not result in the imposition of any tax liability pursuant to Section 409A of the Code.  This Agreement shall be construed and interpreted consistent with that intent.

 

19.          Clawback Policy.  The Stock Units are subject to the terms of the Corporation’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of the Stock Units or any shares of Common Stock or other cash or property received with respect to the Stock Units (including any value received from a disposition of the shares acquired upon payment of the Stock Units).

 

20.          Suspension of Form S-8.  If upon any given Vesting Date, the registration statement on Form S-8 (as may have been amended or superseded from time to time) filed by the Corporation with the Securities and Exchange Commission with respect to the Plan has been suspended or is no longer effective, and the Administrator or its designee reasonably anticipates that the issuance of Common Stock in respect of any of the Stock Units on such Vesting Date would violate applicable federal securities laws, then vesting shall not occur (and the Vesting Date shall be delayed) until the Administrator or its designee reasonably anticipates that making such payment will not cause such a violation.

 

21.          Electronic Signature or Acknowledgement.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument.  The provision of photographic or facsimile copies, or electronic signature, confirmation or acknowledgement of or by a party, shall constitute an effective original signature of a party for all purposes under this Agreement, and  may be used with the same effect as manually signed originals of this Agreement for any purpose.

 

[Remainder of page intentionally left blank.]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.  By the Participant’s execution of this Agreement, the Participant agrees to the terms and conditions hereof and of the Plan.

 

	
INTERNATIONAL RECTIFIER
    	
 
    	
PARTICIPANT
    
	
CORPORATION, a Delaware corporation
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
Signature by Electronic Acceptance or   Confirmation
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    
	
Print Name:
    	
 
    	
 
    
	
 
    	
 
    	
Address
    
	
 
    	
 
    	
 
    
	
Its:
    	
 
    	
 
    
	
 
    	
 
    	
City, State, Zip Code
    

 

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EXHIBIT A

 

PERFORMANCE GOAL - VESTING

 

Subject to the terms of the Plan and this Agreement, forty percent (40%) of the total number of Stock Units subject to the Award are eligible to become vested on the one year anniversary  (the “40% Vesting Date”) of the first occurrence of  (the following being the “40% Performance Goal”)  the Corporation’s “Average Share Price” (as defined below) being equal to or greater than 140% of the closing price of a share of Common Stock (in regular trading) on the Award Date (the “Base Price”).

 

Subject to the terms of the Plan and this Agreement, sixty percent (60%) of the total number of Stock Units subject to the Award are eligible to become vested on the one year anniversary  (the “60% Vesting Date”) of the first occurrence of (the following being the “60% Performance Goal”) the Corporation’s Average Share Price being equal to or greater than 150% of the Base Price.

 

The 40% Vesting Date and the 60% Vesting Date are each a “Vesting Date” for the purposes of this Agreement.  The 40% Vesting Date and the 60% Vesting Date may occur on the same date, but for the avoidance of doubt, each of the 40% Vesting Date and the 60% Vesting Date may occur (and each of the 40% Performance Goal and 60% Performance Goal may be achieved) only once, if at all.

 

The 40% Performance Goal and the 60% Performance Goal are each a “Performance Goal” for the purposes of this Agreement.

 

For purposes of this Agreement, “Average Share Price” means the unweighted average of the daily closing prices of the Common Stock on the New York Stock Exchange for all trading days within any period of one hundred twenty-five (125) consecutive calendar days (with each such period being a “Calculation Period”) that occurs during the period beginning with July 1, 2013 and ending on the last day of the Corporation’s fiscal year ending in June 2016 (with such entire period of three fiscal years being the “Performance Period” hereunder); provided, however, that in determining the Average Share Price, the Administrator shall add back any ordinary or extraordinary cash dividends (without interest) paid by the Corporation on the Common Stock at any time between the Award Date and the end of the applicable Calculation Period.  In determining the date of any given Vesting Date, the one year anniversary of the next trading day following the end of the applicable Calculation Period giving rise to such vesting event shall be used; provided however, if such applicable Calculation Period ends prior to the one year anniversary of the Award Date, then such Vesting Date shall occur on the one year anniversary of the next trading day following the Award Date.

 

Whether and the extent to which any of the Performance Goals have been achieved will be determined by the Administrator (or, to the extent consistent with Section 162(m) of the Code, its delegate) within 60 days following the applicable Calculation Period, and no vesting shall be deemed to have occurred absent such a determination by the Administrator (or such a delegate as the case may be).  Notwithstanding anything contained herein to the contrary (but subject to Section 8(d)), any Stock Units subject to the Award for which the applicable Performance Goal described above has not been determined to have been achieved or has been determined not to have been achieved  within  60 days following the end of the Company’s fiscal year ending in June 2016 shall automatically terminate and be extinguished as of the end of such fiscal year.

 

The Base Price and Performance Goals set forth above shall be equitably and proportionately adjusted to preserve the intended benefits of the Award and mitigate the effects of (1) any stock splits, reverse stock splits, and dividends of stock or other property that occur during the Performance Period, and (2) to the extent that such an adjustment does not violate Section 162(m) of the Code and does not result in a modification of the Award pursuant to applicable accounting rules, any other extraordinary event not foreseen at the time the Performance Goals were established.  The Administrator’s determination of whether such an adjustment is required, and the nature and extent of any such adjustment, shall be final and binding on all persons.

 

Notwithstanding the foregoing, and except as expressly otherwise provided in Section 8 of this Agreement, any vesting of Stock Units subject to the Award is conditioned upon the Participant being an employee of the Corporation, or one of its directly or indirectly owned subsidiaries, continuously through the applicable Vesting Date.

 

9exhibit101.htm

Exhibit 10.1

 

 

 

 

_______________________________________________

 

STOCK

PURCHASE AGREEMENT

 

_______________________________________________

 

BY AND AMONG

 

PROFIT SEEKER PRIVATE EQUITY LTD.,

 

E-WASTE SYSTEMS, INC.,

 

SURF INVESTMENTS, LTD. D/B/A CPU,

 

KIMBERLY CREW

 

_______________________________________________

 

Dated as of June 21, 2013

 

______________________________________________________

 

 

 

 

 

 

 

 

 

 

  

  

  

 

 

STOCK  PURCHASE AGREEMENT

 

THIS AGREEMENT is made as of June 21, 2013,  by and among PROFIT SEEKER PRIVATE EQUITY LTD., a corporation organized under the Laws of the United Kingdom (“PPE”), E-WASTE SYSTEMS, INC., a Nevada corporation (“EWSI”) (PPE and EWSI collectively are the “Buyers”), SURF INVESTMENTS, LTD. D/B/A CPU, a California corporation (“CPU”), KIMBERLY CREW, an individual resident of the Commonwealth of Pennsylvania (“Crew”) (“Crew” is also the “Seller”).

 

RECITALS

 

A. CPU is engaged in the business of selling computer hardware and parts, servicing and repairing computer hardware, providing asset retirement services for computer hardware, and providing end-of-life services including electronics waste recycling, for which it is a registered collector by the State of California.

 

B. The Seller owns all of the issued and outstanding shares of the capital stock of CPU.

 

C. The Buyers desire to purchase from the Seller, and the Seller desires to sell to Buyers, all of the capital stock of CPU (the ‘Common Stock’) upon the terms and subject to the conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the recitals and the respective representations, warranties, indemnities, covenants, agreements and conditions hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound hereby, do hereby agree as follows:

 

1. Definitions:

 

1.1 “Knowledge of the Seller” and terms of similar import shall mean the knowledge that Crew should have after due, reasonable and prudent inquiry.

 

2. PURCHASE OF CPU COMMON STOCK

 

2.1 Purchased CPU Common Stock  Subject to and upon the terms and conditions set forth in this Agreement, Seller will validly sell, transfer, assign and convey to Buyers, and Buyers will accept and purchase from Seller, on the Closing Date, the Common Stock of CPU.

 

2.2 Delivery of CPU Common Stock  At the Closing, the Seller shall deliver, transfer and assign all of the CPU Common Stock to Buyers, in the proportions shown on Exhibit A by delivering stock certificates representing 100% of the capital stock of CPU endorsed or accompanied by stock powers or other similar assignment documents reasonably requested by the Buyers, duly executed and otherwise in proper form for transfer, as shall be necessary to vest in Buyers, full, complete, good and marketable title to such Common Stock free and clear of all liens, claims and encumbrances of any kind whatsoever, all such documents to be in form and substance satisfactory to counsel for Buyers.

 

2.3 Payment of Purchase Price.  The Purchase Price for the CPU Common Stock shall be valued at $222,928 and paid by Buyers to Seller as follows;

 

(a) Up to the total amount of the Purchase Price shall be in the form of assumption of certain aged debt obligations payable to Crew, Julie Peterson, RLS Associates, and others, as shown herein in Exhibit B, (the ‘Debt’) on terms acceptable to Buyers (which generally shall mean each of the Debt items are at least six months old with extended terms of repayment), and

 

 

 

 

 

  

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(b) The balance of the Purchase Price, also as shown on Exhibit B, shall be paid in the form of newly issued Series A Convertible Callable Preferred Stock of EWSI valued at $1,000 for each share which cannot be diluted or changed, and valued at $1,100 when called or converted, (the “EWSI Shares”) and shall be allocated to the Seller.:

 

(c)  Governing document of the Series A Convertible Callable Preferred Stock.

 

(i)           The Form of Certificate of Series A Convertible Callable Preferred Stock of E-Waste Systems Inc. (OTCQB:EWSI) governs the characteristics of the stock being issued and is being included in this Stock Purchase Agreement as Exhibit D.

 

3. CLOSING.

 

3.1 Closing Date.

 

The Closing shall take place within 5 business days of the date of execution herein (the “Closing Date”).

 

3.2 Closing Deliveries.

 

(a)   By the Seller.  Within five business days of the Closing, CPU and the Seller, as applicable, shall deliver to Buyers the following, duly executed:

 

(i) Noncompetition Agreements for Kimberly Crew and Julie Peterson.

 

(ii) Julie Peterson’s Consulting  Agreement

 

(iii) Crew’s Consulting Agreement (to be delivered by Crew only),

 

(iv) the Original Stock Transfer Documents,

 

(v) the Closing Balance Sheet (to be delivered by Crew only);

 

(vi) the Certificate/Articles of Incorporation of CPU certified as of the most recent practicable date by the Secretary of State of California;

 

(vii) a certificate of the Secretary of State of California as to the good standing of CPU as of the most recent practicable date;

 

(viii) the authorizations, consents and approvals set forth in hereto;

 

(ix) the duly executed resignations of all officers and directors of CPU from all offices and directorships of CPU held by them;

 

(x) the original corporate record books and stock record books of CPU (to be delivered by Crew only); and

 

(xi) termination of all shareholder agreements, operating agreements or similar agreements among any of the Seller and/or CPU.

 

 

 

 

 

  

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(xii) written details for all Debt showing their aged nature

 

(b) By Buyers.  At the Closing, Buyers shall deliver to the Seller the following duly executed:

 

(i) Noncompetition Agreements,

 

(ii) Julie Peterson’s Consulting Agreement,

 

(iii) Crew’s Consulting Agreement,

 

(iv) the EWSI Series A Convertible Callable Preferred Stock shares,

 

(v) EWSI’s Board of Director’s consent.

 

(c)           By Buyers and Sellers.  At Closing, Buyers and Sellers shall delive the following executed document to all debt holders listed in Exhibit B:

 

(i)           Debt Modification Agreement

 

4. REPRESENTATIONS AND WARRANTIES OF CREW.  For the purpose of inducing Buyers to enter into this Agreement and to consummate the transactions contemplated hereby, Crew represents and warrants and agrees, that:

 

4.1 Ownership of Common Stock; Authority; Consents.

 

(a) Ownership.  The Seller is the owner of, and has good and marketable title to the Common Stock, free and clear of all liens, claims and encumbrances, and has full legal title and power and the authorizations and approvals necessary to sell, transfer and deliver the Common Stock to Buyers.

 

(b) Authority.  The Seller has all requisite power and authority to enter into this Agreement, and the related agreements referred to herein, and to carry out such Seller’s obligations hereunder.  This Agreement and the related agreements, documents and instruments referred to herein have been duly executed and delivered by the Seller who is a party thereto and constitute the valid and legally binding obligations of each such Seller.

 

(c) Consents.  No consent, approval, authorization or order of any court, governmental agency or body is required for the consummation by the Seller of the transactions contemplated by this Agreement, and the execution, delivery and performance by CPU and the Seller of this Agreement, and of the transactions herein, does not require the consent of any third party under any contract, agreement, lease or license to which CPU or any of the Seller is a party.

 

4.2 Corporate Matters.

 

(a) Organization and Qualification; Power.

 

(i) CPU is a corporation duly organized, validly existing and in good standing under the Laws of the State of California.

 

(ii) CPU is duly qualified and/or licensed, as the case may be, and in good standing in the State of California.

 

 

 

 

 

 

  

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(iii) CPU has all requisite corporate power and authority to own, lease and operate all of its properties and assets and to carry on its business as it is now being conducted.

 

(b) Subsidiaries.  CPU has no subsidiaries or owns any stock, limited liability company interests or other equity interests in any Person.

 

(c) Capitalization of CPU; Ownership of Common Stock.  The entire authorized capital stock of CPU consists of the Common Stock, of which 4,300 shares are issued and outstanding.  All of the issued and outstanding shares of the Common Stock have been duly authorized and validly issued, are fully paid and non-assessable and are owned of record by the Seller free and clear of all liens, claims, encumbrances and restrictions whatsoever.  No shares of Common Stock or other ownership interests in CPU are reserved for issuance or are held as treasury shares.  There are no outstanding options, warrants, conversion rights or other rights to subscribe for or purchase, or other contracts with respect to, the Purchased Equity Interests or any other equity interest of CPU pursuant to which any Seller or CPU is or may become obligated to issue or redeem or exchange any shares of stock or other equity interests of CPU.

 

4.3 Authority; Validity.  The execution and delivery by CPU of this Agreement and the other documents and instruments have been duly authorized by CPU, as applicable.

 

4.4 Financial.  The Seller previously furnished to Buyers true and correct copies of the Financial Statements, copies of all of which are attached hereto.

 

4.5 Absence of Undisclosed Liability.  There are no liabilities or obligations of any kind whatsoever, whether direct, indirect, accrued, contingent or absolute, and whether or not determined or determinable (other than the liabilities of CPU set forth on the Closing Balance Sheet).

 

4.6 Litigation.  CPU is not bound by any order, judgment, stipulation or consent decree of any court or governmental agency affecting its assets, or limiting or affecting its operations.

 

4.7 Licenses; Compliance With Laws and Regulations.

 

(a) Governmental Licenses.  CPU has all governmental licenses and permits necessary to conduct its business, and such licenses and permits are in full force and effect.

 

(b) Compliance With Laws and Regulations.  CPU is in compliance with all applicable Laws relating to the operation of its business.

 

(c) Insurance.  CPU’s assets have been and are insured, and will be insured through the Closing Date.

 

(d) Taxes.  CPU (i) has timely filed with the appropriate governmental agencies all Tax Returns required to be filed by it as of the date of this Agreement for all periods ended prior to the date of this Agreement, (ii) has paid all Taxes shown as payable on such Tax Returns and all Taxes that CPU is required by Law to pay, withhold or collect for all periods ending on or prior to the Closing Date have been correctly reported and fully paid, withheld or collected, or adequately reserved for as set forth in the Closing Balance Sheet.  It is understood by Buyer that $5,000 is owed in payroll taxes

 

4.8 Vacation Pay.  The true and correct amount of vacation, holiday and sick pay unpaid as of the date hereof for all employees of CPU is listed herein as of Closing and is also included on the Closing Balance Sheet as of the date of Closing.

 

 

 

 

 

 

  

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4.9 Contracts and Commitments.

 

(a) Significant Contracts.  CPU is not a party to or is in any way obligated under, any agreement, contract or commitment containing any covenant limiting the freedom of CPU to engage in any line of business or compete with any Person other than in the ordinary course of business.

 

4.10 Patents, Trademarks and Trade Names.  Attached hereto sets forth a true and correct listing of all patents, trade names, trademarks, service marks, common-law trademarks, copyrights, domain names, websites and all registrations and applications for any of the foregoing, owned, possessed, licensed or used by CPU or otherwise used in the business.  CPU owns the entire right, title and interest in and to the items listed

 

4.11 Environmental Matters.  CPU is and has been in compliance with all Environmental Laws and has not received any communication (written or oral), whether from a governmental authority, citizens group, employee or otherwise, that alleges that CPU is not in compliance with applicable Environmental Laws.

 

4.12 Computer Systems.  All of the computer hardware and software systems, and all equipment including imbedded microprocessors, owned, leased or used by CPU (including, without limitation, those related to equipment, quality control activities, accounting and bookkeeping records and record keeping activities, environmental, HVAC and other facility controls, and security and communications systems) are fully operational and are operating properly as designed.

 

4.13 Bank Accounts.  Attached hereto is a complete list of each bank, financial institution and brokerage company in which CPU has an account together with the type of account and the names of all Persons authorized to draw thereon or have access thereto.

 

4.14 No Pending Transactions.  Except for this Agreement, neither CPU nor any  Seller is a party to or is bound by any agreement, undertaking or commitment:  (a) to merge or consolidate CPU with, or to have CPU acquire all or substantially all of the properties and assets of, any other Person; (b) to sell, lease or exchange all or substantially all of CPU’s properties and assets to any other Person; (c) to sell or exchange all or substantially all of the capital stock of CPU to any other Person; or (d) to reorganize CPU.

 

4.15 Employees.

 

(a) CPU is in compliance with all applicable Laws respecting labor and employment, applicant and employee background checking, immigration, discrimination in employment, terms and conditions of employment, wages, hours and occupational safety and health and employment practices, and is not engaged in any unfair labor practice.  CPU is not liable for any payment to any trust or other fund or to any governmental entity, with respect to unemployment compensation benefits, social security or other benefits or obligations for employees other than routine payments to be made in the ordinary course.

 

4.16 Benefit Plans.  The Seller has delivered to Buyers true and correct copies of each of the existing employee benefit plans for which written documentation exists.

 

5. REPRESENTATIONS AND WARRANTIES OF BUYERS.  For the purpose of inducing CPU and the Seller to enter into this Agreement and to consummate the transactions contemplated hereby, Buyers represents and warrants to CPU and the Seller and agrees that:

 

 

 

 

 

 

  

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5.1 Corporate Matters Regarding PPE.

 

(a) Organization and Qualification; Power.  PPE is a corporation duly organized and validly existing under the Laws of the United Kingdom.  PPE has all requisite corporate power and authority to carry on its business as it is now being conducted.

 

(b) Authorization. PPE has all requisite corporate power and authority to enter into this Agreement and the related agreements referred to herein and to carry out its obligations hereunder and thereunder. No further corporate proceedings on the part of PPE is necessary to authorize this Agreement or the transactions contemplated hereby, and this Agreement and the related agreements, documents and instruments referred to herein to which PPE is a party have been duly executed and delivered by PPE and constitute the valid and legally binding obligations of PPE, enforceable against it in accordance with their respective terms.

 

(c) Compliance; Binding Effect. The execution and delivery of this Agreement and the related agreements, documents and instruments referred to herein, and the consummation of the transactions contemplated hereby, by PPE will not (i) violate any provisions of the Articles/Certificate of Incorporation or Bylaws of PPE or (ii) constitute a default under, or constitute an event which with the giving of notice or the lapse of time or both would become a default under, or create any rights of termination, cancellation, purchase, or acceleration in any Person under, any mortgage, lien, lease, agreement or other instrument or obligation to which PPE is a party or by which PPE is bound, or (iii) violate or conflict with any Law, statute, regulation, order, writ, injunction, judgment, arbitration award, decree or other restriction of any kind or character to which PPE is subject or by which PPE is bound.

 

(d) Consents.  No consent, approval, authorization or order of any court, governmental agency or body, or third party is required for the consummation and performance by PPE of the transactions contemplated by this Agreement.

 

5.2 Brokers.  PPE has not incurred, nor will any Person be entitled to, on account of PPE, any brokers’, finders’, or similar fee in connection with the transactions contemplated by this Agreement.

 

6. REPRESENTATIONS AND WARRANTIES OF EWSI.  For the purpose of inducing CPU and the Seller to enter into this Agreement and to consummate the transactions contemplated hereby, EWSI represents and warrants to CPU and the Seller and agrees that:

 

6.1 Corporate Matters Regarding EWSI.

 

(a) Organization and Qualification; Power.  EWSI is a corporation duly organized and validly existing under the Laws of the State of Nevada.  EWSI has all requisite corporate power and authority to own, lease and operate all of its properties and assets and to carry on its business as it is now being conducted.

 

(b) Authorization.  EWSI has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations herein.  No further corporate proceedings on the part of EWSI are necessary to authorize this Agreement or the transactions contemplated hereby, and this Agreement and the related agreements, documents and instruments referred to herein to which EWSI is a party have been duly executed and delivered by EWSI and constitute the valid and legally binding obligations of EWSI.

 

 

 

 

 

  

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(c) Compliance; Binding Effect.  The execution and delivery of this Agreement and the related agreements, documents and instruments referred to herein, and the consummation of the transactions contemplated hereby, by EWSI will not violate any provisions of the Articles/Certificate of Incorporation or Bylaws of EWSI.

 

(d) Consents.  No consent, approval, authorization or order of any court, governmental agency or body, or third party is required for the consummation and performance by EWSI of the transactions contemplated by this Agreement.

 

6.2 Disclosure.  No representation or warranty by EWSI in this Agreement, and no statement, certificate or schedule furnished or to be furnished by or on behalf of it pursuant to this Agreement, or any document or certificate delivered to CPU or the Seller pursuant to this Agreement or in connection with actions contemplated hereby, contains or shall contain any untrue statement of material fact or omits or shall omit a material fact necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading.

 

6.3 Brokers.  EWSI has not incurred, nor will any Person be entitled to, on account of EWSI, any brokers’, finders’, or similar fee in connection with the transactions contemplated by this Agreement.

 

6.4 EWSI Series A Preferred Stock and Common Stock.  The Series A Preferred Stock issued herein is validly issued, duly authorized, fully paid and non-assessable and is not subject to any preemptive rights.  The EWSI Common Stock to be issued to Seller upon conversion of the Series A Preferred Stock, when issued in accordance with the terms of this Agreement, will be duly authorized, validly issued under SEC Rule 144, fully paid and non-assessable and not subject to any preemptive rights.

 

7. COVENANTS OF SELLERS AND CPU.

 

7.1 Conduct Pending Closing Date.  CPU and the Seller severally covenant and agree ) that until the Closing Date:

 

(a) Full Access.  Buyers and all authorized representatives shall have full access to examine the Real Estate and all properties, assets, books, records, financial statements, contracts and documents of CPU, and CPU and its officers and employees will cooperate fully with this examination.

 

(b) Carry on in Regular Course.  CPU shall carry on and operate its business diligently and substantially in the same manner as heretofore, shall pay when due all of its obligations and liabilities, and shall not change any methods of management, accounting or operation, except with the prior written consent of Buyers.

 

(c) Increases Limited.  Without the prior written consent of Buyers, CPU will not grant or permit any increase in the compensation payable or to become payable to any of the officers or employees of such CPU, or grant or permit any increase in the benefits under any bonus, insurance, pension or other benefit plan, payment or arrangement made to, for or with any such employees or officers (including without limitation any sales bonuses to employees with respect to the transactions contemplated herein).

 

(d) Contracts and Commitments.  CPU will not enter into any contract or commitment, or engage in any other transaction, not in the usual and ordinary course of its business and consistent with its business practices, without the prior written consent of Buyers.  CPU will not enter into or negotiate any agreement with any labor organization that will bind Buyers or CPU without the prior consent of Buyers.

 

 

 

 

  

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(e) Maintenance.  CPU shall operate, maintain and repair its property and assets in a normal business manner, and shall not use or operate its property or assets in other than a normal business manner.

 

(f) Preservation of Organization.  CPU shall use its best efforts to preserve its business organization intact, to keep available its present key employees, and to preserve its present relationships with those having business relations with it.

 

(g) Insurance.  CPU will maintain all of its insurance in effect as of the date hereof.

 

7.2 Seller Support Post Closing.  Crew hereby irrevocably commits to maintain functional support  for CPU, for a period of at least two months but not longer than four months, in order to effect an orderly transition, including but not limited to website maintenance, email addresses, any accounting functions, and related support services including: usage of the server, webmail, calendar, and delivery/handover of Quick Books/Tiger Paw software and the eBay account (both of which should be owned by CPU)

 

8. COVENANTS OF BUYERS.

 

8.1 Employment of CPU Employees.  Buyers agree to retain employment of the individuals listed on the same terms as such individuals are employed by CPU immediately before Closing.

 

8.2 Director and Officer Indemnification.  For a period of at least three (3) years after the Closing Date, Buyers will cause CPU to maintain in effect (which in each case shall cover the same matters and be on terms, including without limitation as to limits of liability in insurance policies, no less favorable than as are in effect on the Closing Date):

 

(a) bylaw provisions, certificate of incorporation provisions and other agreements indemnifying current and former directors and officers of CPU who serve or served as such on or prior to the Closing Date; and

 

(b) policies of insurance, including but not limited to professional liability coverage, insuring such officers and directors of CPU against matters, which arose on or prior to the Closing Date.

 

8.3 Further Acts.   On but not later than five days after the Closing Date, or thereafter if necessary, Buyers shall, without cost or expense to the Seller, execute and deliver to or cause to be executed and delivered to the Seller such further instruments and take such other action as the Seller may reasonably require to carry out more effectively and completely the transactions contemplated by this Agreement.

 

9. MUTUAL COVENANTS AND WARRANTIES.

 

9.1 Publicity.  No public announcement or other publicity regarding the transactions referred to herein shall be made by the Seller, the Buyers or CPU (or by any advisor or agent of the Seller or CPU) without the prior written approval of EWSI (which operates under the jurisdiction of the SEC), with the exception of RLS Associates, which is hereby allowed to publish a tombstone/deal announcement of the transaction.

 

9.2 Tax Matters.  The following provisions shall govern the allocation of responsibility as between Buyers and the Seller for certain tax matters following the Closing Date:

 

 

 

 

 

  

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(a) Tax Indemnification.  Crew shall indemnify Buyers, EWSI and CPU and each of their respective affiliates and hold them harmless from and against any Loss, Claim, liability, expense, or other damage attributable to (i) Taxes (or the non-payment thereof) of CPU for all taxable periods ending on or before end of the Closing Date.  The Buyers shall indemnify the Seller and each of their respective affiliates and hold them harmless from and against any Loss, Claim, liability, expense, or other damage attributable to Taxes (or the non-payment thereof) of CPU for all taxable periods ending on or after the Closing Date

 

(b) Responsibility for Filing Tax Returns.  Crew shall prepare or cause to be prepared and file or cause to be filed all income Tax Returns for CPU for any taxable period ending on or prior to the Closing Date.  Buyers shall prepare or cause to be prepared and file or cause to be filed all Tax Returns for CPU that are filed after the Closing Date other than the Tax Returns referenced in the preceding sentence.

 

(c) Cooperation on Tax Matters.  Buyers, CPU, and the Seller shall cooperate fully, as and to the extent reasonably requested by the other party, in connection with the filing of Tax Returns for the periods ending on the Closing Date and any audit, litigation, or other proceeding with respect to Taxes until the expiration of the statute of limitations (and, to the extent notified by Buyers or the Seller, any extensions thereof).

 

9.3 Post-Closing Corporate Matters for CPU.  Buyers and Seller acknowledge that Buyers intend to effectuate the following corporate actions after the Closing (at the Buyers’ discretion and without limiting the Buyers’ rights to take or cause to be taken any other corporate actions):

 

(a) Buyers will appoint the board of directors of CPU.

 

(b) Buyers intends that, after due consideration, the Board of Directors of CPU will appoint the following officers:

 

(i) Julie Peterson, Consulting General Manager

 

(ii) Chris Zwicke, Vice President

 

(c) Buyers intend that they, as stockholders of CPU, and the officers of CPU (as applicable) will take or cause to be taken such actions to amend as necessary or advisable the Articles of Organization, Articles/Certificate of Incorporation, Bylaws and other organizational documents of CPU.

 

(d) Buyers intend to change the registered agent office for CPU.

 

10. CONDITIONS TO OBLIGATIONS OF BUYERS.  The obligations of Buyers to consummate the transactions contemplated by this Agreement are subject to the satisfaction on or prior to the Closing Date of the following conditions:

 

10.1 Ordinary Course.  CPU shall have operated its business in the ordinary course since December 31, 2012, and there shall have been no transactions outside the ordinary course of business without the prior written consent of Buyers.

 

10.2 Third-Party Consents.  All authorizations, consents and approvals of all governmental agencies and authorities required to be obtained in order to permit consummation by Seller of the transactions contemplated by this Agreement and to permit the business currently carried on by CPU to continue to be carried on by such CPU unimpaired immediately following the Closing Date shall have been obtained.

 

 

 

 

 

  

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10.3 Statutory Requirements; Litigation.  All statutory requirements for the valid consummation by Seller of the transactions contemplated by this Agreement, shall have been fulfilled.  Between the date of this Agreement and the Closing Date, no action, investigation or proceeding shall have been instituted or shall have been threatened before a court or other governmental body or by any public authority to restrain or prohibit the transaction contemplated by this Agreement or to obtain damages in respect thereof.

 

10.4 Liens.  The assets of CPU shall be free and clear of all security interests, mortgages, deeds of trust, liens, claims and encumbrances of any nature whatsoever.

 

11. CONDITIONS TO OBLIGATION OF SELLERS.  The obligation of Seller to consummate the transactions contemplated by this Agreement shall be subject to the satisfaction on or prior to the Closing Date of the following conditions.

 

11.1 Representations and Warranties.  Each of the representations and warranties of PPE and EWSI herein contained shall be true and correct in all material respects at and as of the Closing Date.

 

11.2 Statutory Requirements; Litigation.  All statutory requirements for the valid consummation by PPE and EWSI of the transactions contemplated by this Agreement shall have been fulfilled.

 

11.3 Other Agreements and Documents.  On or before the Closing Date, Seller shall have received the closing deliveries specified in this Agreement.

 

11.4 Deliveries.  Buyer will have fully performed with respect to all of the deliveries set forth in Section 3.2(b) above.

 

12. SURVIVAL OF REPRESENTATIONS, WARRANTIES, AGREEMENTS AND COVENANTS; INDEMNIFICATION.

 

12.1 Survival of Representations, Warranties, Agreements and Covenants.

 

(a) Each and every representation and warranty made by CPU, Seller, PPE or EWSI in this Agreement or in any exhibits, schedules, instruments of transfer or other documents delivered pursuant thereto or in connection therewith shall be effective regardless of any investigation that may have been or may be made at any time by or on behalf of the party to whom such representation or warranty is made and shall survive the Closing, but except as otherwise provided in this Section 12.1, shall terminate on the second anniversary of the Closing Date.

 

(b) Any representation or warranty of the Seller relating to title to or ownership of the Common Stock, capitalization of CPU or ownership of assets by CPU shall extend for an unlimited period after the Closing Date.

 

(c) All covenants and agreements contained in this Agreement or in any related agreement, certificate, document or instrument delivered pursuant to this Agreement shall survive the Closing Date in accordance with their terms.

 

12.2 Indemnification by Buyers.  Buyers agrees to indemnify the Seller from and against any and all losses incurred or sustained by, or imposed upon, the Seller with respect to or by reason of (i) any breach or inaccuracy on the part of Buyers of any of its representations and warranties contained in this Agreement or in any related agreement, certificate, document or instrument delivered by Buyers hereunder or (ii) any breach, default or lack of performance on the part of Buyers of any of its agreements or covenants contained in this Agreement or in any related agreement, certificate, document or instrument delivered by Buyers hereunder.

 

 

 

 

  

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12.3 Indemnification by Seller

 

(a) The Seller severally agree to indemnify PPE, EWSI and CPU and hold them harmless from and against any and all Losses incurred or sustained or suffered by, or imposed upon, PPE, EWSI or CPU, with respect to or by reason of any breach or inaccuracy on the part of any such Seller of any such Seller’s representations and warranties contained in this Agreement.

 

(b) Crew shall indemnify and hold harmless Buyers for any and all losses pursuant to Section 12.3 (a) for which she may be liable; and

 

 (c)           For the avoidance of doubt, Buyers’ sole remedy against

the Seller for breach of any representation, warranty, covenant or other obligation hereunder shall be to seek indemnification pursuant to Section 12.3(a); that is, for example, Buyers may not seek recovery against a Seller for an alleged breach of a representation and warranty under this Agreement, and contend that such claim is for “breach of contract,” not for “indemnification,” and that the claim is therefore free of the limitations on “indemnification” set forth in this Section 12.3(c).

 

13. TERMINATION OF AGREEMENT.

 

13.1 Causes. This Agreement and the transactions contemplated hereby may be terminated at any time prior to the completion of the Closing as follows, and in no other manner:

 

(a) By mutual consent of the parties;

 

(b) By written notice from Buyers to the Seller if:

 

(i) there has been a material misrepresentation or breach by Seller in the representations, warranties, agreements or covenants of Seller set forth herein;

 

(ii) any of the conditions provided for in this Agreement have not been satisfied or waived by Buyers in writing and the Closing has not occurred within the timeframe set forth in this Agreement or the date of such notice, whichever is later;

 

(c) By written notice from the Seller to Buyers if:

 

(i) there has been a material misrepresentation or breach by Buyers in the representations, warranties, agreements or covenants of Buyers set forth herein; or

 

(ii) any of the conditions provided for in this Agreement have not been satisfied or waived by the Seller in writing and the Closing has not occurred within the time frame provided for in the Agreement or the date of such notice, whichever is later.

 

(iii) if “Debt Acquired” listed in Exhibit B does not pass verification.

 

13.2 Right to Proceed.  If any of the conditions specified in this Agreement have not been satisfied by Seller, Buyers, in addition to any other rights that may be available to it, may waive its rights to have such conditions satisfied prior to Closing and may proceed with the transactions contemplated hereby, and if any of the conditions specified in this Agreement have not been satisfied by Buyers prior to Closing, the Seller, in addition to any other rights that may be available to them, may waive their rights to have such conditions satisfied and may proceed with the transactions contemplated hereby; provided, however, that any such waiver by Buyers or Seller, as the case may be, shall in no way diminish or eliminate any other rights that may be available to the waiving party related to or as a result of the waived condition or conditions not having been satisfied prior to Closing.

 

 

 

 

 

  

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14. SUBMISSION TO JURISDICTION. Any legal action arising out of or relating to this Agreement or the enforcement of any provision of this Agreement shall be brought or otherwise commenced in any state or federal court located in Philadelphia County, Pennsylvania.  Each party to this Agreement expressly and irrevocably consents and submits to the jurisdiction of each state, federal, and appellate court located in Philadelphia County, Pennsylvania in connection with any such legal action or proceeding. Each party further agrees that each state and federal court located in Philadelphia County, Pennsylvania shall be deemed to be a convenient forum. Each party agrees not to assert (by way of motion, as a defense or otherwise), in any such proceeding commenced in any state or federal court located in Philadelphia County, Pennsylvania any claim that such party is not subject personally to the jurisdiction of such court, that such proceeding has been brought in an inconvenient forum, that the venue of such proceeding is improper or that this Agreement or the subject matter of this Agreement may not be enforced in or by such court. The parties agree that irreparable damage may occur and that the parties would not have any.

 

15. GOVERNING LAW.  This Agreement shall be governed by and construed under and in accordance with the Laws of the Commonwealth of Pennsylvania, excluding any choice of Law rules that might direct the application of the Laws of another jurisdiction.

 

16. NOTICES.  Any notice or other communication required or permitted hereunder shall be in writing and shall be considered delivered in all respects when it has been delivered by hand or overnight courier, by acknowledged facsimile transmission followed by the original mailed by certified mail, return receipt requested, or three (3) days after it is mailed by certified mail, return receipt requested, first class postage prepaid, addressed as follows:

 

	
To Buyers:

To PSPE: The Managing Director, Profit Seeker Private Equity Ltd., 33 Finland Street, London, UK SE16 7TP

To EWSI:  The Secretary Treasurer, E-Waste Systems, Inc, 101 First Street, #493, Los Altos, CA  USA  94022

	
To Seller:

To Kimberly Crew:  263 East Main Street, Suite A.  Newark, DE 19711

or such other addresses as shall be similarly furnished in writing by either party.

 

17. EXHIBITS.  All exhibits and schedules hereto are by reference incorporated herein and made a part hereof.

 

18. ENTIRE AGREEMENT; BINDING EFFECT.  This Agreement contains the entire agreement between the parties hereto with respect to the transactions contemplated herein, and there are no agreements or understandings between the parties other than those set forth herein or executed simultaneously or in connection herewith.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns.

 

19. HEADINGS.  The headings in this Agreement are inserted for convenience only and shall not constitute a part hereof.

 

20. EXPENSES.  The parties hereto shall bear their respective expenses incurred in connection with the negotiation, execution and performance of this Agreement.

 

 

 

 

 

  

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21. AMENDMENT.  This Agreement may be amended only by a written instrument executed on behalf of all of the parties hereto or, in the case of a waiver, by the party waiving compliance.

 

22. ASSIGNMENT.  Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by any of the parties hereto without the prior written consent of the other parties.

 

23. COUNTERPARTS; FACSIMILE SIGNATURE.  This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same agreement

 

 

[signature page follows]

 

 

 

 

 

  

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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement all as of the day and year first above written.

 

 

PSPE:  Buyer

 

PROFIT SEEKER PRIVATE EQUITY LTD.

 

 

/s/    Errol Torres                                                                         

By:  Errol Torres, Managing Director, Profit Seeker Fund

 

EWSI:  Buyer

 

E-WASTE SYSTEMS, INC.

 

 

/s/    Martin Nielson                                                                   

By:  Martin Nielson, Chief Executive Officer

 

CPU:

 

SURF INVESTMENTS, LTD. D/B/A CPU

 

 

/s/   Kimberly Crew                                                                      

By: Kimberly Crew, President

 

CREW:  Seller

 

Kimberly Crew

 

 

 

/s/   Kimberly Crew                                                                     

By:  Kimberly Crew, Individual

 

 

 

 

  

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