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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: July 23, 1999
IAT MULTIMEDIA, INC.
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(Exact name of registrant as specified in charter)
DELAWARE
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(State of other jurisdiction of incorporation)
0-22101 13-3920210
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(Commission File Number) (IRS Employer Identification No.)
Geschaftshaus Wasserschloss, Aarestrasse 17, CH-5300,
Vogelsang-Turgi, Switzerland
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(Address of principal executive offices) (Zip Code)
Registrant's telephone no. including area code: 011-41-56-223-5022
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(Former Address, if changed since Last Report) (Zip Code)
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Item 2. Acquisition or Disposition of Assets.
In connection with the spin-off of our research and development
activities in March 1998, we granted Algo Vision Schweiz AG, one of the entities
formed in connection with the spin-off, an option to purchase a 50% co-ownership
interest in our visual communications intellectual property. In July 1999, as
part of the reorganization of the Algo Vision entities, Algo Vision Schweiz and
Algo Vision Systems GmbH, the other entity formed in connection with the
spin-off, became wholly-owned subsidiaries of Algo Vision plc, an English
company whose shares began trading on the European Association of Securities
Dealers Automated Quotation System on July 23, 1999. Under the terms of a series
of agreements between us, Algo Vision plc and Algo Vision Schweiz (i) Algo
Vision Schweiz transferred its option to purchase our intellectual property
rights to Algo Vision plc, (ii) Algo Vision plc agreed to purchase our visual
communications intellectual property rights (other than the IAT name or mark)
and (iii) we agreed to exchange our 15% equity interest in each of Algo Vision
Systems and Algo Vision Schweiz, for shares of capital stock of Algo Vision plc.
Dr. Vogt, one of our directors, owns approximately 26.2% of the outstanding
shares of Algo Vision plc.
Under the terms of the agreements, Algo Vision plc purchased a 50%
interest in our visual communications intellectual property rights for
$1,000,000 and agreed to purchase, prior to August 22, 1999, the remaining 50%
interest for an additional $2,500,000. Algo Vision plc also agreed to pay us
royalties (ranging from 5% to 10%) on the sale of certain products utilizing the
visual communications technology for a period of two years from the date the
remaining 50% interest is purchased by Algo Vision plc. During the period in
which the intellectual property rights are co-owned by us and Algo Vision plc,
we cannot grant any sublicenses for the intellectual property without the prior
consent of Algo Vision plc. In connection with the transaction, Algo Vision
Schweiz agreed to repay, prior to August 22, 1999, outstanding loans,
aggregating approximately $500,000, made by us to Algo Vision Schweiz as part of
the spin-off.
In addition, as part of the reorganization of the Algo Vision entities,
we exchanged our 15% interest in each of Algo Vision Systems and Algo Vision
Schweiz, for 500,000 shares of Algo Vision plc (valued at $5,000,000 at EASDAQ
admission). These shares are subject to a lock-up agreement for a period of six
months, subject to certain exceptions. We have also agreed to purchase, prior to
August 22, 1999, an additional 250,000 shares of Algo Vision plc for a purchase
price of $2,500,000, of which 200,000 shares will be subject to a lock-up
agreement for a period of three months, subject to certain exceptions.
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Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits.
(c) Exhibits
10.62 Agreement for the Acquisition of Intellectual Property Rights
dated July 22, 1999 among the Registrant, IAT AG, Algo Vision
Schweiz AG and Algo Vision plc.
10.63 Intellectual Property Assignment dated July 22, 1999 among the
Registrant, IAT AG and Algo Vision plc.
10.64 Intellectual Property Assignment dated July 22, 1999 among the
Registrant, IAT AG and Algo Vision plc.
10.65 Share Exchange and Subscription Agreement dated July 22, 1999
between Algo Vision plc and IAT AG.
10.66 Second Subscription Agreement dated July 22, 1999 between Algo
Vision plc and IAT AG.
10.67 Lock-In Agreement dated July 22, 1999 among Algo Vision plc,
Beeson Gregory Limited and IAT AG.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
IAT MULTIMEDIA, INC.
By: /s/ Klaus Grissemann
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Klaus Grissemann
Chief Financial Officer
Dated: August 4, 1999
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AGREEMENT FOR THE ACQUISITION OF INTELLECTUAL PROPERTY RIGHTS
BETWEEN:
IAT MULTIMEDIA INC a Delaware, USA corporation ("IATM")
and
IAT AG, CH-5300 Turgi ("AG"), a Swiss corporation, which is a wholly owned
subsidiary of IATM
and
ALGO VISION SCHWEIZ AG, Ch-5300 Vogelsang-Turgi ("AV AG"), a Swiss corporation
(formerly known as IAT Communication AG, "IATC")
and
ALGO VISION PLC, a company incorporated in England and Wales with its registered
office at 2 Serjeant's Inn, London EC4Y 1LT ("AV plc")
RECITALS
(A) By a spin off agreement dated 11 March 1998 (the "Spin Off Agreement"), the
parties to which were IATM, AG, Dr Viktor Vogt, acting on his own behalf
and on behalf of IATC, and IATC, IATM agreed to transfer certain assets and
liabilities of AG to IATC. Under the Spin Off Agreement (i) AG agreed to
grant a licence of certain intellectual property rights to IATC and (ii) AG
granted IATC an option to acquire 50% ownership of the said intellectual
property rights, subject to necessary third party consents. The Spin Off
Agreement envisaged that AG would assist IATC in obtaining access to third
party
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intellectual property rights, including, if necessary and possible, by way
of sub-licence from AG.
(B) By this Agreement the company formerly known as IAT Communication AG and
now known as Algo Vision Schweiz AG wishes to renounce its option granted
to it by the Spin Off Agreement, with the parties instead entering into
further provisions regarding ownership and licensing of intellectual
property.
(C) This Agreement is entered into in the context of a further agreement or
series of agreements between IATM, AG and AV plc whereby AG will exchange
certain shareholdings in AV AG and Algo Vision Systems GmbH for 500,000
shares in AV plc and whereby AV AG will repay certain loans.
THE PARTIES AGREE AS FOLLOWS:
1. DEFINITIONS
1.1 "Additional Consideration" has the meaning set out in Article 6.2 of this
Agreement;
1.2 "Admission" has the meaning set out in Article 2.1 of this Agreement;
1.3 "Affiliate" means, with respect to any undertaking or legal person, any
other undertaking or legal person directly or indirectly controlling,
controlled by, or under common control with such undertaking or legal
person;
1.4 "AV AG Royalties" has the meaning set out in Article 6.1 of this Agreement;
1.5 "Call Date" means the date that falls no less than fourteen (14) calendar
days after the Effective Date of this Agreement and no later than thirty
(30) calendar days after the Effective Date of this Agreement;
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1.6 "Co-ownership Fee" means the Fee of one million US dollars (US $1m) to be
paid to AG for AV plc to exercise the New Option to acquire co-ownership of
the Intellectual Property and other rights;
1.7 "EASDAQ" the European Association of Securities Dealers Automated
Quotation;
1.8 "Effective Date" means the date of the fulfilment of the condition referred
to in Article 2.1 of this Agreement;
1.9 "IATM Group" means IATM and its Affiliates from time to time, including AG;
1.10 "Improvements" means improvements based essentially on the Intellectual
Property;
1.11 "The Intellectual Property" means the intellectual property owned or used
by AG at the date of the Spin Off Agreement together with intellectual
property owned or used by AG at the Effective Date, including but not
limited to, the Patents and the trade marks MOVING STILL IMAGE and WONDER
BOARD but, for the avoidance of doubt, not including any rights whatsoever
to the IAT name or mark, ownership of which shall remain exclusively in the
IATM Group (intellectual property meaning, without limitation, patents,
patent applications, copyrights, trademarks, trademark registrations,
service marks, service mark registrations, inventions, trade secrets and
licences of any of the foregoing);
1.12 "Licence Agreement" means the licence agreement dated 22 February 1999
between AG and IATC which put in place the Intellectual Property licensing
arrangements envisaged by the Spin Off Agreement;
1.13 "Net Turnover" means the gross price obtained by AV plc or its Affiliates
from sales of Products, after discounts for Product returns, price
reductions, sales taxes and other taxes and duties and transport and
insurance costs;
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1.14 "New Option" means the option granted hereunder to AV plc to acquire a 50%
share of ownership of the Intellectual Property;
1.15 "Patents" means patents and patent applications owned or in the name of a
member of the IATM Group relating to wavelet and still image transmission
technology;
1.16 "Products" means the products listed in the Schedule;
1.17 "Spin Off Agreement" means the spin off agreement referred to Recital (A)
above;
1.18 "Spin Off Agreement Option" means the option granted in the Spin Off
Agreement;
1.19 "Third Party Owned IP" has the meaning set out in Article 4.6.1;
2. CONDITION PRECEDENT
2.1 This Agreement shall be conditional upon the admission ("Admission") to
trading on EASDAQ of 14,464,654 shares of (pound)0.01 each, being the whole
of the issued ordinary share capital of AV plc and the shares forming part
of the authorised share capital but unissued share capital of AV plc
sufficient to satisfy obligations to issue further shares which it has
assumed as at Admission.
2.2 In the event that the condition referred to in Article 2.1 shall not have
been fulfilled prior to 31 July 1999 (unless a later date shall be
unanimously agreed by IATM, AG, AV AG and AV plc) the parties hereto shall
not be bound to proceed with the terms and provisions of this Agreement and
this Agreement shall cease to be of any effect, except Articles 10.2 and 16
which shall remain in force and save in respect of claims arising out of
any antecedent breach of this Agreement.
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3. EXERCISE OF OPTION
3.1 Subject to Article 2, AV AG hereby renounces the Spin Off Agreement Option
on the basis that AG hereby grants a New Option to AV plc on the same terms
as the Spin Off Agreement Option, save that instead of the parties being AG
and IATC, the party accepting the New Option is AV plc. Subject to Article
2, AV plc hereby exercises the New Option.
4. TRANSFER OF INTELLECTUAL PROPERTY INTO CO-OWNERSHIP
4.1 Pursuant to the exercise by AV plc of the New Option and on the basis of
the further terms herein which supplement the New Option, and in
consideration of the Co-ownership Fee and the AV AG Royalty, AG will, on or
within 7 days of Admission, transfer, or where applicable procure that its
Affiliates will transfer, the Intellectual Property into the joint names of
AG and AV plc, such that after the said transfer AG and AV plc will each
own the said Intellectual Property in the form of 50% co-ownership
(Miteigentum).
4.2 The agreed form of co-ownership shall entitle both co-owners and their
Affiliates to exploit the co-owned Intellectual Property themselves and to
grant non-exclusive, sub-licensable licences of the same, save that in the
case of the sub-licences granted after the date of this Agreement by the
IATM Group, the consent of AV plc shall be required. Any sublicenses of
trademarks, trade names or service marks, shall require the consent of both
AV plc and of the IATM Group in order to assure that the quality control
provisions of any such sublicense are appropriate and acceptable to both
owners of the marks and names, such consent not to be unreasonably
withheld. AG and the IATM Group shall not be entitled to charge, sell,
assign or otherwise transfer any part of the co-owned Intellectual Property
or of this Agreement without the consent of AV plc (which AV plc may
withhold in its absolute discretion). AV plc shall be entitled to charge,
sell, assign and otherwise transfer the co-owned Intellectual Property and
its rights under this Agreement, or any portion thereof, without the
consent of AG or the IATM Group.
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4.3 During the period of the co-ownership AV plc shall be entitled to receive
half of all the royalty income received by AG or other members of the IATM
Group from licensing of the co-owned Intellectual Property, except
royalties received by AG from (i) members of the IATM Group which do not
derive from third parties, and (ii) from AV plc or its Affiliates.
4.4 The parties shall ensure that any licences of the Intellectual Property to
non-Affiliated third parties contain termination provisions whereby any
serious breach of the licence (including breach of requirements of
confidentiality, which shall also be included) gives a right to terminate
the licence.
4.5 During the period of co-ownership AV plc shall take the lead in ensuring
the protection of the co-owned Intellectual Property, including by
prosecuting relevant patent applications. AV plc shall be entitled to call
upon AG to co-operate with such protection. The costs of pursuing such
protection shall be borne equally by each co-owner.
4.6 Where, as at the Effective Date, any part of the Intellectual Property is
not owned by the IATM Group as then constituted, or where at such date the
consent of one or more third parties is required to transfer ownership of
the Intellectual Property, IATM undertakes on its own behalf and on behalf
of the IATM Group as follows:
4.6.1 In relation to items of the Intellectual Property not owned by the IATM
Group (the "Third Party Owned IP"), the IATM Group and AV plc will
co-operate in using their best commercially reasonable efforts to
procure a perpetual (or if this is not legally possible, a long term
renewable), worldwide, sub-licensable and assignable and, where
possible, exclusive licence from the relevant owner or licensor for the
benefit of AV plc and its Affiliates to use in the manufacture and sale
of the Products, or the nearest to such licence that can be obtained on
the basis of such efforts. Such licence shall preferably be a direct
licence, but in the absence of this shall be a sub-licence via AG or a
member of the IATM Group.
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Where a sub-licence is granted, the relevant IATM Group company shall
request, and use its best commercially reasonable efforts to have
included, within the relevant head licence (to the extent the same are
not already included) terms whereby in the event of termination of the
licence from the third party to the relevant IATM Group member, a
direct licence shall be granted on similar terms to AV plc. The
obligations on the IATM Group in this Article 4.6.1 shall not apply
where AV plc indicates that it or one of its Affiliates will obtain
without assistance, or that it or one of its Affiliates has already
accepted, the terms of a licence from the owner of any Third Party
Owned IP. Nothing in this Article 4.6.1 shall require the IATM Group to
procure a license or sub-license of the Third Party Owned IP for AV plc
on terms more favourable than the terms available to IATM Group;
4.6.2 In relation to items of Intellectual Property whose transfer requires
third party consent, the IATM Group and AV plc will each use their best
commercially reasonable efforts to obtain such consent in order to
permit transfer in accordance with Article 4.1. To the extent such
consent cannot be obtained the IATM Group will use its best
commercially reasonable efforts to procure a licence instead on similar
terms to those mentioned for Third Party Owned IP;
4.6.3 In the event that the efforts required from the IATM Group are not
successful in procuring for AV plc and its Affiliates any of the
aforementioned rights the IATM Group shall be under no further
obligation to assist in procuring such rights.
4.7 The provisions of Article 4.6 shall continue in effect for as long as it is
necessary to enable procurement of the relevant rights, including after the
Call Date.
5. PAYMENT OF THE CO-OWNERSHIP FEE
AV plc shall pay the Co-ownership Fee at the date of transfer referred to
in Article 4.1 by bank transfer to AG in Turgi, Switzerland.
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6. ADDITIONAL CONSIDERATION PAYMENTS AND ROYALTIES
6.1 AV AG Royalty. AV AG will pay a royalty (the "AV AG Royalty") on Net
Turnover at the rates set forth on the Schedule. The obligation of AV AG to
pay the AV AG Royalty shall cease on the date on which AV plc acquires sole
ownership of the Intellectual Property pursuant to Article 9. In the event
that AV plc does not acquire sole ownership of the Intellectual Property
pursuant to Article 9, AV plc shall continue paying AV AG Royalty on behalf
of AV AG until 16 March 2003.
6.2 Additional Consideration. For a period of two (2) years from the date on
which AV plc acquires sole ownership of the Intellectual Property pursuant
to Article 9, AV plc shall be liable to pay to AG additional consideration
calculated on Net Turnover at the rates set forth on the Schedule
("Additional Consideration"). After the expiry of such two year period the
obligation to pay Additional Consideration to AG shall cease.
6.3 During the AV AG Royalty and the Additional Consideration payment periods
set out in Article 6.1 and Article 6.2 AV plc shall remain liable to
account for AV AG Royalties and Additional Consideration on sales of
Products by its Affiliates and licensees.
7. ADDITIONAL CONSIDERATION PAYMENT AND ROYALTY PROVISIONS
7.1 AV AG Royalties and Additional Consideration shall be paid quarterly within
30 days of the end of each calendar quarter.
7.2 AG shall have the right to audit the AV AG Royalty and Additional
Consideration payments provided for in Article 6. Such right shall be
exercisable only through a person under a professional obligation of
confidentiality. In the event that such an audit reveals that AV AG Royalty
or Additional Consideration payments are deficient by more than five per
cent (5%), the costs of the audit shall be borne by AV plc.
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7.3 AV AG Royalties and Additional Consideration shall be paid in Swiss Francs
or in the currency in which payments for Products are made. The place of
payment shall be Turgi, Switzerland.
7.4 AV plc shall only have a right of set off of AV AG Royalties and Additional
Consideration in the event of written consent or a court judgment to that
effect.
8. IMPROVEMENTS MADE DURING CO-OWNERSHIP PERIOD
8.1 In the event that AV plc or any of its Affiliates shall make or acquire any
Improvement in the period before the Call Date, AV plc shall, or shall
procure that the relevant Affiliate shall, forthwith disclose and
communicate the same to AG and shall grant to AG and its Affiliates a
non-exclusive, royalty-free licence for the period up to the Call Date to
make, have made, use and sell Products incorporating such Improvement. With
the consent of AV plc (which AV plc may withhold in its absolute
discretion), AG shall have the right to grant licences and sublicences to
third parties regarding such Improvements.
8.2 In the event that any member of the IATM Group shall make or acquire any
Improvement in the period before the Call Date, IATM shall, or shall
procure that the relevant Affiliate shall, forthwith disclose and
communicate the same to AV plc and shall grant to AV plc and its Affiliates
a non-exclusive, worldwide, sub-licensable and assignable royalty-free
licence to make, have made, use and sell Products incorporating such
Improvement. The term of such licence shall be the period up to transfer of
the said Improvement to AV plc or one its Affiliates pursuant to Article 9.
9. TRANSFER FROM CO-OWNERSHIP INTO SOLE OWNERSHIP OF AV PLC
9.1 On the Call Date, conditional solely upon Admission, AV plc shall be
obligated to call upon the IATM Group, including AG, to transfer to AV plc,
either on the Call Date or as soon as possible thereafter based on IATM
Group's best efforts, its entire interest in the 50% co-ownership of the
Intellectual Property and in any Improvements made or
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acquired by the IATM Group during the co-ownership period, for a cash
consideration of US$2.5 million.
9.2 AV plc shall give at least two clear business days notice in writing to
IATM Group of the Call Date. Such written notice shall be sent by facsimile
to Finance Director, IAT AG, fax (41) 56 223 50 23.
9.3 AV plc shall be obliged to pay the US $2.5 million cash consideration for
AG's co-ownership interest in the Intellectual Property to a special
purpose account in the name of AG to be maintained by UBS AG, Zurich.
9.4 AV plc agrees that upon acquiring sole ownership of the co-owned
Intellectual Property it shall assume all the benefit and burden of any
licences of the same granted by the IATM Group before the date of such
acquisition.
10. CONFIDENTIALITY
10.1 Subject to the rights of sub-licensing set out herein, the parties agree to
keep each other's know-how confidential during the period of co-ownership.
The IATM Group will keep confidential the know-how of AV plc and its
Affiliates after the period of co-ownership, to the extent such know-how
does not legitimately enter the public domain.
10.2 The parties agree to keep confidential and not disclose to other parties
such of their business secrets as become known to them through this and
preceding agreements, including after termination.
11. WARRANTIES
11.1 AG and IATM warrant severally and on behalf of the IATM Group that, to the
best knowledge of AG and IATM respectively, in the case of the Intellectual
Property, both as at the Effective Date and as at the date of transfer into
the sole ownership of AV plc, and
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in the case of the Improvements by the IATM Group to be transferred
hereunder, as at the said date of transfer:
11.1.1 subject to AV plc's interest as a co-owner of the Intellectual Property
and except in respect of the Third Party Owned IP, one or more members
of the IATM Group is or are the unencumbered owners of the Intellectual
Property and the said Improvements;
11.1.2 the validity of the Intellectual Property or the said Improvements or
the title or right of the IATM Group thereto is not and has not been
under challenge;
11.1.3 the use of the Intellectual Property or the said Improvements does not
infringe any third party rights, and the Intellectual Property or
rights in the said Improvements are not being and have not been
infringed by any third party;
provided however and solely for the purpose of this Article 11.1, "to the
best knowledge of AG and IATM respectively" shall mean the knowledge of
Klaus Grissemann and Jacob Agam only.
11.2 AG and IATM warrant severally and on behalf of the IATM Group both as at
the Effective Date and as at the date of transfer into sole ownership of AV
plc (other than transfers in compliance with this Agreement) that none of
the Intellectual Property owned by the IATM Group, as the IATM Group was
constituted at the time of the Spin Off Agreement, has been transferred
either wholly or partly into the ownership of any third party, nor is any
additional consent required for transfer of ownership of the Intellectual
Property further to such consent as was required at the date of the Spin
Off Agreement, nor has any part of the Intellectual Property been charged
since the date of the Spin Off Agreement by any member of the IATM Group,
past or present.
11.3 If IATM is for any reason in breach of the warranty at 11.2, then without
limiting its other liability for such breach, it shall use its best
commercial efforts to rectify the
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situation leading to such breach in order to achieve the same objective as
if the said breach had not occurred.
12. TERMINATION
Once the condition referred to in Article 2.1 is fulfilled, this Agreement
may not be terminated (including in the event of insolvency or liquidation
or like event), and the parties' only remedy for breach shall be in the
form of damages or an order for specific performance. The parties
acknowledge that (except as provided below) it would be inappropriate for
either to have a right of termination given the nature of the co-ownership
arrangement set out above and the subsequent absolute transfer to AV plc of
all Intellectual Property as envisaged herein.
13. STATUS OF SPIN OFF AGREEMENT AND LICENCE AGREEMENT
In relation to all intellectual property matters this Agreement entirely
supersedes the Spin Off Agreement and the Licence Agreement, and the
Licence Agreement is hereby terminated and of no further force or effect
and none of the parties thereto have any remaining unfulfilled obligations
thereunder.
14. COVENANT OF FURTHER ASSURANCE
At the expense of AV plc, AV plc may call upon the IATM Group to give
reasonable assistance in the protection of the Intellectual Property and
Improvements transferred into the co-ownership or sole ownership of AV plc,
such as by provision of witness statements or records in proceedings for
defending the validity of such Intellectual Property and Improvements.
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15. AMENDMENTS
Amendments to this Agreement shall be in writing signed on behalf of an
authorised officer of each party.
16. GOVERNING LAW AND FORUM FOR DISPUTE RESOLUTION
This Agreement is governed by Swiss law. Disputes shall be settled by means
of arbitration in accordance with the Schiedsgerichtordnung (international
rules) of the Zurich Chamber of Commerce before three arbitrators, the
language of the proceedings and the award being in English. If there are
only two sides in the arbitration, each side shall appoint one arbitrator
with the third being appointed by agreement or, failing agreement, by the
President of the Zurich Chamber of Commerce. If there are more than two
sides, the parties shall attempt to agree the method of appointing
arbitration but to the extent agreement cannot be reached the panel shall
be appointed by the President of the Zurich Chamber of Commerce.
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IAT MULTIMEDIA INC
Place, Date
7/22/99
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Signature
/s/ Jacob Agam
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Name (in capitals)
JACOB AGAM
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IAT AG
Place, Date
7/22/99
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Signature
/s/ Klaus Grissemann
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Name (in capitals)
KLAUS GRISSEMANN
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ALGO VISION SCHWEIZ AG
Place, Date
7/22/99
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Signature
/s/ Mark Stockli /s/ Monica Germann
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Name (in capitals)
MARK STOCKLI MONICA GERMANN
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ALGO VISION PLC
Place, Date
7/22/99
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Signature
/s/ Viktor Vogt
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Name (in capitals)
VIKTOR VOGT
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SCHEDULE
Vision & Live 3.X 5% on sales price of the software price
in the systems or customer licence
Vision & Live light 5% Ditto
MSI 2.X 10% on sales price of the software or
customer licence
H.32X lib. 10% of sales price or customer licence
Wonderboard DM 25 per piece sold
A4 Codec DM 25 per piece sold
Wavelet 10% on software sales price or customer
licence
Wavelet new products on patent 5% on software sales price or customer
licence
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DATED July 22, 1999
IAT MULTIMEDIA INC
and
IAT AG
and
ALGO VISION PLC
---------------------
INTELLECTUAL PROPERTY
ASSIGNMENT
---------------------
Baker & McKenzie
100 New Bridge Street
London
EC4V 6JA
Tel: (0171) 919 1000
Fax: (0171) 919 1999
Ref: CJC/NHC/KHW
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INTELLECTUAL PROPERTY ASSIGNMENT
BETWEEN:
IAT MULTIMEDIA INC a Delaware, USA corporation ("IATM")
and
IAT AG, CH-5300 Turgi ("AG"), a Swiss corporation, which is a wholly owned
subsidiary of IATM
and
ALGO VISION PLC, a company incorporated in England and Wales with its registered
office at 2 Serjeant's Inn, London EC4Y 1LT ("AV plc")
RECITALS:
(A) Under an Agreement for the Acquisition of Intellectual Property Rights
between IATM AG, AV plc and Algo Vision Schweiz AG ("the Agreement") AG
agreed that, subject to the admission to trading on EASDAQ of certain
shares of AV plc, AG would, on or within seven days of admission, transfer,
or where applicable procure that its Affiliates (as defined below) would
transfer, certain Intellectual Property (as also defined below) into the
joint names of AG and AV plc in the form of 50% co-ownership (Miteigentum)
in consideration of the Co-Ownership Fee (as defined below) and certain
royalty rights.
(B) This assignment is entered into pursuant to the Agreement.
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OPERATIVE PROVISIONS
1. DEFINITIONS
1.1 "Admission" means the admission to trading on EASDAQ of 14,464,654 shares
of (pound)0.01 each, being the whole of the issued ordinary share capital
of AV plc and the shares forming part of the authorised share capital but
unissued share capital of AV plc sufficient to satisfy obligations to issue
further shares which it has assumed as at Admission;
1.2 "Affiliate" means, with respect to any undertaking or legal person, any
other undertaking or legal person directly or indirectly controlling,
controlled by, or under common control with such undertaking or legal
person;
1.3 "Co-ownership Fee" means one million US dollars (US $1 million) payable by
AV plc to AG to acquire co-ownership of the Intellectual Property;
1.4 "Effective Date" means the date of Admission;
1.5 "IATM Group" means IATM and its Affiliates from time to time, including AG;
1.6 "Intellectual Property" means the intellectual property owned or used by AG
at the date of the Spin Off Agreement, together with intellectual property
owned or used by AG at the Effective Date, including, but not limited to,
the Patent Rights and the Trade Mark Rights but, for the avoidance of
doubt, not including any rights whatsoever to the IAT name or mark,
ownership of which shall remain exclusively in the IATM Group (intellectual
property meaning, without limitation, patents, patent applications,
copyrights, trademarks, trademark registrations, service marks, service
mark registrations, inventions, trade secrets and licences of any of the
foregoing);
2
<PAGE>
1.7 "The Patent Rights" means the German patent application number 197 37
258.9, European patent application number 98115394.3-2202/0899958 and US
patent application number 09/138,640;
1.8 "Spin-off Agreement" means the Spin-off Agreement of 11 March 1988 between
IATM, AG, Dr. Viktor Vogt and IATC;
1.9 "The Trade Mark Rights" means Community Trade Mark number 000623751
(WONDERBOARD), Community Trade Mark number 000623777 (MOVING STILL IMAGE),
Swiss trade mark application number 456211 (WONDERBOARD), US trademark
application 75/354,082 (WONDERBOARD), Swiss trade mark application number
06441/1997 (MOVING STILL IMAGE) and any rights deriving from the terminated
US trademark application 75/353,932 (MOVING STILL IMAGE).
2. ASSIGNMENT
2.1 In consideration of the Co-ownership Fee, receipt of which is hereby
acknowledged, and certain other royalty payments as set out in the
Agreement for the Acquisition of Intellectual Property Rights, AG and IATM
assign the Intellectual Property into the joint names of AG and AV plc such
that upon the said assignment each party shall be a 50% co-owner
(Miteigentum) in accordance with the conditions set out in the Agreement.
2.2 The above assignment shall be subject to the obtaining of any necessary
third party consents, which the IATM Group is obliged to assist in
obtaining under the Agreement.
3. FURTHER ASSURANCE
3.1 AG and its Affiliates shall enter into all such documents and do all acts
as may be reasonably requested by AV plc to effect the purposes of this
assignment, including without limitation, all such documents and acts
necessary for effecting the aforementioned transfer of the Intellectual
Property.
3
<PAGE>
4. GOVERNING LAW
4.1 This assignment shall be governed by Swiss law.
EXECUTED BY:
IAT MULTIMEDIA INC
Place, Date
7/22/99
- ------------------------------------
Signature
/s/ Jacob Agam
- -------------------------------------
Name (in capitals)
JACOB AGAM
- ------------------------------------
Position
Chairman and Chief Executive Officer
- ------------------------------------
IAT AG
Place, Date
7/22/99
- ------------------------------------
Signature
/s/ Klaus Grissemann
- -------------------------------------
Name (in capitals)
KLAUS GRISSEMANN
- ------------------------------------
Position
Chief Financial Officer
- -----------------------------------
4
<PAGE>
ALGO VISION PLC
Place, Date
7/22/99
- ------------------------------------
Signature
/s/ Viktor Vogt
- -------------------------------------
Name (in capitals)
VIKTOR VOGT
- -------------------------------------
Position
Director
- -------------------------------------
5
<PAGE>
DATED July 22, 1999
IATM MULTIMEDIA INC
and
IAT AG
and
ALGO VISION PLC
---------------------
INTELLECTUAL PROPERTY
ASSIGNMENT
---------------------
Baker & McKenzie
100 New Bridge Street
London
EC4V 6JA
Tel: (0171) 919 1000
Fax: (0171) 919 1999
Ref: CJC/NHC/KHW
<PAGE>
INTELLECTUAL PROPERTY ASSIGNMENT
BETWEEN:
IAT MULTIMEDIA Inc, a Delaware, USA corporation ("IATM")
and
IAT AG, CH-5300 Turgi ("AG"), a Swiss corporation, which is a wholly owned
subsidiary of IATM
and
ALGO VISION PLC, a company incorporated in England and Wales with its registered
office at 2 Serjeant's Inn, London EC4Y 1LT ("AV plc")
RECITALS:
(A) Under an Agreement for the Acquisition of Intellectual Property Rights
between IATM, AG, AV plc and Algo Vision Schweiz AG ("the Agreement") AG
agreed that, subject to the admission to trading on EASDAQ of certain
shares of AV plc, AG would, on or within seven days of admission, transfer,
or where applicable procure that its Affiliates (as defined below) would
transfer, certain Intellectual Property (also as defined below) into the
joint names of AG and AV plc in the form of 50% co-ownership (Miteigentum)
in consideration of a fee of one million US dollars and certain royalty
rights.
(B) The Agreement further provided that AV plc shall be obligated, from 14 days
after the said admission but no later than 30 days thereafter, to call upon
the IATM Group to transfer its entire interest in the 50% co-ownership of
the Intellectual Property and in any Improvements (as defined below) made
or acquired by the IATM Group during the co-
2
<PAGE>
ownership period in consideration of a fee of US$2.5 million and certain
additional consideration payments.
(C) The parties have already entered into an assignment transferring the
Intellectual Property into co-ownership. This agreement is entered into in
order to effect the second stage of the ownership transfer.
OPERATIVE PROVISIONS
1. DEFINITIONS
1.1 "Admission" means the admission to trading on EASDAQ of 14,464,654 shares
of (pound)0.01 each, being the whole of the issued ordinary share capital
of AV plc and the shares forming part of the authorised share capital but
unissued share capital of AV plc sufficient to satisfy obligations to issue
further shares which it has assumed as at Admission;
1.2 "Affiliate" means, with respect to any undertaking or legal person, any
other undertaking or legal person directly or indirectly controlling,
controlled by, or under common control with such undertaking or legal
person;
1.3 "Effective Date" means the date of Admission;
1.4 "The Fee" means the fee of US $2.5 million payable by AV plc to AG to
acquire entire ownership of the Intellectual Property and the Improvements;
1.5 "IATM Group" means IATM and its Affiliates from time to time, including AG;
1.6 "Improvements" means improvements based essentially on the Intellectual
Property;
2
<PAGE>
1.7 "Intellectual Property" means the intellectual property owned or used by AG
at the date of the Spin Off Agreement, together with intellectual property
owned or used by AG at the Effective Date, including, but not limited to,
the Patent Rights and the Trade Mark Rights but, for the avoidance of
doubt, not including any rights whatsoever to the IAT name or mark,
ownership of which shall remain exclusively in the IATM Group (intellectual
property meaning, without limitation, patents, patent applications,
copyrights, trademarks, trademark registrations, service marks, service
mark registrations, inventions, trade secrets and licences of any of the
foregoing);
1.8 "The Patent Rights" means German patent application number 197 37 258.9,
European patent application number 98115394.3-2202/0899958 and US patent
application number 09/138,640;
1.9 "Spin-off Agreement" means the Spin-off Agreement of 11 March 1988 between
IATM, AG, Dr. Viktor Vogt and IATC;
1.10 "The Trade Mark Rights" means Community Trade Mark number 000623751
(WONDERBOARD), Community Trade Mark number 000623777 (MOVING STILL IMAGE),
Swiss trade mark application number 456211 (WONDERBOARD), US trademark
application 75/354,082 (WONDERBOARD), Swiss trade mark application number
06441/1997 (MOVING STILL IMAGE) and any rights deriving from the terminated
US trademark application 75/353,932 (MOVING STILL IMAGE).
2. ASSIGNMENT
2.1 In consideration of the Fee, receipt of which is hereby acknowledged, and
certain additional consideration payments, as set out in the Agreement for
the Acquisition of Intellectual Property Rights, AG and IATM hereby assign
their interest in the Intellectual Property and the Improvements entirely
into the name of AV plc.
3
<PAGE>
2.2 The above assignment shall be subject to the obtaining of any necessary
third party consents which the IATM Group is obliged to assist in obtaining
under the Agreement.
3. FURTHER ASSURANCE
3.1 AG and its Affiliates shall enter into all such documents and do all acts
as may be reasonably requested by AV plc to effect the purposes of this
assignment, including without limitation all such documents and acts
necessary for effecting the aforementioned transfer of the Intellectual
Property.
4. GOVERNING LAW
4.1 This assignment shall be governed by Swiss law.
EXECUTED BY:
IAT MULTIMEDIA INC
Place, Date
7/22/99
- ------------------------------------
Signature
/s/ Jacob Agam
- -------------------------------------
Name (in capitals)
JACOB AGAM
- ------------------------------------
Position
Chairman and Chief Executive Officer
- ------------------------------------
4
<PAGE>
IAT AG
Place, Date
7/22/99
- ------------------------------------
Signature
/s/ Klaus Grissemann
- -------------------------------------
Name (in capitals)
KLAUS GRISSEMANN
- ------------------------------------
Position
CFO
- -----------------------------------
ALGO VISION PLC
Place, Date
7/22/99
- ------------------------------------
Signature
/s/ Viktor Vogt
- -------------------------------------
Name (in capitals)
VIKTOR VOGT
- -------------------------------------
Position
Director
- -------------------------------------
5
<PAGE>
DATED July 22, 1999
(1) ALGO VISION PLC
AND
(2) IAT AG
------------------------------------------------------
SHARE EXCHANGE AND SUBSCRIPTION AGREEMENT
------------------------------------------------------
Baker & McKenzie
100 New Bridge Street
London
EC4V 6JA
Tel: (0171) 919 1000
Fax: (0171) 919 1999
Ref: CJC/KHW/CCC
<PAGE>
THIS AGREEMENT is made the 22nd day of July 1999.
BETWEEN:
(1) ALGO VISION PLC, a company incorporated in England and Wales with
registered number 3794223 whose registered office is at 2 Serjeants Inn,
London EC4Y 1LT (the "Company"); and
(2) IAT AG, a company incorporated in Switzerland with its registered office at
CH-5300 Turgi, Switzerland ("IAT")
WHEREAS:
(A) The Company is a public limited liability company incorporated in England
and Wales with an authorised share capital of (pound)200,000 divided into
20,000,000 shares of 1 pence each ("Shares") of which 7,000,000 Shares have
been issued and are fully paid or credited as fully paid.
(B) The Company intends to apply for admission ("Admission") to trading on the
European Association of Securities Dealers Automated Quotation System
("EASDAQ") for 14,464,654 Shares constituting the whole of its issued
ordinary share capital and the shares forming part of its authorised but
unissued share capital sufficient to satisfy obligations to issue further
shares which it has assumed as at Admission. For this purpose an admission
document expected to be dated on or about 8 July 1999 (the "Admission
Document") has been prepared and a copy of proof 14 thereof has been
supplied to IAT.
1
<PAGE>
(C) Conditional solely upon Admission, the Company wishes to allot 500,000 new
Shares and IAT wishes to subscribe for the same number of new Shares (the
"Subscription Shares") in exchange for shares held by IAT in the registered
share capital of Algo Vision Systems GmbH, a company incorporated in
Germany ("AV Bremen") and Algo Vision Schweiz AG, a company incorporated in
Switzerland ("AV Schweiz") on the terms and conditions set out in this
Agreement.
(D) IAT is the owner of a quota of the paid in share capital in the amount of
DM 15,000 of AV Bremen and of 150 shares of AV Schweiz (the "AV Bremen
Shares" and the "AV Schweiz Shares" respectively).
(E) As at the date of this Agreement, the Company shall execute a share
exchange and subscription agreement with the shareholders of Algo Vision
Mediatec GmbH and the remaining shareholders of AV Bremen and AV Schweiz,
pursuant to which and also conditional solely upon the Admission, the
Company shall allot 2,411,058 new Shares in exchange for shares held in the
registered share capital of Algo Vision Mediatec GmbH, AV Bremen and AV
Schweiz.
IT IS HEREBY AGREED as follows:
1. Subject only to Admission occurring on or prior to 31 July 1999, on the
date on which such Admission occurs (the "Allotment Date") IAT shall
subscribe for, and the Company shall issue and allot to IAT, the
Subscription Shares. The Subscription Shares shall be issued as fully paid
and shall rank pari passu in all respects with the existing Shares of the
Company in issue on the Allotment Date.
2. The consideration for the Subscription Shares shall be the unconditional
and irrevocable transfer by IAT of its AV Bremen Shares and AV Schweiz
Shares.
3. The Company warrants that:
2
<PAGE>
3.1 the Subscription Shares shall be allotted and issued fully paid up and in
accordance with the memorandum and articles of association of the Company;
3.2 the Company is a public limited liability company, duly organised, validly
existing, and in good standing; by "good standing" (a phrase which has no
recognised meaning under English law) it is meant that, according to the
certificate of the Registrar of Companies, the Company has, according to
the documents on the file of the Company in the custody of the Registrar,
been in continuous and unbroken existence since the date of its
incorporation and no action is currently being taken by the Registrar for
striking the Company off the register and dissolving it as defunct, and as
far as the Registrar is aware the Company is not in liquidation or subject
to an administration order and no receiver or manager of the Company's
property has been appointed. The Company has all requisite corporate power
to function as a holding company. Complete copies of the Company's
memorandum and articles of association, as amended, have been delivered to
IAT;
3.3 the execution, delivery and performance of this Agreement is within the
legal capacity and power of the Company and has been duly authorised by all
requisite corporate action on the part of the Company. This Agreement is a
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except insofar as its enforcement may
be limited by (a) bankruptcy, insolvency, moratorium or similar laws
affecting the enforcement of creditors' rights generally and (b) equitable
principles limiting the availability of equitable remedies. All persons who
executed this Agreement on behalf of the Company have been duly authorised
to do so;
3.4 as of the date hereof, the Company has an authorised share capital of
(pound)200,000 divided into 20,000,000 shares of l pence each of which
7,000,000 shares are issued and fully paid. Except as disclosed in the
Admission Document, the Company does not have outstanding any
subscriptions, options, rights, warrants, convertible securities or other
agreements or commitments to issue, or contracts or any other agreements
obligating the Company to issue any shares of any class or kind, or
securities convertible into shares;
3
<PAGE>
3.5 neither the execution of this Agreement nor the consummation of the
transactions contemplated herein will conflict with, violate or result in a
breach or constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default), or result in the termination of,
or accelerate the performance required by, or result in the creation of any
lien or encumbrance upon any of the assets of the Company under, any
provision of any memorandum, articles of association, indenture, mortgage,
lien, lease, agreement, contract, instrument, or any other restriction of
any kind or character to which the Company is subject or by which the
Company is bound, or require the consent of any third party or governmental
agency; and
3.6 the Company has power under its Memorandum and Articles of Association, and
the directors of the Company will be duly authorised, to allot and issue
the Subscription Shares and all other authorisations, approvals and
consents required by the Company to allot and issue the Subscription Shares
pursuant to this Agreement have been obtained and become unconditional and
are in full force and effect; and
3.7 the unaudited pro forma opening balance sheet of the Company as at 31
December 1998 which has been provided to IAT, fairly represents the
financial position of the Company as of that date and the Company has no
liabilities (whether absolute, actual, contingent or otherwise) as at 31
December 1998 which were required to be reflected in and disclosed in such
balance sheet in accordance with UK GAAP and which were not so reflected.
4. IAT warrants that it is the registered owner of the AV Bremen Shares and AV
Schweiz Shares, free and clear of any lien, charge, option, right of
pre-emption or other encumbrance or third party right or interest
whatsoever.
5. IAT agrees to do all such acts and things and execute such documents and
deeds at its own expense as may be necessary fully and effectively to
transfer its AV Bremen Shares and AV Schweiz Shares to the Company.
4
<PAGE>
6. The Company agrees at its own expense to do all such acts and things and
execute such documents and deeds as may be necessary fully and effectively
to allot the Subscription Shares to IAT.
7. The Company and IAT shall each bear their own taxes, duties, fees, costs
and expenses arising from or in connection with the Subscription.
8. If for any reason Admission has not taken place by 31 July 1999 or such
later date as the parties may agree, this Agreement shall terminate without
liability to any of the parties hereto.
9. This Agreement may be executed in one or more counterparts, and by the
parties on separate counterparts, but shall not be effective until each
party has executed at least one counterpart and each such counterpart shall
constitute an original of this Agreement but all the counterparts shall
together constitute one and the same instrument.
10. This Agreement shall be governed by and construed in accordance with
English law and the parties submit to the non-exclusive jurisdiction of the
English courts for the purpose of enforcing any claims arising under this
Agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement the day and
year first above written.
SIGNED by )
for and on behalf of ) /s/ Viktor Vogt
ALGO VISION PLC )
in the presence of: )
5
<PAGE>
SIGNED by )
for and on behalf of ) /s/ Klaus Grissemann
IAT AG )
in the presence of: )
6
<PAGE>
DATED July 22, 1999
(1) ALGO VISION PLC
AND
(2) IAT AG
---------------------------------------------------
SECOND SUBSCRIPTION AGREEMENT
---------------------------------------------------
Baker & McKenzie
100 New Bridge Street
London
EC4V 6JA
Tel: (0171) 919 1000
Fax: (0171) 919 1999
Ref: CJC/KHW
<PAGE>
THIS AGREEMENT is made the 22nd day of July, 1999
BETWEEN:
(1) ALGO VISION PLC, a company registered in England and Wales with registered
number 3794223 whose registered office is at 2 Serjeants' Inn, London EC4Y
1LT (the "Company"); and
(2) IAT AG, a company registered in Switzerland with its registered office at
CH-5300 Turgi, Switzerland (the "Subscriber").
WHEREAS:
(A) The Company is a public liability company incorporated in England and Wales
with an authorised share capital of (pound)200,000 divided into 20,000,000
shares of 1 p each ("Shares"), of which 7,000,000 Shares have been issued
and are fully paid up or credited as fully paid as at the date of this
Agreement.
(B) Pursuant to a Share Exchange and Subscription Agreement of even date
herewith the Subscriber has subscribed for 500,000 Shares.
(C) The Company intends to apply for the admission ("Admission") to the trading
system operated by the European Association of Securities Dealers Automated
Quotation NV/SA ("EASDAQ") of 14,464,654 Shares consisting of the whole of
its issued ordinary share capital and the shares forming part of its
authorised but unissued share capital sufficient to satisfy obligations to
issue further shares which it has assumed as at the date of Admission. For
this purpose an admission document expected to be dated on or about 8 July
1999 (the "Admission Document") has been prepared and a copy of proof 14
thereof has been supplied to IAT.
1
<PAGE>
(D) IAT AG wishes to subscribe for an additional 250,000 Shares in
consideration for the payment of $2,500,000 to the Company.
IT IS HEREBY AGREED as follows:
1. This Agreement is conditional upon Admission occurring by no later than 31
July 1999 or such later date as the Parties may agree.
2. On the date (the "Allotment Date"), which shall be a date notified by the
Company to the Subscriber in writing no earlier than 14 calendar days after
Admission and no later than 30 calendar days after Admission (or such other
dates as the parties may agree), the Subscriber shall subscribe in cash
for, and the Company shall issue and allot to the Subscriber, 250,000
Shares (the "Subscription Shares") at a price of US$10 (ten United States
Dollars) per Share (the "Subscription"). The Subscription Shares shall be
issued as fully paid and shall rank pari passu in all respects with the
existing ordinary shares of the Company in issue on the Allotment Date.
Such written notice by the Company to the Subscriber shall be given at
least two clear business days prior to the Allotment Date and shall be by
fax to:
Finance Director
IAT AG
(41) 26 921 00 93
For the purposes of this agreement, "business day" shall mean a day which
banks are open for business in New York, Zurich and London.
3. On the Allotment Date, the Subscriber shall pay to the Company a total sum
of US$2,500,000 (two million five hundred thousand United States Dollars)
in immediately available funds in consideration for the issue and allotment
to it of the Subscription Shares such payment shall be made by wire
transfer to a US dollar account of the Company with
2
<PAGE>
Lloyds TSB plc, the details of which are provided by the Company to the
Subscriber within twelve (12) calendar days of Admission.
4. The Company warrants that:
4.1. the Subscription Shares shall be allotted and issued fully paid up and
in accordance with the memorandum and articles of association of the
Company;
4.2. the Company is a public limited liability company, duly organised,
validly existing, and in good standing; by "good standing" (a phrase
which has no recognised meaning under English law) it is meant that,
according to the certificate of the Registrar of Companies, the
Company has, according to the documents on the file of the Company in
the custody of the Registrar, been in continuous and unbroken
existence since the date of its incorporation and no action is
currently being taken by the Registrar for striking the Company off
the register and dissolving it as defunct, and as far as the Registrar
is aware the Company is not in liquidation or subject to an
administration order and no receiver or manager of the Company's
property has been appointed. The Company has all requisite corporate
power to function as a holding company. Complete copies of the
Company's memorandum and articles of association, as amended, have
been delivered to Subscriber;
4.3. the execution, delivery and performance of this Agreement is within
the legal capacity and power of the Company and has been duly
authorised by all requisite corporate action on the part of the
Company. This Agreement is a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its
terms, except insofar as its enforcement may be limited by (a)
bankruptcy, insolvency, moratorium or similar laws affecting the
enforcement of creditors' rights generally and (b) equitable
principles limiting the availability of equitable remedies, All
persons who executed this Agreement on behalf of the Company have been
duly authorised to do so;
4.4. as of the date hereof, the Company has an authorised share capital of
(pound)200,000 divided into 20,000,000 shares of l pence each of which
7,000,000 shares are issued and fully
3
<PAGE>
paid. Except as disclosed in the Admission Document, the Company does
not have outstanding any subscriptions, options, rights, warrants,
convertible securities or other agreements or commitments to issue, or
contracts or any other agreements obligating the Company to issue any
shares of any class or kind, or securities convertible into shares;
4.5. neither the execution of this Agreement nor the consummation of the
transactions contemplated herein will conflict with, violate or result
in a breach or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default), or result in the
termination of, or accelerate the performance required by, or result
in the creation of any lien or encumbrance upon any of the assets of
the Company under, any provision of any memorandum, articles of
association, indenture, mortgage, lien, lease, agreement, contract,
instrument, or any other restriction of any kind or character to which
the Company is subject or by which the Company is bound, or require
the consent of any third party or governmental agency;
4.6. the Company has power under its Memorandum and Articles of
Association, and the directors of the Company will be duly authorised,
to allot and issue the Subscription Shares and all other
authorisations, approvals and consents required by the Company to
allot and issue the Subscription Shares pursuant to this Agreement
have been obtained and become unconditional and are in full force and
effect; and
4.7. the unaudited pro forma opening balance sheet of the Company as at 31
December 1998 which has been provided to Subscriber, fairly represents
the financial position of the Company as of that date and the Company
has no liabilities (whether absolute, actual, contingent or otherwise)
as at 31 December 1998 which were required to be reflected in and
disclosed in such balance sheet in accordance with UK GAAP and which
were not so reflected.
5. If for any reason Admission has not taken place by 31 July 1999, this
Agreement shall terminate without liability to either party.
4
<PAGE>
6. Each party shall bear their respective costs and expenses arising from or
in connection with the Subscription.
7. This Agreement is governed by English law and the parties submit to the
non-exclusive jurisdiction of the English Courts for the purpose of
enforcing any claims arising under this Agreement.
5
<PAGE>
IN WITNESS WHEREOF the parties hereto have executed this Agreement the day and
year first above written.
SIGNED by )
for and on behalf of ) /s/ Viktor Vogt
ALGO VISION PLC )
in the presence of: )
SIGNED by )
for and on behalf ) /s/ Klaus Grissemann
IAT AG )
in the presence of: )
6
<PAGE>
DATED July 22, 1999
(1) ALGO VISION PLC
(2) BEESON GREGORY LIMITED
(3) IAT AG
-----------------------------
LOCK-IN AGREEMENT
-----------------------------
<PAGE>
THIS AGREEMENT is made on July 22, 1999
BETWEEN:
(1) ALGO VISION PLC, a company registered in England and Wales with registered
number 3794223 whose registered office is at 2 Serjeants' Inn, London EC4Y
1LT ("COMPANY");
(2) BEESON GREGORY LIMITED, a company registered in England and Wales with
registered number 2316630 whose registered office is at The Registry, Royal
Mint Court, London EC3N 4EY ("BEESON GREGORY"); and
(3) IAT AG, company incorporated in Switzerland with its registered office at
CH-5300, Turgi, Switzerland ("IAT").
RECITALS
A. The Company is a public limited liability company incorporated in England
and Wales with an authorised share capital of (pound)200,000 divided into
20,000,000 shares of 1 pence each ("Shares") of which 7,000,000 Shares have
been issued and are fully paid or credited as fully paid.
B. The Company intends to apply for the admission ("ADMISSION") to trading on
the European Association of Securities Dealers Automated Quotation System
("EASDAQ") of 14,464,654 Shares constituting the whole of its issued
ordinary share capital and the shares forming part of its authorised but
unissued share capital sufficient to satisfy obligations to issue further
shares which it has assumed at Admission.
1
<PAGE>
C. Beeson Gregory has been appointed as Sponsor in relation to the application
for Admission in accordance with the EASDAQ Rules.
D. Rule 3550 of the EASDAQ Admission Rules (as amended) provides that, as an
issuer coming to EASDAQ for the first time, the Company is also required to
undertake that each shareholder with more than 10 per cent. of its issued
share capital at Admission will not dispose of more than 20 per cent. of
its holding for a reasonable period of time from the first day of trading
of the Shares ("TRADING COMMENCEMENT"), except through a public offering.
D. Beeson Gregory, as Sponsor of the Company, believes, and IAT acknowledges,
that because of the size of its shareholding in the Company, and having
regard to the EASDAQ Admission Rules (as amended), it is in the best
interests of the Company and of protecting the market in the Shares that
such a significant shareholder of the Company at Admission refrain from
selling or procuring the sale of Shares for a period following Admission.
E. Pursuant to a share exchange and subscription agreement between IAT and the
Company dated 22 July 1999, the Company agreed to allot to IAT 500,000
Shares in exchange for all of the shares or other equity interests held by
IAT in Algo Vision Schweiz AG and Algo Vision Systems GmbH ("ADMISSION
SHARES").
F. Pursuant to a subscription agreement between IAT and the Company dated 22
July 1999, it was agreed that IAT would subscribe for and be allotted
250,000 Shares within 30 days of Admission, in consideration of a cash
payment of US$ 2.5 million ("SUBSEQUENT SUBSCRIPTION SHARES"), and the
parties to this agreement have agreed that the provisions of this agreement
shall apply to 200,000 of such Subsequent Subscription Shares.
2
<PAGE>
NOW IT IS HEREBY AGREED as follows:
1. LOCK-IN OF IAT
IAT undertakes with the Company and Beeson Gregory that, except in the case
of a Release Event or as set out in Clauses 1.1 and 1.2 below, it will not,
and it will procure that its affiliated companies and associates will not,
transfer or otherwise dispose of any of the Admission Shares or 200,000 of
the Subsequent Subscription Shares (together the "LOCKED-UP SHARES") which
are held by IAT or any of its affiliated companies or associates or any
shares, receipts or securities of the Company into which such Shares are
sub-divided or converted (or any direct or indirect interest in such
shares, receipts or securities) during the period from Trading Commencement
until i) the date six months thereafter (inclusive) in respect of the
Admission Shares or ii) the date three months thereafter (inclusive) in
respect of 200,000 of the Subsequent Subscription Shares ("RESTRICTION
PERIOD"), provided that IAT shall be entitled to:
1.1 pledge, mortgage or otherwise charge any or all of the Locked-Up Shares
provided that such pledge, mortgage or charge is notified to Beeson
Gregory;
1.2 sell the Locked-Up Shares by way of a private placement through Beeson
Gregory with such placees (if any) as Beeson Gregory, having consulted with
the Company, shall in its absolute discretion approve; provided that:
1.2.1 prior to the making of any such transfer the transferee(s) shall have
agreed in terms reasonably acceptable to Beeson Gregory to be bound by
the provisions of this agreement; and
1.2.2 Beeson Gregory shall be under no obligation to seek or procure
placees.
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2. RELEASE EVENTS
The restrictions contained in Clause 1 shall not apply in the case of any
of the following events (each a "RELEASE EVENT"):
2.1 acceptance of a general offer for the whole of the issued equity share
capital of the Company (other than any equity share capital held by or
committed to the offeror and/or persons acting in concert with the
offeror); or
2.2 execution of an irrevocable commitment to accept a general offer for the
whole of the issued equity share capital of the Company (other than any
equity share capital held by or committed to the offeror and/or persons
acting in concert with the offeror); or
2.3 a compromise or arrangement between the Company and its creditors or any
class of them or between the Company and its members or any class of them
which is agreed to by the creditors or members; or
2.4 an order of a court of competent jurisdiction requiring any Shares to be
sold or transferred or a consent order which has the same effect.
3. DEFINITIONS
Reference in Clause 1 to:
3.1 transfer or disposal shall, subject to Clause 1.1 and 1.2, be deemed to
include sale, offer for sale, pledge, mortgage or the grant of any option
or other right to dispose of the Locked-Up Shares or the announcement of
any intention relating thereto; and
3.2 Shares shall include any securities or other financial instruments which
are convertible into or are exchangeable for Shares.
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4. NOTICES
4.1 Any notice to be given under this agreement shall be in writing and shall
be served by sending it by hand, facsimile transmission or first class
post:
4.1.1 if to the Company, to the registered office for the time being of the
Company, marked for the attention of the Company Secretary;
4.1.2 if to Beeson Gregory, to its registered office for the time being,
marked for the attention of the Head of Corporate Finance; and
4.1.3 if to IAT, to its registered office for the time being, marked for the
attention of the Finance Director;
4.2 Any notice referred to in clause 4.1 shall be deemed to have been received:
4.2.1 if delivered by hand, on the day of delivery and in proving service it
shall be necessary only to produce a receipt for the communication
signed by or on behalf of the addressee;
4.2.2 if sent by facsimile transmission, at the time of transmission or, if
the time of transmission is not during the addressee's normal business
hours, at 9.30 a.m. (UK time) on the next business day and in proving
service it shall be necessary only for the communication or a
confirmatory letter to have been delivered by hand or sent by first
class post on the same day but failure of the addressee to receive
such confirmation shall not invalidate the relevant communication
deemed given by facsimile transmission; and
4.2.3 if sent by first class post, on the second business day after the day
of posting (or five business days after the day of posting in the case
of posting to an address outside the United Kingdom) and, in proving
service, it shall be necessary only to
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prove a communication was contained in an envelope which was duly
addressed and posted in accordance with this clause.
5. COUNTERPARTS
This agreement may be executed in one or more counterparts, and by the
parties on separate counterparts, but shall not be effective until each
party has executed at least one counterpart and each such counterpart shall
constitute one and the same instrument.
6. RELEVANT LAW
This agreement shall be governed by and construed in accordance with
English Law.
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IN WITNESS WHEREOF THIS AGREEMENT HAS BEEN EXECUTED BY THE DULY AUTHORISED
REPRESENTATIVES OF THE PARTIES ON THE DATE SPECIFIED AT THE BEGINNING OF THIS
AGREEMENT
EXECUTED as a DEED )
and DELIVERED by )
ALGO VISION PLC )
acting by:- )
Director /s/ Viktor Vogt
Director/Secretary
EXECUTED as a DEED )
and DELIVERED by )
BEESON GREGORY LIMITED )
acting by:- )
Director /s/
Director/Secretary
EXECUTED as a DEED )
and DELIVERED by )
IAT AG )
acting by:- )
Director /s/ Klaus Grissemann
Director/Secretary
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