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EXHIBIT 10.11
STOCK EXCHANGE AGREEMENT
This Stock Exchange Agreement (the "Agreement") is dated this 7th day of
September, 2000, by and between Tomax technologies inc., a Utah corporation (the
"Company"), and Keith Low (the "Shareholder").
RECITALS
WHEREAS, the parties have agreed that it would be in the best interests
of the Company and the Shareholder to enter into this Agreement, pursuant to
which One Million Eighty-five Thousand Seven Hundred Fourteen (1,085,714) shares
of Common Stock held by Shareholder will be exchanged for a like number of
shares of Series B Preferred Stock issued by the Company. Holding the preferred
stock instead of common stock will enable Shareholder to receive upon redemption
of such Series B Preferred shares a cash payment of One Million Six Hundred
Eighty-five Thousand Five Hundred Seventy-One Dollars ($1,685,571.00) at the
time of the determination by the Company's board of directors to redeem, as set
forth in that certain Certificate of Designation of the Rights, Privileges and
Preferences of the Series B Preferred Stock, a copy of which is attached hereto
and incorporated herein by this reference. The exchange will benefit the Company
by allowing the Company to grant options relative to the common shares exchanged
by Shareholder, all without diluting the existing shareholder group.
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants and conditions
contained herein and of the Recitals which are incorporated herein by this
reference, the parties hereto hereby agree as follows:
1. Exchange of Shares. The Shareholder hereby agrees to exchange One
Million Eighty-five Thousand Seven Hundred Fourteen (1,085,714) shares of Common
Stock for a like number of shares of Series B Preferred Stock, all issued by the
Company. The Company hereby agrees to issue such shares of Series B Preferred
Stock ("Preferred Shares" or "Shares") to Shareholder. Both Shareholder and the
Company acknowledge and agree that Shareholder has delivered to the Company a
stock certificate representing 1,085,714 shares of Common Stock, together with
an executed Stock Power in favor of the Company and that the Company has issued
to Shareholder a certificate representing 1,085,714 shares of Series B Preferred
Stock.
2. Representations and Warranties of the Shareholder. The Shareholder
represents to the Company, as of the date hereof, that:
2.1 Title. The Shareholder is the sole record and beneficial
owner of the common shares delivered pursuant to this Agreement, such
common shares are free and clear of all liens and encumbrances, and the
Shareholder has the full and unrestricted right, power and authority to
exchange such common shares. Upon delivery of the certificate for such
common shares to the Company, and issuance by the Company of a like
number of Series B Preferred Shares as described hereinabove, the
Company will acquire good and marketable title to and complete ownership
of such common shares, free and clear of any liens and encumbrances.
2.2 Valuation. The Shareholder acknowledges that the Company is
currently in the process of preparing a registration statement for the
initial public offering of its common stock and that the valuation of
the common stock exchanged pursuant hereto is likely to be significantly
greater than the Series B Preferred Shares received in such exchange,
although no formal valuation has been done by either party.
Notwithstanding the foregoing, the Shareholder has determined to
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proceed with the transaction as his stated method of managing risk and
likely obtaining, although such is not assured, a cash redemption
payment prior to the time that he may otherwise be allowed to sell any
common shares into any public market. The Shareholder acknowledges that
he is not acting under duress or any undue influence by the Company or
any other person in the execution and performance of this Agreement.
2.3 Securities Law Representations and Warranties.
(a) INVESTMENT INTENT. The Shareholder is acquiring the Shares
for its own account for the purpose of investment and not with a view
to, or for resale in connection with, the distribution thereof. The
Shareholder understands that the Shares have not been registered under
the Securities Act of 1933, as amended (the "Securities Act") or the
securities laws of any state, and hereby agrees not to make any sale,
transfer or other disposition of any such Shares unless either (i) the
Shares first shall have been registered under the Securities Act and all
applicable state securities laws, or (ii) an exemption from such
registration is available, and the Company has received such documents
and agreements from the Shareholder and the transferee as the Company
reasonably requests at such time. A legend noting such restrictions will
be placed on such certificates.
(b) EXEMPTION FROM REGISTRATION. The Shareholder understands
and acknowledges that the offering of the Shares pursuant to this
Agreement will not be registered under the Securities Act on the grounds
that the offering and sale of the Shares contemplated by this Agreement
are exempt from registration pursuant to Regulation D or under Section
4(2) of the Securities Act, and that the Company's reliance upon such
exemption is predicated upon the Shareholder's representations set forth
in this Section 2.3.
(c) ACCREDITED INVESTOR. The Shareholder is an "accredited
investor" as defined in Rule 501(a) of Regulation D under the Securities
Act. The Shareholder has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of
its investment in the Shares. The Shareholder has received all the
information the Shareholder has requested from the Company and considers
necessary or appropriate for deciding whether to purchase the Shares.
The Shareholder has the ability to bear the economic risks inherent in
its investment in the Shares and is able, without materially impairing
its financial condition, to hold the Shares for an indefinite period of
time and to suffer a complete loss of its investment.
(d) ACCESS TO INFORMATION. The Shareholder has served as a
director of the Company since 1983, and at present continues to serve on
the Company's board of directors. The Shareholder has also been an
employee of the Company during such period and continues to be an
employee of the Company. In such capacities, the Shareholder has had the
opportunity to: (i) discuss the Company's business, management and
financial condition, affairs and prospects with the Company's
management; and (ii) visit the Company's facilities and inspect certain
of the Company's records provided by the Company.
3. Miscellaneous.
3.1 ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS. This Agreement
constitutes the entire agreement between the Shareholder and the Company
relative to the subject matter hereof and thereof. Any previous
agreement or negotiations between the Shareholder and the Company
concerning the subject matter of this Agreement is superseded by this
Agreement. The rights of the parties to this Agreement shall inure to
the benefit of and be binding upon any direct or remote successor to all
or the greater part of the properties of such party. Any other
assignment
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may be made only with the prior written consent of all the other
parties. No assignment, whether or not permitted, will relieve the
assignor of or otherwise affect the assignor's obligations with respect
to the obligations assumed by such successor.
3.2 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Utah.
3.3 LITIGATION. Each party to this Agreement irrevocably
consents and submits to the jurisdiction of the federal and state courts
sitting in Salt Lake County, Utah in any action or proceeding arising
out of or relating to this Agreement or the consummation of the
transactions contemplated in this Agreement. Each party irrevocably: (a)
agrees that all claims in respect of any such action or proceeding may
be heard and determined in these courts; (b) waives any objection that
such party now or hereafter may have to the laying of venue for any
action or proceeding arising out of or relating to this Agreement
brought in the aforementioned courts; and (c) agrees to consent to
transfer of any action involving the parties to such forum based on the
convenience and interest of the parties.
3.4 COUNTERPARTS; FACSIMILE. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument. A
facsimile copy of an executed signature page shall be deemed an
original.
3.5 NOTICES. Any notice required or permitted under this
Agreement shall be given in writing and shall be conclusively deemed
given upon actual receipt if given by hand delivery, overnight courier,
mail or facsimile transmission addressed:
if to the Shareholder, to:
Keith Low
9582 So. Daisy Meadow Cr.
Sandy, UT 84065
if to the Company, to:
Tomax Technologies, inc.
205 North 400 West
Salt Lake City, UT 84103
fax: (801) 924-3400
with a copy to:
Lyndon L. Ricks
Kruse, Landa & Maycock, L.L.C.
50 W. Broadway, Suite 800 (84101)
P.O. Box 45561
Salt Lake City, UT 84145-0561
fax: (801) 531-7091
or to such other address as the Company or the Shareholder may designate
by 10 days prior written notice to the other parties to this Agreement.
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3.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; CLAIMS. The
representations and warranties of the parties contained in or made
pursuant to this Agreement shall survive the execution and delivery of
this Agreement.
3.7 AMENDMENT, WAIVER. Any provision of this Agreement may be
amended or waived only by a written instrument signed by the Company and
the Shareholder.
3.8 EXPENSES. The Company and the Shareholder shall bear their
own expenses in connection with this transaction.
3.9 SEVERABILITY. If any provision of this Agreement, or the
application thereof, is for any reason and to any extent determined by a
court of competent jurisdiction to be invalid or unenforceable, the
remainder of this Agreement and the application of such provision to
other persons or circumstances will be interpreted so as best to
reasonably effect the intent of the parties to this Agreement. The
parties agree to use their best efforts to replace such void or
unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the greatest possible extent, the
economic, business and other purposes of the void or unenforceable
provision.
3.10 CONSTRUCTION. The headings of the Sections of this
Agreement are for convenience and shall not be considered in the
interpretation of this Agreement. The words "hereof," "hereunder" and
similar words refer to this Agreement as a whole and not to any
subdivision contained in this Agreement. References herein to a Section
or Exhibit refer to the designated Section or Exhibit of or to this
Agreement. In construing the terms of this Agreement, no presumption
shall operate in favor of or against any party as a result of its
counsel's role in drafting this Agreement.
IN WITNESS WHEREOF, the parties have executed this Stock Exchange
Agreement.
TOMAX TECHNOLOGIES INC.
By: /s/ Eric Olafson
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Eric Olafson, President
/s/ Keith Low
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KEITH LOW
