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EXHIBIT 10.40
STOCK PURCHASE AND SALE AGREEMENT
This Stock Purchase and Sale Agreement (this "Agreement") is made and
entered into as of this ___ day of ____________, 2000 by and between The Canopy
Group, Inc., a Utah corporation ("Canopy"), Caldera Systems, Inc., a Delaware
corporation ("Caldera"), and Metrowerks Holdings, Inc., a Delaware corporation
(the "Purchaser"). Canopy and Caldera shall sometimes be referred to
individually herein as a "Seller," or collectively as the "Sellers."
WHEREAS, the Sellers currently hold an aggregate of 12,010,585 shares of
the Common Stock of Lineo, Inc. (the "Company"), and Caldera and Canopy intend
to sell 2,000,000 and 1,000,000 of their respective shares of the Company's
Common Stock (the "Shares") to the Purchaser and the Purchaser intends to
purchase the Shares from the Sellers at a price of $7.50 per Share.
NOW, THEREFORE, based on the foregoing and other due and proper
consideration, the receipt and sufficiency of which is hereby acknowledged, it
is resolved that:
1. Sale of Stock. Upon execution of this Agreement, the Sellers shall sell and
deliver to the Purchaser, and the Purchaser agrees to purchase and accept from
the Sellers, free and clear of all liens, encumbrances and restrictions of any
kind or nature whatsoever other than restrictions imposed by federal and state
securities laws, on the terms and subject to the conditions set forth in this
Agreement, and for the aggregate purchase price of $22,500,000, good and
marketable title to the Shares.
2. Closing. Upon execution of this Agreement, the purchase price for the Shares
shall be delivered to each respective Seller by the Purchaser, at the option of
each Seller, in the form of a certified or bank cashier's check payable to or
upon the order of such Seller or by wire transfer to an account designated by
such Seller, and each Seller shall deliver or cause to be delivered to the
Purchaser a certificate or certificates representing the Shares being sold by
such Seller hereunder, duly endorsed for transfer, or accompanied by duly
executed assignments separate from certificate, transferring to Purchaser good
and marketable title to the Shares, free and clear of all liens, encumbrances
and restrictions of any kind or nature whatsoever other than restrictions
imposed by federal and state securities laws (the "Closing").
3. Representations and Warranties of Seller. Each Seller, severally and not
jointly, hereby represents and warrants to, and covenants and agrees with,
Purchaser that:
a. Ownership of Shares. Such Seller owns of record and beneficially all of
such Seller's Shares and has, and at all times prior to and as of the Closing
will have, good and marketable title to such Shares, free and clear of all
liens, encumbrances and restrictions of any kind or nature whatsoever other than
restrictions imposed by federal and state securities laws.
b. Delivery of Good Title. Upon delivery of the Shares and payment of the
purchase price therefor pursuant to this Agreement, Purchaser will have good and
marketable title to the Shares, free and clear of all liens, encumbrances and
restrictions of any kind or nature whatsoever other than restrictions imposed by
federal and state securities laws, which restrictions shall continue to be
applicable to the Purchaser.
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c. Organization, Good Standing and Qualification. Each Seller represents,
severally, that it: (i) is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation; (ii) is duly
qualified to transact business and is in good standing in each jurisdiction in
which such qualification is required; and (iii) has all required power and
authority necessary to carry out the transactions contemplated by this
Agreement.
d. Authorization. All corporate action on the part of each Seller, their
respective officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement, and the Stockholder Agreement (as
defined below), and all other agreements contemplated hereby to which each
Seller is a party, the performance of all obligations of each Seller hereunder
and thereunder, and the sale and issuance of the Shares being sold hereunder has
been or will be taken prior to the Closing. This Agreement, the Stockholder
Agreement, and all other agreements contemplated hereby to which each Seller is
a party constitute valid and legally binding obligations of each Seller,
enforceable in accordance with their respective terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights generally, and
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
e. Governmental Consents. No consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of either Seller is
required in connection with the consummation of the transactions contemplated by
this Agreement, except for such filings required pursuant to applicable federal
and state securities laws, which filings will be effected within the required
statutory period.
f. Offering. Subject in part to the truth and accuracy of the Purchaser's
representations set forth in Section 4 of this Agreement, the offer, sale and
issuance of the Shares as contemplated by this Agreement are exempt from the
registration requirements of the Securities Act of 1933, as amended (the "Act"),
and the qualification or registration requirements of the Law or other
applicable blue sky laws. Neither the Sellers nor any authorized agent acting on
either Seller's behalf will take any action hereafter that would cause the loss
of such exemptions.
g. No Access to Nonpublic Information. Caldera represents that none of its
officers or executive employees has, or at any time in the past has had, access
to any nonpublic information regarding or concerning the Company, and no officer
or executive employee of Caldera is, or at time was, an officer, director, or
executive employee of the Company.
h. Disclosure. Each Seller has fully provided the Purchaser with all the
information that the Purchaser has requested for deciding whether to purchase
the Shares. To its knowledge, neither this Agreement (including all the exhibits
and schedules hereto), nor any other statements or certificates made or
delivered in connection herewith contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements herein
not misleading in light of the circumstances under which they were made.
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4. Representations and Warranties of the Purchaser.
a. Suitability of Investment. The Purchaser represents to the Sellers that:
(i) it has such knowledge and experience in financial and business matters that
it is capable of evaluating the merits and risks of the investment contemplated
by this Agreement and making an informed investment decision with respect
thereto; (ii) it is able to bear the economic risk of an investment in the
Shares and can afford to sustain a substantial loss on such investment; (iii) it
has had, during the course of this transaction, the opportunity to ask questions
and receive answers from the Sellers and the Company concerning the Company and
this Agreement; (iv) it is an "accredited investor" as such term is defined in
Rule 501 under the Securities Act of 1933, as amended (the "Securities Act");
and (v) it is purchasing the Shares for its own account, for investment only and
not with a view to, or any present intention of, effecting a distribution of
such securities or any part thereof except pursuant to a registration or an
available exemption under applicable law. The purchaser acknowledges that the
Shares have not been registered under the Securities Act or the securities laws
of any state or other jurisdiction and cannot be disposed of unless the Shares
are subsequently registered under the Securities Act and any applicable state
laws or an exemption from such registration is available.
b. Shares Not Registered. The Purchaser understands that the Shares have
not been registered under the Securities Act, that there is no public market for
the Shares and that it must bear the economic risk of investment in the Company
for an indefinite period of time.
c. Authority to Purchase. The Purchaser has full right, authority and power
under its governing charter documents to enter into this Agreement and each
agreement, document and instrument to be executed and delivered by or on behalf
of the Purchaser pursuant to or as contemplated by this Agreement and to carry
out the transactions contemplated hereby and thereby, and the execution,
delivery and performance by the Purchaser of this Agreement and each such other
agreement, document and instrument have been duly authorized by all necessary
action under Purchaser's governing charter documents. This Agreement and each
agreement, document and instrument executed and delivered by the Purchaser
pursuant to or as contemplated by this Agreement constitute, or when executed
and delivered will constitute, valid and binding obligations of each Purchaser
enforceable in accordance with their respective terms. The execution, delivery
and performance by the Purchaser of this Agreement and each such other
agreement, document and instrument, and the performance of the transactions
contemplated hereby and thereby, do not and will not: (i) violate, conflict with
or result in a default (whether after the giving of notice, lapse of time, or
both) under any contract or obligation to which the Purchaser is a party or by
which it or its assets are bound; (ii) violate or result in a violation of, or
constitute a default under, any provision of any law, regulation or rule, or any
order of, or any restriction imposed by, any court or other governmental agency
applicable to the Purchaser; or (iii) require from the Purchaser any notice to,
declaration or filing with, or consent or approval of any governmental authority
or other third party.
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d. Legend. The Purchaser acknowledges and agrees that the following legend
shall be typed on each certificate evidencing any of the securities issued
hereunder held at any time by the Purchaser:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES OR BLUE SKY LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT (1) PURSUANT TO A
REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS
EFFECTIVE UNDER THE ACT OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM
REGISTRATION UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES
AND (3) IN ACCORDANCE WITH APPLICABLE STATE SECURITIES AND BLUE SKY
LAWS.
5. Conditions of Purchaser's Obligations. Purchaser's obligation to purchase and
pay for the Shares to be purchased by it shall be subject to the compliance by
each Seller with its agreements herein contained and to the fulfillment to the
Purchaser's satisfaction, or the waiver by the Purchaser, on or before and at
the Closing Date of the following conditions:
a. Satisfaction of Conditions. The representations and warranties of each
Seller contained in this Agreement shall be true and correct on and as of the
Closing Date; each of the conditions specified in this Section 5 shall have been
fulfilled to the Purchaser's satisfaction or waived in writing by the Purchaser;
and, on the Closing Date, certificates to such effect executed by the President
and Chief Financial Officer of each Seller shall have been delivered to the
Purchaser.
b. All Proceedings Satisfactory. All corporate and other proceedings taken
prior to or at the Closing in connection with the transactions contemplated by
this Agreement, and all documents and evidences incident thereto, shall be
reasonably satisfactory in form and substance to the Purchaser. All third party
and governmental consents, approvals and filings required in connection with the
consummation of the transactions hereunder (including, without limitation, all
blue sky law filings, governmental approvals pursuant to the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1986, as amended ("HSR"), and waivers of all
preemptive rights and rights of first refusal) shall have been obtained, and
shall be reasonably satisfactory in form and substance to the Purchaser. Each
Seller further covenants and agrees to use all commercially reasonable efforts
to assist the Purchaser and the Company in complying with HSR, including,
without limitation, making any necessary filings, and providing any and all
information that is reasonably requested by any government agency, the
Purchaser, or the Company in connection with the Purchaser and the Company's
compliance with HSR.
c. Stockholder Agreement. The Company, each Seller, and the Purchaser shall
have entered into the Stockholder Agreement in substantially the form attached
hereto as EXHIBIT A (the "Stockholder Agreement").
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d. Opinion of Sellers' Counsel. The Purchaser shall have received from
Parr, Waddoups, Xxxxx, Lace & Xxxxxxxx, P.C., counsel for Caldera, an opinion
(the "Caldera Opinion"), dated as of the Closing, in substantially the form
attached hereto as EXHIBIT B, and from Xxxxxxx Xxxxx & Xxxxxxx, counsel for
Canopy, an opinion (the "Canopy Opinion"), dated as of the Closing, in
substantially the form attached hereto as EXHIBIT C.
e. Consent of the Company. The Purchaser shall have received from the
Sellers written consent of the Company to the transactions contemplated in this
Agreement.
f. Warrant Purchase Agreement. The Purchaser and the Company shall have
entered into a Warrant Purchase Agreement in substantially the form attached
hereto as EXHIBIT D (the "Warrant Purchase Agreement").
7. Miscellaneous.
a. Binding Effect; Governing Law. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns. This Agreement shall be governed and interpreted under the
laws of the State of Delaware.
b. Indemnification.
(i) Each Seller agrees, severally and not jointly, to indemnify and hold
harmless the Purchaser and the Purchaser's general partners, if any
(collectively, the "Indemnitees"), against any investigations, proceedings,
claims or actions and for any expenses, damages, liabilities or losses (joint or
several) arising out of such investigations, proceedings, claims or actions that
arise out of or are based upon any breach of any representation, warranty,
agreement or covenant of such Seller contained herein. Upon written request,
each Seller agrees to reimburse the Indemnitee for any legal or other expenses
reasonably incurred in connection with investigating or defending any such
investigations, proceedings, claims or actions, as such expenses or other costs
are incurred. The Indemnitee may select their own counsel.
(ii) Each Seller agrees, severally and not jointly, from and after the date
of this Agreement until the first anniversary hereof, to indemnify the
Indemnitees against any investigations, proceedings, claims or actions and for
any expenses, damages, liabilities or losses (joint or several) arising out of
such investigations, proceedings, claims or actions that arise out of or are
based upon any breach of any representation or warranty, made by the Company in
the Warrant Purchase Agreement; provided, however, that any indemnification by
either Seller as a result of the Company's breach of said representations and
warranties shall be limited to the aggregate purchase price paid by the
Purchaser to such Seller hereunder; and provided further, that as a condition to
such indemnification obligation, each Seller may require the Indemnitee to
transfer to such Seller that number of Shares that is equal to the aggregate
amount of such indemnification divided by $7.50. Notwithstanding the limitation
of damages set forth in the preceding sentence, upon written request, each
Seller agrees to reimburse the Indemnitee for any legal or other expenses
reasonably incurred in connection with investigating or defending any such
investigations, proceedings, claims or actions, as such expenses or other costs
are incurred. The Indemnitee may select their own counsel.
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c. Dispute Resolution. In the event that after the date hereof, there is
any dispute between the Purchaser and either Seller, then the following
procedure shall be followed:
(i) Upon the occurrence of such a dispute either such Seller(s) or the
Purchaser may by written notice (the "Initial Notice") to the other party
call for the consideration of such dispute by the Seller(s), on the one
hand, and the general manager of the Metrowerks Division of Motorola's
Semiconductor Products Sector ("SPS"), or such person's successor (such
persons, the "Transaction Committee"). The Transaction Committee shall meet
to discuss, review and attempt to resolve the dispute. The Transaction
Committee may be assisted by other advisors, including accountants,
attorneys, and employees, in its discussions and review.
(ii) If the Transaction Committee is unable to reach an agreement
under clause (a) above within thirty (30) days of the Initial Notice, then
each of the Purchaser and such Seller(s) shall call for a higher level
resolution discussion, pursuant to which the Purchaser shall designate in
writing by notice to such Seller(s) within ten (10) days after the
expiration of such thirty (30) day period a higher level management
employee which shall be the President of SPS, or an equivalent position, as
the case may be, (a "High Level Management Employee") to discuss and
attempt to resolve the dispute. Such High Level Management Employee may be
assisted by other advisors, including accountants, attorneys, and
employees, in his or her discussions and negotiations with the other party.
Such Seller(s) and the Purchaser agree to negotiate in good faith with one
another for an additional period ending sixty (60) days after the date of
Initial Notice.
(A) In the event the dispute remains unresolved after the passage
of sixty (60) days after the date of the Initial Notice, then such
parties may attempt to settle any claim or controversy arising out of
it through consultation and negotiation in good faith and a spirit of
mutual cooperation. If those attempts fail, then the dispute will be
mediated by a mutually-acceptable mediator to be chosen by the
Purchaser and such Seller(s) (the "Mediator"). Neither the Purchaser
nor such Seller(s) may unreasonably withhold consent to the selection
of a mediator, and the Purchaser and such Seller(s) will share the
costs of the mediation equally.
(iii) Any dispute which the Purchaser and the Seller(s) cannot resolve
through negotiation or mediation within ninety (90) days of the date of the
initial demand for it by either the Purchaser or such Seller(s) may then be
submitted to the courts within the State of Delaware for resolution. The
use of any procedures under this Section 7(c)(iii) will not be construed
under the doctrines of laches, waiver or estoppel to affect adversely the
rights of either party, and nothing in this paragraph will prevent either
the Seller(s) or the Purchaser from resorting to judicial proceedings if
(a) good faith efforts to resolve the dispute under these procedures have
been unsuccessful or (b) interim relief from a court is necessary to
prevent serous and irreparable injury to one party or to others.
(iv) Notwithstanding any of the procedures set forth in this Section
7(c), any controversy involving intellectual property may be brought
immediately to the federal courts within the State of Delaware for
resolution without resorting to the transaction committee or mediation
provisions set forth herein.
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d. Nondisclosure. Neither the Purchaser nor either Seller shall issue any
press release or make any other public disclosure (including disclosure to
public officials) with respect to this Agreement or the transactions
contemplated by this Agreement, except as required by law, without the prior
approval of the other party, which approval shall not be unreasonably withheld;
provided, that either party may, if considered necessary by its counsel to
fulfill its obligations as a publicly traded corporation, respond to inquiries
and issue such releases as it considers necessary and appropriate, if it
notifies the other party in advance of the substance of such proposed response
or proposed release and gives such party reasonable opportunity for comment
prior to such response or release.
e. Notice. Unless otherwise provided, any notice under this Agreement shall
be given in writing and shall be deemed effectively given (a) upon personal
delivery to the party to be notified, (b) upon confirmation of receipt by fax by
the party to be notified, (c) one business day after deposit with a reputable
overnight courier, prepaid for overnight delivery and addressed as set forth
below, or (d) three days after deposit with the United States Post Office,
postage prepaid, registered or certified with return receipt requested and
addressed to the party to be notified at the address indicated below, or at such
other address as such party may designate by 10 days' advance written notice to
the other party given in the foregoing manner.
If to the Purchaser:
Metrowerks Holdings, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Attn: President
Fax: (000) 000-0000
with a copy to:
Motorola, Inc.
Law Department
0000 X. Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: General Counsel
If to Caldera;
Caldera Systems, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxx, XX 00000
Attn: President
If to Canopy:
The Canopy Group, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxx, XX 00000
Attn: Xxxxx Xxxxx
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with a copy to:
Xxxxxx Xxxxx & Xxxxxxx
000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxxxxxx
Fax: (000) 000-0000
e. Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, including counterparts transmitted by telecopier or
telefax, each of which when so executed and delivered shall be taken to be an
original; but such counterparts shall together constitute one and the same
document.
(This space intentionally left blank.)
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first set forth above.
SELLERS:
THE CANOPY GROUP, INC.
By:
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Name:
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Title:
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CALDERA SYSTEMS, INC.
By:
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Name:
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Title:
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PURCHASER
METROWERKS HOLDINGS, INC.
By:
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Name:
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Title:
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Lineo, Inc. hereby acknowledges the terms of this Agreement and consents to the
sale of shares of its Common Stock as contemplated hereby:
LINEO, INC.
By:
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Name:
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Title:
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