Exhibit 10.4
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made this 26th day of July
2005 by D. Xxxxxx Xxxxxxxxx, an individual ("Buyer"), and Ramtron
International Corporation, a Delaware corporation ("Seller").
RECITALS
WHEREAS, Seller desires to sell, and Buyer desires to purchase, all of the
issued and outstanding shares (the "Shares") of capital stock of Mushkin,
Inc., a Colorado corporation (the "Company"), for the consideration and on
the terms set forth in this Agreement;
WHEREAS, Seller is the owner of all of the Shares of the Company;
WHEREAS, Buyer has held the position of Vice President and General Manager of
the Company since March 2005 and prior to such time was primarily responsible
for operating the Company as a consultant for approximately two years; and
WHEREAS, due to Buyer's relationships with the Company, Buyer has significant
knowledge and experience with respect to the Company.
AGREEMENT
NOW THEREFORE, in consideration of the Recitals that shall be deemed to be a
substantive part of this Agreement, the mutual covenants, promises,
agreements, representations and warranties contained in this Agreement, and
other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto do hereby covenant, promise,
agree, represent and warrant as follows:
ARTICLE 1. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Article 1:
"Account Receivable Amount" means Seven Hundred Eighty Eight Thousand Four
Hundred Seventy Six dollars and no/100 (U.S. $788,476.00);
"Breach" shall be deemed to have occurred of a representation, warranty,
covenant, obligation, or other provision of this Agreement or any instrument
delivered pursuant to this Agreement if there is or has been (a) any
inaccuracy in or breach of, or any failure to perform or comply with, such
representation, warranty, covenant, obligation, or other provision, or (b)
any claim (by any Person) or other occurrence or circumstance that is or was
inconsistent with such representation, warranty, covenant, obligation, or
other provision, and the term "Breach" means any such inaccuracy, breach,
failure, claim, occurrence, or circumstance.
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"Buyer" shall have the meaning set forth in the first paragraph of this
Agreement.
"Closing" shall have the meaning set forth in Article 2.3.
"Closing Date" shall mean the date and time as of which the Closing actually
takes place.
"Company" shall have the meaning set forth in the Recitals of this Agreement.
"Consent" means any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"Contemplated Transactions" means all of the transactions contemplated by
this Agreement, including:
(a) the sale of the Shares by Seller to Buyer;
(b) the execution, delivery, and performance of the Promissory Note;
(c) the performance by Buyer and Seller of their respective covenants
and obligations under this Agreement; and
(d) Buyer's acquisition and ownership of the Shares and exercise of
control over the Company.
"Contract" means any agreement, contract, obligation, promise, or undertaking
(whether written or oral and whether express or implied) that is legally
binding.
"Damages" shall have the meaning set forth in Article 5.2.
"Encumbrance" means any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right
of first refusal, or restriction of any kind, including any restriction on
use, voting, transfer, receipt of income, or exercise of any other attribute
of ownership.
"Fraud" means any intentional false or bad faith representation of a matter
of fact by a party hereto or any director, officer, employee or agent of such
Party, whether by word or conduct, by false or misleading allegations, or by
concealment of that which should have been disclosed, which deceives and is
intended to deceive the defrauded party so that such party will act upon it
to its legal injury.
"Governmental Authorization" means any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to
any Legal Requirement.
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"Governmental Body" means any:
(a) nation, state, county, city, town, village, district, or other
jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official,
or entity and any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.
"IRC" means the Internal Revenue Code of 1986, as amended, or any successor
law, and regulations issued by the IRS pursuant to the Internal Revenue Code
or any successor law.
"IRS" means the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department of the
Treasury.
"Knowledge" means an individual will be deemed to have "Knowledge" of a
particular fact or other matter if such individual is:
(a) actually aware of such fact or other matter; or
(b) with respect to the Seller, the actual knowledge of Seller's
directors and officers, not including the Buyer.
"Legal Requirement" means any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution,
law, ordinance, principle of common law, regulation, statute, or treaty.
"Order" means any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"Organizational Documents" means (a) the Articles or certificate of
incorporation and the bylaws of a corporation; (b) any charter or similar
document adopted or filed in connection with the creation, formation, or
organization of a Person; and,(c) any amendment to any of the foregoing.
"Person" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company,
joint venture, estate, trust, association, organization, labor union, or
other entity or Governmental Body.
"Proceeding" means any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative,
or informal) commenced, brought, conducted, or heard by or before, or
otherwise involving, any Governmental Body or arbitrator.
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"Promissory Note" shall have the meaning set forth in Article 2.2(c).
"Representative" means with respect to a particular Person, any director,
officer, employee, agent, consultant, advisor, or other representative of
such Person, including legal counsel, accountants, and financial advisors.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"Seller" shall have the meaning set forth in the first paragraph of this
Agreement.
"Shares" shall have the meaning set forth in the Recitals of this Agreement.
"Subsidiary" means with respect to any Person (the "Owner"), any corporation
or other Person of which securities or other interests having the power to
elect a majority of that corporation's or other Person's board of directors
or similar governing body, or otherwise having the power to direct the
business and policies of that corporation or other Person (other than
securities or other interests having such power only upon the happening of a
contingency that has not occurred) are held by the Owner or one or more of
its Subsidiaries; when used without reference to a particular Person,
"Subsidiary" means a Subsidiary of the Company.
"Tax" means any county, state, federal or foreign net or gross income,
receipts, franchise, estimated, alternative minimum, add-on minimum, sales,
use, transfer, registration, consumption, capital, large corporations, goods
and services, workers compensation, ad valorem, withholding, production,
health, value added, excise, natural resources, severance, stamp, occupation,
premium, windfall profits, assets, environmental (including under Section 59A
of the Code), customs duty, real property, real property gains, personal
property, capital stock, social security, unemployment, pension, disability,
payroll, license, employee or other withholding or other tax, assessment,
fee, levy or other governmental charge of any kind whatever, whether disputed
or not, including any interest, penalties or additions to tax or additional
amounts in respect of the foregoing.
"Tax Return" means any return (including any information return), report,
statement, schedule, notice, form, or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment,
collection, or payment of any Tax or in connection with the administration,
implementation, or enforcement of or compliance with any Legal Requirement
relating to any Tax.
"Threatened" means a claim, Proceeding, dispute, action, or other matter will
be deemed to have been "Threatened" if any demand or statement has been made
(orally or in writing) or any notice has been given (orally or in writing),
or if any other event has occurred or any other circumstances exist, that
would lead a prudent Person to conclude that such a claim, Proceeding,
dispute, action, or other matter is likely to be asserted, commenced, taken,
or otherwise pursued in the future.
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ARTICLE 2. SALE AND TRANSFER OF SHARES; CLOSING
2.1 SHARES
Subject to the terms and conditions of this Agreement, at the Closing, Seller
will sell and transfer the Shares to Buyer, and Buyer will purchase the
Shares from Seller.
2.2 PURCHASE PRICE
The total purchase price (the "Purchase Price") for the Shares, determined
based on financial statements of the Company compiled July 15, 2005, will be
One Million Eight Hundred Ten Thousand Nine Hundred and Sixteen Dollars (U.S.
$1,810,916.00). The Purchase Price shall be paid to Seller as follows:
(a) Eight Hundred Twenty Two Thousand Four Hundred and Forty Dollars
(U.S. $822,440.00) ("Cash Portion of the Purchase Price") in
immediately available funds as of the Closing Date which funds
shall be immediately withdrawn by Seller from the Company's
Operating Account at the Xxxxx Fargo Bank, N.A., Denver, Colorado
(the "Account");
(b) an assignment by the Company to the Seller of all of the Company's
right, title and interest in the Account Receivable Amount, and
authorization by the Company for the Seller to withdraw certain
funds from the Account pursuant to the terms of the Accounts
Receivable Agreement;
(c) execution and delivery by the Company to the Seller of the $100,000
Promissory Note payable to Seller; and
(d) $100,000.00 paid by Buyer to Seller in good funds at Closing.
2.3 CLOSING
The purchase and sale (the "Closing") provided for in this Agreement will
take place at the offices of Seller's counsel at Xxxx Xxxxx XXX, 00 Xxxxxx
Xxxxxx, 0xx Xxxxx, 0000 00xx Xxxxxx, Xxxxxx, XX 00000, on July 26, 2005 at
10:00 a.m. (local time).
2.4 CLOSING OBLIGATIONS
At the Closing:
(a) Seller will deliver to Buyer:
(i) on or before 5 days after Closing, Seller shall deliver signed
certificates representing the Shares to Buyer;
(ii) letters of resignations from each of the Company's directors
and officers effective upon the Closing (or effective upon
execution of the Shares by an officer or director executing
such Shares), except that Seller shall not be required to
cause the termination of employment of D. Xxxxxx Xxxxxxxxx,
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Vice President and General Manager, and Xxxxx Xxxx, Division
Manager, it being the desire of the Buyer to retain the
employment of such individuals after Closing.
(iii) Request for Consent to Assignment of Lease which shall be
mutually executed by Seller, Buyer and the Company, and
subsequently presented by the Company to the Landlord
thereunder seeking the Landlord's consent to such assignment.
(iv) Certificate of Good Standing for Ramtron International
Corporation;
(v) Certificate of Good Standing for Mushkin, Inc.
(vi) To the extent available to Seller prior to Closing, and if not
available at Closing, Seller will use its best efforts after
closing to obtain Certificates of Authority for states within
the United States in which Mushkin, Inc. has been authorized
to do business;
(vii) Organizational documents for Mushkin, Inc.
(b) Seller shall be authorized to immediately withdraw:
(i) the Cash Portion of the Purchase Price as set forth in
paragraph 2.2(a) of this Agreement; and
(ii) pursuant to the terms of the Account Receivable Agreement,
certain monies held in the Account.
(c) Buyer, as an individual, shall:
(i) execute and deliver this Agreement to Seller; and
(ii) deliver $100,000 in good funds to Seller;
(d) Buyer, as the sole owner of the Shares received from the Seller
herein and on behalf of the Company, acknowledges and approves of
all of the Company's obligations set forth in this Agreement, and
shall cause the Company at Closing to deliver to the Seller the
fully authorized and properly executed:
(i) Promissory Note; and
(ii) Account Receivable Agreement.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
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3.1 ORGANIZATION AND GOOD STANDING
(a) The Company is a corporation duly organized, validly existing, and
in good standing under the laws of its jurisdiction of
incorporation, with full corporate power and authority to conduct
its business as it is now being conducted, to own or use the
properties and assets that it purports to own or use. To the best
of its knowledge, the Company is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
state or other jurisdiction in which either the ownership or use of
the properties owned or used by it, or the nature of the activities
conducted by it, requires such qualification.
(b) Seller has delivered to Buyer copies of the Organizational
Documents of the Company, as currently in effect.
3.2 AUTHORITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid, and binding obligation
of Seller, enforceable against Seller in accordance with its terms.
Upon the execution and delivery by Seller of the any certificates
or other required closing documents (collectively, the "Seller's
Closing Documents"), the Seller's Closing Documents will constitute
the legal, valid, and binding obligations of Seller, enforceable
against Seller in accordance with their respective terms. Seller
has the absolute and unrestricted right, power, authority, and
capacity to execute and deliver this Agreement and the Seller's
Closing Documents and to perform its obligations under this
Agreement and the Seller's Closing Documents.
(b) Except as known by the Buyer or as previously disclosed by the
Seller to the Buyer, neither the execution and delivery of this
Agreement nor the consummation or performance of any of the
Contemplated Transactions will, directly or indirectly (with or
without notice or lapse of time):
(i) contravene, conflict with, or result in a violation of (A) any
provision of the Organizational Documents of the Company, or
(B) any resolution adopted by the board of directors or the
stockholders of the Company;
(ii) contravene, conflict with, or result in a violation of, or
give any Governmental Body or other Person the right to
challenge any of the Contemplated Transactions or to exercise
any remedy or obtain any relief under any Legal Requirement or
any Order to which the Company or either Seller, or any of the
assets owned or used by the Company, may be subject; or
(iii) contravene, conflict with, or result in a violation of any of
the terms or requirements of, or give any Governmental Body
the right to revoke, withdraw, suspend, cancel, terminate, or
modify, any Governmental Authorization that is held by the
Company or that otherwise relates to the business of, or any
of the assets owned or used by, the Company.
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To the Seller's and Buyer's knowledge, neither the Seller nor the Company is
or will be required to give any notice to or obtain any Consent from any
Person in connection with the execution and delivery of this Agreement or the
consummation or performance of any of the Contemplated Transactions except
with respect to obtaining the Consent to: i) this transaction from Silicon
Valley Bank ("SVB"), 0000 Xxxxxxxx Xxx. Xxxxxxx, XX 00000 (which may
necessitate a release of any lien granted by Seller in favor of SVB in which
event Seller shall obtain such Consent and/or release from SVB) ; and, ii)
assignment of the Standard Office Lease (the "Lease") between the Company, as
a subsidiary of Seller, and Tremont Place, LLC for the premises located at
Xxxxx 000, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000. With respect to
SVB and/or the Lease, Seller, Buyer and the Company shall cooperate after
Closing to obtain the necessary Consents and/or releases contemplated herein.
3.3 CAPITALIZATION
The authorized equity securities of the Company consist of 1,000 shares of
common stock, par value $.01 per share, of which 1,000 shares are issued and
outstanding and constitute the Shares. Seller is the record and beneficial
owner and holder of the Shares, free and clear of all Encumbrances. Except
for the transfer limitation ledger describing that the Shares are not
registered under the Securities Act, no legend or other reference to any
purported Encumbrance appears upon any certificate representing equity
securities of the Company. All of the outstanding equity securities of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable.
3.4 NO SUBSIDIARIES
The Company does not have any subsidiaries and does not, directly or
indirectly, own any interest in or control any corporation, partnership,
joint venture, or other business entity.
3.5 BOOKS AND RECORDS
The books of account, minute books, stock record books, and other records of
the Company, all of which have been previously made available to Buyer, and
to which Buyer has been fully aware in his capacity as a consultant and/or
officer operating the Company, are complete and correct and have been
maintained in accordance with sound business practices. The minute books of
the Company contain accurate and complete records of all meetings held of,
and corporate action taken by, the stockholders, the Boards of Directors, and
committees of the Boards of Directors of the Company, and no meeting of any
such stockholders, Board of Directors, or committee has been held for which
minutes have not been prepared and are not contained in such minute books. At
the Closing, all of those books and records will be in the possession of the
Company.
3.6 TITLE TO PROPERTIES; ENCUMBRANCES
The Company owns all the properties and assets (whether real, personal, or
mixed and whether tangible or intangible) that they purport to own located in
the facilities owned or operated by the Company or reflected as owned in the
books and records of the Company.
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3.7 TAXES
(a) The Company has filed or caused to be filed all Tax Returns that
are or were required to be filed by or with respect to the Company
pursuant to applicable Legal Requirements. The Company has paid, or
made provision for the payment of, all Taxes that have or may have
become due pursuant to those Tax Returns or otherwise, or pursuant
to any assessment received by Seller or the Company.
(b) All Tax Returns filed by (or that include on a consolidated basis)
the Company are true, correct, and complete. There is no tax
sharing agreement that will require any payment by the Company
after the date of this Agreement.
3.8 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS
To Seller's Knowledge, Seller has conducted and is conducting the Company's
business in compliance with all applicable Legal Requirements of all
Governmental Bodies. To Seller's Knowledge, neither the real or personal
properties owned, leased, operated or occupied by the Company, nor the use,
operation or maintenance thereof, (i) violates any Legal Requirements of any
Governmental Body, or (ii) violates any restrictive or similar covenant,
agreement, commitment, understanding or arrangement.
3.9 LEGAL PROCEEDINGS; ORDERS
(a) There is no pending Proceeding:
(i) that has been commenced by or against the Company or that
otherwise relates to or may affect the business of, or any of
the assets owned or used by, the Company; or
(ii) challenges, or that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any
of the Contemplated Transactions.
To the Knowledge of Seller, (1) no such Proceeding has been Threatened, and
(2) no event has occurred or circumstance exists that may give rise to or
serve as a basis for the commencement of any such Proceeding.
3.10 CONTRACTS; NO DEFAULTS
Seller has provided Buyer with access to all contracts under which the
Company is providing services (collectively, the "Service Contracts"). To
Seller's Knowledge each of the Service Contracts is in full force and effect,
is valid and binding upon each of the parties thereto and is fully
enforceable by the Company against the other party thereto in accordance with
its terms.
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3.11 EMPLOYEES
No employee or director of the Company is a party to, or is otherwise bound
by, any agreement or arrangement, including any confidentiality,
noncompetition, or proprietary rights agreement, between such employee or
director and any other Person ("Proprietary Rights Agreement") that in any
way adversely affects or will affect (i) the performance of his duties as an
employee or director of the Company, or (ii) the ability of the Company to
conduct its business, including any Proprietary Rights Agreement with Seller
or the Company by any such employee or director. To Seller' Knowledge, no
director, officer, or other key employee of the Company (other than: Xxxxxxx
X. Xxxxxxxx, Xxxx X. Xxxxx, Xxxx Xxxxxx, Xxxx X. Xxxxxxxx and Xxx Xxxx)
intends to terminate his employment with the Company.
Notwithstanding anything in this Agreement to the contrary, Seller, Buyer
and the Company acknowledge the March 4, 2005 letter agreement (the "Letter
Agreement") between D. Xxxxxx Xxxxxxxxx and the Company concerning employment
with the Company. In consideration of the covenants set forth herein, the
Parties agree that the Letter Agreement shall be deemed null and void
effective upon Closing and the parties to the Letter Agreement shall be
relieved of and hereby release each other from and against any and all rights,
obligations and liabilities associated with such Letter Agreement.
3.12 INTELLECTUAL PROPERTY
Seller has provided Buyer with access to all of the Company's patents, patent
applications, trademarks, trade names, or trademark or trade name
registrations, service marks, and copyrights or copyright registrations (the
"Proprietary Rights"). All of the Company's Proprietary Rights are valid,
enforceable, in full force and effect and free and clear of any and all
security interests, liens, pledges and encumbrances of any nature or kind.
The Company has not licensed, leased or otherwise assigned, transferred or
granted any right to use any of its Proprietary Rights to any other Person.
Notwithstanding the foregoing, to the extent Seller has pledged any
Proprietary Rights or other rights to SVB (See, Paragraph 3.2(b)), then
Seller shall cause any lien created by such pledge to be terminated and/or
released. Buyer acknowledges the existence of two patent applications
(Serial #10/904,980 {Memory Heatsink, filed December 8, 2004} and Serial
#29/216,013 {Memory Card Heatsink filed October 28, 2004}) that were
originally filed by D. Xxxxxx Xxxxxxxxx and subsequently assigned by
Xx. Xxxxxxxxx to the Company.
3.13 DISCLOSURE
(a) No representation or warranty of Seller in this Agreement omits to
state a material fact necessary to make the statements herein or
therein, in light of the circumstances in which they were made, not
misleading.
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(b) There is no fact known to Seller that has specific application to
Seller or the Company (other than general economic or industry
conditions) and that materially adversely affects the assets,
business, prospects, financial condition, or results of operations
of the Company (on a consolidated basis) that has not been set
forth in this Agreement.
3.14 BROKERS OR FINDERS
Seller and its agents have incurred no obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions or other
similar payment in connection with this Agreement, other than the
representation of Seller by Unterberg & Associates ("Unterberg"). Seller
shall pay any fee due Unterberg that may arise out of the transaction
contemplated by this Agreement.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 ORGANIZATION AND GOOD STANDING
Buyer is an individual.
4.2 AUTHORITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid, and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms.
Upon the execution and delivery by Buyer of the Promissory Note and
any other required closing documents (collectively, the "Buyer's
Closing Documents"), the Buyer's Closing Documents will constitute
the legal, valid, and binding obligations of Buyer, enforceable
against Buyer in accordance with their respective terms. Buyer has
the absolute and unrestricted right, power and authority to execute
and deliver this Agreement and the Buyer's Closing Documents and to
perform its obligations under this Agreement and the Buyer's
Closing Documents.
(b) Neither the execution and delivery of this Agreement by Buyer nor
the consummation or performance of any of the Contemplated
Transactions by Buyer will give any Person the right to prevent,
delay, or otherwise interfere with any of the Contemplated
Transactions pursuant to:
(i) any Legal Requirement or Order to which Buyer may be subject;
or
(ii) any Contract to which Buyer is a party or by which Buyer may
be bound.
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Buyer is not and will not be required to obtain any Consent from any Person
in connection with the execution and delivery of this Agreement or the
consummation or performance of any of the Contemplated Transactions. To
Buyer's knowledge, the following parties have entered into agreements with
the Company which give rise to rights and obligations of the Company to which
the Buyer has knowledge:
Tiger Direct
ABS
Monarch
PC Club
Best Buy
Fry's Electronics
Xxxxxx Micro
Microcenter
4.3 INVESTMENT INTENT
Buyer is acquiring the Shares for his own account and not with a view to
their distribution within the meaning of Article 2(11) of the Securities Act.
4.4 CERTAIN PROCEEDINGS
There is no pending Proceeding that has been commenced against Buyer and that
challenges, or may have the effect of preventing, delaying, making illegal,
or otherwise interfering with, any of the Contemplated Transactions. To
Buyer's Knowledge, no such Proceeding has been Threatened.
4.5 BROKERS OR FINDERS
Buyer and its officers and agents have incurred no obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with this Agreement.
ARTICLE 5. INDEMNIFICATION; REMEDIES
5.1 SURVIVAL
All representations, warranties, covenants, and obligations in this Agreement,
and any other certificate or document delivered pursuant to this Agreement
will survive the Closing.
5.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER
Seller will indemnify and hold harmless Buyer, the Company, and their
respective Representatives, stockholders, controlling persons, and affiliates
(collectively, the "Indemnified Persons") for, and will pay to the
Indemnified Persons the amount of, any loss, liability, claim, damage
(including incidental and consequential damages), expense (including costs of
investigation and defense and reasonable attorneys' fees) or diminution of
value, whether or not involving a third-party claim (collectively, "Damages"),
arising, directly or indirectly, from or in connection with:
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(a) any Breach of any representation or warranty made by Seller in this
Agreement, or any other certificate or document delivered by Seller
pursuant to this Agreement; provided, that Buyer due to Buyer's
history with the Company had no Knowledge at or prior to Closing
that such representation or warranty was in fact inaccurate or
false and failed to inform the Seller of such inaccuracy or false
nature of the representation or warranty; or
(b) any Breach by Seller of any covenant or obligation of the Seller in
this Agreement.
The remedies provided in this Article 5.2 will not be exclusive of or limit
any other remedies that may be available to Buyer or the other Indemnified
Persons.
5.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER
Buyer will indemnify and hold harmless Seller, and will pay to Seller the
amount of any Damages arising, directly or indirectly, from or in connection
with (a) any Breach of any representation or warranty made by Buyer in this
Agreement or in any certificate delivered by Buyer pursuant to this Agreement,
(b) any Breach by Buyer of any covenant or obligation of Buyer in this
Agreement or (c) any liability, obligation or warranty of the Company that
exists as of July 15, 2005, regardless of when such liability, obligation or
warranty was made or incurred by the Company.
5.4 TIME LIMITATIONS
Seller will have no liability (for indemnification or otherwise) with respect
to any representation or warranty, or covenant or obligation to be performed
and complied with unless on or before July 14, 2006 Buyer notifies Seller of
a claim specifying the factual basis of that claim in reasonable detail to
the extent then known by Buyer. Buyer will have no liability (for
indemnification or otherwise) with respect to any representation or warranty,
or covenant or obligation to be performed and complied with unless on or
before July 14, 2006 Seller notifies Buyer of a claim specifying the factual
basis of that claim in reasonable detail to the extent then known by Seller.
5.5 LIMITATIONS ON AMOUNT--SELLER
Seller will have no liability (for indemnification or otherwise) with respect
to the matters described in Article 5.2 until the total of all Damages
exceeds Five Thousand Dollars ($5,000). Seller's aggregate liability for any
and all Damages shall not exceed the amount of Fifty Thousand Dollars
($50,000). Notwithstanding the limitations of indemnification set forth in
the immediately preceding sentence, the parties agree that nothing herein
limits any potential remedies of the Buyer or any of its affiliates arising
under applicable state and federal common laws with respect to Fraud
committed by Seller, the Company or any director, officer, employee or agent
of the Company.
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5.6 LIMITATIONS ON AMOUNT--BUYER
Buyer will have no liability (for indemnification or otherwise) with respect
to the matters described in Article 5.3 until the total of all Damages
exceeds Five Thousand Dollars ($5,000), and in no event shall Buyer be liable
for total Damages greater than Fifty Thousand Dollars ($50,000).
Notwithstanding the limitations of indemnification set forth in the
immediately preceding sentence, the parties agree that nothing herein limits
any potential remedies of the Seller or any of its affiliates arising under
applicable state and federal common laws with respect to Fraud committed by
Buyer or any director, officer, employee or agent of Buyer.
5.7 PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS
(a) Promptly after receipt by an indemnified party under Article 5.2 of
notice of the commencement of any Proceeding against it, such
indemnified party will, if a claim is to be made against an
indemnifying party under such Article, give notice to the
indemnifying party of the commencement of such claim, but the
failure to notify the indemnifying party will not relieve the
indemnifying party of any liability that it may have to any
indemnified party, except to the extent that the indemnifying party
demonstrates that the defense of such action is prejudiced by the
indemnifying party's failure to give such notice.
(b) If any Proceeding referred to in this Article is brought against an
indemnified party and it gives notice to the indemnifying party of
the commencement of such Proceeding, the indemnifying party will,
unless the claim involves Taxes, be entitled to participate in such
Proceeding and, to the extent that it wishes (unless (i) the
indemnifying party is also a party to such Proceeding and the
indemnified party determines in good faith that joint
representation would be inappropriate, or (ii) the indemnifying
party fails to provide reasonable assurance to the indemnified
party of its financial capacity to defend such Proceeding and
provide indemnification with respect to such Proceeding), to assume
the defense of such Proceeding with counsel satisfactory to the
indemnified party and, after notice from the indemnifying party to
the indemnified party of its election to assume the defense of such
Proceeding, the indemnifying party will not, as long as it
diligently conducts such defense, be liable to the indemnified
party under this Article 5.7 for any fees of other counsel or any
other expenses with respect to the defense of such Proceeding,
in each case subsequently incurred by the indemnified party in
connection with the defense of such Proceeding, other than
reasonable costs of investigation. If the indemnifying party
assumes the defense of a Proceeding, (i) it will be conclusively
established for purposes of this Agreement that the claims made in
that Proceeding are within the scope of and subject to
indemnification; (ii) no compromise or settlement of such claims
may be effected by the indemnifying party without the indemnified
party's consent unless (A) there is no finding or admission of any
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violation of Legal Requirements or any violation of the rights of
any Person and no effect on any other claims that may be made
against the indemnified party, and (B) the sole relief provided is
monetary damages that are paid in full by the indemnifying
party; and (iii) the indemnified party will have no liability with
respect to any compromise or settlement of such claims effected
without its consent. If notice is given to an indemnifying party of
the commencement of any Proceeding and the indemnifying party does
not, within ten (10) days after the indemnified party's notice is
given, give notice to the indemnified party of its election to
assume the defense of such Proceeding, the indemnifying party will
be bound by any determination made in such Proceeding or any
compromise or settlement effected by the indemnified party.
(c) Notwithstanding the foregoing, if an indemnified party determines
in good faith that there is a reasonable probability that a
Proceeding may adversely affect it or its affiliates other than as
a result of monetary damages for which it would be entitled to
indemnification under this Agreement, the indemnified party may, by
notice to the indemnifying party, assume the exclusive right to
defend, compromise, or settle such Proceeding, but the indemnifying
party will not be bound by any determination of a Proceeding so
defended or any compromise or settlement effected without its
consent (which may not be unreasonably withheld).
(d) Seller hereby consents to the non-exclusive jurisdiction of any
court in which a Proceeding is brought against any Indemnified
Person for purposes of any claim that an Indemnified Person may
have under this Agreement with respect to such Proceeding or the
matters alleged therein, and agree that process may be served on
Seller with respect to such a claim anywhere in the world.
5.8 PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS
A claim for indemnification for any matter not involving a third-party claim
may be asserted by notice to the party from whom indemnification is sought.
ARTICLE 6. GENERAL PROVISIONS
6.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party to this
Agreement will bear its respective expenses incurred in connection with the
preparation, execution, and performance of this Agreement and the
Contemplated Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants.
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6.2 PUBLIC ANNOUNCEMENTS
Any public announcement or similar publicity with respect to this Agreement
or the Contemplated Transactions will be issued, if at all, at such time and
in such manner as Seller determines. Unless consented to by Seller in advance
or required by Legal Requirements, prior to any public announcement, Buyer
shall keep this Agreement strictly confidential and may not make any
disclosure of this Agreement to any Person. Seller and Buyer will consult
with each other concerning the means by which the Company' employees,
customers, and suppliers and others having dealings with the Company will be
informed of the Contemplated Transactions, and Buyer will have the right to
be present for any such communication.
6.3 CONFIDENTIALITY
Buyer and Seller will maintain in confidence, and will cause the directors,
officers, manager, employees, agents, and advisors of Buyer and the Company
to maintain in confidence, any written, oral, or other information obtained
in confidence from another party or the Company in connection with this
Agreement or the Contemplated Transactions, unless (a) such information is
already known to such party or to others not bound by a duty of
confidentiality or such information becomes publicly available through no
fault of such party, (b) the use of such information is necessary or
appropriate in making any filing or obtaining any consent or approval
required for the consummation of the Contemplated Transactions, or (c) the
furnishing or use of such information is required by legal proceedings.
6.4 NOTICES
All notices, consents, waivers, and other communications under this Agreement
must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by
telecopier (with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as
a party may designate by notice to the other parties):
Seller:
Ramtron International Corporation
0000 Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Attention Xxxxxxx Xxxxxxxx, III CEO
Facsimile No. (000) 000-0000
With a copy to: Xxxx Xxxxx LLP
0000 00xx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Facsimile No. (000) 000-0000
Page-16
Buyer:
000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention D. Xxxxxx Xxxxxxxxx
Facsimile No.
With a copy to: L. Xxxxx Xxxxxxx, Xx., Esq.
Xxxxxxx & Associates, PC
000 X. Xxxxxxx Xxx # X
Xxxxxx, XX 00000
Attention: L. Xxxxx Xxxxxxx, Xx., Esq.
Facsimile No. 000-000-0000
6.5 JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based on any
right arising out of, this Agreement may be brought against any of the
parties in the courts of the State of Colorado, County of El Paso, and each
of the parties consents to the jurisdiction of such courts (and of the
appropriate appellate courts) in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding referred
to in the preceding sentence may be served on any party anywhere in the world.
6.6 FURTHER ASSURANCES
The parties agree (a) to furnish upon request to each other such further
information, (b) to execute and deliver to each other such other documents,
and (c) to do such other acts and things, all as the other party may
reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
6.7 WAIVER
The rights and remedies of the parties to this Agreement are cumulative and
not alternative. Neither the failure nor any delay by any party in exercising
any right, power, or privilege under this Agreement or the documents referred
to in this Agreement will operate as a waiver of such right, power, or
privilege, and no single or partial exercise of any such right, power, or
privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out
of this Agreement or the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of
the claim or right unless in writing signed by the other party; (b) no waiver
that may be given by a party will be applicable except in the specific
instance for which it is given; and (c) no notice to or demand on one party
will be deemed to be a waiver of any obligation of such party or of the right
of the party giving such notice or demand to take further action without
notice or demand as provided in this Agreement or the documents referred to
in this Agreement.
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6.8 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements between the parties with
respect to its subject matter (including the non-binding Letter of Intent
between Buyer and Seller) and constitutes (along with the documents referred
to in this Agreement) a complete and exclusive statement of the terms of the
agreement between the parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement executed by the
party to be charged with the amendment.
6.9 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
Neither party may assign any of its rights under this Agreement without the
prior consent of the other parties, which will not be unreasonably withheld.
Subject to the preceding sentence, this Agreement will apply to, be binding
in all respects upon, and inure to the benefit of the successors and
permitted assigns of the parties. Nothing expressed or referred to in this
Agreement will be construed to give any Person other than the parties to this
Agreement any legal or equitable right, remedy, or claim under or with
respect to this Agreement or any provision of this Agreement. This Agreement
and all of its provisions and conditions are for the sole and exclusive
benefit of the parties to this Agreement and their successors and assigns.
6.10 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by any
court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid
or unenforceable only in part or degree will remain in full force and effect
to the extent not held invalid or unenforceable.
6.11 ARTICLE HEADINGS, CONSTRUCTION
The headings of Articles in this Agreement are provided for convenience only
and will not affect its construction or interpretation. All references to
"Article" or "Articles" refer to the corresponding Article or Articles of
this Agreement. All words used in this Agreement will be construed to be of
such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding words
or terms.
6.12 TIME OF ESSENCE
With regard to all dates and time periods set forth or referred to in this
Agreement, time is of the essence.
6.13 GOVERNING LAW
This Agreement will be governed by the laws of the State of Colorado without
regard to conflicts of laws principles.
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6.14 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
6.15 ATTORNEY'S FEES:
Should any claim or action be initiated by any Party to this Agreement, then
the prevailing party to such claim or action shall be entitled to collect its
attorney's fees and costs pertaining to any such action or claim.
6.16 EMPLOYEE BENEFIT PLANS
Buyer, through his employment with the Company and as a long-term consultant
to the Seller and/or the Company, is aware and has become knowledgeable to
the extent to form an understanding sufficient for Buyer to proceed to
Closing concerning the benefit plans for the Company and its employees (the
"Benefit Plans"). The Benefit Plans, include but are not limited to the
Ramtron Stock Option Plan, the Ramtron 401(k) Plan, group insurance
(including health/medical, dental, life insurance, disability insurance,
vision, and dental) non-qualified deferred compensation, or other similar
fringe benefit plans, and all other employee benefit funds or programs
(whether or not within the meaning of Section 3(3) of ERISA) covering
employees or former employees of Seller (collectively, the "Plans"). Buyer
prior to Closing has had access to all Plan documents and related documents.
With respect to each Plan, Buyer and Seller, to the best of their respective
knowledge, understand and/or acknowledge that:
(a) No Plan is a Multiemployer Plan, and no Plan is subject to the
provisions of Title IV of ERISA.
(b) No Plan is maintained in connection with any trust described in
Code Section 501(c)(9).
(c) There have been no prohibited transactions with respect to any Plan.
(d) No "Fiduciary" (as defined in ERISA Section 3(21)) has any
liability for breach of fiduciary duty or any other failure to act
or comply in connection with the administration or investment of
the assets of any such Plan.
(e) The Company has not ever maintained nor contributed, nor has it
ever been required to contribute, to any Plan providing health or
medical benefits for current or future retired or terminated
employees, their spouses or their dependents (other than in
accordance with Code Section 4980B).
(f) Each Plan has been maintained and administered in material
compliance with its terms and with the requirements prescribed by
any and all legal requirements that are applicable to such plans,
including but not limited to ERISA, the Code, and the Consolidated
Omnibus Budget Reconciliation Act of 1985 (COBRA).
Page-19
(g) Nothing done or omitted to be done and no transaction or holding of
any asset under or in connection with any Plan has made or will
make the Company, or any officer or director of the Company,
subject to any liability under Title I of ERISA or any liability
for any tax under Code Section 4972 or Code Sections 4975 through
4980B, inclusive. No condition exists that would prevent the
Company from amending or terminating any Plan.
(h) Effective as of Closing, or after closing upon approval by Seller's
Board of Directors, the Company will no longer be a participating
employer in any of the Seller's Plans, and Seller will have no
obligation to provide continuing coverage under any of the Seller's
Plans, including but not limited to the Ramtron International
Corporation 401(k) Plan, the health plan, the dental plan, vision
plan, 1995 Stock Option Plan, 1999 Stock Option Plan, disability
plan, life insurance plan, or cancer insurance plan. To the extent
Buyer desires to continue insurance coverage under the Seller's
Plans relating to health and/or dental insurance for the Company's
employees, Seller will use its best efforts to, but can not and
does not guarantee, the continuation of any such coverage up to and
after August 1, 2005. Buyer acknowledges that it shall be Buyer's
and/or the Company's responsibility to apply for, obtain, secure
and maintain any and all insurance relating to the Company and its
employees. Buyer and the Company hereby release Seller, its
officers, directors, shareholders, employees, agents, and attorneys
and shall hold them harmless from and against any claim from any
Company employee, and/or any third party, associated with or
directly or indirectly related to the facilitation of, and/or
assisting to provide, continuation of any insurance for the benefit
of the Company and/or its employees on or after the Closing Date.
(i) Buyer recognizes that the Company will terminate participation
in the Seller's Plans, effective as of the Closing, and has
obtained replacement health and dental coverage for the
benefit of its employees. The Buyer agrees that, as of the
Closing, Seller shall have no further obligation to provide
any benefits under any of the Seller's Plans, including but
not limited to the Ramtron International Corporation 401(k)
Plan, the health plan, the dental plan, vision plan, 1995
Stock Option Plan, 1999 Stock Option Plan, disability plan,
life insurance plan, or cancer insurance plan.
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as
of the date first written above.
D. XXXXXX XXXXXXXXX,
An Individual
/s/ D. Xxxxxx Xxxxxxxxx
---------------------------
By: D. Xxxxxx Xxxxxxxxx
RAMTRON INTERNATIONAL CORPORATION,
a Delaware corporation
/s/ Xxxx X. Xxxxx
-----------------------------
By: Xxxx X. Xxxxx
Title: President - Technology Group
STATE OF COLORADO )
) ss.
COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this 26th day of July,
2005, by D. Xxxxxx Xxxxxxxxx as an individual.
Witness my hand and official seal.
My commission
expires: 10-18-05 /s/ Xxxxxx X. Xxxx
-------------------
Xxxxxx X. Xxxx
Notary Public
0000 00xx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
---------------------------
Address
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