NVE CORPORATION
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made as of April 12, 2002
among NVE Corporation, a Minnesota corporation (the "Company"), and Cypress
Semiconductor Corporation, a Delaware Corporation (the "Purchaser").
SECTION 1. Authorization and Sale of Shares Stock
1.1 Authorization. The Company will authorize the sale and issuance of
Three Million, Four Hundred Thirty Four Thousand, Two Hundred and Forty Three
(3,434,243) shares of the Company's common stock, $0.01 par value, (the
"Shares") representing approximately twenty percent of the outstanding shares of
the Company for an aggregate purchase price of Six Million Two Hundred and
Twenty-Eight Thousand Dollars $6,228,000) (the "Purchase Price"), pursuant to
the terms and conditions of this Agreement. The Company will also authorize the
issuance of a Warrant to purchase Two Million (2,000,000) shares of the
company's common stock at $3.00 per share, exercisable up to three years from
the date of this Agreement.
SECTION 2. Closing Dates; Delivery
2.1 Closing Dates. The closing of the purchase and sale of the Shares and
the issuance of the Warrant hereunder shall take place at 9:00 a.m., Central
Standard Time, on April 19, 2002 (the "Closing") at the offices of the Company's
legal counsel or at such other time and place upon which the Company and the
Purchaser shall agree (the date of the Closing is hereinafter referred to as the
"Closing Date").
2.2 Delivery. At the Closing, the Purchaser will deliver a check or wire
transfer for the entire purchase amount, and the Company will deliver to the
Purchaser a certificate or certificates, registered in the Purchaser's name
representing the number of Shares purchased, and the Warrant. Purchaser
understands that the certificate representing the Shares and the shares of the
Company's common stock issuable upon the exercise of the Warrant, because they
are being sold without being registered under applicable state and federal
securities laws, will be "restricted shares" and will bear a legend restricting
their transfer other than pursuant to a valid registration statement filed under
such applicable laws.
SECTION 3. Representations and Warranties of the Company
Except as set forth on Schedule 3 attached hereto, the Company represents and
warrants to the Purchaser that the following statements in this Section 3 are
true and correct:
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3.1 Organization and Standing; Articles and Bylaws. The Company is a
corporation duly organized and existing under the laws of the State of Minnesota
and is in good standing under such laws. The Company has requisite corporate
power and authority to own and operate its properties and assets, and to carry
on its business as presently conducted and as proposed to be conducted. The
Company and each of its subsidiaries is duly qualified to do business and in
good standing as a foreign corporation in each jurisdiction in which the failure
to be so qualified would have a material adverse effect on the business, assets
(including intangible assets), prospects, condition (financial or otherwise), or
results of operations of the Company and its subsidiaries taken as a whole (a
"Material Adverse Effect"). The Company has delivered a true and correct copy of
its charter documents and the charter documents of each of the Company's
subsidiaries, each as amended to date, to the Purchaser.
3.2 Corporate Power. The Company will have at the Closing Date all
requisite legal and corporate power and authority to execute and deliver this
Agreement to sell and issue the Shares hereunder and to carry out and perform
its obligations under the terms of this Agreement.
3.3 Capitalization. The current capitalization of the Company is as set
forth on Schedule 3.3. Except as set forth in Schedule 3.3, there are no
options, warrants or other rights to purchase any of the Company's authorized
and unissued capital stock.
3.4 Authorization. All corporate action on the part of the Company, its
directors and shareholders necessary for the authorization, execution, delivery
and performance of this Agreement by the Company, the authorization, sale,
issuance and delivery of the Shares and the performance of all of the Company's
obligations hereunder has been taken or will be taken prior to the Closing. This
Agreement, when executed and delivered by the Company, shall constitute a valid
and binding obligation of the Company, enforceable in accordance with its terms,
subject to laws of general application relating to bankruptcy, insolvency and
the relief of debtors and rules of law governing specific performance,
injunctive relief or other equitable remedies. The Shares, when issued in
compliance with the provisions of this Agreement, will be validly issued, will
be fully paid and nonassessable; and the Shares will be free of any liens or
encumbrances, assuming the Purchaser takes the shares with no notice thereof,
other than any liens or encumbrances created by or imposed upon the holders;
provided, however, that the Shares will be subject to restrictions on transfer
under state and federal securities laws.
3.5 Litigation; Governmental Proceedings. There are no legal actions,
suits, arbitrations or other legal, administrative or governmental proceedings
or investigations pending or, to the knowledge of the Company, threatened
against the Company, or its properties or business. The Company is not in
default with respect to any judgment, order or decree of any court or any
governmental agency or instrumentality. To its knowledge, the Company has not
been threatened with any action or proceeding under any business or zoning
ordinance, law or regulation.
3.6 Patents and Trademarks. The Company believes that it has sufficient
title and
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ownership of all patents, trademarks, service marks, trade names, copyrights,
trade secrets, information, proprietary rights and processes which are material
and necessary for its business as now conducted without any conflict with or
infringement of the rights of others. The Company has not received any
communications alleging that the Company has violated or, by conducting its
business as proposed, would violate any of the patents, trademarks, service
marks, trade names, copyrights or trade secrets or other proprietary rights of
any other person or entity.
3.7 Securities Filings. During the period of the last twelve months, the
Company has filed in a timely manner all of forms required by the Securities and
Exchange Act of 1934
3.8 Subsidiaries. Except for the subsidiaries of the Company listed on
Schedule 3.8, the Company does not have and has never had any subsidiaries and
does not otherwise own and has never otherwise owned any shares of capital stock
or any interest in, or control, directly or indirectly, any other corporation,
partnership, association, joint venture or other business entity. The Company
beneficially owns, directly or indirectly, all of the outstanding capital stock
of each of its subsidiaries.
3.9 Valid Issuance of Stock.
(a) Valid Issuance. The shares of Company Common Stock to be issued
pursuant to this Agreement will be, upon payment therefor by the Purchaser in
accordance with this Agreement, duly authorized, validly issued, fully paid and
non-assessable, free and clear of all liens, claims and encumbrances, except
encumbrances or restrictions arising under federal or state securities laws. The
shares of Company Common Stock issuable upon the exercise of the Warrant have
been duly and validly authorized and reserved for issuance and, upon issuance,
sale and delivery in accordance with the terms of the Warrant, for the
consideration provided for therein, will be duly and validly issued, fully paid
and non-assessable free and clear of all liens, claims and encumbrances, except
encumbrances or restrictions arising under federal or state securities laws.
(b) Compliance with Securities Laws. Assuming the accuracy of the
representations made by the Purchasers in Section 4 hereof (and assuming no
change in applicable law and no unlawful distribution of Shares or the Warrant
by the Purchaser or other parties), the Shares, the Warrant and the shares of
Company Common Stock issuable upon the exercise of the Warrant will be issued to
the Purchaser in compliance with applicable exemptions from (i) the registration
and prospectus delivery requirements of the Securities Act of 1933, as amended
(the "Securities Act") and (ii) the registration and qualification requirements
of all applicable securities laws of the states of the United States.
3.10 SEC Documents; Financial Statements.
(a) Reports. The Company has made available to the Purchaser prior to
the date hereof accurate and complete copies of all forms, reports and documents
filed by the Company with the Securities and Exchange Commission ("SEC") since
November 21, 2000 (the
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"SEC Documents"). Each of the SEC Documents, as of the respective date thereof
(or if amended or superseded by a filing prior to the Closing Date, then on the
date of such filing), did not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. The Company is not a party to any material contract, agreement or
other arrangement that was required to have been filed as an exhibit to the SEC
Documents that was not so filed.
(b) Financial Statements. The financial statements of the Company and
the related notes contained in the SEC Documents (the "Company Financials")
present fairly, in accordance with generally accepted accounting principles
("GAAP"), the financial position of the Company as of the dates indicated, and
the results of its operations and cash flows for the periods therein specified,
subject, in the case of unaudited financial statements for interim periods, to
normal year-end audit adjustments. The Company Financials (including the related
notes) have been prepared in accordance with GAAP applied on a consistent basis
throughout the periods therein specified, except that unaudited financial
statements may not contain all footnotes required by GAAP.
3.11 No Undisclosed Liabilities. The Company does not have any liability,
indebtedness, obligation, expense, claim, deficiency, guaranty or endorsement of
any type, whether accrued, absolute, contingent, matured, unmatured or
otherwise, whether or not required to be reflected in financial statements in
accordance with GAAP ("Liabilities"), except Liabilities that: (i) are reflected
in the Company's audited balance sheet as of December 31, 2001 (the "Balance
Sheet"), or (ii) have arisen since the date of the Balance Sheet in the ordinary
course of the Company's business consistent with past practices and are not
material either individually or in the aggregate.
3.12 Eligibility to Use Form S-3. The Company is eligible to use Form S-3
under the Securities Act.
3.13 Governmental Consents. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, or
notice to, any federal, state or local governmental authority on the part of the
Company is required in connection with the issuance of the Shares, the Warrant
or, as of the date hereof, the shares of Company Common Stock issuable upon the
exercise of the Warrant, to the Purchaser, or the consummation of the other
transactions contemplated by this Agreement, other than any filing that may be
required pursuant to Regulation D promulgated under the Securities Act. Such
filings will be made within the time prescribed by law.
3.14 Non-Contravention. The execution, delivery and performance of this
Agreement and the Warrant by the Company, and the consummation by the Company of
the transactions contemplated hereby (including issuance of the Shares, the
Warrant and the shares of Company Common Stock issuable upon the exercise of the
Warrant), do not (i) contravene or conflict with the Articles of Incorporation
or Bylaws of the Company; (ii) constitute a material violation of
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any provision of any federal, state, local or foreign law binding upon or
applicable to the Company; (iii) constitute a default or require any consent
under, give rise to any right of termination, cancellation or acceleration of,
or to a loss of any material benefit to which the Company is entitled under, or
result in the creation or imposition of any lien, claim or encumbrance on any
assets of the Company under, any Contract (as defined in Section 3.13) to which
the Company is a party or any permit, license or similar right relating to the
Company or by which the Company may be bound or affected, or the triggering of
any preemptive or anti-dilution rights or rights of first refusal or first
offer, or any similar rights (whether pursuant to a "poison pill" provision or
otherwise), on the part of holders of the Company's or any of its subsidiaries'
securities.
3.15 Title to Properties; Absence of Liens and Encumbrances. The Company
has good and valid title to, or, in the case of leased properties and assets,
valid leasehold interests in, all of its tangible properties and assets, real,
personal and mixed, used or held for use in its business, free and clear of any
Liens, except (i) as reflected in the Company Financials or in Schedule 3.14,
(ii) Liens for Taxes not yet due and payable, and (iii) such imperfections of
title and encumbrances, if any, which are not material in character, amount or
extent, and which do not detract from the value, or interfere with the present
use, of the property subject thereto or affected thereby.
3.16 Litigation. Except as set forth on Schedule 3.15, there is no action,
claim, arbitration, audit, hearing, investigation, litigation, suit, writ
(whether civil, criminal, administrative, investigative or informal) commenced,
brought, conducted or heard by or before, or otherwise involving any
governmental body or arbitrator ("Proceeding") of any nature pending or, to the
Company's knowledge, threatened against the Company, its properties or any of
its officers or directors, in their respective capacities as such and the
Company is not aware of any basis for the foregoing. Schedule 3.15 sets forth,
with respect to any pending or, to the knowledge of the Company, threatened
Proceeding, the forum, the parties thereto, the subject matter thereof and the
amount of damages claimed or other remedy requested. The Company has received no
notice that any court, administrative agency or commission or other federal,
state, county, local or foreign governmental authority, instrumentality, agency
or commission has at any time challenged or questioned the legal right of the
Company to manufacture, offer or sell any of its products in the present manner
or style thereof.
3.17 Representations and Materials Complete. None of the representations or
warranties made by the Company in this Agreement (including the schedules
hereto), nor any statement made in any schedule, exhibit or certificate
furnished by the Company pursuant to this Agreement, contains or will contain on
the Closing Date any untrue statement of a material fact or omits or will omit
on the Closing Date to state any material fact necessary in order to make the
statements contained herein or therein, in the light of the circumstances under
which made, not misleading. The Company has delivered to the Purchaser or its
counsel true and complete copies of each document that has been requested by the
Purchaser or its counsel.
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SECTION 4. Representations and Warranties of the Purchaser
Purchaser hereby represents and warrants to the Company with respect to the
purchase of the Shares that the following statements in this Section 4 are true
and correct:
4.1 Experience. Purchaser has substantial experience in evaluating and
investing in private placement transactions of securities in companies similar
to the Company so that it is capable of evaluating the merits and risks of its
investment in the Company and has the capacity to protect its own interests. In
addition, Purchaser is an Accredited Investor within the meaning of Rule 501(a)
under the Securities Act.
4.2 Investment. Purchaser is acquiring the Shares for investment for its
own account, not as a nominee or agent, and not with the view to, or for resale
in connection with, any distribution thereof. Purchaser understands that the
Shares to be purchased have not been, and will not be, registered under the
Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act, the availability of which depends upon, among
other things, the bona fide nature of the investment intent and the accuracy of
Purchaser's representations as expressed herein.
4.3 Rule 144. Purchaser acknowledges that the Shares must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from such registration is available. Purchaser is aware of the
provisions of Rule 144 and Rule 144A promulgated under the Securities Act. Rule
144 permits limited resale of shares purchased in a private placement subject to
the satisfaction of certain conditions, including the existence of a public
market for the shares, the availability of certain current public information
about the Company, the resale occurring not less than one year after a party has
purchased and paid for the security to be sold, the sale being effected through
a "broker's transaction" or in transactions directly with a "market maker" and
the number of shares being sold during any three-month period not exceeding
specified limitations. Rule 144A provides a non-exclusive safe harbor exemption
from the registration requirements of the Securities Act for resales to
"qualified institutional buyers," as defined, of any restricted securities that,
when issued, were not of the same class as securities listed on a U.S.
securities exchange or quoted by NASDAQ. Since the Company's securities are not
currently listed on an exchange or quoted by NASDAQ, such exemption under Rule
144A would not currently apply. In addition, except for securities of an issuer
subject to the reporting requirements of the Securities and Exchange Act of
1934, availability of the exemption is contingent upon the right of the holder
of the security and the prospective purchaser to obtain from the issuer
specified limited information upon request. Finally, although 144A does not
require any specific resale restrictions, a seller must take reasonable steps to
ensure that the buyer is aware that the seller may rely on the 144A exemption.
4.4 Access to Data. Purchaser has had an opportunity to discuss the
Company's business, management and financial affairs with the Company's
management and the opportunity
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to review the Company's facilities and public reports filed under the Securities
Exchange Act of 1934. Purchaser has also had an opportunity to ask questions of
officers of the Company, which questions were answered to its satisfaction.
Purchaser understands that such discussions, as well as any written information
issued by the Company were intended to describe certain aspects of the Company's
business and prospects but were not a thorough or exhaustive description.
4.6 Authorization. All corporate action on the part of the Purchaser
necessary for the authorization, execution, delivery and performance of all of
the Purchaser's obligations hereunder has been taken or will be taken prior to
the Closing. This Agreement, when executed and delivered by the Purchaser, shall
constitute a valid and binding obligation of the Purchaser, enforceable in
accordance with its terms.
4.7 Brokers or Finders. The Company has not, and will not, incur, directly
or indirectly, as a result of any action taken by such Purchaser, any liability
for brokerage or finders' fees or agents' commissions or any similar charges in
connection with this Agreement.
4.8 Tax Liability. Purchaser has reviewed with its own tax advisors the
federal, state, local and foreign tax consequences of this investment and the
transactions contemplated by this Agreement (including any tax consequences
resulting from the recently enacted tax legislation). Purchaser relies solely on
such advisors and not on any statements or representations of the Company or any
of its agents. Purchaser understands that it (and not the Company) shall be
responsible for its own tax liability that may arise as a result of this
investment or the transactions contemplated by this Agreement.
SECTION 5. Registration Rights
5.1 Demand Registration Rights. The Purchaser shall have one demand
registration right. Upon receipt of a valid request by the Purchaser to register
some or all of the Shares (the "Registrable Shares"), the Company shall prepare
as promptly as practicable and file a Registration Statement for the Registrable
Shares, and the Company shall use its best efforts to cause the Registration
Statement to become effective under the Securities Act in accordance with the
Securities Act Rules. The Company shall have the right to delay any registration
statement during any period in which any other registration statement (other
than on Form S-4 or Form S-8 promulgated under the Securities Act or any
successor forms thereto) pursuant to which any other shares of the Company's
common stock has been filed and not withdrawn or has been declared effective
within the prior one hundred eighty (180) days. In addition, the Company may
delay the filing or effectiveness of the registration statement for a period of
up to ninety (90) days after the date of a request for registration pursuant to
this Section 5.1 if at the time of such request the Company reasonably
determines that such registration and offering would interfere with any material
transaction involving the Company as approved by the Board of Directors.
Notwithstanding the foregoing the Company shall not be required to register any
Registrable Shares under this Section 5.1 unless such requested registration
shall be for the purpose of registering at least $500,000 worth of Shares as
calculated by using the closing bid price of a
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shares of the Company's common stock as reported by the OTC Bulletin Board, or
by such other exchange or quotation system as the Company's common stock price
is reported subsequent to the Closing, as of the date of the request.
5.2 Piggy Back" Registration Rights. Until the earlier of (i) the third
anniversary of this Agreement or (ii) the date on which the Purchaser may sell
all of its Shares under Rule 144K of the Rules and regulations of the Securities
Act of 1933, if the Company at any time proposes to file a Registration
Statement (other than for a distribution for the account of Purchaser or for a
employee benefit plan) under the Securities Act relating to an underwritten
Public Offering of Common Stock that would permit the inclusion therein of
shares of Common Stock to be distributed in accordance with the method of
distribution contemplated by such Registration Statement, the Company shall
include all Registrable Shares specified by the Purchaser. The Company shall
provide to Purchaser notice of any plan to Register shares at least twenty (20)
days prior to initial filing of such registration statement. Purchaser shall
notify the Company within ten (10) days of delivery of such notice whether and
how many Registrable Shares it wishes to include in such offering. If the
offering is an underwritten offering, any rights contained in this Section 5.2
shall be subject to cutback should the Underwriter decide it would be imprudent
to offer all or any other securities or it needs to reduce the number of
securities it can offer.
5.3 Expenses. All expenses (other than underwriting discounts and
commissions relating to the Registrable Shares, as provided in the last sentence
of this Section 5.3) incurred by the Company in complying with Section 5
including, without limitation, all registration and filing fees (including all
expenses incident to filing with the NASD), fees and expenses of complying with
securities and blue sky laws, printing expenses, fees and expenses of the
Company's counsel and accountants, shall be prepaid by the Company; provided,
however, that all underwriting discounts, selling commissions applicable to the
Registrable Shares, or legal fees and expenses of the Purchaser and/or any other
holder of Registrable Shares shall be borne by the holders selling such
Registrable Shares, in proportion to the number of Registrable Shares sold by
each such holder.
5.4 Indemnification. (a)In connection with any registration of any
Registrable Shares under the Securities Act pursuant to this Agreement, the
Company shall indemnify and hold harmless the holders of Registrable Shares,
each underwriter, broker or any other person acting on behalf of the holders of
Registrable Shares and each other person, if any, who controls any of the
foregoing persons within the meaning of the Securities Act against any losses,
claims, damages or liabilities, joint or several (or actions in respect
thereof), to which any of the foregoing persons may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or allegedly untrue statement of a material fact contained in
the registration statement under which such Registrable Shares were registered
under the Securities Act, any preliminary prospectus or final prospectus
contained therein or otherwise filed with the Commission, any amendment or
supplement thereto or any document incident to registration or
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qualification of any Registrable Shares, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or,
with respect to any prospectus, necessary to make the statements therein in
light of the circumstances under which they were made not misleading, or any
violation by the Company of the Securities Act or state securities or blue sky
laws applicable to the Company and relating to action or inaction required of
the Company in connection with such registration or qualification under such
state securities or blue sky laws; and shall reimburse the holders of
Registrable Shares, such underwriter, such broker or such other person acting on
behalf of the holders of Registrable Shares and each such controlling person for
any legal or other expenses reasonably incurred by any of them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage, liability or action (including
any legal or other expenses incurred) arises out of or is based upon an untrue
statement or allegedly untrue statement or omission or alleged omission made in
said registration statement, preliminary prospectus, final prospectus,
amendment, supplement or document incident to registration or qualification of
any Registrable Shares in reliance upon and in conformity with written
information furnished to the Company through an instrument duly executed by the
holders of Registrable Shares or their counsel or underwriter specifically for
use in the preparation thereof; provided further, however, that the foregoing
indemnity agreement is subject to the condition that, insofar as it relates to
any untrue statement, allegedly untrue statement, omission or alleged omission
made in any preliminary prospectus but eliminated or remedied in the final
prospectus (filed pursuant to Rule 424 of the Securities Act), such indemnity
agreement shall not inure to the benefit of any of the Investors, underwriter,
broker or other person acting on behalf of holders of the Registrable Shares
from whom the person asserting any loss, claim, damage, liability or expense
purchased the Registrable Shares which are the subject thereof, if a copy of
such final prospectus had been made available to such person and such Investor,
underwriter, broker or other person acting on behalf of holders of the
Registrable Shares and such final prospectus was not delivered to such person
with or prior to the written confirmation of the sale of such Registrable Shares
to such person.
(b) In connection with any registration of Registrable Shares under
the Securities Act pursuant to this Agreement, each holder of Registrable Shares
shall severally and not jointly indemnify and hold harmless (in the same manner
and to the same extent as set forth in the preceding paragraph of this Section
5) the Company, each director of the Company, each officer of the Company who
shall sign such registration statement, each underwriter, broker or other person
acting on behalf of the holders of Registrable Shares and each person who
controls any of the foregoing persons within the meaning of the Securities Act
with respect to any statement or omission from such registration statement, any
preliminary prospectus or final prospectus contained therein or otherwise filed
with the Commission, any amendment or supplement thereto or any document
incident to registration or qualification of any Registrable Shares, if such
statement or omission was made in reliance upon and in conformity with written
information furnished to the Company or such underwriter by such holder
specifically for use in connection with the preparation of such registration
statement, preliminary prospectus, final
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prospectus, amendment, supplement or document; provided, however, that the
maximum amount of liability in respect of such indemnification shall be limited,
in the case of each seller of Registrable Shares, to an amount equal to the net
proceeds actually received by such seller from the sale of Registrable Shares
effected pursuant to such registration.
(c) Promptly after receipt by an indemnified party of notice of the
commencement of any action involving a claim referred to in the preceding
paragraphs of this Section 5, such indemnified party will, if a claim in respect
thereof is made against an indemnifying party, give written notice to the latter
of the commencement of such action. The failure of any indemnified party to
notify an indemnifying party of any such action shall not (unless such failure
shall have a material adverse effect on the indemnifying party) relieve the
indemnifying party from any liability in respect of such action that it may have
to such indemnified party on account of this Section 5. In case any such action
is brought against an indemnified party, the indemnifying party will be entitled
to participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be responsible for any
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof, provided, however, that if any indemnified
party shall have reasonably concluded that there may be one or more legal or
equitable defenses available to such indemnified party which are additional to
or conflict with those available to the indemnifying party, or that such claim
or litigation involves or could have an effect upon matters beyond the scope of
the indemnity agreement provided in this Section 5, the indemnifying party shall
not have the right to assume the defense of such action on behalf of such
indemnified party (but shall have the right to participate therein with counsel
of its choice) and such indemnifying party shall reimburse such indemnified
party and any person controlling such indemnified party for that portion of the
fees and expenses of any counsel retained by the indemnified party which is
reasonably related to the matters covered by the indemnity agreement provided in
this Section 5. If the indemnifying party is not entitled to, or elects not to,
assume the defense of a claim, it will not be obligated to pay the fees and
expenses of more than one counsel with respect to such claim.
(d) If the indemnification provided for in this Section 5 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, claim, damage, liability or action referred to herein, then
the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amounts paid or payable by such indemnified
party as a result of such loss, claim, damage, liability or action in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions, which resulted in such loss, claim, damage,
liability or action as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to
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information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The parties agree that it
would not be just and equitable if contribution pursuant hereto were determined
by pro rata allocation or by any other method or allocation which does not take
account of the equitable considerations referred to herein. No person guilty of
fraudulent misrepresentation shall be entitled to contribution from any person.
5.5 Information. The Purchaser shall furnish to the Company such written
information regarding the Purchasers and the distribution proposed by the
Purchasers as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Agreement.
5.6 Assignment of Rights. The rights of Purchaser under section 5.1 may be
assigned but only to someone who is transferred at least 250,000 shares and only
upon written notice to the Company. In no event will the Company be obligated to
effect more than one demand registration under Section 5.1. The rights of
Purchaser under section 5.2 may be assigned but only to someone who is
transferred at least 50,000 shares and only upon written notice to the Company.
5.7 Delay of Registration. Purchaser shall not have any right to take any
action to restrain, enjoin, or otherwise delay any registration as the result of
any controversy that might arise with respect to the interpretation or
implementation of this Section 5.
5.8 Subsequent Registration Rights. Nothing in this Agreement shall prevent
the Company from entering into any agreement with any holder or prospective
holder of any securities of the Company giving such holder or prospective holder
any registration rights.
SECTION 6. Other Rights
6.1 Board of Directors.
(a) The Company agrees that it will, until such time as Purchaser no
longer owns at least five percent (5%) of the outstanding capital stock of the
Company, nominate an individual designated by the Purchaser (the "Purchaser
Designee") to serve for election to the Company's Board of Directors and shall
not oppose the election of such Purchaser Designee.
(b) Upon the election of any Purchaser Designee, the Purchaser
Designee shall be added to the Company's insurance policy relating to its
directors and officers, and the Company shall enter into an indemnification
agreement with such Purchaser Designee in form and substance reasonably
satisfactory to the Purchaser Designee and the Purchaser.
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SECTION 7. Conditions to the Purchaser's Obligations at Closing.
The obligations of the Purchaser under this Agreement are subject to the
fulfillment or waiver by the Purchaser, on or before the Closing, of each of the
following conditions:
7.1 Representations and Warranties True. Each of the representations and
warranties of the Company contained in Section 3 shall be true and correct on
and as of the date hereof and shall be true and correct in all material respects
on and as of the Closing Date, except as set forth in Schedule 3, with the same
effect as though such representations and warranties had been made as of the
Closing.
7.2 Performance. The Company shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing and
shall have obtained all approvals, consents and qualifications necessary to
complete the purchase and sale described herein.
SECTION 8. Conditions to the Company's Obligations at Closing.
The obligations of the Company to the Purchaser under this Agreement are
subject to the fulfillment or waiver by the Company, on or before the Closing,
of each of the following conditions:
8.1 Representations and Warranties True. The representations and warranties
of the Purchaser contained in Section 4 shall be true and correct on and as of
the date hereof and shall be true and correct in all material respects on and as
of the Closing Date with the same effect as though such representations and
warranties had been made as of the Closing.
8.2 Payment of Purchase Price. Purchaser shall have delivered to the
Company funds in an amount equal to the Purchase Price.
SECTION 9. Miscellaneous
9.1 Governing Law. This Agreement shall be governed in all respects by the
internal laws of the State of Minnesota, without regard to its conflict of law
principles.
792 Survival. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by the Purchaser and the
closing of the transactions contemplated hereby.
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9.3 Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto,
provided, however, that the rights of a Purchaser to purchase the Shares shall
not be assignable without the consent of the Company.
9.4 Entire Agreement; Amendment This Agreement, the License and Joint
Ownership Agreement between the Company and the Purchaser of even date hereof,
and the other documents delivered pursuant hereto at the Closing constitute the
full and entire understanding and agreement between the parties with regard to
the subjects hereof and thereof. Except as expressly provided herein, neither
this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought.
9.5 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, by federal express or similar overnight
messenger or otherwise delivered by hand or by messenger, addressed as follows:
If to the Company: NVE Corp.
00000 Xxxxxx Xxxx Xxxx
Xxxx Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Fax: (000) 000-0000
With copies to: Xxxx Plant Xxxxx, P.L.L.P.
0000 Xxxx Xxxxxx
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx XX 00000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
If to the Purchaser: Cypress Semiconductor Corp.
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: ____________________
Fax: (000) 000-0000
With copies to: Cypress Semiconductor Corp.
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, Ph.D., Esq.
Xxxxxxxx Xxxxxxxxx, CFO
Fax: (000) 000-0000
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Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or 72
hours after the same has been deposited in a regularly maintained receptacle for
the deposit of the United States mail, addressed and mailed as aforesaid or, if
sent by federal express or similar overnight messenger, at the earlier of its
receipt or 24 hours after the same has been deposited with such service.
9.6 Delays or Omissions. Except as expressly provided herein, no delay or
omission to exercise any right, power or remedy accruing to Purchaser, upon any
breach or default of the Company under this Agreement, shall impair any such
right, power or remedy of Purchaser nor shall it be construed to be a waiver of
any such breach or default, or an acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of Purchaser of any breach or default under this
Agreement, or any waiver on the part of Purchaser of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any holder, shall be
cumulative and not alternative.
9.7 Expenses. The Company and the Purchaser shall each bear its own
expenses incurred on its behalf with respect to this Agreement and the
transactions contemplated hereby.
9.8 Counterparts. This Agreement may be executed in counterparts, each of
which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
9.9 Severability. In the event that any provision of this Agreement becomes
or is declared by a court of competent jurisdiction to be illegal, unenforceable
or void, this Agreement shall continue in full force and effect without said
provision; provided that no such severability shall be effective if it
materially changes the economic benefit of this Agreement to any party.
9.10 Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not considered in construing or
interpreting this Agreement.
9.11 Press Release. The Company will allow the Purchaser to review any
press releases relating to this Agreement and or the License and Joint Ownership
Agreement dated of even date herewith (the "License and Joint Ownership
Agreement"). The final content of such press release will be subject to the
approval of the Purchaser, which approval shall not be unreasonably withheld.
Notwithstanding the foregoing, Purchaser understands and agrees that the Company
will be required under applicable securities to issue a press release and file a
copy
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of both this Agreement and the License and Joint Ownership Agreement with the
SEC in connection with its public filings.
The foregoing Purchase Agreement is hereby executed as of the date first above
written.
"COMPANY"
NVE Corporation
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Its: President & CEO
"PURCHASER"
Cypress Semiconductor Corporation
By: /s/ X.X. Xxxxxxx
----------------------------------------
Its: President & CEO
Schedule 3.3
Capitalization
Common Stock authorized: 30,000,000 shares, $0.01 par value
Stock authorized, all types: 50,000,000 shares
Common Stock outstanding as of January 31, 2002: 17,177,406 shares, $0.01 par value
Stock options and warrants reserved as of January 31, 2002
(2000 NVE Corporation Stock Option Plan as amended) 5,000,000 shares
Approximate options and warrants outstanding
as of January 31,2002 1,096,000
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