EXHIBIT 2.12
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "AGREEMENT") is made as
of February 16, 1999, between Fluence Technology, Inc., a Delaware corporation
("FLUENCE" or "BUYER"), and Opmaxx, Inc., a Delaware corporation ("OPMAXX" or
the "COMPANY"). Fluence and Opmaxx are each sometimes referred to as a "PARTY"
and collectively as the "PARTIES".
RECITALS
A. Fluence, Opmaxx, and their respective Boards of Directors
deem it advisable for Opmaxx to merge with and into Merger Sub (defined below)
in accordance with the terms and provisions of this Agreement (the "MERGER").
B. Holders in each class and series of issued and outstanding
Common and Preferred Stock of Opmaxx (collectively, the "OPMAXX STOCK") have
reviewed the terms of this Agreement; holders of at least a majority of the
shares of Opmaxx Class A Common, Series A Preferred, and Series B Preferred
Stock (treated as a single class) and the holders of at least two-thirds of the
Series A Preferred Stock (voting as a separate class) have executed irrevocable
proxies authorizing Xxxxxxx X. Xxxxxxx to vote their shares in favor of the
Merger.
C. As a result of the Merger the holders of the Shares will
receive a portion of eight million dollars ($8,000,000.00) in cash (minus the
amount required to pay in full the outstanding debt of the Company at the
Effective Time of the Merger), as more fully described in and subject to the
specific terms and provisions of this Agreement.
D. Immediately prior to the Effective Time of the Merger, all
outstanding vested employee stock options shall be exercised for Common Stock
(all Common Stock and Preferred Stock outstanding immediately prior to the
Effective Time of the Merger being, the "SHARES").
E. The transactions contemplated by this Agreement shall be
consummated only if Buyer, in its sole discretion, indicates to the Company its
desire to do so. Prior to or contemporaneously with its decision to consummate
such transactions, Fluence shall incorporate Opmaxx Acquisition Company, Inc., a
Delaware corporation, as its wholly-owned subsidiary ("MERGER SUB").
F. This Agreement sets forth the terms and conditions to which
the parties hereto have agreed and further contemplates the consummation of
certain related transactions hereinafter described.
Agreement and Plan of Merger
Page 1
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the
mutual promises and covenants of the parties hereto, and subject to the terms
and conditions set forth herein, the parties herein agree as follows:
1. DEFINITIONS.
Certain terms used in this Agreement and the Exhibits hereto
are specifically defined herein or therein. Unless elsewhere defined in this
Agreement or the Exhibits, these definitions are set forth or referred to in
EXHIBIT A of this Agreement.
2. REORGANIZATION AND MERGER.
Subject to the terms and conditions of this Agreement, the
parties hereto agree that, following the Closing (as defined in Section 3
below), Merger Sub and Opmaxx shall execute and file the Certificate of Merger
in substantially the form attached hereto as EXHIBIT B with the Delaware
Secretary of State, whereupon Opmaxx shall be merged with and into Merger Sub
and Merger Sub shall be the surviving corporation in such merger and shall
become a wholly owned subsidiary of Fluence. The parties intend that the Merger
shall be accounted for using the purchase method of accounting.
2.1 SURVIVING CORPORATION.
Upon the effectiveness of the Merger (hereinafter referred to
as the "EFFECTIVE TIME OF THE MERGER"), Opmaxx shall be merged with and into
Merger Sub and the separate existence of Opmaxx shall cease. Merger Sub shall be
the corporation surviving the Merger.
2.2 CERTIFICATE OF INCORPORATION AND BYLAWS OF OPMAXX.
The Certificate of Incorporation and Bylaws of Merger Sub at
and immediately prior to the Effective Time of the Merger (as restated to effect
a change of name to "Opmaxx, Inc."), shall be the Certificate of Incorporation
and Bylaws of Merger Sub following the Effective Time of the Merger.
2.3 COMMON STOCK OF MERGER SUB.
Each share of the common stock of Merger Sub (the "MERGER SUB
COMMON STOCK") issued and outstanding immediately prior to the Effective Time of
the Merger shall, by virtue of the Merger and without any action on the part of
any holder thereof, continue to be one share of Merger Sub Common Stock.
Agreement and Plan of Merger
Page 2
2.4 MERGER CONSIDERATION ALLOCATION AND CANCELLATION OF
THE SHARES.
Subject to the other terms of this Section 2, each of the
Shares shall, by virtue of the Merger and without any action on the part of any
holder thereof, be converted into the right to receive a portion of the
$8,000,000.00 Merger Consideration (the "MERGER CONSIDERATION"), and each of the
Shares shall be deemed canceled and retired. The Merger Consideration shall be
allocated among the outstanding debt of the Company immediately prior to the
Effective Time of the Merger, the Class A Common Stock, the Class B Common
Stock, the Series A Preferred Stock and the Series B Preferred Stock as
indicated on EXHIBIT C. The Company and the Opmaxx Common Stockholders hereby
fully exculpate and indemnify Buyer and its officers, directors, advisors,
representatives and affiliates from any and all claims in any way related to the
allocation of the Merger Consideration and the Additional Merger Consideration
amongst holders of the Shares.
2.5 CONVERSION OF OPMAXX OPTIONS.
Subject to the other terms of this Section 2, each of the
unvested options outstanding immediately prior to the Effective Time of the
Merger ("OPMAXX OPTIONS") to purchase Opmaxx Common Stock shall, by virtue of
the Merger and without any action on the part of any holder thereof, be
converted into the right to acquire that number of shares of Fluence Stock
determined by multiplying the number of shares of Opmaxx Stock into which such
Opmaxx Options are convertible immediately prior to the Effective Time of the
Merger by the Option Conversion Number (as defined below), at an exercise price
per share of Fluence Common Stock equal to the exercise price per share of such
Opmaxx Option divided by the Option Conversion Number, subject to the provisions
of Section 2.7 regarding the elimination of fractional shares. Each Opmaxx
Option and the Opmaxx 1997 Stock Option/Issuance Plan shall be assumed by
Fluence. The Option Conversion Number shall be the fair market value of a share
of Common Stock of Opmaxx, without regard to class, divided by the fair market
value of one share of Fluence Common Stock on the day of Closing. The fair
market value of one share of Common Stock of Opmaxx and Fluence on the date of
Closing shall be determined by an independent third party mutually agreeable to
Fluence and Opmaxx. If they cannot agree on an appraiser, Fluence and Opmaxx
shall each select an appraiser and those appraisers shall select a third
appraiser whose determination of fair market value shall be binding on the
parties. It is a condition to Fluence's assumption under this paragraph that
each holder of unvested options to purchase Opmaxx Common Stock shall have
furnished Fluence with a signed waiver agreement (in form and substance
satisfactory to Fluence) in which such person, as consideration for the
assumption of his or her Opmaxx Options by Fluence in the Merger, waives any and
all right he or she may otherwise have under the Agreement or the agreements
evidencing his or her Opmaxx Options or otherwise, to receive any portion of the
Merger Consideration or Additional Merger Consideration upon the subsequent
exercise of the assumed options which would reflect, or otherwise compensate
such person for, the cash consideration payable per share of Opmaxx Common Stock
to the actual holders of Opmaxx Common Stock in conversion of their shares of
such Common Stock in the Merger.
Agreement and Plan of Merger
Page 3
2.6 EXCHANGE OF STOCK CERTIFICATES.
At the Effective Time of the Merger, Opmaxx and Fluence shall
submit to Fluence's registrar and transfer agent, Xxxxxxxx Xxxxxxxx at Credence
Systems Corporation, 000 Xxxxxxx Xxxxxx, Xxxxxxx, XX 00000 (the "EXCHANGE
AGENT"), an instruction letter including a list of the names, addresses and
social security numbers/taxpayer identification numbers or other appropriate
documentation of each holder of shares of Opmaxx Stock outstanding immediately
prior to the Effective Time of the Merger. As soon as reasonably practicable
following the Effective Time of the Merger, Fluence shall cause the Exchange
Agent to cause each such Opmaxx Stockholder to receive, in exchange for the
Opmaxx Stock held by such Opmaxx Stockholder, a cash payment representing the
Opmaxx Stockholder's share of the Merger Consideration as determined by the type
or types of securities of Opmaxx held and exchanged by such stockholder and by
reference to EXHIBIT C. A holder of Opmaxx Stock whose stock certificate(s) have
been lost or destroyed shall, upon providing satisfactory evidence of ownership
of such shares and appropriate indemnification, have the right to the delivery
of the appropriate cash amount.
2.7 TRANSFER BOOKS.
The stock transfer books of Opmaxx pertaining to Opmaxx Stock
outstanding at the Effective Time of the Merger shall be closed at the Effective
Time of the Merger, and thereafter no transfer of any such shares of Opmaxx
Stock shall be recorded thereon.
2.8 OPMAXX DISSENTING SHARES.
Opmaxx Stockholders holding any shares of Opmaxx stock that
are eligible to be "DISSENTING SHARES" within the meaning of the Delaware
General Corporate Law ("DELAWARE CODE") with respect to the Merger and as to
which dissenter's rights to require the purchase of such shares have been
properly exercised will be entitled to their rights under the Delaware Code with
respect to such shares. Merger Sub shall pay all amounts to which dissenting
stockholders of Opmaxx may be entitled by reason of the Merger. Shares of Opmaxx
Stock as to which dissenting stockholders' rights of appraisal have not been
properly perfected under the Delaware Code will be converted to cash as provided
in Section 2.4 above.
2.9 FURTHER ASSURANCES.
Fluence and Opmaxx agree that if, at any time after the
Effective Time of the Merger, any further deeds, assignments or assurances are
reasonably necessary or desirable to be obtained from Opmaxx, Fluence or its
officers or directors, to consummate the Merger or to carry out the purposes of
this Agreement at or after the Effective Time of the Merger, then Fluence,
Opmaxx and their respective officers and directors shall execute and deliver all
such proper deeds, assignments and assurances and do all other things necessary
or desirable to consummate the Merger and to carry out the purposes of this
Agreement, in the name of Opmaxx, Fluence or otherwise.
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Page 4
3. THE CLOSING.
Subject to the satisfaction or waiver of the closing
conditions set forth in Section 6 of this Agreement, the closing of the Merger
(the "CLOSING") and other transactions contemplated by this Agreement shall take
place at 0000 XX Xxxxxxxxx Xxxxx, Xxxxxxxxx, XX 00000 at 10:00 a.m. local time
on such date as is set by Buyer (the "CLOSING DATE").
4. REPRESENTATIONS AND WARRANTIES OF OPMAXX.
The Company makes the representations and warranties set forth
at EXHIBIT D hereto to the Buyer.
5. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer makes the representations and warranties set forth at
EXHIBIT E hereto to the Company.
6. CONDITIONS TO THE CLOSING
6.1 BUYER'S CONDITIONS.
The parties hereto acknowledge that Buyer is under no
obligation to consummate the Merger contemplated by this Agreement. Subject to
Section 11.6, should Buyer determine, in its sole discretion, to consummate the
Merger, the Company agrees to cause the following to be true at or prior to the
Closing (PROVIDED, however, that the Company shall have no obligation to cause
actions or events over which it has no control):
(a) The representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
on and as of the date hereof except as set forth in the Disclosure Schedule, and
shall also be true and correct in all material respects on and as of the
Closing, except as set forth in the Revised Disclosure Schedule.
(b) The Company shall have performed or complied in all
material respects with all covenants required under this Agreement to be
performed or complied with by the Company at or prior to the Closing.
(c) At the Closing, there shall be no injunction, restraining
order or decree of any nature of any court or government authority of competent
jurisdiction that is in effect that restrains or prohibits the consummation of
the transactions contemplated by this Agreement.
(d) All third party consents and approvals, including
governmental consents and approvals, required to consummate the transactions
contemplated by this Agreement shall have been obtained.
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Page 5
(e) All holders of unvested options to acquire Common Stock
shall have waived any and all rights they may have in respect thereof in
exchange for the right to receive stock options issued by Buyer.
(f) The Company shall have executed and delivered to Buyer an
Escrow Agreement in the form of EXHIBIT F hereto.
(g) All Vested Options and the Tektronix Warrant shall have
been exercised at or prior to Closing.
(h) Counsel for the Company shall have provided a legal
opinion in a form satisfactory to Fluence.
6.2 CONDITIONS TO THE COMPANY'S OBLIGATIONS.
The Company's obligation to effect the Merger hereunder is
subject to the satisfaction at or prior to the Closing of the following
conditions:
(a) The representations and warranties of Buyer contained in
this Agreement shall be true and correct in all material respects on and as of
the Closing Date with the same force and effect as though made on and as of the
Closing Date (except that to the extent that any such representation or warranty
relates to a particular date, such representation or warranty shall be so true
and correct as of that particular date).
(b) Buyer shall have performed or complied in all material
respects with all covenants required under this Agreement to be performed or
complied with by Buyer at or prior to the Closing.
(c) At the Closing, there shall be no injunction, restraining
order or decree of any nature of any court or government authority of competent
jurisdiction that is in effect that restrains or prohibits the consummation of
the transactions contemplated hereby.
(d) All third party consents and approvals, including
governmental consents and approvals, required to consummate the transactions
contemplated by this Agreement shall have been obtained.
(e) Buyer shall have tendered the Merger Consideration to the
Exchange Agent for delivery to the Company's stockholders in accordance with
Sections 2.4 and 3 above.
(f) Buyer shall have executed and delivered to the Company an
Escrow Agreement in the form of EXHIBIT F hereto.
(g) Counsel for the Buyer shall have provided a legal opinion
in a form satisfactory to the Company.
Agreement and Plan of Merger
Page 6
7. COVENANTS OF THE COMPANY
7.1 NEGATIVE COVENANTS
The Company shall not, without the approval of the Buyer:
(a) create, incur, assume or permit to exist any indebtedness,
except for indebtedness for borrowed money owed to Fluence or Silicon Valley
Bank or their affiliates and indebtedness in the form of accounts payable
incurred in the Ordinary Course of Business;
(b) create, incur, assume or permit to exist any lien on any
property or assets of the Company now owned or hereafter acquired by it or on
any income or revenues or rights in respect thereof, except for liens in favor
of Fluence or Silicon Valley Bank or their affiliates;
(c) enter into any arrangement, directly or indirectly, with
any person whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property which it intends to use
for substantially the same purpose or purposes as the property being sold or
transferred;
(d) purchase, hold or acquire any capital stock, evidences of
indebtedness or other securities of, make or permit to exist any loans or
advances to, or make or permit to exist any investment or any other interest in,
any other person;
(e) merge into or consolidate with any other person, or permit
any other person to merge into or consolidate with it, or sell, transfer, lease
or otherwise dispose of (in one transaction or in a series of transactions) all
or any substantial part of its assets (whether now owned or hereafter acquired)
or any capital stock of any subsidiary, or purchase, lease or otherwise acquire
(in one transaction or a series of transactions) all or any substantial part of
the assets of any other person, except that the Company may purchase and sell
inventory in the Ordinary Course of Business;
(f) declare or pay, directly or indirectly, any dividend or
make any other distribution, whether in cash, property, securities or a
combination thereof, with respect to any shares of its capital stock or directly
or indirectly redeem, purchase, retire or otherwise acquire for value any shares
of any class of its capital stock or set aside any amount for any such purpose,
except that the Company may redeem unvested shares at cost from terminated
employees or consultants under the terms of the Company's 1997 Stock
Option/Issuance Plan.
(g) issue any capital stock or options or warrants to acquire
such to any Person other than Buyer and its affiliates, except for shares of
Common Stock issued pursuant to the exercise of outstanding options or warrants
or under future options to be granted or exercised under the Company's 1997
Stock Option/Issuance Plan.
Agreement and Plan of Merger
Page 7
(h) sell or transfer any property or assets to, or purchase or
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its affiliates, except under any agreements that exist
as of the date of this Agreement and are disclosed on the Disclosure Schedule,
or that exist as of Closing and are disclosed on the Revised Disclosure
Schedule;
(i) engage in any other activity outside the Ordinary Course
of Business or engage at any time in any business or business activity other
than the business currently conducted by it and business activities reasonably
incidental thereto;
(j) nor shall it permit any directors, officers, agents or
representatives to, directly or indirectly, initiate, solicit, encourage,
negotiate with respect to, provide any confidential information in connection
with, or otherwise facilitate, any inquiries or the making of any proposal or
offer with respect to a merger, reorganization, share exchange, consolidation or
similar transaction involving, or any purchase of all or any significant portion
of the assets or any equity securities of, it or any of its subsidiaries;
(k) purposely cause any material adverse change in the
Business Condition of the Company (or any occurrence, circumstance, or
combination thereof which could reasonably be expected to result in any such
material adverse change) from that reflected in the Company Financial Statements
as of December 31, 1997;
(l) create any contractual obligation for any material
transaction (other than the transactions contemplated herein) other than in the
Ordinary Course of Business;
(m) increase or modify the compensation or benefits payable or
to become payable by the Company to any of its Officers and Executive Staff, or
changes pursuant to employment agreements currently in effect or changes in
position of such Officers and Executive Staff other than through the voluntary
termination of such position by the officer or executive staff member or
termination for cause;
(n) increase or modify any bonus, pension, insurance or other
employee benefit plan, payment or arrangement (including, without limitation,
the granting of stock options, restricted stock awards or stock appreciation
rights) made to, for or with any of its Officers and Executive Staff, unless
such increase or modification includes all Service Providers of the Company;
(o) alter any term of any outstanding security of the Company,
unless such alteration is necessary to meet the terms of this Agreement;
(p) make any loan, advance or capital contribution to, or
investment in, any person other than advances made in the Ordinary Course of
Business of the Company;
(q) make any material change in its method of operating the
business or in its accounting practices relating thereto;
Agreement and Plan of Merger
Page 8
(r) make any mortgage, pledge, lien, security interest,
hypothecation, charge or other encumbrance imposed or agreed to be imposed on
the assets of the Company other than liens arising with respect to taxes not yet
due and payable, and such liens and encumbrances, if any, which arise in the
ordinary course of business and are not material in nature or amount either
individually or in the aggregate, and which do not detract from the value of the
assets of the Company or impair the operations conducted thereon;
(s) sell, lease, or dispose of, or make any agreement to sell,
lease, or dispose of any of the assets of the Company, other than sales, leases,
or dispositions in the usual and ordinary course of business and consistent with
prior practice;
(t) make any (A) incurrence, assumption or guarantee by the
Company of any debt for borrowed money other than trade indebtedness incurred in
the ordinary course of business consistent with past practice, provided that
such loan or loans are at market rates, the proceeds therefrom are used solely
for working capital purposes by the Company and the total outstanding
indebtedness of the Company at any time does not exceed $2,200,000; (B) waiver
or compromise by it of a valuable right or of a debt owed to it; (C) any
satisfaction or discharge of any lien, claim, or encumbrance or payment of any
obligation by it, except that which is not material to its Business Condition;
(D) issuance or sale of any securities convertible into or exchangeable for debt
securities of the Company; or (E) issuance or sale of options or other rights to
acquire from the Company, directly or indirectly, debt securities of the Company
or any securities convertible into or exchangeable for any such debt securities;
and
(u) transfer or grant any right under Intellectual Property
Rights other than those transferred or granted in the Ordinary Course of
Business consistent with past practice.
7.2 AFFIRMATIVE COVENANTS
(a) This Agreement and the transaction contemplated hereby
have been approved by the Board of Directors of the Company, and holders
representing at least a majority of the Opmaxx Class A Common, Series A
Preferred, and Series B Preferred shares (treated as a single class) and holders
representing at least two-thirds of the Opmaxx Series A Preferred Stock (voting
as a separate class) have executed irrevocable individual proxies authorizing
Xxxxxxx X. Xxxxxxx to vote their shares in favor of the Merger. Xxxxxxx X.
Xxxxxxx shall convene a meeting of the stockholders and vote thereat all shares
as authorized by such proxies in favor of the Merger, as promptly as practicable
after being requested to do so by Buyer.
(b) At or before the Closing Date, the Company will prepare
and deliver to Buyer a revised Disclosure Schedule ("REVISED DISCLOSURE
SCHEDULE"), as if the Company were making the representations and warranties set
forth in this Agreement as of the Closing Date.
Agreement and Plan of Merger
Page 9
8. COVENANTS OF THE BUYER
8.1 AFFIRMATIVE COVENANTS
(a) Buyer agrees to extend credit to the Company up to a
maximum amount of $1,750,000. One million one hundred and fifty thousand dollars
($1,150,000) of such credit has already been provided. The remaining $600,000 of
credit will be made available to the Company immediately upon execution of this
Agreement, on a revolving basis, for use by the Company at any time, from time
to time, and for any reason, provided that the Company's withdrawals be made in
increments of $50,000 or more (or, if less than $50,000 of the original $750,000
credit facility remains, then that lesser amount). Buyer agrees to disburse the
amount requested by the Company within five (5) business days of receiving the
Company's request. The additional $600,000 in revolving credit will be evidenced
by a promissory note substantially in the form of Exhibit G attached hereto, and
secured by certain assets of the Company as provided in the existing Security
Agreement between the parties.
(b) Buyer agrees to forgive fifty percent (50%) of the
outstanding loan amount owed by the Company pursuant to Section 8.1(a) as of the
termination date of this Agreement indicated in Section 11.6, provided that: (i)
Buyer has not obligated itself to consummate the transactions contemplated by
this Agreement prior to such date by providing notice to the Company of its
intent to do so prior to December 31, 1999; and (ii) the Company is not in
material breach of any covenants set forth in Section 7 hereof as of the
termination date.
(c) During the term of this Agreement and throughout the
period in which Additional Merger Consideration may be earned pursuant to
Section 9, Buyer agrees to take necessary steps to cause the worldwide sales and
distribution organization of its parent corporation, Credence Systems
Corporation ("Credence"), to participate in sales efforts to promote the
Company's Products as it promotes Buyer's products.
(d) During the term of this Agreement and throughout the
period in which Additional Merger Consideration may be earned pursuant to
Section 9, Buyer agrees that its worldwide sales and distribution organization
will pursue sales of the Company's Products as it pursues sales of its own
products.
(e) During the term of this Agreement and throughout the
period in which Additional Merger Consideration may be earned pursuant to
Section 9, Buyer agrees that its marketing organization will promote the
Company's Products as it promotes its own products.
(f) During the term of this Agreement and throughout the
period in which Additional Merger Consideration may be earned pursuant to
Section 9, Buyer agrees that its marketing communications organization will
support promotion of the Company's Products through trade shows, press releases,
and the like, at no charge and as requested by the Company.
(g) Buyer agrees that within six (6) months after execution of
this Agreement, it will make available to the Company at no charge, four (4)
software engineers to perform
Agreement and Plan of Merger
Page 10
development work for the Company. Buyer agrees that these four engineers will be
available to the Company on an exclusive basis, and will remain so until
termination of this Agreement. Buyer further agrees that the work product of
these four engineers will be the sole and exclusive intellectual property of the
Company (notwithstanding their employment status), and that Buyer will take all
actions and execute any further agreements necessary to ensure that such work
product remains the sole and exclusive property of the Company, including,
without limitation, requiring each of such engineers to execute confidentiality
and development agreements in the Company's favor and the appropriate
assignments of intellectual property.
(h) During the term of this Agreement and throughout the
period in which Additional Merger Consideration may be earned pursuant to
Section 9, Buyer agrees to take necessary steps to cause Credence to provide a
source code copy of its Analog Wave Tool to the Company at no charge for
development purposes, and to license the Company to distribute binary executable
versions of the Analog Wave Tool to its customers.
9. ADDITIONAL MERGER CONSIDERATION
The Opmaxx Common Stockholders shall be entitled to receive the
following amounts in addition to the Merger Consideration:
9.1 DEFINITION OF NET RECEIPTS FOR PAYMENT OF ROYALTIES. The
term "NET RECEIPTS" shall mean any money actually received by Buyer from the
sale, lease, rental, license or other commercial exploitation of the Products,
including maintenance fees, but excluding fees for engineering consulting
services and after deduction of all amounts related to returns and allowances
and uncollectible accounts. The term "PRODUCTS", as used herein, shall mean the
computer software programs sold or under development by Opmaxx or on the Opmaxx
sales price list as of the Closing Date as such Products are further developed,
extended, modified, enhanced and otherwise customized after the Closing. The
term Products shall also include all present and future enhancements,
corrections, modifications, upgrades, variations, revisions, improvements,
translations in human or machine-readable languages and codes, conversions,
derivatives, new versions or releases of or to the Products at any time
developed after the Closing. Buyer agrees not to incorporate products, whether
developed by Buyer or alternative sources, into its distribution that reduces
the expected revenue stream from the Additional Merger Consideration.
9.2 PAYMENT OF ADDITIONAL MERGER CONSIDERATION. Subsequent to
the Closing, Buyer shall be obligated to pay to the Escrow Agent within
forty-five (45) days of the end of each calendar quarter additional Merger
Consideration (the "ADDITIONAL MERGER CONSIDERATION") equal to ten percent (10%)
of Net Receipts for sales of the Products from the Closing Date through December
31, 2003. Such payments of Additional Merger Consideration are required for all
sales made through December 31, 2003, even if payments for such sales are not
received until a later date. The Additional Merger Consideration payments will
be held, administered, and disbursed by the Escrow Agent, subject to offset
according to Section 10.3, pursuant to the terms of the Escrow Agreement.
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9.3 BUNDLED SALES OF THE PRODUCTS. In the event the Company's
successor sells, rents, leases or sublets the Products in conjunction with other
products where the Products are not separately itemized and invoiced, then the
Opmaxx Common Stockholders shall be entitled to receive, and Buyer shall be
obligated to pay, Additional Merger Consideration, at the applicable rate set
forth in Section 9.2 above, based upon the proportionate percentage of the
catalog value of the Product or Products in relation to the aggregate catalog
value of the Product or Products and the other products sold and invoiced as a
bundled package.
9.4 RECORDS. Buyer covenants and agrees to maintain adequate
records of all transactions contemplated hereby, subject to the Nondisclosure
Agreement. The Common Stockholder Representative shall be entitled to audit and
examine the records maintained by Buyer in connection with the transactions
contemplated hereby at Buyer's principal executive offices during customary
business hours and upon five (5) business days' prior notice, and to make copies
of said financial records of Buyer reflecting transactions directly related to
sale of the Products. The Common Stockholder Representative shall pay for costs
of any audits conducted by the Common Stockholder Representative, except that if
Buyer's royalty calculations are determined to be greater than 2% in error,
Buyer shall pay the costs of such audit.
9.5 GOOD FAITH EFFORTS. Buyer covenants and agrees to provide
the funding, staffing and support necessary or desirable to further develop,
market, and distribute the Products at least equivalent to the funding, staffing
and support expended by the Company prior to the Merger.
10. INDEMNIFICATION
10.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS.
(a) Notwithstanding any investigation conducted at any time
with regard thereto by or on behalf of any party to this Agreement, all
representations and warranties of the Company and the Buyer shall survive the
execution, delivery, and performance of this Agreement until January 1, 2004. No
investigation made by or on behalf of Buyer with respect to the Company shall be
deemed to affect Buyer's reliance on the representations, warranties, covenants
and agreements made by the Company contained in this Agreement and shall not be
a waiver of Buyer's right to indemnity as herein provided for the breach or
inaccuracy of or failure to perform or comply with any of the Company's
representations, warranties, covenants or agreements in this Agreement. No
investigation made by or on behalf of the Company with respect to the Buyer
shall be deemed to affect the Company's reliance on the representations,
warranties, covenants and agreements made by the Buyer contained in this
Agreement and shall not be a waiver of the Company's right to indemnity as
herein provided for the breach or inaccuracy of or failure to perform or comply
with any of the Buyer's representations, warranties, covenants or agreements in
this Agreement.
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Page 12
(b) Nothing in this Agreement shall be construed as limiting
in any way the remedies that may be available to a party in the event of fraud
relating to the representations, warranties, agreements or covenants made by any
other party in this Agreement.
(c) Notwithstanding anything in this Agreement to the
contrary, the Company shall have liabilities and obligations for Claims and
Liabilities (as defined herein) under this Section 10 only with respect to
claims submitted or notices of claims provided to the Escrow Agent and the
Common Stockholder Representative on or before December 31, 2003.
Notwithstanding the expiration date of the representations, warranties,
covenants and agreements set forth herein, if Buyer shall notify the Escrow
Agent and the Common Stockholder Representative with respect to the submission
of a claim prior to January 1, 2004, the Company's liability or obligation for
Claims and Liabilities shall continue in full force and effect until settled in
accordance with the terms and conditions of the Escrow Agreement.
10.2 INDEMNIFICATION OF FLUENCE
Subject to the limitations contained in this section, the
Opmaxx Common Stockholders shall indemnify and hold harmless Fluence, its
affiliates, officers, directors, stockholders, employees and agents from and
against any and all losses, claims, judgments, liabilities, demands, charges,
suits, penalties, costs or expenses, including court costs and attorneys' fees
("CLAIMS AND LIABILITIES") with respect to or arising from (i) the breach of any
warranty or any inaccuracy of any representation made by Opmaxx in this
Agreement, or (ii) the breach of any covenant or agreement made by Opmaxx in
this Agreement. The Company shall not have breached a representation or warranty
in this Agreement to the extent that the Company became required to disclose a
new item or matter on the Revised Disclosure Schedule if the Company learns of
the fact, condition or circumstance requiring such disclosure after the date of
this Agreement and prior to Closing.
10.3 LIMITATIONS TO THE INDEMNIFICATION OF FLUENCE
Anything to the contrary notwithstanding, Fluence shall not be
indemnified and held harmless in respect of any Claims and Liabilities which are
covered by insurance owned by Opmaxx to the extent that any net loss is reduced
by such insurance. Fluence's recourse in respect of its right to indemnity by
and from the Opmaxx Common Stockholders shall be limited to the Additional
Merger Consideration held or to be deposited into escrow under the Escrow
Agreement; Fluence's indemnity shall not extend to Additional Merger
Consideration once it is paid out to the Opmaxx Common Stockholders pursuant to
the Escrow Agreement. Fluence shall not be permitted to enforce any claim for
indemnification under this Section 10 until the aggregate amount of Claims and
Liabilities exceeds $50,000 (the "THRESHOLD"). Once Claims and Liabilities in
excess of the Threshold have been asserted by Fluence, all Claims and
Liabilities above that amount may be pursued by Fluence unless otherwise limited
by this Agreement or the Escrow Agreement, provided, however, that the Agreement
will control in the case of any conflicts between it and the Escrow Agreement.
The parties understand and agree that: (i) the obligation of the Opmaxx Common
Stockholders to indemnify Fluence and its related parties as provided in this
Section 10 shall be the exclusive remedy for Fluence and such
Agreement and Plan of Merger
Page 13
related parties in the event of any breach of any express or implied
representation, warranty or covenant of Opmaxx under this Agreement; (ii) the
only recourse for Fluence and such related parties to enforce such
indemnification obligations shall be through the Escrow Agreement against the
Additional Merger Consideration; and (iii) the indemnity obligations of the
Opmaxx Common Stockholders under this Section 10 shall terminate after 11:59
p.m. (PST) on December 31, 2003, except insofar as Fluence has properly asserted
a claim for indemnification under this Section 10 and pursuant to the terms of
the Escrow Agreement and such claim has not been resolved in accordance with the
terms of the Escrow Agreement.
10.4 INDEMNIFICATION OF OPMAXX
Fluence shall defend, indemnify and hold harmless Opmaxx, and
its officers, directors, stockholders, employees and agents against and in
respect to all Claims and Liabilities with respect to or arising from (i) breach
of any warranty or any inaccuracy of any representation made by Fluence, or (ii)
breach of any covenant or agreement made by Fluence in this Agreement.
10.5 LIMITATIONS TO THE INDEMNIFICATION OF OPMAXX
Anything to the contrary notwithstanding, Opmaxx shall not be
indemnified and held harmless in respect of any Claims and Liabilities which are
covered by insurance owned by Fluence to the extent that any net loss is reduced
by such insurance. Opmaxx shall not be permitted to enforce any claim for
indemnification under this Section 10 until the aggregate amount of Claims and
Liabilities exceeds the Threshold indicated in Section 10.3. Once Claims and
Liabilities in excess of the Threshold have been asserted by Opmaxx, all Claims
and Liabilities above that amount may be pursued by Opmaxx unless otherwise
limited by this Agreement. The parties understand and agree that the indemnity
obligations of Fluence under this Section 10 shall terminate after 11:59 p.m.
(PST) on December 31, 2003, except insofar as Opmaxx has properly asserted a
claim for indemnification under this Section 10.
11. MISCELLANEOUS
11.1 SUCCESSORS AND ASSIGNS.
The provisions of this Agreement shall inure to the benefit
of, and be binding upon, the successors and assigns of the Parties. Nothing in
this Agreement, express or implied, is intended to confer upon any Party other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
11.2 GOVERNING LAW AND DISPUTE RESOLUTION.
This Agreement shall be governed by and construed under the
laws of the State of Oregon without giving effect to any choice of law rule that
would cause the application of the laws of any jurisdiction other than the
internal laws of the State of Oregon to the rights and duties
Agreement and Plan of Merger
Page 14
of the Parties hereunder. Any disputes arising among the Parties in
connection with this Agreement shall be settled by the Parties amicably through
good faith discussions upon the written request of any Party. In the event that
any such dispute cannot be resolved through such discussions within a period of
sixty (60) days after delivery of such notice, the dispute shall be finally
settled by arbitration in Portland, Oregon, in accordance with the rules then in
effect of the American Arbitration Association. The arbitrator(s) shall have the
authority to grant specific performance, and to allocate between the Parties the
costs of arbitration in such equitable manner as the arbitrator(s) may
determine. The prevailing party in the arbitration shall be entitled to receive
reimbursement of its reasonable expenses incurred in connection therewith.
Judgment upon the award so rendered may be entered in any court having
jurisdiction or application may be made to such court for judicial acceptance of
any award and an order of enforcement, as the case may be.
11.3 NOTICES.
Any and all notices, requests, demands and other
communications required or otherwise contemplated to be made under this
Agreement, shall be in writing and shall be deemed to have been duly given (i)
if delivered personally, when received, (ii) if transmitted by facsimile, on the
first (1st) business day following receipt of a confirmation of receipt, or
(iii) if by overnight courier service, on the second (2nd) business day
following the date of deposit with such courier service. All such notices,
requests, demands and other communications shall be addressed as follows:
If to the Company:
Opmaxx, Inc.
0000 XX Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx, President and CEO
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx Xxxx
1600 Pioneer Tower
000 X.X. Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. XxXxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Buyer:
Fluence Technology, Inc.
Agreement and Plan of Merger
Page 15
0000 X.X. Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx XxXxxxxxxx, President and CEO
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
Two Embarcadero Place
0000 Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
11.4 EXPENSES.
Each Party shall pay all costs and expenses incurred by it in
connection with this Agreement. Each Party agrees to cooperate with the other
Party (at the other Party's expense) in obtaining any regulatory approvals
required in connection with the transactions contemplated hereby.
11.5 AMENDMENTS AND WAIVERS.
Any term of this Agreement may be amended only with the
written consent of each of the Parties. No waiver of any term or condition of
this Agreement shall be valid or binding on any Party unless the same shall have
been mutually assented to in writing by each Party. The failure of a Party to
enforce at any time any of the provisions of this Agreement, or the failure to
require at any time performance by one or both of the other Parties of any of
the provisions of this Agreement, shall in no way be construed to be a present
or future waiver of such provisions, nor in any way affect the ability of a
Party to enforce each and every such provision thereafter.
11.6 TERMINATION.
If the Closing shall not have occurred by the earlier of (a)
January 1, 2000, and (b) the date sixty days after the Company shall have
provided to Buyer financial statements of the Company prepared using GAAP
applied consistent with past practices showing two consecutive financial
quarters of positive net income, then this Agreement shall terminate.
Agreement and Plan of Merger
Page 16
11.7 SEVERABILITY.
If any provision in this Agreement shall be found or be held
to be invalid or unenforceable then the meaning of said provision shall be
construed, to the extent feasible, so as to render the provision enforceable,
and if no feasible interpretation would save such provision, it shall be severed
from the remainder of this Agreement which shall remain in full force and effect
unless the severed provision is essential and material to the rights or benefits
received by any Party. In such event, the Parties shall use best efforts to
negotiate, in good faith, a substitute, valid and enforceable provision or
agreement which most nearly affects the Parties' intent in entering into this
Agreement.
11.8 FURTHER ASSURANCES.
The Parties shall each perform such acts, execute and deliver
such instruments and documents, and do all such other things as may be
reasonably necessary to accomplish the transactions contemplated in this
Agreement.
11.9 SPECIFIC PERFORMANCE.
Without prejudice to the rights and remedies otherwise
available to Buyer, Buyer shall be entitled to equitable relief by way of
injunction or otherwise if the Company breaches or threatens to breach any of
the provisions of this Agreement.
11.10 REFERENCES; SUBJECT HEADINGS.
Unless otherwise indicated, references to Sections and
Exhibits herein are to Sections of, and Exhibits to, this Agreement. The subject
headings of the Sections of this Agreement are included for the purpose of
convenience of reference only, and shall not affect the construction or
interpretation of any of its provisions.
11.11 COUNTERPARTS.
This Agreement may be executed in one or more counterparts,
but all of which together shall constitute one and the same instrument.
11.12 ENTIRE AGREEMENT.
This Agreement and the Schedules and Exhibits referred to
herein embody the entire agreement and understanding of the parties and
supersede any and all prior agreements, arrangements and understandings relating
to matters provided for herein, with the express exception of the Mutual
Nondisclosure Agreement between Opmaxx and Fluence dated October 30, 1998, and
any amendments thereto ("NONDISCLOSURE AGREEMENT"), which will continue in force
for the full term thereof.
Agreement and Plan of Merger
Page 17
11.13 NONSOLICITATION.
Each party agrees that prior to the Closing Date or for a two
(2) year period after termination pursuant to Section 11.6, it will not solicit
for itself or any affiliated competing company or business organization, any
employee of the other party, whether or not such employee's employment is
pursuant to a written agreement and whether or not such employment is for a
determined period or is at will.
[The Remainder of this Page Left Intentionally Blank]
Agreement and Plan of Merger
Page 18
IN WITNESS WHEREOF, the Parties have caused their respective
duly authorized representatives to execute this Agreement as of the date first
written above.
OPMAXX, INC.
By:
---------------------
Xxxxxxx X. Xxxxxxx
President and CEO
FLUENCE TECHNOLOGY, INC.
By:
---------------------
Xxxx XxXxxxxxxx
President and CEO
Agreement and Plan of Merger
Page 19
EXHIBIT A
As used in this Agreement, the following terms shall have the
meanings specified below:
"ADDITIONAL MERGER CONSIDERATION" shall have the meaning
assigned in Section 9.2.
"AGREEMENT" shall have the meaning assigned in the heading of
this Agreement.
"BUSINESS CONDITION" shall have the meaning assigned in the
opening paragraph of Exhibit D.
"BUSINESS MATERIALS" shall have the meaning assigned in
Section D.14(a) of Exhibit D.
"BUYER" shall have the meaning assigned in the heading of this
Agreement.
"BUYER'S FINANCIAL STATEMENTS" shall have the meaning assigned
in Section E.5 of Exhibit E.
"BUYER'S INTERIM FINANCIAL STATEMENTS" shall have the meaning
assigned in Section E.5 of Exhibit E.
"CLAIMS AND LIABILITIES" shall have the meaning assigned in
Section 10.2.
"CLASS A WARRANTS" shall have the meaning assigned in Section
D.3(a) of Exhibit D.
"CLOSING" shall have the meaning assigned in Section 3.
"CLOSING DATE" shall have the meaning assigned in Section 3.
"COBRA" shall have the meaning assigned in Section D.19 of
Exhibit D.
"COMMON STOCK" shall have the meaning assigned in Recital B.
"COMMON STOCKHOLDER REPRESENTATIVE" shall have the meaning
assigned in the Escrow Agreement.
"COMPANY" shall have the meaning assigned in the heading of
this Agreement.
"COMPANY FINANCIAL STATEMENTS" shall have the meaning assigned
in Section D.7 of Exhibit D.
"COMPANY OPTIONS" shall have the meaning assigned in Section
D.3(a) of Exhibit D.
Page 1 - Exhibit A
to Agreement and Plan of Merger
"COMPANY RETURNS" shall have the meaning assigned in Section
D.11 of Exhibit D.
"CONTRACTS" shall have the meaning assigned in Section D.13 of
Exhibit D.
"DELAWARE CODE" shall have the meaning assigned in Section
2.8.
"DISCLOSURE SCHEDULE" shall have the meaning assigned in the
opening paragraph of Exhibit D.
"DISSENTING SHARES" shall have the meaning assigned in Section
2.8.
"EXCHANGE AGENT" shall have the meaning assigned in Section
2.6.
"EXECUTIVE STAFF" shall mean the installed officers of Opmaxx.
"EFFECTIVE TIME OF THE MERGER" shall have the meaning assigned
in Section 2.1.
"ERISA" shall have the meaning assigned in Section D.19 of
Exhibit D.
"ERISA AFFILIATE" shall have the meaning assigned in Section
D.19 of Exhibit D.
"FLUENCE" shall have the meaning assigned in the heading of
this Agreement.
"GAAP" shall have the meaning assigned in Section D.7 of
Exhibit D.
"GOVERNMENTAL ENTITY" shall have the meaning assigned in
Section D.5 of Exhibit D.
"HSR ACT" shall have the meaning assigned in Section D.5 of
Exhibit D.
"INTELLECTUAL PROPERTY RIGHTS" shall have the meaning assigned
in Section D.14 of Exhibit D.
"INTERIM FINANCIAL STATEMENTS" shall have the meaning assigned
in Section D.7 of Exhibit D.
"INTERESTED PARTIES" shall have the meaning assigned in
Section D.20 of Exhibit D.
"IRS" shall have the meaning assigned in Section D.11 of
Exhibit D.
"MATERIAL ADVERSE EFFECT" shall mean that the condition or
event has had a material and substantial adverse effect on the
financial condition, property, assets, prospects or results of
the Company.
"MERGER" shall have the meaning assigned in Recital A.
"MERGER CONSIDERATION" shall have the meaning assigned in
Section 2.4.
Page 2 - Exhibit A
to Agreement and Plan of Merger
"MERGER SUB" shall have the meaning assigned in Recital E.
"MERGER SUB COMMON STOCK" shall have the meaning assigned in
Section 2.3.
"NET RECEIPTS" shall have the meaning assigned in Section 9.1.
"NON-DISCLOSURE AGREEMENT" shall have the meaning assigned in
Section 11.12.
"1933 ACT" shall have the meaning assigned in Section E.4 of
Exhibit E.
"1997 FINANCIAL STATEMENTS" shall have the meaning assigned in
Section D.7 of Exhibit D.
"OFFICERS" shall have the meaning assigned in the Delaware
Code.
"OPMAXX" shall have the meaning assigned in the heading of
this Agreement.
"OPMAXX COMMON STOCKHOLDERS" shall mean all record holders of
Opmaxx Class A or Class B Common Stock as of the Effective
Time of the Merger.
"OPMAXX OPTIONS" shall have the meaning assigned in Section
2.5.
"OPMAXX STOCK" shall have the meaning assigned in Recital B.
"OPTION CONVERSION NUMBER" shall have the meaning assigned in
Section 2.5.
"ORDINARY COURSE OF BUSINESS" shall mean the Company's usual
manner and methods of conducting its business, as well as
market, commercial, and financial events which ordinarily
occur.
"PARTIES" and "PARTY" shall have the meanings assigned in the
heading of this Agreement.
"PLANS" shall have the meaning assigned in Section D.19 of
Exhibit D.
"PREFERRED STOCK" shall have the meaning assigned in Recital
B.
"PRODUCTS" shall have the meaning in Section 9.1.
"REVISED DISCLOSURE SCHEDULE" shall have the meaning in
Section 7.2(b).
"RULE 144" shall have the meaning assigned in Section E.5 of
Exhibit E.
"SERIES B WARRANTS" shall have the meaning assigned in Section
D.3(a) of Exhibit D.
"SERVICE PROVIDERS" shall mean employees, consultants and
independent contractors.
Page 3 - Exhibit A
to Agreement and Plan of Merger
"SHARES" shall have the meaning assigned in Recital D.
"TAX," "TAX RETURNS", and "TAXES" shall have the meanings
assigned in Section D.11 of Exhibit D.
"TEKTRONIX WARRANT" shall mean the Warrant to purchase the
Company's Common Stock pursuant to that certain Warrant
Agreement dated August 28, 1998.
"THRESHOLD" shall have the meaning given it in Section 10.3.
"VESTED OPTIONS" shall mean all vested options to purchase the
Company's Common Stock pursuant to the terms of the Company's
1997 Stock Option/Issuance Plan.
Page 4 - Exhibit A
to Agreement and Plan of Merger
EXHIBIT B
CERTIFICATE OF MERGER
OF
OPMAXX ACQUISITION CORPORATION, A DELAWARE CORPORATION
WITH AND INTO
OPMAXX, INC., A DELAWARE CORPORATION
Opmaxx, Inc. a corporation organized under the Delaware
General Corporation Act (the "Act"), hereby certifies that:
1. The name and state of incorporation of each of the constituent
corporations are:
NAME STATE OF INCORPORATION
---- ----------------------
Opmaxx Acquisition Corporation Delaware
Opmaxx, Inc. Delaware
2. An Agreement and Plan of Merger has been adopted, certified,
executed and acknowledged by each of the constituent corporations in accordance
with the Act.
3. Opmaxx, Inc. will be the surviving corporation in the merger.
4. The Restated Certificate of Incorporation of Opmaxx, Inc. attached
as EXHIBIT A shall be the certificate of incorporation of the surviving
corporation.
5. The executed Agreement and Plan of Merger is on file at the
following place of business of the surviving domestic corporation:
Opmaxx, Inc.
0000 X.X. Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
6. A copy of the Agreement and Plan of Merger will be furnished by the
surviving corporation on request and without cost to any stockholder of the
constituent corporations.
IN WITNESS WHEREOF, this Certificate of Merger has been duly
executed as of the 7th day of September 1999, and is being filed in accordance
with Section 251 of the Act by an authorized person of the surviving
corporation.
OPMAXX, INC., a Delaware
corporation
By:
-----------------------
[Name]
-----------------------
[Position]
Page 1 - Exhibit B
to Agreement and Plan of Merger
EXHIBIT C
The eight million dollar ($8,000,000.00) Merger Consideration
will be allocated in the following manner:
1. Retire any debt obligations of the Company
outstanding as of immediately prior to the Effective
Time of the Merger (including any Accounts Payable
and other Current Liabilities). The Company's debt
will first be reduced by the amount of any Accounts
Receivable (net of reserves) or cash on the balance
sheet as of the Effective Time of the Merger.
2. Holders of the Company's Series A Preferred Stock
will receive $4.89 per Series A Preferred share.
3. Holders of the Company's Series B Preferred Stock
will receive $2.55 per Series B Preferred share.
4. Holders of the Company's Class A and B Common Stock
will receive a dollar amount per share equal to the
amount of the remaining Merger Consideration divided
by the number of issued and outstanding shares of the
Company's Class A and B Common Stock at the Effective
Time of the Merger.
Page 1 - Exhibit C
to Agreement and Plan of Merger
EXHIBIT D
Except as set forth in the corresponding Sections or
subsections of the disclosure schedule (the "DISCLOSURE SCHEDULE") delivered by
the Company to Buyer and attached hereto, the Company makes the representations
and warranties set forth below, which shall be true and correct as of the date
hereof. Except as set forth on the Revised Disclosure Schedule, to be delivered
by the Company to the Buyer at or prior to the Closing, the representations and
warranties set forth below shall also be true and correct as of the Closing. As
used in this Agreement, "BUSINESS CONDITION" shall refer to the Company's
financial condition, properties, assets, liabilities, prospects and results of
operations.
D.1 ORGANIZATION AND EXISTENCE OF OPMAXX.
Opmaxx is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has all requisite
corporate power to carry on its business as now conducted and as proposed to be
conducted and to enter into and, subject to stockholder approval, perform its
obligations under this Agreement and the other agreements contemplated hereby to
which it is as party. Opmaxx is qualified to do business as a foreign
corporation and is in good standing in every jurisdiction in which the character
or location of the assets owned by it or the nature of the business transacted
by it requires such qualification where the failure to so qualify would have a
Material Adverse Effect. Opmaxx has delivered to Fluence, or will deliver at the
Closing, true, correct and complete copies of (a) the Certificate of
Incorporation (duly certified by the Delaware Secretary of State), (b) the
Bylaws (certified by the Secretary of Opmaxx), and (c) the Minute and Stock
Books (certified by the Secretary of Opmaxx) of Opmaxx.
D.2 AUTHORITY AND BINDING EFFECT.
The Company has full power and authority to enter into this
Agreement to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by all parties, the performance by the Company of its obligations hereunder and
thereunder, and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate or other action. The
Company has taken all necessary action with respect to the execution and
delivery of this Agreement. This Agreement constitutes a legal, valid and
binding obligation of the Company, enforceable in accordance with its respective
terms, except as limited by applicable bankruptcy, insolvency, moratorium,
reorganization or other laws affecting creditors' rights and remedies generally.
D.3 AUTHORIZED CAPITAL STOCK OF OPMAXX.
(a) The authorized capital stock of the Company consists of
15,000,000 shares of Class A Common Stock, 10,000,000 shares of Class B Common
Stock, and 2,000,000 shares of Preferred Stock, of which 639,423 shares have
been designated as Series A Preferred Stock and
Page 1 - Exhibit D
to Agreement and Plan of Merger
400,000 shares have been designated as Series B Preferred Stock. As of the date
of this Agreement, there were issued and outstanding 2,061,439 shares of Class A
Common Stock, 1,851,571 shares of Class B Common Stock, 352,920 shares of Series
A Preferred Stock, 375,112 shares of Series B Preferred Stock, and options to
purchase 498,087 shares of Class B Common Stock (the "COMPANY OPTIONS"),
warrants to purchase 224,198 shares of Class A Common Stock (the "CLASS A
WARRANTS"), and warrants to purchase 53,000 shares of Series B Preferred Stock
(the "SERIES B WARRANTS"). As of the date of this Agreement, there were 750,000
shares of Class B Common Stock reserved for issuance upon the exercise of
outstanding Company Options. Except as set forth above, there are no outstanding
shares of Company capital stock or options, warrants, calls, conversion rights,
commitments or agreements of any character to which the Company is a party or by
which the Company may be bound that do or may obligate the Company to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
the Company capital stock or that do or may obligate the Company to grant,
extend or enter into any such option, warrant, call, conversion right,
commitment or agreement.
(b) All outstanding shares of capital stock are, and any
shares of Common Stock issued upon exercise of any Company Option will be, duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights created by statute, the Company's Certificate of Incorporation
or Bylaws, or any agreement to which the Company is a party or by which the
Company may be bound. All outstanding capital stock or other Company securities
have been issued in compliance with applicable foreign, federal and state
securities laws. Holders of issued and outstanding capital stock have no basis
for asserting rights to rescind the purchase of any such capital stock.
(c) SCHEDULE D.3 contains a complete and accurate list of, and
the number of shares or Company Options owned of record by, all holders of
outstanding capital stock and outstanding vested and unvested Company Options
and their current residence address.
(d) Except for any restrictions imposed by applicable state
and federal securities laws, there is no right of first refusal, co-sale right,
right of participation, right of first offer, option or other restriction on
transfer applicable to any shares of the Company capital stock to which the
Company is a party or which are known to Company.
(e) The Company is not a party or subject to any agreement or
understanding, and there is no agreement or understanding between or among any
persons that affects or relates to the voting or giving of written consent with
respect to any outstanding security of the Company, except for those referred to
in Recital B and Section 7.2 of the Agreement.
D.4 CONFLICTS.
The execution and delivery of this Agreement does not and the
performance and consummation of the transactions contemplated hereby will not,
conflict with or result in any conflict with, breach or violation of any
statute, law, rule, regulation, judgment, order, decree, or ordinance applicable
to the Company or its properties or assets, or conflict with or result in any
conflict with, breach or violation of or default (with or without notice or
lapse of time, or both)
Page 2 - Exhibit D
to Agreement and Plan of Merger
under, or give rise to a right of termination, cancellation, forfeiture or
acceleration of any obligation or the loss of a benefit under, or result in the
creation of a lien or encumbrance on any of the properties or assets of the
Company pursuant to (i) any provision of the current Certificate of
Incorporation or Bylaws of the Company or (ii) any agreement, contract, note,
mortgage, indenture, lease, instrument, permit, concession, franchise or license
to which the Company is a party or by which the Company or any of its property
or assets may be bound or affected.
D.5 CONSENTS.
No consent, approval, order or authorization of, or
registration, declaration of, or qualification or filing with, any court,
administrative agency, commission, regulatory authority or other governmental or
administrative body or instrumentality, whether domestic or foreign (a
"GOVERNMENTAL ENTITY"), is required by or with respect to the Company in
connection with the execution and delivery of this Agreement by the Company or
the consummation by the Company of the transactions contemplated hereby, except
for filings, if any, required to be made by each of Buyer and the Company under
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX XXX").
D.6 NO SUBSIDIARIES.
Opmaxx has no subsidiaries or equity investments in any
person.
D.7 FINANCIAL STATEMENTS; LIABILITIES.
The Company has furnished to Buyer a complete and accurate
copy of its audited balance sheet as of December 31, 1997 and its audited
statements of operations, cash flow and stockholders' equity for the fiscal year
ending December 31, 1997 (the "1997 FINANCIAL STATEMENTS") and its unaudited
balance sheet as of December 31, 1998 and its unaudited interim statements of
operation, cash flow and stockholders' equity for the period ended December 31,
1998 (the "INTERIM FINANCIAL STATEMENTS") (collectively the 1997 and Interim
Financial Statements are referred to herein as the "COMPANY FINANCIAL
STATEMENTS"). The Company Financial Statements are attached hereto as SCHEDULE
D.7. The Company Financial Statements have been prepared in accordance with
generally accepted accounting principles ("GAAP") consistently applied and
fairly present the consolidated financial position of the Company as and at the
dates thereof and the Company's consolidated results of operations and cash
flows for the periods then ended. Subject, in the case of the Interim Financial
Statements, to normal year end adjustments.
D.8 LEASES
Except as indicated in SCHEDULE D.8, the leases set forth in
SCHEDULE D.8 hereto are in full force and effect and there is no existing
default of a material nature under any of such leases on the part of Opmaxx or,
to the best knowledge of Opmaxx, the other party thereunder. Such leases consist
only of documents described in SCHEDULE D.8 hereto, complete and correct copies
of which have been provided by Opmaxx to Fluence. The buildings and any major
items
Page 3 - Exhibit D
to Agreement and Plan of Merger
of equipment and machinery reflected on the Company Financial Statements are
generally in such operating condition and repair, ordinary wear and tear
excepted, as is adequate for the conduct of Opmaxx's business.
D.9 ABSENCE OF CERTAIN EVENTS.
Except as set forth in SCHEDULE D.9 attached hereto or as
updated pursuant to Section 7.2(b) of the Agreement, since December 31, 1997,
there has not been:
(a) any material adverse change in the Business Condition of
the Company (or any occurrence, circumstance, or combination thereof which could
reasonably be expected to result in any such material adverse change) from that
reflected in the Company Financial Statements as of December 31, 1997; or
(b) any increase in or modification of the compensation or
benefits payable or to become payable by the Company to any of its Service
Providers or changes pursuant to employment agreements currently in effect or
changes in position; or
(c) any increase in or modification of any bonus, pension,
insurance or other employee benefit plan, payment or arrangement (including,
without limitation, the granting of stock options, restricted stock awards or
stock appreciation rights) made to, for or with any of its Service Providers; or
(d) any modification, waiver, change, amendment, release,
rescission, accord and satisfaction, or termination of, or with respect to, any
material term, condition, or provision of any contract, agreement, license, or
other instrument to which the Company is a party and relating to or affecting
the Company's Business Condition, other than any satisfaction by performance in
accordance with the terms thereof in the usual and ordinary course of business
and consistent with prior practice; or
(e) any labor disputes or disturbances affecting in an adverse
fashion the Business Condition, including, without limitation, the filing of any
petition or charge of unfair labor practices with the National Labor Relations
Board; or
(f) any notice (written or unwritten) from any employee of the
Company who provides any services to the Company that such employee has
terminated, or intends to terminate, such employee's employment with the
Company; or
(g) any notice (written or unwritten) from any of the
Company's suppliers that any such supplier will not continue to supply the
current level and type of goods currently being provided by such supplier to the
Company on similar terms and conditions; or
(h) any adverse relationships or conditions with vendors or
customers that could have a material adverse effect on the Company's Business
Condition; or
(i) any waivers, compromises or discharges of any rights or
debt owed of substantial value to the Company; or
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to Agreement and Plan of Merger
(j) any other event or condition of any character which has
materially adversely affected the Company's Business Condition; or
(k) any purchase or lease of or any agreements to purchase or
lease capital assets by the Company in excess of $25,000 individually or in the
aggregate; or
(l) any issuance, redemption, repurchase or other acquisition
of shares of the Company capital stock (other than issuances pursuant to
exercise of the Company Options or repurchases of the Company Common Stock at
cost in the ordinary course under the terms of vesting agreements) or any
declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to the Company capital stock;
or
(m) any agreement or arrangement made by the Company to take
any action which, if taken prior to the date hereof, would have made any
representation or warranty set forth in this Section D.9 untrue or incorrect as
of the date when made.
D.10 ABSENCE OF UNDISCLOSED LIABILITIES.
There are no debts, liabilities, or obligations with respect
to the Company or to which the assets of the Company or its business, property
or assets are subject, whether liquidated, unliquidated, accrued, absolute,
contingent or otherwise, that are not identified in the Disclosure Schedule or
reflected in the Interim Financial Statements, except for liabilities and
obligations arising subsequent to December 31, 1998 from the operations of the
business of the Company in the ordinary course consistent with prior practices.
D.11 TAXES AND TAX RETURNS.
(a) Except as set forth on SCHEDULE D.11: (i) Opmaxx has
accurately prepared and duly filed all Tax Returns (as hereinafter defined)
which are required by law to be filed by it on or prior to the date hereof; (ii)
Opmaxx has duly paid all Taxes (as hereafter defined) due or claimed to be due
from it with respect to all taxable periods or portions of periods ended on or
before the date hereof (whether or not shown on any Tax Return), and there are
no assessments or claims for payment of Taxes now pending or, to the best
knowledge of Opmaxx, threatened, nor any audit of the records of Opmaxx being
made or threatened by any taxing authority for any such periods or portions
thereof; and (iii) to the knowledge of Opmaxx, there are no facts or
circumstances which could reasonably be expected to constitute a basis for
assessments or claims for the payment of additional Taxes. The amounts set up as
provisions for Taxes, if any, on the most recent balance sheet included in the
Financial Statements are sufficient for the payment of all unpaid Taxes of
Opmaxx, accrued for or applicable to the periods ended on such date and all
years and periods prior thereto and for which Opmaxx, at those dates, was
liable. Opmaxx has properly withheld and paid, or accrued for payment, when due,
to appropriate state and/or federal authorities, all sales and use taxes, if
any, and all amounts required to be withheld from payments made to its
employees, independent contractors, creditors, stockholders, or other third
parties and has also paid all employment taxes as required under applicable
laws.
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to Agreement and Plan of Merger
(b) Opmaxx has not waived any statute of limitation in respect
of any Taxes or assessments by any federal, state, county, local, foreign or
other taxing jurisdiction or agreed to any extension of time with respect to an
assessment or deficiency in any Tax. Opmaxx has not filed a consent under
Section 341(f) of the Tax Code concerning collapsible corporations. Opmaxx has
not made a consent dividend election under Section 565 of the Code, and has not
been a personal holding company under Section 542 of the Code.
(c) Opmaxx has not made any payments, and is not obligated to
make any payments, nor is Opmaxx a party to any agreement that under any
circumstances could obligate it to make any payments, that would not be
deductible under Section 280G of the Tax Code. Opmaxx has not been a United
States real property holding corporation within the meaning of Section 897(c)(2)
of the Tax Code during the applicable period specified in Section
897(c)(1)(A)(ii) of the Tax Code. Opmaxx is not a party to or bound by any tax
indemnity, tax allocation or tax sharing agreement, or any closing agreement or
offer in compromise with any taxing authority.
(d) Except as set forth on SCHEDULE D.11, Opmaxx is not, and
has never been, required to file a consolidated or combined state or federal
income Tax Return with any other person or entity and is not liable for the
Taxes of any person under Treas. Reg. Section 1.1502-6 (or any similar provision
of state, local, or foreign law), as transferee or successor, by contract or
otherwise. Opmaxx is not a party to any joint venture, partnership, or other
arrangement or contract which could be treated as a partnership for federal
income tax purposes. Opmaxx has not been a distributing corporation in a
transaction described in Section 355(a)(1) of the Code.
(e) For purposes of this Agreement, the term "Tax" or "Taxes"
means any federal, state, local, or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental (including taxes under Tax Code Section 59A), customs
duties, capital stock, franchise, profits, withholding, social security,
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.
(f) For purposes of this Agreement, the term "Tax Return"
means any return, declaration, report, claim for refund, or information return
or statement relating to Taxes, including any schedule or attachment thereto,
and including any amendment thereof.
D.12 FIXED ASSETS.
SCHEDULE D.12 is a list of all of the fixed assets used in the
Ordinary Course of Business, other than any fixed asset the replacement cost of
which would be less than $5,000.00 and which is not of material importance to
Opmaxx's operations. The fixed assets are in good working order and condition,
ordinary wear and tear excepted.
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to Agreement and Plan of Merger
D.13 MATERIAL CONTRACTS.
(a) SCHEDULE D.13 lists all material outstanding agreements,
contracts, contract rights, licenses, purchase and sale orders, quotations and
other executory commitments (collectively, the "CONTRACTS"), whether or not in
writing, to which the Company is a party that relate to any aspect of the
business, assets, services or properties of the Company.
(b) The Company has performed all of its obligations under the
terms of each Contract and is not in default thereunder. No event or omission
has occurred which but for the giving of notice or lapse of time or both would
constitute a default by the Company under any such Contract; and each such
Contract is valid and binding on all parties thereto and in full force and
effect. The Company has received no written or unwritten notice of default,
cancellation, or termination in connection with any such Contract.
D.14 INTELLECTUAL PROPERTY
(a) The Company owns, or is licensed or otherwise entitled to
exercise, without restriction (other than pursuant to applicable law and the
terms of each such license) all rights to all inventions, patents, trademarks,
trade names, service marks, copyrights, trade secrets, domain names and other
intellectual property rights, and any applications or registrations therefor
(collectively, the "INTELLECTUAL PROPERTY RIGHTS"), and all schematics,
technology, source code, know-how, computer software programs and all other
tangible and intangible information or material used or usable by the Company in
its business (collectively, the "THE BUSINESS MATERIALS") without any conflict
or infringement of the rights of others. All of such Intellectual Property
Rights and Business Materials are set forth in SCHEDULE D.14.
(b) SCHEDULE D.14 also lists (i) the jurisdictions or
countries in which each such Intellectual Property Right has been registered and
its registration number, or has been applied for and its application number;
(ii) all licenses, sublicenses and other agreements as to which the Company is a
party and pursuant to which the Company or any other person is authorized to use
any Intellectual Property Right except for licenses for software which is
generally available; and (iii) if applicable, all parties to whom the Company
has delivered copies of the Company source code, whether pursuant to an escrow
arrangement or otherwise, or parties who have the right to receive such source
code. Copies of all such licenses, sublicenses or other agreements identified
pursuant to clause (ii) above have been delivered by the Company to Buyer.
(c) The Company is not, or as a result of the execution and
delivery of this Agreement or the performance of the Company's obligations
hereunder will not be, in violation of, or lose or in any way impair any
material rights pursuant to any license, sublicense or agreement described in
SCHEDULE D.14.
(d) The Company is the absolute owner or licensee of, with all
necessary right, title and interest in and to (free and clear of any liens,
encumbrances or security interests), the Intellectual Property Rights and has
rights to the use, sale, license or disposal thereof or the material covered
thereby in connection with the services or products in respect of which the
Intellectual Property Rights are being used, sold, licensed or disposed of. The
Company has
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to Agreement and Plan of Merger
taken all commercially reasonable actions and made all applicable applications
and filings pursuant to applicable laws to perfect or protect its interests in
such Intellectual Property Rights.
(e) No claims with respect to the Intellectual Property Rights
or Business Materials have been asserted or are threatened by any person, and
there are no claims (i) to the effect that the manufacture, marketing, license,
sale or use of any product as now used or offered or proposed for use or sale by
the Company infringes any copyright, patent, trade secret or other intellectual
property right of any third party or violates any license or agreement with any
third party; (ii) contesting the right of the Company to use, sell, license or
dispose of any Intellectual Property Rights or Business Materials; or (iii)
challenging the ownership, validity or effectiveness of any of the Intellectual
Property Rights or Business Materials.
(f) All patents and registered trademarks, service marks and
other company, product or service identifiers and registered copyrights held by
the Company are valid and subsisting.
(g) There has not been and there is not now any unauthorized
use, infringement or misappropriation of any of the Intellectual Property Rights
by any third party, including, without limitation, any service provider of the
Company; the Company has not been sued or charged as a defendant in any claim,
suit, action or proceeding which involves a claim of infringement of any
patents, trademarks, service marks, copyrights or other intellectual property
rights and which has not been finally terminated prior to the date hereof; and
there are no such charges or claims outstanding
(h) No Intellectual Property Right is subject to any
outstanding order, judgment, decree, or, except as provided for in the terms of
the relevant license, stipulation or agreement restricting in any manner the
licensing thereof by the Company. The Company has not entered into any agreement
granting any third party the right to bring infringement actions with respect
to, or otherwise to enforce rights with respect to, any Intellectual Property
Right owned by the Company. The Company has the exclusive right to file,
prosecute and maintain all applications and registrations with respect to the
Intellectual Property Rights owned by the Company.
D.15 LICENSES, PERMITS, ETC.
Attached hereto as SCHEDULE D.15 is a list and description of
all material licenses, franchises, permits, easements, certificates, consents,
rights and privileges, and other governmental authorizations necessary or
appropriate to the conduct of the business of Opmaxx other than those listed on
SCHEDULE D.1. All such items are in full force Opmaxx has not received any
notice, nor does Opmaxx have any knowledge that any governmental authority
intends to cancel, terminate or modify any of such licenses or permits or that
valid grounds for any such cancellation, termination or modification currently
exist.
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to Agreement and Plan of Merger
D.16 LITIGATION.
Neither the Company nor any of the Company's officers or
directors is engaged in, or has received any threat of, any litigation,
arbitration, investigation, claim or other proceeding relating to the Company or
its officers, directors, employees, benefit plans, properties, Intellectual
Property Rights, the business, properties or assets of the Company, licenses,
permits or goodwill, or against or affecting the actions taken or contemplated
in connection therewith, nor, to the best of the Company's knowledge is there
any basis therefor. There is no action, suit, proceeding, or investigation
pending or threatened against the Company, or the officers or directors of the
Company, that questions the validity of this Agreement or the right of the
Company to enter into this Agreement or to consummate the transactions
contemplated hereby or thereby, or which might reasonably be expected to result
in any adverse change in the business, condition or properties of the Company's
Business Condition. There is no action, suit, proceeding, or investigation by
the Company currently pending or which any of them currently intends to
initiate. None of the Company, nor any of the Company's officers or directors is
bound by any judgment, decree, injunction, ruling or order of any court,
governmental, regulatory or administrative department, commission, agency or
instrumentality, arbitrator or any other person which would or could have a
material adverse effect on the Company's Business Condition.
D.17 COMPLIANCE WITH LAWS.
Since the date of its incorporation the Company has complied
in all material respects with all applicable foreign, federal, state, municipal
and other political subdivision or governmental agency statutes, ordinances and
regulations, including, without limitation, those imposing taxes, in every
applicable jurisdiction, in respect of the ownership of its assets and
properties and the conduct of its business where the effect of failure to so
comply would have a Material Adverse Effect.
D.18 LABOR RELATIONS/PERSONNEL.
(a) The Company has not failed to comply in any material
respect with the Americans with Disabilities Act, as amended, Title VII of the
Civil Rights Act of 1964, as amended, the Fair Labor Standards Act, as amended,
the Occupational Safety and Health Act of 1970, as amended, all other
applicable, foreign, federal, state, and local laws, rules, and regulations
relating to employment (including without limitation any age discrimination
laws), and all applicable laws, rules and regulations governing payment of
minimum wages and overtime rates and the withholding and payment of taxes from
compensation of employees. All payments due from Company on account of employee
health and welfare insurance have been paid.
(b) Except as set forth on SCHEDULE D.18, there are no written
employment or separation agreements, or oral employment or separation agreements
other than those establishing an "at-will" employment relationship between the
Company and any of its employees.
Page 9 - Exhibit D
to Agreement and Plan of Merger
(c) SCHEDULE D.18 contains a list of all current directors,
officers and employees of the Company setting forth the job title and salary
(including bonuses and commissions) payable to each such person. SCHEDULE D.18
also includes independent contractors and consultants of the Company, none of
which receive hourly wages or possess job titles.
D.19 EMPLOYEE PLANS.
(a) All plans, programs, policies, commitments or other
arrangements (whether or not set forth in a written document) maintained or
contributed to by the Company or any subsidiary or other trade or business
(whether or not incorporated) treated as a single employer with the Company (an
"ERISA AFFILIATE") pursuant to Code Section 414(b), (c), (m) or (o) which
provide deferred or incentive compensation, stock options or other stock
purchase rights, severance or termination pay, medical, dental, life, disability
or accident benefits (whether or not insured), collective bargaining agreements,
benefits described in Code Sections 125 or 129, or pension, profit sharing or
retirement benefits to, or for the benefit of, any active, former or retired
employee or other service provider of the Company or their spouses or dependents
are set forth in SCHEDULE D.19 (collectively, the "PLANS"). Each Plan has been
maintained and administered in all respects in compliance with its terms and
with the requirements prescribed by all statutes, orders, rules and regulations,
including but not limited to ERISA and the Code, which are applicable to such
Plan, except to the extent such noncompliance would not have a material and
adverse effect on the operation of such Plan. All contributions, reserves or
premium payments required to be made or accrued as of the date hereof to the
Plans have been made or accrued.
(b) The Company and each ERISA Affiliate has complied with (i)
the applicable health care continuation and notice provisions of the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") and the
regulations (including proposed regulations) thereunder, (ii) the applicable
requirements of the Family Medical and Leave Act of 1993 and the regulations
thereunder and (iii) the applicable requirements of the Health Insurance
Portability and Accountability Act of 1996 and the regulations (including
proposed regulations) thereunder, except to the extent that any such failure to
comply would not, in the aggregate, have a material adverse effect on the
Company.
D.20 INTERESTED PARTY RELATIONSHIPS.
Except as set forth on SCHEDULE D.20, neither the Company nor
any officer, director nor five percent security holder of the Company
(collectively, the "INTERESTED PARTIES") (nor any family member of any
Interested Party or any corporation, partnership or other entity which, directly
or indirectly, alone or together with others, controls, is controlled by, or is
in common control with any Interested Party, the Company or any such family
member) have any material financial interest, direct or indirect, in any
material supplier or customer, any party to any contract which is material to
the Company or any competitor of the Company.
D.21 PRODUCTS LIABILITY.
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to Agreement and Plan of Merger
(a) There are no claims against the Company, fixed or
contingent, asserting (i) any damage, loss or injury caused by any product or
(ii) any breach of any express or implied product warranty or any other similar
claim with respect to any product other than standard warranty obligations (to
replace, repair or refund) made by the Company in the Ordinary Course of
Business, except for those claims that, if adversely determined against the
Company, would not have a material adverse effect on the Business Condition of
the Company. As used herein, "product" shall mean any products manufactured,
designed, developed, distributed, sold, re-sold, customized or serviced by the
Company, including Products.
(b) None of the products and services sold, licensed,
rendered, or otherwise provided by the Company (or by any of its subsidiaries)
in the conduct of its business will malfunction, will cease to function, will
generate materially incorrect data or will produce materially incorrect results
or will cause any of the above with respect to the property or business of third
parties using such products or services when processing, providing or receiving
(i) date-related data from, into and between the Twentieth (20th) and
Twenty-First (21st) centuries, or (ii) date-related data in connection with any
valid date in the Twentieth (20th) or Twenty-First (21st) centuries, causing a
material adverse effect on the Company, its business or the property or business
of any third parties using such products or services.
(c) Except as set forth on SCHEDULE D.21, neither the Company
nor any subsidiary has made any representations or warranties specifically
relating to the ability of any product or service sold, licensed, rendered, or
otherwise provided by the Company (or by any of its subsidiaries) in the conduct
of their respective businesses to operate without malfunction, to operate
without ceasing to function, to generate correct data or to product correct
results when processing, providing or receiving (i) date-related data from, into
and between the Twentieth (20th) and Twenty-First (21st) centuries, or (ii)
date-related data in connection with any valid date in the Twentieth (20th) or
Twenty-First (21st) centuries.
D.22 PRODUCT WARRANTIES.
The Company has provided to Buyer copies or descriptions of
its warranty policies and all outstanding oral and written warranties or
guarantees relating to any of the Company's products, if any, other than
warranties or guarantees implied by law.
D.23 CUSTOMERS.
SCHEDULE D.23 lists all customers of the Company during the
twelve-month period ended December 31, 1998. The Company has furnished Buyer
with complete and accurate copies or descriptions of all current agreements
(written or unwritten) with such customers. There is no complaint, event,
happening or fact which would lead the Company to believe that any relationship
with any of such customers has deteriorated or that any of such customers
intends to cancel any orders in backlog.
D.24 SUPPLIERS.
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to Agreement and Plan of Merger
SCHEDULE D.24 lists all suppliers of goods to the Company
during the prior two (2) years and the value of goods supplied to the Company in
each such year where such value exceeds $100,000 per annum. There has not been
any event, happening or fact which would lead the Company to believe any of such
suppliers will not continue to supply the current level and type of goods
currently being provided to the Company on similar terms and conditions.
D.25 BOOKS AND RECORDS.
The books and records of the Company to which Buyer and its
accountants and attorneys have been given access are the true books and records
of the Company and truly and fairly reflect the underlying facts and
transactions in all material respects.
D.26 BANK ACCOUNTS AND POWERS OF ATTORNEY.
Set forth in SCHEDULE D.26 is an accurate and complete list
showing (a) the name and address of each bank in which the Company has an
account or safe deposit box, the number of any such account or any such box, and
the names of all persons authorized to draw thereon or to have access thereto
and (b) the names of all persons, if any, holding powers of attorney from the
Company and a summary statement of the terms thereof.
D.27 COMPLETE DISCLOSURE.
No representation or warranty made by the Company in this
Agreement, nor any document, written information, statement (oral or written),
financial statement, certificate, schedule or exhibit prepared and furnished, or
to be prepared and furnished by the Company or its representatives pursuant
hereto or in connection with the transactions contemplated hereby, contains or
will contain any untrue statement of a material fact, or omits or will omit to
state a material fact necessary to make the statements or facts contained herein
or therein not misleading in light of the circumstances under which they were
furnished which has not been corrected in subsequent documents, written
information, written statements, financial statements or by certificates,
schedules or exhibits, as the case may be, and provided to Buyer. All schedules
and exhibits prepared by the Company shall be updated as of the Closing in a
form reasonably acceptable to Buyer.
D.28 INSURANCE.
SCHEDULE D.28 lists all insurance policies and fidelity bonds
covering the assets, business, equipment, properties, operations, employees,
officers and directors of the Company, the amounts of coverage under each such
policy and bond of the Company.
D.29 ACCOUNTS RECEIVABLE.
The amount of all accounts receivable of the Company will be
good and collectible in full in the ordinary course of business within 90 days
of Closing; all accounts receivable arise from bona fide transactions in the
ordinary course of business; no contest with
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to Agreement and Plan of Merger
respect to the amount or validity of any amount is pending; and none of such
accounts receivable is subject to any counterclaim, rights of return, refusals
to pay or setoff except to the extent of the allowance therefor recorded in
accordance with GAAP.
D.30 EXPORTS TO CERTAIN COUNTRIES.
For the five years preceding the date hereof, the Company has
made no sales to entities located or residing or domiciled in, directly or
indirectly, Cuba, North Korea, Libya, Iraq, Iran or any other countries
prohibited by U.S. export control laws.
D.31 FOREIGN CORRUPT PRACTICES ACT.
None of the activities or types of conduct below have been or
may have been engaged in by the Company, either directly or indirectly:
(a) Any bribes or kickbacks to government officials or their
relatives, or any other payments to such persons, whether or not legal, to
obtain or retain business or to receive favorable treatment with regard to
business; or
(b) Any bribes or kickbacks to persons other than government
officials, or to relatives of such persons, or any other payments to such
persons or their relatives, whether or not legal, to obtain or retain business
or to receive favorable treatment with regard to business; or
(c) Any illegal contributions made to any political party,
political candidate or holder of governmental office; or
(d) Any bank accounts, funds or pools of funds created or
maintained without being reflected on the corporate books of account, or as to
which the receipts and disbursements therefrom have not been reflected on such
books; or
(e) Any receipts or disbursements, the actual nature of which
has been "disguised" or intentionally misrecorded on the corporate books of
account; or
(f) Fees paid to consultants or commercial agents which
exceeded the reasonable value of the services purported to have been rendered;
or
(g) Any payments or reimbursements made to personnel of the
Company for the purposes of enabling them to expend time or to make
contributions or payments of the kind or for the purpose referred to above. In
addition, the Company has not violated the United States Corrupt Foreign
Practices Act or any other similar laws, statute, rule or regulation of any
country.
D.32 TAKEOVER STATUTES.
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to Agreement and Plan of Merger
No "fair price," "moratorium," "control share acquisition" or
other similar anti-takeover statute or regulation or any applicable
anti-takeover provision in the Company's charter or bylaws is, or at the Closing
will be, applicable to the Buyer.
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to Agreement and Plan of Merger
EXHIBIT E
E.1 ORGANIZATION.
Buyer is a corporation duly organized and validly existing
under the laws of the jurisdiction of its incorporation.
E.2 AUTHORIZATION.
Buyer has the corporate power and authority to execute,
deliver and perform this Agreement and to pay the Merger Consideration. This
Agreement constitutes Buyer's valid and legally binding obligation, enforceable
against Buyer in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting rights of creditors generally and by general principles
of equity (regardless of whether enforcement is sought in a proceeding at law or
in equity). The execution, delivery and performance of this Agreement by Buyer
have been duly authorized by all necessary corporate action.
E.3 NO CONSENT OR APPROVAL REQUIRED.
No consent, approval or authorization of, or filing with, any
third party, including any governmental or regulatory authority, is required for
the valid authorization, execution and delivery by Buyer of this Agreement or
the consummation of the transactions contemplated hereby.
E.4 INVESTMENT EXPERIENCE.
Buyer (i) is an "accredited investor" as such term is defined
in Rule 501(a) under the Securities Act of 1933, as amended (the "1933 ACT");
(ii) has such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of the
prospective Merger, and has so evaluated the merits and risks of such Merger;
and (iii) is able to bear the economic risk of such Merger and, at the present
time, is able to afford a complete loss of its investment in the Merger.
E.5 FINANCIAL STATEMENTS
The Buyer has furnished to the Company a complete and accurate
copy of its unaudited balance sheet as of October 31, 1997 and its unaudited
statements of operations, cash flow and stockholders' equity for the fiscal year
ending October 31, 1997 and its unaudited balance sheet as of July 31, 1998 and
its unaudited interim statements of operation, cash flow and stockholders'
equity for the nine month period ended July 31, 1998 (the "Buyer's Interim
Financial Statements") (collectively the 1997 and Interim Financial Statements
are referred to herein as the "BUYER'S FINANCIAL STATEMENTS"). The Buyer's
Financial Statements are attached hereto as SCHEDULE E.5. The Buyer's Financial
Statements have been prepared in accordance
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to Agreement and Plan of Merger
with generally accepted accounting principles ("GAAP") consistently applied and
fairly present the consolidated financial position of the Buyer as and at the
dates thereof and the Buyer's consolidated results of operations and cash flows
for the periods then ended. Subject, in the case of the Buyer's Interim
Financial Statements, to normal year end adjustments.
Page 2 - Exhibit E
to Agreement and Plan of Merger
EXHIBIT F
ESCROW AGREEMENT
This Escrow Agreement (the "Agreement") is made and entered
into as of _____________, 1999 (the "Effective Date"), by and among Fluence
Technology, Inc., a Delaware corporation ("Fluence"), Opmaxx, Inc., a Delaware
corporation ("Opmaxx" or the "Company"), Xxxxxxx Xxxxxxx as the representative
of the Opmaxx Common Stockholders (the "Common Stockholder Representative" or
the "Representative"), and _________________, as escrow agent (the "Escrow
Agent").
RECITALS
A. Opmaxx and Fluence have entered into an Agreement and Plan
of Merger dated as of February 16, 1999, (the "Plan"), pursuant to which Opmaxx
Acquisition Corporation ("Merger Sub"), a wholly-owned subsidiary of Fluence to
be formed by Fluence prior to or contemporaneously with consummation of the
transactions contemplated by the Plan, shall be merged with Opmaxx (the
"Merger"), with Merger Sub to be the surviving corporation of the Merger (the
"Surviving Corporation"). In the Merger, the outstanding shares of Opmaxx Common
and Preferred Stock ("Opmaxx Stock") will be converted into the right to receive
a portion of the $8,000,000 Merger Consideration, with the Opmaxx Common
Stockholders entitled to receive Additional Merger Consideration as more fully
described in the Plan.
B. The Plan provides that the Additional Merger Consideration
will be placed in an escrow established in accordance with this Agreement to
secure the indemnification obligations under Section 10 of the Plan.
C. The parties desire to enter into this Agreement to
establish the terms and conditions under which the escrow will be established
and maintained.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. CERTAIN DEFINED TERMS.
1.1 TERMS DEFINED IN PLAN.
Capitalized terms used in this Agreement and not otherwise
defined herein shall have the same meanings given to such terms in the Plan.
1.2 ESCROW.
As used herein, the "Escrow" means the escrow and the Escrow
Account (as defined in Section 2.1 below) established pursuant to this Agreement
in which the Additional Merger Consideration (as defined in Section 9.2 of the
Plan) will be held to secure indemnification.
Escrow Agreement
Page 1
1.3 TERMINATION DATE.
"Termination Date" means January 1, 2004, the date on which
the parties' indemnification obligations expire pursuant to Section 10.1 of the
Plan.
2. FORMATION OF ESCROW ACCOUNTS.
2.1 DELIVERY AND DEPOSIT OF ADDITIONAL MERGER
CONSIDERATION.
Upon the execution of this Agreement by all parties hereto,
and until the Termination Date, Fluence will deliver to the Escrow Agent the
Additional Merger Consideration in the manner specified in Section 9.2 of the
Plan. The Escrow Agent agrees to accept delivery of the above-mentioned
Additional Merger Consideration, and to hold the same in escrow in an escrow
account (the "Escrow Account"), subject to the terms and conditions of this
Agreement.
2.2 TREATMENT OF ADDITIONAL MERGER CONSIDERATION.
The Additional Merger Consideration shall be held by the
Escrow Agent and shall not be subject to any lien, attachment, trustee process
or any other judicial process of any creditor of any party hereto.
3. ADMINISTRATION OF ESCROW ACCOUNT.
The Escrow Agent shall administer the Escrow Account as
follows:
3.1 INTEREST BEARING ACCOUNT.
The Escrow Agent shall keep the Additional Merger
Consideration in an account bearing interest at a rate not less than the daily
money market rate at U.S. Bank National Association (or similar bank).
3.2 CLAIM NOTICE.
If Fluence asserts a claim for indemnification under Section
10 of the Plan on or prior to the Termination Date, then Fluence shall promptly
give written notice of such claim (a "Claim Notice"), including a copy of such
claim and/or process and all legal pleadings in connection therewith, to the
Common Stockholder Representative and the Escrow Agent in accordance with
Section 11 hereof. Each Claim Notice shall state the amount of claimed Claims
and Liabilities (the "Claimed Amount") and the basis for such claim. Fluence
shall assert any claim for indemnification promptly following its discovery of
the facts giving rise to such claim and in no event more than sixty (60) days
from such discovery so long as such period does not extend beyond the
Termination Date of this Agreement.
Escrow Agreement
Page 2
3.3 RESPONSE NOTICE.
Within thirty (30) days after delivery of a Claim Notice to
the Common Stockholder Representative, the Representative shall give to Fluence,
with a copy to the Escrow Agent, a written response (the "Response Notice") in
which the Representative shall either:
(a) agree to the full Claimed Amount and instruct the Escrow
Agent to release and deliver such portion of the Additional Merger Consideration
having a value equal to the full Claimed Amount from the Escrow Account to
Fluence; or
(b) agree to a portion of the Claimed Amount (the "Agreed
Amount") and instruct the Escrow Agent to release and deliver such portion of
the Additional Merger Consideration having a value equal to the Agreed Amount
from the Escrow Account to Fluence, and contest the remainder of the Claimed
Amount and instruct the Escrow Agent to hold present and future, if necessary,
portions of the Additional Merger Consideration equal to such contested amount
in the Escrow Account until such contested amount is resolved pursuant to
Section 4 below; or
(c) contest the full amount of the Claimed Amount and instruct
the Escrow Agent to hold present and future, if necessary, portions of the
Additional Merger Consideration equal to such contested amount in the Escrow
Account until such contested amount is resolved pursuant to Section 4 below.
The Representative may contest the Claimed Amount and withhold release
of Additional Merger Consideration only based upon a good faith belief that all
or such portion of the Claimed Amount does not constitute Claims and
Liabilities, or does not constitute the actual amount of Claims and Liabilities
incurred, for which Fluence is entitled to indemnification under Section 10 of
the Plan. If no Response Notice is delivered by the Representative within such
thirty (30) day period, then the Representative shall be deemed to have agreed
that the full Claimed Amount may be released and delivered from the Escrow
Account to Fluence.
3.4 RELEASE WITHOUT CONTEST.
(a) If in his Response Notice the Representative agrees (or if
the Representative fails to deliver a Response Notice within the required time
period and as such is deemed to have agreed) that the Additional Merger
Consideration having a value equal to the full Claimed Amount may be released
from the Escrow Account to Fluence, then the Escrow Agent shall promptly
thereafter deliver to Fluence from the Escrow Account Additional Merger
Consideration having a value equal to the Claimed Amount (or such lesser amount
as is then held in the Escrow Account).
(b) If the Representative in the Response Notice agrees that
Additional Merger Consideration having a value equal to the Agreed Amount may be
released from the Escrow Account to Fluence in the respective amounts set forth
in the Response Notice, then the Escrow Agent shall promptly thereafter deliver
to Fluence such Agreed Amount from present and future, if necessary, portions of
the Additional Merger Consideration, and the provisions of Section 4 shall apply
to any and all of the Claimed Amount being contested by the Representative.
Escrow Agreement
Page 3
4. ARBITRATION OF CONTESTED RELEASES.
4.1 ARBITRATION OF DISPUTES OVER ESCROW RELEASE.
If the Representative gives a Response Notice contesting the release of
Additional Merger Consideration equal to all or any part of the Claimed Amount
set forth in the applicable Claim Notice, as provided in Sections 3.3(b) and (c)
above (the "Contested Amount"), then such dispute shall be settled by mandatory
binding arbitration pursuant to the terms of Section 11.2 of the Plan.
4.2 ACTIONS OF ESCROW AGENT PENDING ARBITRATION.
Upon receipt of a Claim Notice from Fluence, the Escrow Agent
shall continue to hold in the Escrow Account Additional Merger Consideration
having a value sufficient to cover the Claimed Amount from present and future,
if necessary, deposits of such from Fluence, notwithstanding the intervening
expiration of a calendar quarter or the occurrence of the Termination Date,
until: (a) receipt of a Response Notice instructing the Escrow Agent to release
and deliver an amount of such Additional Merger Consideration equal to all or a
portion of such Claimed Amount from the Escrow Account to Fluence; (b) delivery
of a copy of a settlement agreement executed by Fluence and the Representative
setting forth instructions to the Escrow Agent as to the release of such
Additional Merger Consideration that shall be made with respect to any Contested
Amount; (c) delivery of a copy of the final decision of the arbitrator setting
forth instructions to the Escrow Agent as to the release of Additional Merger
Consideration that shall be made with respect to any Contested Amount; or (d)
receipt of a court order or judgment directing Escrow Agent to act with respect
to the distribution of any Additional Merger Consideration. The Escrow Agent
shall thereupon release Additional Merger Consideration from the Escrow Account
in accordance with such Response Notice, settlement agreement, arbitrator's
instructions, court order or judgment, as applicable.
4.3 NO RESPONSIBILITY OF ESCROW AGENT TO RESOLVE DISPUTE.
If any controversy arises involving any party to this
Agreement (other than the Escrow Agent) concerning the subject matter of this
Agreement, including a Contested Amount, the Escrow Agent will not be required
to determine the controversy or to take any action until such dispute has been
resolved.
4.4 BURDEN OF PROOF.
For any claim submitted to an arbitration hereunder, the
burden of proof will be as it would be if the claim were litigated in a judicial
proceeding.
Escrow Agreement
Page 4
5. PAYMENT OF REMAINING ADDITIONAL MERGER CONSIDERATION
TO OPMAXX COMMON STOCKHOLDERS.
5.1 QUARTERLY DISBURSEMENTS.
At the end of each calendar quarter (and on the Termination
Date), the Escrow Agent shall deliver to Fluence and the Representative a
statement summarizing the Additional Merger Consideration deposited into the
Escrow Account that quarter by Fluence, the interest accrued in the Escrow
Account that quarter, and the total amount of all Claimed Amounts made pursuant
to Sections 3 or 4 hereof in connection with the Escrow Account (the excess, if
any, of such balance in such Escrow Account over the total amount of such
Claimed Amounts against such Escrow Account shall be referred to as the "
Quarterly Escrow Balance"). Fluence and the Representative each shall review the
accuracy of the Quarterly Escrow Balance and notify the Escrow Agent and each
other of any asserted discrepancy or of the absence of any discrepancy within
ten (10) business days of receipt of the foregoing statement. Upon the Escrow
Agent's notification of no discrepancy by Fluence and the Representative within
the ten (10) business day period specified in the preceding sentence, then
within ten (10) business days thereafter, the Escrow Agent shall deliver to each
of the Opmaxx Common Stockholders an amount of the Additional Merger
Consideration representing such Opmaxx Common Stockholder's share of the
Quarterly Escrow Balance less a portion of the accrued interest allocable, on a
proportional basis, to the Claimed Amounts, free and clear of the Escrow created
by this Agreement. If either Fluence or the Representative notifies the Escrow
Agent of a discrepancy, any dispute with respect to such discrepancy shall be
resolved by mandatory binding arbitration as provided in Section 4. After the
last claim shall have been resolved pursuant to Sections 3 and 4 hereof and all
Additional Merger Consideration deliverable to Fluence upon the resolution of
all such Claimed Amounts and their allocated interest have been delivered to
Fluence, the remaining balance, if any, of the Additional Merger Consideration
shall be delivered by the Escrow Agent to each Opmaxx Common Stockholders free
and clear of the Escrow created by this Agreement.
5.2 DISTRIBUTION OF THE ADDITIONAL MERGER CONSIDERATION.
All distributions of Additional Merger Consideration to the
Opmaxx Common Stockholders to be made by the Escrow Agent under this Section 5
shall be made in the amounts specified in Exhibit C to the Plan.
5.3 DELIVERY METHODS.
Delivery of Additional Merger Consideration by the Escrow
Agent shall be by registered mail or by nationally recognized overnight courier.
The Escrow Agent shall not be responsible for obtaining insurance in connection
with such delivery.
6. FEES AND EXPENSES OF ESCROW AGENT.
6.1 ESCROW AGENT FEES.
All fees of the Escrow Agent for the services to be rendered
by the Escrow Agent hereunder, will be paid fifty percent (50%) by Fluence and
fifty percent (50%) by the Opmaxx
Escrow Agreement
Page 5
Common Stockholders. Fees owed by the Opmaxx Common Stockholders under this
Section 6 shall be paid out of the Additional Merger Consideration.
6.2 ESCROW AGENT'S EXTRAORDINARY FEES.
Fluence and the Representative hereby acknowledge that all
fees and usual charges for services of the Escrow Agent hereunder shall be
considered compensation for ordinary services as contemplated by this Agreement.
In the event that the Escrow Agent renders any service not provided for in this
Agreement, or if the parties hereto request a substantial modification of the
terms of this Agreement, or if any controversy arises and the Escrow Agent is
made a party to any litigation pertaining to this Agreement or its subject
matter, then the Escrow Agent shall be reasonably compensated for such
extraordinary services and reimbursed for all reasonable costs, attorney's fees
and expenses incurred by the Escrow Agent in rendering such extraordinary
services, which costs, fees and expenses shall be borne by Fluence and the
Opmaxx Common Stockholders as provided in Section 6.1 above.
7. LIABILITY AND AUTHORITY OF REPRESENTATIVE; SUCCESSORS
AND ASSIGNEES.
7.1 LIMITS ON LIABILITY.
The Representative shall incur no liability with respect to
any action taken or suffered by him in his capacity as Representative in
reliance upon any note, direction, instruction, consent, statement or other
documents believed by him to be genuinely and duly authorized, nor for other
action or inaction except his own willful misconduct or gross negligence. The
Representative may, in all questions arising under this Escrow Agreement, rely
on the advice of counsel, and for anything done, omitted or suffered in good
faith by the Representative based on such advice, the Representative shall not
be liable to anyone.
7.2 SUCCESSOR REPRESENTATIVES.
In the event of the death or permanent disability of the
Representative, or the resignation of Representative as the representative of
the Opmaxx Common Stockholders hereunder, a successor Representative shall be
elected by a majority vote of the Opmaxx Common Stockholders. Each successor
Representative shall have all of the power, authority, rights and privileges
conferred by this Agreement upon the original Representative, and the term
"Representative" as used herein shall be deemed to include each successor
Representative. Unless and until the Escrow Agent receives written notice from
all of the Opmaxx Common Stockholders identifying a new representative, the
Escrow Agent shall at all times be entitled to assume that the Representative
set forth in this Agreement is the Representative hereunder. Upon receipt of
such written notice, the Escrow Agent shall be fully protected and not be held
liable for any instructions received by the new representative of the Escrow
Indemnitors.
Escrow Agreement
Page 6
7.3 AUTHORITY OF REPRESENTATIVE.
The Representative shall have full power and authority to
represent the Opmaxx Common Stockholders and their successors with respect to
all matters arising under this Agreement or related to the subject matter hereof
and all actions taken by the Representative hereunder shall be binding upon each
and all of the Opmaxx Common Stockholders and their successors, as if expressly
confirmed and ratified in writing by each of them. Without limiting the
generality of the foregoing, the Representative shall have full power and
authority to interpret all of the terms and provisions of this Agreement, to
compromise and settle any claims asserted hereunder and to authorize payments to
be made with respect hereto, on behalf of the Opmaxx Common Stockholders and
their successors. The Opmaxx Common Stockholders (with respect to the Additional
Merger Consideration) have consented to the appointment of the Representative as
representative of the Opmaxx Common Stockholders (with respect to the Additional
Merger Consideration) and as the attorney-in-fact and agent for and on behalf of
each Opmaxx Common Stockholder for the purposes of taking actions and executing
agreements and documents on behalf of any of the Opmaxx Common Stockholders as
provided in this Agreement, and, subject to the express limitations set forth
below, the taking by the Representative of any and all actions and the making of
any decisions required or permitted to be taken by him under this Agreement,
including, but not limited to, the exercise of the power to authorize delivery
to Fluence of Additional Merger Consideration and to take all actions necessary
in the judgment of the Representative for the accomplishment of the foregoing
and all of the other terms, conditions and limitations of this Agreement. The
Representative will have unlimited authority and power to act on behalf of each
Opmaxx Common Stockholder with respect to this Agreement and the disposition,
settlement or other handling of all claims, rights or obligations arising under
this Agreement with respect to Additional Merger Consideration so long as all
Opmaxx Common Stockholders are treated in the same manner (unless the Opmaxx
Common Stockholders otherwise consent). The Opmaxx Common Stockholders will be
bound by all actions taken by the Representative in connection with this
Agreement, and Fluence will be entitled to rely on any action or decision of the
Representative.
8. LIMITATION OF ESCROW AGENT'S RESPONSIBILITY AND
LIABILITY.
8.1 LIMITATION OF RESPONSIBILITY.
The Escrow Agent's duties are limited to those set forth in
this Agreement, and the Escrow Agent, acting as such under this Agreement, is
not charged with knowledge of or any duties or responsibilities under any other
document or agreement, including, without limitations the Plan. The Escrow Agent
may execute any of its powers or responsibilities hereinafter and exercise any
rights hereunder either directly or by or through its agents or attorneys.
Nothing in this Escrow Agreement will be deemed to impose upon the Escrow Agent
any duty to qualify to do business or to act as a fiduciary or otherwise in any
jurisdiction. The Escrow Agent will not be responsible for, and will not be
under a duty to examine into or pass upon, the validity, binding effect,
execution or sufficiency of this Escrow Agreement or of any agreement mandatory
or supplemental hereto.
Escrow Agreement
Page 7
8.2 LIMITATION OF LIABILITY.
The Escrow Agent will incur no liability with respect to any
action taken, not taken or suffered by it in reliance upon any notice,
direction, instruction, consent, statement or other document believed by it to
be genuine and duly authorized, nor for any other action or inaction, except its
own willful misconduct or gross negligence. In all questions arising under this
Agreement, the Escrow Agent may rely on the advice of counsel, and for anything
done, omitted or suffered in good faith by the Escrow Agent based on such
advice, the Escrow Agent will not be liable to anyone. The Escrow Agent will not
be required to take any action hereunder involving any expense unless the
payment of such expense is made or provided for in a manner satisfactory to it.
The Escrow Agent will not be liable for any action taken or omitted to be taken
by it in good faith unless a court of competent jurisdiction determines that the
Escrow Agent's willful misconduct or gross negligence was the cause of any loss
to Fluence, the Representative, or any Opmaxx Common Stockholder. The Escrow
Agent will have no obligations with respect to the investment of Additional
Merger Consideration except as expressly provided in Section 3.1. Any dispute
which may arise with respect to the payment or ownership or right of possession
of all or any part of the Escrow or the Additional Merger Consideration, or the
duties of the Escrow Agent hereunder, shall be satisfied pursuant to the
provisions of Section 4. The Escrow Agent shall be under no duty to institute or
defend any proceeding unless the subject of such proceeding is part of its
duties hereunder. In the event of any dispute between the parties to this Escrow
Agreement, or between any of them and any other person, resulting in adverse
claims or demands being made upon any of the Additional Merger Consideration, or
in the event that Escrow Agent, in good faith, is in doubt as to what action it
should take hereunder, the Escrow Agent may, at its option, file a suit as
interpleader in a court of appropriate jurisdiction, or refuse to comply with
any claims or demands on it, or refuse to take any other action hereunder, so
long as such dispute shall continue or such doubt shall exist. The Escrow Agent
shall be entitled to continue so to refrain from acting until (i) the rights of
all parties have been fully and finally adjudicated by a court of appropriate
jurisdiction or (ii) all differences and doubt shall have been resolved by
agreement among all of the interested persons, and the Escrow Agent shall have
been notified thereof in writing signed by all such persons. The rights of the
Escrow Agent under this Section 8 are cumulative of all other rights which it
may have by law or otherwise.
8.3 INDEMNITY.
Fluence and the Opmaxx Common Stockholders (collectively, the
"Indemnifying Parties"; individually, an "Indemnifying Party") hereby jointly
and severally covenant and agree to reimburse, indemnify and hold harmless the
Escrow Agent and its employees and agents from and against any loss, damage or
liability suffered or incurred by or asserted against the Escrow Agent
(including amounts paid in settlement of any action, suit, proceeding, or claim
brought or threatened to be brought and including reasonable expenses of legal
counsel) arising out of, in connection with or based upon any act or omission by
the Escrow Agent relating in any way to this Agreement or the Escrow Agent's
services hereunder. This indemnity will not apply to any such loss, damage or
liability arising from the gross negligence or willful misconduct on the Escrow
Agent's part. Anything in this Agreement to the contrary notwithstanding, in no
event will the Escrow Agent be liable for special, indirect or consequential
damage or loss of any kind whatsoever (including but not limited to lost
profits), even if the Escrow Agent has been advised of the likelihood of such
loss or damage and regardless of the form of action.
Escrow Agreement
Page 8
8.4 PARTICIPATION IN DEFENSE OF THE ESCROW AGENT.
Each Indemnifying Party may participate at its own expense in
the defense of any claim or action that may be asserted against the Escrow
Agent, and if the Indemnifying Parties so elect, the Indemnifying Parties may
assume the defense of such claim or action; provided, however, that if there
exists a conflict of interest that would make it inappropriate for the same
counsel to represent both the Escrow Agent and the Indemnifying Parties, the
Escrow Agent's retention of separate counsel will be reimbursable as provided in
Section 8.3. The Escrow Agent's right to indemnification hereunder will survive
the Escrow Agent's resignation or removal as escrow agent hereunder and will
survive the termination of this Agreement by lapse of time or otherwise.
8.5 NOTICE OF CLAIMS AGAINST ESCROW AGENT.
The Escrow Agent will notify each Indemnifying Party by
letter, or by telephone or telecopy confirmed by letter sent U.S. first class
mail, registered or certified, of any receipt by the Escrow Agent of a written
assertion of a claim against the Escrow Agent related to this Agreement, or any
action commenced against the Escrow Agent, within ten (10) business days after
the Escrow Agent's receipt of written notice of such claim. However, the Escrow
Agent's failure to so notify each Indemnifying Party will not operate in any
manner whatsoever to relieve an Indemnifying Party from any liability it may
have otherwise on account of this Section 8. In the event the Escrow Agent fails
to so notify each Indemnifying Party and an Indemnifying Party is prejudiced
thereby, then such Indemnifying Party will not have liability to Escrow Agent
under this Section 8.
9. SUCCESSOR ESCROW AGENT.
In the event the Escrow Agent becomes unavailable or unwilling
to continue in its capacity herewith, the Escrow Agent may resign at any time
and be discharged from its duties or obligations hereunder by giving a written
resignation to the parties to this Escrow Agreement, specifying not less than
thirty (30) days prior written notice of the date when such resignation shall
take effect; provided, however, that no such resignation shall become effective
until the appointment of a successor Escrow Agent and acceptance of such
appointment by such successor Escrow Agent. Fluence may appoint a successor
Escrow Agent without the consent of the Representative so long as such successor
is a bank with assets of at least Fifty Million Dollars ($50,000,000) which has
no direct depository or lending relationship with Fluence and which is qualified
to do business in the State of Oregon, and may appoint any other successor
Escrow Agent with the consent of the Representative, which shall not be
unreasonably withheld. If, within such notice period, Fluence provides to the
Escrow Agent written instructions with respect to the appointment of a successor
Escrow Agent in accordance with this Section 9 and directions for the transfer
of any Additional Merger Consideration then held by the Escrow Agent to such
successor, the Escrow Agent shall act in accordance with such instructions and
promptly transfer such Additional Merger Consideration to such designated
successor. If no successor Escrow Agent is appointed within sixty (60) days of
the date specified for the Escrow Agent's resignation
Escrow Agreement
Page 9
to take effect, the Escrow Agent shall have the right to apply to a court of
competent jurisdiction for such appointment at the expense of Fluence. Each
successor Escrow Agent shall execute and deliver an instrument accepting such
appointment and shall, without further acts, be vested in all the estates,
properties, rights, powers and duties of the Escrow Agent or any other
predecessor Escrow Agent as if originally named as Escrow Agent hereunder.
10. TERMINATION.
This Agreement shall terminate upon the later of (a) the
Termination Date, or (b) the release by the Escrow Agent of all of the
Additional Merger Consideration in accordance with this Agreement.
Notwithstanding any termination of this Escrow Agreement, the provisions of
Sections 6.1, 7.1, and 8.3 hereof shall survive such termination and remain in
full force and effect.
11. NOTICES.
All notices, requests, consents, and other communications
hereunder shall be in writing and shall be deemed to have been properly given or
made on the date personally delivered or on the date mailed, by first class
registered or certified mail with postage prepaid, by private nationally
recognized courier service or by facsimile and confirmed, if delivered, mailed,
courier or facsimile to the respective parties hereto at the following
addresses:
If the Escrow Agent:
If to Fluence or Merger Sub, to:
Fluence Technology, Inc.
0000 X.X. Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx XxXxxxxxxx, President and CEO
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx, Phleger & Xxxxxxxx LLP
Two Embarcadero Place
0000 Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Escrow Agreement
Page 10
if to the Representative, to:
Xxxxxxx Xxxxxxx
c/o Opmaxx, Inc.
0000 XX Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx Xxxx LLP
1600 Pioneer Tower
000 X.X. Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. XxXxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party hereto may designate a different address by providing written notice
of such new address to the other parties hereto.
12. MISCELLANEOUS.
12.1 GOVERNING LAW; ASSIGNS.
This Agreement will be governed by and construed in accordance
with the internal laws of the State of Oregon without regard to conflict of law
principles and will be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and permitted assigns.
12.2 COUNTERPARTS.
This Agreement may be executed in two or more counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same instrument.
12.3 ENTIRE AGREEMENT; SEVERABILITY.
Except as otherwise set forth in the Plan, this Agreement
constitutes the entire understanding and agreement of the parties with respect
to the subject matter of this Agreement and supersedes all prior agreements or
understandings, written or oral, between the parties with respect to the subject
matter hereof. If any provision of this Agreement is held to be illegal or
unenforceable by a tribunal of competent jurisdiction, then such provision shall
not be voided,
Escrow Agreement
Page 11
but shall be deemed modified to the extent necessary to make such provision
lawful and enforceable, and the other provisions of this Agreement shall remain
in full force and effect.
12.4 WAIVERS.
No waiver by any party hereto of any condition or of any
breach of any provision of this Agreement will be effective unless in writing.
No waiver by any party of any such condition or breach, in any one instance,
will be deemed to be a further or continuing waiver of any such condition or
breach or a waiver of any other condition or breach of any other provision
contained herein.
12.5 AMENDMENT.
This Agreement may be amended by the written agreement of
Fluence, the Escrow Agent and the Representative, provided that, if the Escrow
Agent does not agree to an amendment agreed upon by Fluence and the
Representative, the Escrow Agent will resign (which resignation shall be
effective immediately and, in any event, prior to the effective date of the
amendment) and Fluence will appoint a successor Escrow Agent in accordance with
Section 9 hereof. No such amendment may treat any one Opmaxx Common Stockholder
differently from the other Opmaxx Common Stockholders unless consented to in
writing by Opmaxx Common Stockholders having beneficial ownership in a majority
of the outstanding Additional Merger Consideration, as well as the consent of
any Opmaxx Common Stockholder who is to be treated differently.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year first above written.
Escrow Agreement
Page 12
