AGREEMENT AND PLAN OF MERGER By and Among PLX Technology, Inc., as the Purchaser, Osprey Acquisition Sub, Inc., as the Merger Sub, Oxford Semiconductor, Inc., as the Company, and VantagePoint Venture Partners IV (Q), L.P., as the Stockholder...
Exhibit 2.1
AGREEMENT
AND PLAN OF MERGER
By
and Among
PLX
Technology, Inc.,
as
the Purchaser,
Osprey
Acquisition Sub, Inc.,
as
the Merger Sub,
Oxford
Semiconductor, Inc.,
as
the Company,
and
VantagePoint
Venture Partners IV (Q), L.P.,
as
the Stockholder Representative
Dated
December 15, 2008
AGREEMENT
AND PLAN OF MERGER
THIS
AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made
and entered into this 15th day
of December, 2008, by and among PLX Technology, Inc., a Delaware corporation
(the “Purchaser”), Osprey
Acquisition Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of
the Purchaser (the “Merger Sub”), Oxford
Semiconductor, Inc., a Delaware corporation (the “Company”), and
VantagePoint Venture Partners IV (Q), L.P., a Delaware limited partnership,
solely in its capacity as the representative of the Stockholders (the “Stockholder
Representative”). Except as otherwise set forth herein,
capitalized terms used herein have the meanings set forth in Exhibit A.
ARTICLE
1
1.1 The
Merger. In accordance with the provisions of this Agreement,
at the Effective Time, the Merger Sub will be merged (the “Merger”) with and
into the Company in accordance with the provisions of the Delaware General
Corporation Law (“DGCL”). Following
the Merger, the Company will continue as the surviving corporation and a
wholly-owned subsidiary of the Purchaser (the “Surviving
Corporation”), and the separate corporate existence of the Merger Sub
will cease.
1.2 Closing; Effective Time and
Actions at the Closing. Subject to the satisfaction or waiver
of the conditions set forth in Article 5, the consummation of the Merger
and the other transactions contemplated by this Agreement (the “Closing”) will take
place at the offices of Xxxxx & XxXxxxxx LLP, 000 Xxxxxx Xxx, Xxxx Xxxx,
Xxxxxxxxxx on January 2, 2009, but in no event later than the third Business Day
after the satisfaction or waiver of the conditions set forth in Article 5,
or at such other time, date and location as the Purchaser and the Company may
agree in writing (the “Closing
Date”). On the Closing Date:
(a) Effective
Time. The Merger will be consummated by the filing of a
certificate of merger with the Secretary of State of the State of Delaware in
accordance with Section 251(c) of the DGCL. The time that
the Merger becomes effective in accordance with Sections 103 and 251 of the
DGCL is referred to in this Agreement as the “Effective
Time.”
(b) General
Deliveries. The parties will deliver or cause to be delivered
the various certificates, instruments and documents referred to in
Article 5.
(i) (A) The
Purchaser and Computershare, Inc., (the “Escrow and Exchange
Agent”), acting as exchange agent or escrow agent as the context may
require, will execute and deliver the Exchange Agent Agreement in substantially
the form attached hereto as Exhibit B, with
such changes as the parties may reasonably agree (the “Exchange Agent
Agreement”), and (B) the Purchaser, the Escrow and Exchange Agent
and the Stockholder Representative will execute and deliver the Escrow Agreement
in substantially the form attached hereto as Exhibit C, with
such changes as the parties may reasonably agree (the “Escrow
Agreement”).
(ii) The
Purchaser will deposit with the Escrow and Exchange Agent immediately prior to
the Closing, the aggregate number of shares of Purchaser Common Stock equal to
the Share Consideration issuable to the Stockholders pursuant to Article 2
at the Closing and specifically excluding the Escrow Shares (the “Closing
Disbursement”). Such Closing Disbursement, less any
Stockholder Representative Fund Shares, will be placed by the Escrow and
Exchange Agent in a separate account under the Exchange Agent Agreement (the
“Exchange
Fund”) for disbursement as set forth in Section 1.2(d) and
Article 2. The Stockholder Representative Fund Shares will be
placed by the Escrow and Exchange Agent in the Stockholder Representative Fund
for disbursement as set forth in Section 10.1 hereof. At the Closing,
the Purchaser will deliver to the Stockholder Representative the Note (as such
term is defined herein).
(iii) In the
event the stockholders of the Purchaser approve the Note Satisfaction as
provided in Section 2.1(d) herein on or before June 30, 2009, the Purchaser
will make available to the Escrow and Exchange Agent, as soon as commercially
practicable but in any event no later than three Business Days after the date of
the Special Meeting, that number of shares of Purchaser Common Stock issuable
upon the Note Satisfaction (the “Note Satisfaction
Shares” and with the Share Consideration, the “Shares”), plus cash
in the amount of any accrued interest, for disbursement as set forth in
Section 1.2(d) and Article 2.
(iv) In the
event the stockholders of the Purchaser fail to approve the Note Satisfaction as
provided in Section 2.1(d) herein on or before June 30, 2009, the Purchaser
will deposit with the Escrow and Exchange Agent an amount in cash equal to the
principal amount of the Note, plus any accrued interest thereon, as soon as
commercially practicable but in any event no later than three Business Days
after the date of the Special Meeting and in all events on or before June 30,
2009, for payment as set forth in Section 1.2(d) and Article 2, which
amount will be paid to the Stockholder Representative in satisfaction of the
Note.
(v) Concurrently
with the Closing, and pursuant to applicable provisions of the Escrow Agreement,
the Escrow and Exchange Agent will establish an escrow account to hold the
Escrow Shares (the “Escrow Fund”) in
trust pursuant to the Escrow Agreement free of any Encumbrance, which Escrow
Shares will be issuable to the Stockholders less any pending or paid
indemnification claims asserted pursuant to Article 9, in accordance with the
terms of this Agreement and the Escrow Agreement and as provided in the Final
Merger Consideration Allocation Schedule pursuant to Section 2.3(a)
hereof. The adoption of this Agreement and approval of the Merger by
the Stockholders will constitute approval of the Escrow Fund, the Exchange Agent
Agreement, the Escrow Agreement and the appointment of the Stockholder
Representative.
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(d) Disbursement to
Stockholders. Promptly after each of the Effective Time and
the earlier of the Special Meeting or the maturity date of the Note, as the case
may be, the Purchaser will issue or
pay, or will cause the Escrow and Exchange Agent to issue or pay, to the
Stockholders the applicable portion of the Merger Consideration, if any, in
accordance with Article 2 and other applicable provisions of this
Agreement, the Exchange Agent Agreement and the Escrow Agreement.
(e) Fractional
Shares. No fraction of a share of Purchaser Common Stock will
be issued at the Effective Time or upon the Note Satisfaction, but in lieu
thereof, each holder of Outstanding Company Shares who would otherwise be
entitled to a fraction of a share of Purchaser Common Stock pursuant to
Article 2 hereof (after aggregating all fractional shares of Purchaser
Common Stock to be received by such holder) will be entitled to receive an
amount of cash (rounded to the nearest cent) equal to the product of such
fraction multiplied by the Purchaser Closing Stock Price.
1.3 Effects of the
Merger. The Merger will have the effects set forth in the
DGCL. Without limiting the generality of the foregoing, as of the
Effective Time, all properties, rights, privileges, powers and franchises of the
Company and the Merger Sub will vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company and the Merger Sub will become
debts, liabilities and duties of the Surviving Corporation.
1.4 Certificate of Incorporation
and Bylaws. At the Effective Time, the certificate of
incorporation of the Company will be amended and restated in its entirety to be
identical to the certificate of incorporation of the Merger Sub, as in effect
immediately prior to the Effective Time, except that the name of the Surviving
Corporation will be “Oxford Semiconductor, Inc.” and such other changes as may
be required pursuant to Section 7.2 hereof. The bylaws of the
Merger Sub, as in effect immediately prior to the Effective Time, will be the
bylaws of the Surviving Corporation, subject to any changes as may be required
pursuant to Section 7.2 hereof.
1.5 Directors. The
directors of the Merger Sub at the Effective Time will be the initial directors
of the Surviving Corporation and will hold office from the Effective Time until
their respective successors are duly elected or appointed and qualified in the
manner provided in the certificate of incorporation and the bylaws of the
Surviving Corporation or as otherwise provided by Law.
1.6 Officers. The
officers of the Merger Sub at the Effective Time will be the initial officers of
the Surviving Corporation and will hold office from the Effective Time until
their respective successors are duly elected or appointed and qualified in the
manner provided in the certificate of incorporation and bylaws of the Surviving
Corporation or as otherwise provided by Law.
ARTICLE
2
2.1 Merger
Consideration.
(a) For the
purposes hereof, the following definitions will apply:
(i) “Common Stock
Allocation” means the aggregate percentage of the Merger Consideration
allocated or otherwise payable to the holders of the Participating Company
Common Shares pursuant to the Stockholder Matters Agreement.
(ii) “Escrow Amount” means
the product obtained by multiplying (x) the Escrow Shares by (y) the
Purchaser Closing Stock Price.
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(iii) “Escrow Shares” means
a number of shares of Purchaser Common Stock equal to ten percent (10%) of
the Merger Consideration Closing Value. For the purposes of
this subsection (iii),
each such share of Purchaser Common Stock will have a deemed value equal to the
Purchaser Closing Stock Price.
(iv) “Merger Consideration”
means, collectively, (i) 5,600,000 shares of Purchaser Common Stock (the “Share
Consideration”), and (ii) a promissory note (the “Note”) in the form
attached hereto as Exhibit D in the
aggregate principal amount of $14,200,000 (the “Note Principal
Amount”), which will accrue simple interest at 6% per annum and will be
due and payable on June 30, 2009 unless the stockholders of the Purchaser
approve the Note Satisfaction by that date. In the event the
stockholders of the Purchaser do so approve the Note Satisfaction by that date,
the Note will be fully satisfied as to its principal amount by delivery of
3,400,000 shares of Purchaser Common Stock to the Stockholder
Representative.
(v) “Merger Consideration Closing
Value” means the sum of (A) the Note Principal Amount and
(B) the product obtained by multiplying (1) the Share Consideration
and (2) the Purchaser Closing Stock Price.
(vi) “Options” means all
outstanding options, warrants or other rights to acquire shares of Company
Capital Stock, whether or not exercisable and whether or not vested, whether or
not granted under the Stock Option Plans.
(vii) “Outstanding Company
Shares” means the sum of (a) the number of shares of Common Stock,
plus
(b) the number of shares of Series A Preferred Stock, plus (c) the
number of shares of Series B Preferred Stock, in each case issued and
outstanding as of the Effective Time.
(viii) “Outstanding Company
Series A Shares” means the aggregate number of shares of
Series A Preferred Stock, issued and outstanding as of the Effective
Time.
(ix) “Outstanding Company
Series B Shares” means the aggregate number of shares of
Series B Preferred Stock, issued and outstanding as of the Effective
Time.
(x) “Participating Company Common
Shares” means the aggregate number of shares of Common Stock issued and
outstanding as of the Effective Time and held of record by the Participating
Common Holders.
(xi) “Participating Common
Pro-Rata” means the percentage obtained by dividing one share of Common
Stock by the Participating Company Common Shares.
(xii) “Purchaser Closing Stock
Price” means the per share closing sale price of the Purchaser Common
Stock as quoted on the NASDAQ Global Market on the Closing Date.
(xiii) “Series A
Allocation” means the aggregate percentage of the Merger Consideration
allocated or otherwise payable to the holders of the Outstanding Company
Series A Shares pursuant to the Stockholder Matters Agreement.
(xiv) “Series B
Allocation” means the aggregate percentage of the Merger Consideration
allocated or otherwise payable to the holders of the Outstanding Company
Series B Shares pursuant to the Stockholder Matters Agreement.
(xv) “Series A
Pro-Rata” means the percentage obtained by dividing one share of
Series A Preferred Stock by the Outstanding Company Series A
Shares.
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(xvi) “Series B
Pro-Rata” means the percentage obtained by dividing one share of
Series B Preferred Stock by the Outstanding Company Series B
Shares.
(xvii) “Stockholder Matters
Agreement” means the Preferred and Common Stockholder Matters Agreement
dated as of December 15, 2008 as attached as Exhibit I
hereto. Such Stockholder Matters Agreement will not amended, other
than to add Stockholders as parties thereto, without the prior written consent
of the Purchaser, which consent will not be unreasonably withheld, delayed or
conditioned. Notwithstanding the foregoing, in the event that the
holders of the Outstanding Company Shares do not enter into the Stockholder
Matters Agreement on or prior to the Effective Time, then any references to such
Stockholder Matters Agreement in this Article 2 will be deemed to refer to
the Company’s certificate of incorporation, as amended through the Closing
Date.
(xviii) “U.K. Options” has the
meaning set forth in Section 2.2(b).
(xix) “U.K. Plans” mean,
collectively, the Oxford Semiconductor Limited Inland Revenue Approved Executive
Share Option Scheme, the Oxford Semiconductor Limited Unapproved Executive Share
Option Scheme, the Oxford Semiconductor Limited Enterprise Management Incentive
Share Option Scheme, and the Oxford Semiconductor Limited 2004 Share Option
Scheme (incorporating Enterprise Management Incentive Options and Incentive
Stock Options.
(xx) “U.S. Options” has the
meaning set forth in Section 2.2(a).
(xxi) “U.S. Plan” has the
meaning set forth in Section 2.2(a).
(i) Series B Preferred
Stock. Subject to the terms hereof and notwithstanding the
liquidation preferences set forth in the certificate of incorporation of the
Company, as amended to date, as of the Effective Time and pursuant to the waiver
set forth in the Stockholder Matters Agreement, each share of Series B
Preferred Stock issued and outstanding (other than shares of Series B
Preferred Stock to be cancelled in accordance with
subsection (iv) hereof, and any Dissenting Shares) immediately prior
to the Effective Time, by virtue of the Merger and without any action on the
part of Purchaser, the Merger Sub, the Company or the Stockholders, will be
cancelled and extinguished, and each such share of Series B Preferred Stock
will be converted into the right to receive the following:
(A) a number
of shares of Purchaser Common Stock equal to the product of (x) the
Series B Pro-Rata multiplied by (y) the product of (1) the
Series B Allocation multiplied by (2) the Share
Consideration;
(B) a
conditional number of shares of Purchaser Common Stock equal to the product of
(x) the Series B Pro-Rata multiplied by (y) the product of
(1) the Series B Allocation multiplied by (2) the Escrow Shares;
and
(C) an
interest in the Note equal to the product of (x) the Series B Pro-Rata
multiplied by (y) the product of (1) the Series B Allocation
multiplied by (2) the Note Principal Amount.
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In the
event the stockholders of the Purchaser do not approve the Note Satisfaction at
the Special Meeting, the amount of cash each holder is entitled receive for the
shares of Series B Preferred Stock held by such holder upon the repayment
of the Note as provided in clause (C) above will be rounded to the nearest cent
and computed after aggregating cash amounts for all Outstanding Company Shares
held by such holder.
(ii) Series A Preferred
Stock. Notwithstanding the liquidation preferences set forth
in the certificate of incorporation of the Company, as amended to date, as of
the Effective Time and pursuant to the waiver set forth in the Stockholder
Matters Agreement, each share of Series A Preferred Stock issued and
outstanding (other than shares of Series A Preferred Stock to be cancelled
in accordance with subsection (iv) hereof, and any Dissenting Shares)
immediately prior to the Effective Time, by virtue of the Merger and without any
action on the part of Purchaser, the Merger Sub, the Company or the
Stockholders, will be cancelled and extinguished, and each such share of
Series A Preferred Stock will be converted into the right to receive the
following:
(A) a number
of shares of Purchaser Common Stock equal to the product of (x) the
Series A Pro-Rata multiplied by (y) the product of (1) the
Series A Allocation multiplied by (2) the Share
Consideration;
(B) a
conditional number of shares of Purchaser Common Stock equal to the product of
(x) the Series A Pro-Rata multiplied by (y) the product of
(1) the Series A Allocation multiplied by (2) the Escrow Shares;
and
(C) an
interest in the Note equal to the product of (x) the Series A Pro-Rata
multiplied by (y) the product of (1) the Series A Allocation
multiplied by (2) the Note Principal Amount.
In the
event the stockholders of the Purchaser do not approve the Note Satisfaction at
the Special Meeting, the amount of cash each holder is entitled receive for the
shares of Series A Preferred Stock held by such holder upon the repayment
of the Note will be rounded to the nearest cent and computed after aggregating
cash amounts for all Outstanding Company Shares held by such
holder.
(iii) Common
Stock. As of the Effective Time, each share of Common Stock
issued and outstanding (other than shares of Common Stock to be cancelled in
accordance with subsection (iv) hereof, and any Dissenting Shares)
immediately prior to the Effective Time, by virtue of the Merger and without any
action on the part of Purchaser, the Merger Sub, the Company or the
Stockholders, will be cancelled and extinguished, and each such share of Common
Stock will, pursuant to the liquidation preferences of the Company’s certificate
of incorporation, as amended to date, have no right to receive any portion of
the Merger Consideration. Notwithstanding the foregoing, in the event
a holder of Common Stock (other than holders who are also holders of Preferred
Stock) prior to the Effective Time executes and delivers a counterpart signature
page to the Stockholder Matters Agreement to the Company and becomes a party
thereto in accordance therewith (such Stockholder, a “Participating Common
Stockholder”), then immediately following the Effective Time, each share
of Common Stock held by such Participating Common Stockholder will be converted
into the right to receive the following:
6
(A) a number
of shares of Purchaser Common Stock equal to the product of
(x) Participating Common Pro-Rata multiplied by (y) the product of
(1) the Common Share Allocation multiplied by (2) the Share
Consideration;
(B) a
conditional number of shares of Purchaser Common Stock equal to the product of
(x) Participating Common Pro-Rata multiplied by (y) the product of
(1) the Common Share Allocation multiplied by (2) the Escrow Shares;
and
(C) an
interest in the Note equal to the product of (x) Participating Common
Pro-Rata multiplied by (y) the product of (1) the Common Share
Allocation multiplied by (2) the Note Principal Amount.
In the
event the stockholders of the Purchaser do not approve the Note Satisfaction at
the Special Meeting, the amount of cash each Participating Common Stockholder is
entitled receive for the shares of Common Stock held by such holder upon the
repayment of the Note will be rounded to the nearest cent and computed after
aggregating cash amounts for all shares of Outstanding Company Shares held by
such Participating Common Stockholder.
(iv) Treasury
Stock. Each share of Company Capital Stock that is owned by
the Company immediately prior to the Effective Time will automatically be
cancelled and retired and will cease to exist, and no consideration will be
delivered in exchange therefor.
(v) Generally. All
Outstanding Company Shares, when so converted, will no longer be outstanding and
will automatically be canceled and retired and will cease to exist, and each
holder of a certificate representing such Outstanding Company Shares will cease
to have any rights with respect thereto, except the right to receive the Merger
Consideration represented by such certificate in accordance with this
Article 2.
(c) Conversion of Merger Sub
Capital Stock. As of the Effective Time, each issued and
outstanding share of capital stock of the Merger Sub will be converted into one
validly issued, fully-paid and non-assessable share of common stock, $0.001 par
value, of the Surviving Corporation.
(d) Satisfaction of the
Note. The aggregate, then-outstanding principal amount of the
Note may be satisfied by the issuance and delivery of 3,400,000 shares of
Purchaser Common Stock (as adjusted for any stock split, stock dividend or other
recapitalization or restructuring of the Purchaser Common Stock) upon approval
by the stockholders of the Purchaser at the Special Meeting in accordance with
the provisions hereof and as set forth therein (the “Note
Satisfaction”). As soon as commercially practicable but in any
event no later than three Business Days following the Note Satisfaction, the
Purchaser will cause the Exchange and Escrow Agent (i) to deliver to the
Stockholders the shares of Purchaser Common Stock to which they are entitled and
(ii) to pay to the Stockholders any accrued interest on the Note in cash,
in each case in accordance with the Exchange Agent Agreement.
(a) U.S.
Options. Immediately prior to the Effective Time and
contingent upon the consummation of the transactions contemplated by this
Agreement, all Options issued and outstanding under the Company’s 2005 Stock
Plan (the “U.S.
Plan” and such Options the “U.S. Options”) will
automatically become fully vested and terminate at the Effective Time without
any action on the part of any party. As a result of such termination,
the holders of the U.S. Options will not be entitled to receive any Merger
Consideration in exchange thereof.
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(b) U.K.
Options. Subject to the approval of HM Revenue and Customs
submitted on December 11, 2008 (the “HMRC Approval”) with
respect to the U.K. Options granted under the Oxford Semiconductor Limited
Inland Revenue Approved Executive Share Option Scheme, at the Effective Time all
unexercised options and/or other rights to purchase shares of Common Stock
granted under the U.K. Plans will lapse pursuant to the terms of the U.K. Plans
and, as applicable, the Stockholder Matters Agreement. In connection
therewith, the Company will take all actions necessary to procure the HMRC
Approval as soon as commercially practicable following the date hereof and will
further take all actions necessary, or as otherwise reasonably requested by the
Purchaser, to ensure that the U.K. Options lapse at the Effective Time,
including amending the U.K. Plans and obtaining the U.K. Option holders’ consent
and/or notifying the U.K. Option holders. In the event that
(i) such HMRC Approval has not been granted or otherwise obtained as of the
Effective Time, or (ii) any holder of any U.K. Option is allowed or
otherwise entitled to exercise such U.K. Option in any manner following the
Effective Time, either under the terms of such U.K. Option, the U.K. Plans or
applicable Law, the parties will cooperate in good faith to cause (a) the
termination and/or lapse of any such U.K. Option and the rights thereunder, and
(b) the distribution of any portion of the Merger Consideration otherwise
payable in respect of the shares issuable upon exercise of such U.K. Option,
which may include the deposit into an escrow account of such portion of the
Merger Consideration until such time as the U.K. Option and the rights relating
thereto have lapsed in their entirety and are of no further force and
effect. Without limiting the foregoing or the rights of the Purchaser
hereunder, the Company and each Founder (as such term is defined in
Section 3.4 of the Company Disclosure Schedule) will amend the Pledge
Agreement (as such term is defined in Section 3.4 of the Company Disclosure
Schedule) as soon as practicable following the date hereof to make such changes
as the Purchaser may reasonable request to ensure compliance with this
Section 2.2(b) or as otherwise described in Section 3.4 of the Company
Disclosure Schedule.
(c) Other
Options. All other Options not described in paragraphs (a) and
(b) above that are outstanding immediately prior to the Effective Time, if any,
will be cancelled and extinguished, and no consideration will be delivered in
the exchange therefor.
(d) No Other
Rights. Prior to the Effective Time, except for
obtaining the HMRC Approval, the Company will have taken all actions necessary
or appropriate so that (i) at the Effective Time, all options, warrants,
securities convertible into Company Capital Stock and other rights to purchase
or otherwise acquire Company Capital Stock from the Company will be cancelled
and the Stock Option Plans will be terminated, provided that any such
termination will comply with the provisions of Code Section 409A where
applicable, (ii) at the Effective Time, no Person other than the holders of
the Outstanding Company Shares will have any right, title or interest in or to
the ownership of the Company or the Surviving Corporation, (iii) the
holders of Outstanding Company Shares and Options will, on and after the
Effective Time, have no right, title or interest in or to the Company, the
Surviving Corporation or any securities of the Company or the Surviving
Corporation (other than, the right to receive the Merger Consideration), and
(iv) no Person holding any securities of the Company will have any right to
acquire any securities of the Purchaser, the Merger Sub or the Surviving
Corporation by virtue of any such securities of the Company or any act or
omission of the Company or its agents other than the Merger
Consideration.
2.3 Exchange.
(a) Exchange
Procedures. The following exchange procedures will govern the
exchange of the Outstanding Company Shares at or following the Effective
Time:
(A) No later
than the date hereof, the Company will have delivered to the Purchaser a
preliminary spreadsheet setting forth (I) the name of each Stockholder as
of the date hereof, (II) the number of shares and stock certificate numbers
of Outstanding Company Shares held by such Stockholder as of the date hereof,
(III) the portion of the Merger Consideration and the Closing Disbursement
issuable and payable to such Stockholder in accordance with the provisions
hereof as of the date hereof, and (IV) each Stockholder’s proportional
interest in the Escrow Fund and the Stockholder Representative Fund as of the
date hereof (such spreadsheet, the “Preliminary Merger
Consideration Allocation Schedule”). Upon receipt by the
Purchaser and approval thereof (which will not be unreasonably delayed,
conditioned or withheld), the Preliminary Merger Consideration Allocation
Schedule will be appended to this Agreement as Exhibit E-1
hereto. The Company and the Stockholder Representative expressly
acknowledge that the Preliminary Merger Consideration Allocation Schedule sets
forth the contemplated allocation of the Merger Consideration disbursable or
otherwise payable in accordance with this Article 2.
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(B) No later
than three Business Days prior to the Closing Date, the Company will have
delivered to the Purchaser a spreadsheet setting forth (I) the name of each
Stockholder as of the Closing Date, (II) the number of shares and stock
certificate numbers of Outstanding Company Shares held by such Stockholder as of
the Effective Time, (III) the portion of the Merger Consideration and the
Closing Disbursement issuable and payable to such Stockholder in accordance with
the provisions hereof as of the Closing Date, and (IV) each Stockholder’s
proportional interest in the Escrow Fund and the Stockholder Representative Fund
as of the Closing Date (such spreadsheet, the “Final Merger Consideration
Allocation Schedule”). Upon receipt by the Purchaser and
approval thereof (which will not be unreasonably delayed, conditioned or
withheld), the Final Merger Consideration Allocation Schedule will be appended
to this Agreement as Exhibit E-2
hereto and appended as an appropriately numbered exhibit to the Exchange Agent
Agreement and the Escrow Agreement.
(ii) As soon
as practicable after the Effective Time but in no event later than five Business
Days thereafter, the Purchaser will mail, or will cause the Escrow and Exchange
Agent to mail, to each Stockholder at the respective addresses set forth on the
Final Merger Consideration Allocation Schedule the following: (A) notice
that the Closing has occurred; (B) a letter of transmittal in the form
attached to the Exchange Agent Agreement (the “Transmittal Letter”);
and (C) instructions for effecting the surrender of the Certificates (as
defined herein) in exchange for the Merger Consideration issuable and payable
with respect thereto.
(iii) Upon
surrender of a certificate or certificates after the Effective Time which
immediately prior to the Effective Time represented any Outstanding Company
Shares (a “Certificate”) (or an
effective affidavit of loss required by Section 2.3(b)), together with a
duly executed Transmittal Letter (collectively, the “Transmittal
Documentation”), to the Escrow and Exchange Agent, the holder of such
Certificate will be entitled to receive in exchange for that portion of the
Merger Consideration that such holder has the right to receive pursuant to the
provisions of this Article 2, all as set forth in the Final Merger
Consideration Allocation Schedule, and the surrendered Certificate will
immediately be cancelled.
(iv) Within
five Business Days of receipt by the Escrow and Exchange Agent of the duly
executed Transmittal Documentation, with respect to the Outstanding Company
Shares for which the applicable Transmittal Documentation has been properly
submitted, the Purchaser will cause the Escrow and Exchange Agent to issue to
such tendering holder the portion of the Closing Disbursement in accordance with
the provisions of this Article 2 and in accordance with the Exchange Agent
Agreement.
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(b) Lost, Stolen or Destroyed
Certificates. In the event that any Certificates have been
lost, stolen or destroyed, the Escrow and Exchange Agent may, in its discretion
and as a condition precedent to the issuance of any Merger Consideration in
respect thereof, require the owner of such lost, stolen or destroyed Certificate
(i) to provide an affidavit of such loss, theft or destruction in a form
satisfactory to the Escrow and Exchange Agent and any additional documentation
reasonably requested by the Escrow and Exchange Agent, (ii) to indemnify
and hold harmless the Purchaser Indemnified Parties (as defined herein) from and
against any claim that may be made against the Purchaser Indemnified Parties
with respect to the Certificates alleged to have been lost, stolen or destroyed,
and/or (iii) to provide a sufficient indemnity bond in form and substance
reasonably satisfactory to the Escrow and Exchange Agent.
(c) Dissenting
Shares. The provisions of this Section 2.3 will also
apply to Dissenting Shares that lose their status as such, except that the
obligations of the Purchaser under this Section 2.3 will commence on the
date of loss of such status and the holder of such shares will be entitled to
receive in exchange for such shares of the Merger Consideration to which such
holder is entitled pursuant to Section 2.1.
(d) No Further Ownership Rights
in Company Capital Stock. Any Merger Consideration paid or
issued upon the surrender of Certificates in accordance with the terms hereof
will be deemed to be in full satisfaction of all rights pertaining to such
Certificates, and there will be no further registration of transfers on the
records of the Surviving Corporation of shares of Company Capital Stock which
were outstanding immediately prior to the Effective Time.
(e) Termination of Exchange
Fund. Any portion of the Exchange Fund which remains
undistributed on the date that is 90 days after the Effective Time will be
delivered to the Purchaser, provided that the Purchaser provides prior written
notification to the Stockholder Representative of the delivery to Purchaser, and
any holder of a Certificate who has not previously complied with this
Section 2.3 will be entitled to receive, upon demand, only from the
Purchaser, disbursement of its claim for the Merger Consideration.
2.4 [Intentionally
Omitted.]
2.5 Dissenter’s
Rights. Notwithstanding anything in this Agreement to the
contrary, any shares of Company Capital Stock outstanding immediately prior to
the Effective Time and held by a holder who has properly exercised the holder’s
appraisal rights in accordance with Section 262 of the DGCL or any
successor provision (“Dissenting Shares”)
will not be converted into, or represent the right to receive, the Merger
Consideration, unless and until such holder fails to perfect or effectively
withdraws or otherwise loses such holder’s right to appraisal and payment under
the DGCL. If, after the Effective Time, any such holder fails to
perfect or effectively withdraws or loses his right to appraisal, then such
Dissenting Shares will thereupon be treated as if they had been converted as of
the Effective Time into the right to receive the Merger Consideration to which
such holder is entitled, without interest or dividends thereon, upon the
surrender of the Certificate(s) which formerly represented such Dissenting
Shares, in the manner provided in Section 2.3. The Company will
give (a) the Purchaser and the Stockholder Representative prompt notice of any
demands received by the Company for appraisal of shares of Company Capital
Stock, attempted withdrawals of such demands and any other instrument served
pursuant to the DGCL and received by the Company relating to stockholders’
rights of appraisal, and (b) the Purchaser the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal under the
DGCL, provided that any settlement or proceeding that results in a claim by any
Purchaser Indemnified Party pursuant to Article 9 will be subject to the dispute
resolution mechanism provided therein. The Purchaser will keep the
Stockholder Representative reasonably informed of such negotiations and
proceedings. The Company will not voluntarily make any payment with
respect to, or settle or offer to settle, any such demand for payment, except
with the prior written consent of the Purchaser and the Stockholder
Representative.
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2.6 Post-Closing Adjustment to
Escrow Fund. The Escrow Fund may be reduced from time to time
in accordance with the provisions of Article 9 of this
Agreement. The balance of the Escrow Fund will be disbursed upon the
expiration of the Indemnification Period as provided in Article 7
hereof.
2.7 Taking of Necessary Action;
Further Action. If, at any time after the Effective Time, any
further action is necessary or desirable to carry out the purposes of this
Agreement and to vest the Purchaser with control over, and to vest the Surviving
Corporation with full right, title and possession to, all assets, property,
rights, privileges, powers and franchises of the Company, the officers and
directors of the Company and the Stockholder Representative will and are hereby
authorized to, in the name of their respective corporations or otherwise, take
all such lawful and necessary action as may be requested by the
Purchaser.
2.8 Taxes. Notwithstanding
any other provision of this Agreement, the Purchaser will have the right to
withhold all Taxes from payments to be made hereunder (including any payments in
connection with the Exchange Agent Agreement and the Escrow Agreement) if such
withholding is required by Law, and to collect a FIRPTA Certificate
substantially in the form attached hereto as Exhibit G from the
Company and
Forms W-8 or W-9 or other forms from the Stockholders to the extent required by
any foreign, federal, state or local laws. The parties intend that
(i) the Merger will be treated as a taxable transaction and not as a
“reorganization” for federal income tax purposes and (ii) all of the Merger
Consideration will be treated for federal income tax purposes as payments in
exchange for the Company Capital Stock owned by the Stockholders. The parties
agree to report the transactions contemplated by this Agreement in a manner
consistent with that intent. The Purchaser will take no action
inconsistent with such intended treatment, including merging the Company into
the Purchaser or any direct or indirect subsidiary of Purchaser in connection
with the Merger; provided, however, that in no
event will the approval of the Note Satisfaction be construed as an action
inconsistent with the treatment of the Merger as a taxable
transaction.
(a) The Share
Consideration, the Note and, if applicable, the Note Satisfaction Shares will be
issued in a transaction exempt from registration under the Securities Act by
reason of Section 4(2) thereof and/or Regulation D promulgated under the
Securities Act and may not be re-offered or resold other than in conformity with
the registration requirements of the Securities Act and such other applicable
rules and regulations or pursuant to an exemption therefrom.
(b) The
certificates representing shares of Purchaser Common Stock will be legended as
follows:
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT
OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR
HYPOTHECATION IS IN COMPLIANCE THEREWITH.
11
Such
certificates will also include such additional legends as necessary to comply
with applicable foreign, federal and state securities laws. The
certificates representing the Shares will be subject to a stop transfer order
with the Purchaser’s transfer agent that restricts the transfer of such Shares
except in compliance herewith. Following the first anniversary of the
Effective Date, upon request and tender of such legended certificate to
Purchaser, each Stockholder will be entitled to removal of the legend set forth
in this Section 2.9(b) and issuance of a replacement certificate
therefor. The Purchaser will provide commercially reasonable
assistance in connection with such legend removal upon written request by the
Stockholder; provided that such Stockholder will be responsible for any related
expenses.
ARTICLE
3
The
Company represents and warrants to the Purchaser and the Merger Sub that, as of
the date of this Agreement and the Closing Date, the statements set forth in
this Article 3 are true and correct, except as set forth in the disclosure
letter delivered herewith (the “Company Disclosure
Schedule”).
3.1 Corporate
Matters.
(a) The
Company 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
and authority to own, lease and operate its properties and assets and to conduct
its business as presently conducted. The Company is duly qualified or
licensed to do business and, where applicable as a legal concept, is in good
standing as a foreign corporation in each jurisdiction in which the character of
the properties it owns, operates or leases or the nature of its activities makes
such qualification or licensure necessary, except where the failure to be so
qualified, licensed or in good standing would not have a Material Adverse Effect
on the Company. The Company has made available to the Purchaser
accurate and complete copies of the certificate of incorporation and bylaws of
the Company and the certificate of incorporation and bylaws or other comparable
charter or organizational documents of each Company Subsidiary, as currently in
effect and as amended to date, and neither the Company nor any Company
Subsidiary is in default under or in violation of any provision
thereof.
(b) The
Company does not own or control directly or indirectly any equity, participation
or similar interest in any other corporation, partnership, limited liability
company, joint venture, trust, other business association or person other than
the Subsidiaries listed in Section 3.1(b) of the Company Disclosure
Schedule (each, a “Company Subsidiary”
and collectively, the “Company
Subsidiaries”). The Company Subsidiaries are duly organized
and validly existing under the laws of their respective jurisdictions of
incorporation. The Company Subsidiaries are duly qualified to conduct
business and are in corporate and tax good standing under the laws of each
jurisdiction in which the nature of their respective businesses or the ownership
or leasing of their respective properties requires such qualification, each of
which is listed in Section 3.1(b) of the Company Disclosure Schedule,
except where the failure to be so qualified or in good standing would not have a
Material Adverse Effect on the Company. The Company Subsidiaries have
all requisite corporate power and authority to carry on the businesses in which
they are presently engaged and to own and use the properties presently owned and
used by them. All of the issued and outstanding shares of capital
stock of each of the Company Subsidiaries are duly authorized, validly issued,
fully paid, nonassessable and free of preemptive rights and held of record and
beneficially owned by the Company. All shares of the Company
Subsidiaries that are held of record or owned beneficially by the Company are
held or owned free and clear of any restrictions on transfer (other than
restrictions under the Securities Act and applicable Law), claims, security
interests, options, warrants, rights, contracts, calls, commitments, equities
and demands. There are no outstanding or authorized options,
warrants, rights, agreements or commitments to which the Company or any of the
Company Subsidiaries is a party or which are binding on any of them providing
for the issuance, disposition or acquisition of any capital stock of any of the
Company Subsidiaries. There are no outstanding stock appreciation,
phantom stock or similar rights with respect to any of the Company
Subsidiaries. There are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of any capital stock of
any of the Company Subsidiaries.
12
3.2 Authority and
Enforceability. The Company has all requisite corporate power
and authority to execute and deliver this Agreement and each of the Ancillary
Agreements to which the Company is a party and to perform the Company’s
obligations under this Agreement and each such Ancillary
Agreement. The execution, delivery and performance of this Agreement
and the Ancillary Agreements have been duly authorized by all necessary action
on the part of the Company. Without limiting the foregoing, (i) the
board of directors of the Company has duly adopted resolutions unanimously
approving this Agreement, the Merger and the other transactions contemplated by
this Agreement, and (ii) the holders of the requisite number of the outstanding
shares of Company Capital Stock, pursuant to applicable Law and the Company’s
certificate of incorporation in effect as of the date hereof, have approved this
Agreement, the Merger and the other transactions contemplated by this
Agreement. This Agreement has been duly executed and delivered by the
Company and, assuming the due authorization, execution and delivery by each of
the other parties to the Agreement, constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to (a) laws of general application relating to
bankruptcy, insolvency, and the relief of debtors, and (b) rules of law
governing specific performance, injunctive relief and other equitable
remedies. Upon the execution and delivery by the Company of the
Ancillary Agreements to which the Company is a party and assuming the due
authorization, execution and delivery by each of the other parties to each
Ancillary Agreement, such Ancillary Agreements will constitute the legal, valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, subject to (a) laws of general application
relating to bankruptcy, insolvency, and the relief of debtors, and
(b) rules of law governing specific performance, injunctive relief and
other equitable remedies.
3.3 No
Conflict. Other than filings, approvals and/or notices set
forth in Section 3.3 of the Company Disclosure Schedule, neither the
execution and delivery of this Agreement, nor the consummation or performance of
the transactions contemplated by this Agreement, will either (a) directly
or indirectly (with or without notice, lapse of time or both) conflict with,
result in a breach or violation of, constitute a default (or give rise to any
right of termination, cancellation, acceleration, suspension or modification of
any obligation or loss of any benefit) under, result in any payment becoming due
under, result in the imposition of any Encumbrances on any of the Company
Capital Stock or any of the properties or assets of the Company under
(i) the certificate of incorporation or bylaws of the Company, or the
certificate of incorporation or bylaws or other comparable charter or
organizational documents of any Company Subsidiary, or any resolution adopted by
the stockholders or board of directors of the Company, in each case as amended
to date, (ii) any material Governmental Authorization, or (iii) any
material Law or Judgment applicable to the Company or any of its material
properties or assets; or (b) require the Company to obtain any material
consent, waiver, approval, ratification, permit, license or Governmental
Authorization of, give any notice to, or make any filing or registration with,
any Governmental Authority or other Person.
13
3.4 Capitalization and
Ownership. The authorized capital stock of the Company
consists solely of 32,000,000 shares of common stock, par value $0.001 (“Common Stock”), of
which 16,918,987 shares are issued and outstanding as of the date hereof,
4,546,404 shares of preferred stock designated as Series A Preferred Stock
(“Series A
Preferred Stock”), par value $0.001, all of which are issued and
outstanding as of the date hereof, and 2,426,844 shares of preferred stock
designated as Series B Preferred Stock (“Series B Preferred
Stock”), par value $0.001, of which 2,254,844 shares are issued and
outstanding as of the date hereof. Section 3.4 of the Company
Disclosure Schedule sets forth, as of the date hereof, a complete and accurate
list of all Stockholders of record, indicating the number of shares of Company
Capital Stock held of record by each. The Company has provided to the
Purchaser a complete and accurate list as of the date of this Agreement of all
outstanding Options, indicating the holders thereof, the number and class or
series of Company Capital Stock subject to each Option, the exercise price and
date of grant for each Option. All of the Options will terminate and
be of no further force or effect at or immediately prior to the Effective Time,
and none of the Company, the Purchaser, the Merger Sub or the Surviving
Corporation will, thereafter, have any Liability or obligation, including any
obligation to pay any Merger Consideration with respect thereto. All
of the issued and outstanding shares of Company Capital Stock are duly
authorized, validly issued, fully paid, nonassessable and free of all preemptive
rights. All of the issued and outstanding shares of Company Capital
Stock which may previously have been subject to a right of repurchase in favor
of the Company or any other Person, or otherwise subject to “vesting” provisions
are fully vested by lapse of time and no longer subject to any repurchase right,
without regard to any acceleration in connection with the
Merger. There are no outstanding or authorized options, warrants,
rights, agreements or commitments to which the Company is a party or which are
binding upon the Company providing for the issuance or redemption of any shares
of Company Capital Stock. No holder of Indebtedness of the Company
has any right to convert or exchange such Indebtedness for Company Capital
Stock. There are no outstanding or authorized stock appreciation,
phantom stock or similar rights with respect to the Company. There
are no agreements to which the Company is a party or by which it is bound with
respect to the voting (including voting trusts or proxies), registration under
the Securities Act, or any foreign securities Law, or sale or transfer
(including agreements relating to preemptive rights, rights of first refusal,
co-sale rights or “drag-along” rights) of any securities of the
Company. All of the issued and outstanding shares of Company Capital
Stock were issued in compliance with applicable federal and state securities
laws. The outstanding shares of the Company Capital Stock is held of
record by the Stockholders in the number and type set forth opposite their names
as provided in the Final Merger Consideration Allocation Schedule.
3.5 Financial
Statements. The Company has provided to the Purchaser the
following financial statements (collectively, the “Financial
Statements”): (a) audited consolidated balance sheets of the Company
and the Company Subsidiaries as of December 31, 2006 and December 31,
2007 (the December 31, 2007 balance sheet, the “Audited Balance
Sheet”) and the related audited consolidated statements of income,
changes in stockholders’ equity and cash flow for each of the fiscal years then
ended, including in each case any notes thereto, together with the report
thereon of PricewaterhouseCoopers LLP, independent certified public accountants;
and (b) the unaudited consolidated balance sheet of the Company and the
Company Subsidiaries as of September 30, 2008 (the “Interim Balance
Sheet”) and the related unaudited consolidated statements of income,
changes in stockholders’ equity and cash flow for the nine-months then
ended. The Financial Statements were prepared based on the books and
records of the Company and the Company Subsidiaries and have been prepared in
accordance with GAAP, consistently applied throughout the periods involved
(except that the unaudited financial statements are subject to normal recurring
year-end adjustments, the effect of which will not, individually or in the
aggregate, be material, and the absence of notes). The Financial
Statements fairly present, in all material respects, the consolidated financial
condition and the results of operations, changes in stockholders’ equity and
cash flow of the Company and the Company Subsidiaries as of the respective dates
and for the periods indicated therein. No financial statements of any
Person other than the Company and the Company Subsidiaries are required by GAAP
to be included in the consolidated financial statements of the
Company.
3.6 Books and
Records. The minute books and stock record books of the
Company and the Company Subsidiaries, all of which have been made available to
the Purchaser, are accurate and complete in all material respects. At
the Effective Time, all such books and records will be in the possession of the
Company. The minute books of the Company in all material respects
contain accurate and complete records of all meetings held of, and corporate
action taken by, the Company’s stockholders, directors and directors’
committees, and no such meeting has been held for which minutes have not been
prepared and are not contained in such minute books.
14
(a) Subject
to any reserves set forth in the Interim Balance Sheet, the accounts receivable
reflected on the Interim Balance Sheet represent or will represent valid
obligations arising from sales and delivery of goods actually made or services
actually performed in the ordinary course of business. The Company
has not received any written claims nor, to the Knowledge of the Company, have
any such claims been threatened, relating to the amount or validity of such
account receivable, other than returns in the ordinary course or as reserved
against on the Interim Balance Sheet. Section 3.7(a) of the
Company Disclosure Schedule sets forth an accurate and complete list and the
aging of all notes and accounts receivable as of November 30, 2008 except for
inaccuracies which do not change or otherwise alter the aggregate amount of the
obligations under such notes and accounts receivable. Notwithstanding
any provision hereof, the Company makes no representation or warranty as to the
collectability of any accounts receivable of the Company.
(b) Section 3.7(b) of
the Company Disclosure Schedule contains an accurate, correct and complete list
of the names and addresses of all banks and financial institutions in which the
Company has an account, deposit, safe-deposit box, line of credit or other loan
facility or relationship, or lock box or other arrangement for the collection of
accounts receivable, with the names of all Persons authorized to draw or borrow
thereon or to obtain access thereto.
3.8 Inventories. Section 3.8
of the Company Disclosure Schedule sets forth a list of the Company’s inventory
as of November 30, 2008. Except as has been reserved against on the
Interim Balance Sheet, all of the inventory of the Company reflected on the
Interim Balance Sheet was properly stated therein at standard cost determined in
accordance with GAAP consistently maintained and applied by the
Company. The Company does not have any commitments to purchase
inventory other than in the ordinary course of business.
3.9 No Undisclosed
Liabilities. The Company and the Company Subsidiaries have no
Liability of a nature required to be disclosed on a balance sheet or in the
related notes to financial statements prepared in accordance with GAAP, except
for (a) Liabilities accrued or expressly reserved for in specific line
items on the Interim Balance Sheet, (b) Liabilities incurred in the
ordinary course of business after the date of the Interim Balance Sheet,
(c) Liabilities incurred in the ordinary course of business pursuant to the
written contractual obligations of the Company or the Company Subsidiaries, as
the case may be, copies of which were previously made available to the Purchaser
and (d) Liabilities incurred in connection with the transactions
contemplated in this Agreement.
3.10 Absence of Certain Changes
and Events. From the date of the Interim Balance Sheet through
the Closing Date:
(i) no event
has occurred that has had a Material Adverse Effect on the Company;
(ii) the
Company has not declared or paid any dividend in respect of any shares of
Company Capital Stock;
(iii) there has
been no material increase in the compensation or benefits payable by the Company
or a Company Subsidiary to any of its current employees or independent
contractors;
15
(iv) neither
the Company nor any Company Subsidiary has amended its certificate of
incorporation or bylaws or other applicable charter documents, other than in
connection with the transactions contemplated by this Agreement;
(v) the
Company and the Company Subsidiaries have conducted their business in the
ordinary course, other than in connection with the transactions contemplated by
this Agreement or as determined by the board of directors of the Company in the
exercise of its fiduciary responsibility;
(vi) neither
the Company nor any Company Subsidiary has reclassified, combined, split,
subdivided, redeemed or otherwise acquired, directly or indirectly, any of its
capital stock;
(vii) neither
the Company nor any Company Subsidiary has (A) issued, guaranteed or assumed any
Indebtedness or (B) made loans, advances or investment in any other person,
other than advances to its employees for expenses in the ordinary course of
business;
(viii) neither
the Company nor any Company Subsidiary has sold, leased, licensed or made other
disposition of or Encumbrance on any of its properties or assets (other than
sales of inventory in the ordinary course of business);
(ix) neither
the Company nor any Company Subsidiary has acquired by merger or consolidation
with, or by purchase of all or a substantial portion of the assets or any stock
of, or by any other manner, any business or Person;
(x) neither
the Company nor any Company Subsidiary has, other than in the ordinary course of
business (A) except as required by Law, adopted, entered into, terminated
or amended any Company Plan, collective bargaining agreement or employment,
severance or similar contract, (B) amended or accelerated the payment, right to
payment or vesting of any compensation or benefits, (C) paid any benefit not
provided for as of the Closing Date under any Company Plan, or (D) granted any
awards under any bonus, incentive, performance or other compensation plan or
arrangement or benefit plan, or removed existing restrictions in any Company
benefit plans or contracts or awards made thereunder;
(xi) neither
the Company nor any Company Subsidiary has cancelled, released or waived any
claims or rights with a value exceeding $50,000 or otherwise outside the
ordinary course of business;
(xii) neither
the Company nor any Company Subsidiary has settled any legal
proceeding;
(xiii) neither
the Company nor any Company Subsidiary has made any capital expenditure or other
expenditure with respect to property, plant or equipment in excess of $50,000
individually or $100,000 in the aggregate;
(xiv) neither
the Company nor any Company Subsidiary has changed any accounting principles,
methods or practices or investment practices, including any changes as were
necessary to conform with GAAP or applicable Law;
16
(xv) neither
the Company nor any Company Subsidiary has accelerated or delayed in the payment
of accounts payable or other liabilities or in the collection of notes or
accounts receivable; and
(xvi) neither
the Company nor any Company Subsidiary has made any Tax election or settlement
of any Tax Liability or amendment of any Tax return.
3.11 Assets. The
Company and the Company Subsidiaries have good and marketable title to, or in
the case of leased or licensed assets, valid leasehold interests in or license
rights to, all of their assets, tangible or intangible, free and clear of any
Encumbrances other than Permitted Encumbrances. The Company and the
Company Subsidiaries own, lease or license all assets and properties used in
their business as currently conducted, and such assets and properties constitute
all of the assets necessary for the conduct of their business as currently
conducted as of the date hereof. Each item of tangible personal
property is in good operating condition and repair, ordinary wear and tear
excepted, except as would not, individually or in the aggregate, have a Material
Adverse Effect on the Company.
3.12 Real
Property.
(a) The
Company does not own any real property, nor has the Company ever owned any real
property.
(b) Section 3.12(b) of
the Company Disclosure Schedule sets forth an accurate and complete list of all
real property in which the Company or a Company Subsidiary has a leasehold or
subleasehold estate or other right to use or occupy (collectively, the “Leased Real
Property”). The Company has made available to the Purchaser
accurate and complete copies of all leases and other Contracts granting a right
in or relating to the Leased Real Property and all Contracts and other documents
evidencing, creating or constituting Encumbrances upon or rights in the Leased
Real Property. Such leases and Contracts are in full force and
effect, valid and effective in accordance with their terms, and neither the
Company nor any Company Subsidiary is in material default under said leases and
Contracts.
(c) The
Company and the Company Subsidiaries hold valid leasehold interests in their
Leased Real Property, free and clear of any Encumbrances other than Permitted
Encumbrances.
(d) No Person
other than the Company or a Company Subsidiary is in possession of any portion
of the Leased Real Property. Neither the Company nor a Company
Subsidiary has granted to any Person the right to use or occupy any portion of
any parcel of Leased Real Property, and neither the Company nor a Company
Subsidiary has received written notice of any claim of any Person to the
contrary.
3.13 Intellectual
Property.
(a) Company Intellectual
Property. The Company owns or otherwise has valid and legally
enforceable rights to use the Intellectual Property owned, licensed, used or
held for use by the Company at any time prior to and including the Closing Date
(the “Company
Intellectual Property”).
(i) Owned Intellectual
Property. With respect to all Company Intellectual Property
owned by the Company (the “Owned Intellectual
Property”), Section 3.13(a)(i) of the Company Disclosure
Schedule sets forth a complete and accurate list of all of the following:
(A) Registered Intellectual Property, (B) products sold or offered for
sale by the Company, (C) internal development tools that are used by the
Company and are material to the operations of the Company’s business, and
(D) Internet Addresses, indicating for each of the foregoing
(A) through (D) (whenever applicable) the (x) applicable jurisdiction of
use and registration, (y) registration number, publication number and
application number, and (z) dates of filing, publication, issuance and
renewal. Except as specifically set forth on
Section 3.13(a)(i) of the Company Disclosure Schedule, the Company has
valid title to the Owned Intellectual Property and is the sole and exclusive
owner of the Owned Intellectual Property.
17
(ii) Inbound and Outbound
Licenses. Schedule 3.13(a)(ii) of the Company’s Disclosure
Schedule lists: (i) each oral and written agreement pursuant to
which any third Person has licensed to the Company or otherwise authorized the
Company to use Intellectual Property (the “Third Party Intellectual
Property”), other than commercially available general purpose software
purchased or licensed pursuant to shrink-wrap, click-wrap or other standard
forms of agreements for less than $50,000); and (ii) all agreements under
which the Company has licensed or otherwise granted to any Person rights in any
of the Company Intellectual Property (including the right to use, market or
otherwise exploit or commercialize any of the Company Intellectual Property or
related products or services) other than Contracts with the Company’s customers
entered into in the ordinary course of business which involve payments to the
Company in the amount of less than $50,000 over the life of such Contracts
(collectively, the “Company IP
Agreements”). The Company has not breached any of the Company
IP Agreements, and, to the Knowledge of the Company, no other Person thereto has
breached any Company IP Agreement. Section 3.13(a)(ii) of the
Company Disclosure Schedule also lists separately all of the following related
to the Company Intellectual Property: (i) any exclusive rights granted to
any Person; or (ii) any source code escrow or other form of delivery or
disclosure of any source code to or for the benefit of any Person.
(iii) The
Company Intellectual Property set forth on Sections 3.13(a)(i) and
3.13(a)(ii) of the Company Disclosure Schedule constitutes all of the
material Intellectual Property used in or necessary to conduct the business of
the Company as currently conducted. The Company has a valid license
to use intellectual property licensed to it in connection with the operation of
the Company’s business, subject only to the terms of the underlying license
agreements.
(b) Effect of
Closing. Immediately after the Closing, the Surviving
Corporation will be the sole owner of, and will have valid title to, the Owned
Intellectual Property, and will have the full right to use, license and transfer
the Company Intellectual Property in the same manner and on the same terms that
the Company had immediately prior to the Closing. The Company is not
legally bound by any Contract or other obligation under which the occurrence of
the Closing could (i) obligate the Surviving Corporation or the Purchaser
to license, or otherwise grant rights to any other Person in, any Intellectual
Property (whether owned or used by the Company), or (ii) entitle any Person
to a release of any source code from escrow or otherwise.
(c) Registered Intellectual
Property. With respect to all Registered Intellectual Property
included within the Owned Intellectual Property:
(i) Fees and
Applications. All necessary registration, maintenance,
renewal, and annuity fees and Taxes have been paid, and all necessary documents
have been filed, in connection with the Company’s Registered Intellectual
Property. In connection with the Registered Intellectual Property
included with the Owned Intellectual Property, all registrations are in force
and all applications for the same are pending in good standing and without
opposition, interference, re-examination or any other adverse action or
Proceedings pending or, to the Company’s Knowledge, threatened by or before the
Governmental Authority in which the registrations or applications are issued or
filed (other than routine administrative actions and/or office actions and the
like).
18
(ii) List of Maintenance
Actions. Section 3.13(c)(ii) of the Company Disclosure
Schedule accurately and completely lists all actions that must be taken by the
Company within 90 days after the date of this Agreement including with respect
to the payment of any fees or Taxes or the filing of any documents reasonably
necessary or appropriate to maintain, perfect or renew any Registered
Intellectual Property that is Owned Intellectual Property.
(d) Validity. All
Owned Intellectual Property (including all registrations therefor) is (i) valid
and subsisting under applicable Law to the Company’s Knowledge, and the Company
has taken no action or failed to take any action that could render any of the
Owned Intellectual Property invalid or unenforceable, and (ii) not subject to
any outstanding Judgment or Contract to which the Company is a party adversely
affecting the Company’s use thereof or rights thereto.
(e) Indemnity
Agreements. The Company has not agreed to indemnify, defend or
otherwise hold harmless any other Person with respect to any Loss resulting or
arising from the Company Intellectual Property, except under those Contracts
summarized or described in Section 3.13(e) of the Company Disclosure
Schedule.
(f) No Violation of the Company
Rights. To the Company’s Knowledge, no Person has infringed,
misappropriated, or otherwise violated or conflicted with any of the Company
Intellectual Property. Immediately after the Closing, the Surviving
Corporation will have sole rights to bring actions for infringement or
misappropriation of the Owned Intellectual Property. The Company has
not commenced or threatened any Proceeding, or asserted any allegation or claim,
against any Person for infringement or misappropriation of the Company
Intellectual Property or breach of any Contract involving the Company
Intellectual Property.
(g) No Violation of Third Party
Rights. To the Company’s Knowledge, neither the conduct of the
business of the Company nor the Company’s creation, use, license or other
transfer of the Company Intellectual Property infringes or misappropriates any
other Person’s Intellectual Property rights. The Company has not
received written notice of any pending or threatened Proceeding nor is the
Company aware of any allegation or claim in which any Person alleges that the
Company, its business or the Company Intellectual Property has violated any
Person’s Intellectual Property rights. There is no action or claim
pending or, to the Knowledge of Company, threatened (x) against the Company
concerning the ownership, validity, registerability, enforceability or the
Company’s use of, or licensed right to use, any Company Intellectual Property,
or (y) contesting or challenging the ownership, validity, registerability or
enforceability of, or the Company’s right to use, any Company Intellectual
Property. There are no pending disputes between the Company and any
other Person relating to the Company Intellectual Property that have been
asserted by the Company or another Person in writing or, if oral, that would
have a Material Adverse Effect on the Company if not resolved in the Company’s
favor.
(h) Confidentiality. The
Company has taken all commercially reasonable steps necessary to protect and
preserve Trade Secrets and other Confidential Information included in the
Company Intellectual Property. The Company has obtained from each
current and former employee, consultant and other independent contractor an
executed proprietary information and invention assignment agreement (containing
no exceptions or exclusions from the scope of its coverage) substantially in the
form(s) set forth in Section 3.13(h) of the Company Disclosure
Schedule. To the Company’s Knowledge, none of those current or former
employees, consultants or other independent contractors has violated any of
those agreements.
19
(i) Software
Functionality. Each of the Software programs included in the
Owned Intellectual Property is functional and operational substantially in
accordance with the specifications and documentation of the Company relating to
that Software in the ordinary course of the Company’s business. The
Company possesses full and complete source and object code versions of all such
Software.
(i) The
computer Software source and object code underlying or utilized in connection
with the Owned Intellectual Property does not incorporate, depend upon or
require for its functionality any source or object code or other Intellectual
Property that is not wholly-owned by the Company.
(ii) No
government funding, facilities of a university, college, other educational
institution or research center, was used in the creation or development of the
Owned Intellectual Property.
(iii) The
Company is not a member of, and the Company is not obligated to license or
disclose any Intellectual Property to, any official or de facto standards
setting or similar organization or to any organization’s members.
(iv) None of
the Software within the Owned Intellectual Property incorporates, is distributed
with or is, in whole or in part, subject to the provision of any written open
source agreement or other type of license agreement or distribution model
agreement that (A) requires the distribution or making available of the
source code for any such Software, (B) prohibits or limits the Company from
charging a fee or receiving consideration in connection with sublicensing or
distributing any such Software, (C) except as specifically permitted by
Law, grants any right to any Person (other than the Company) or otherwise allows
any such Person to decompile, disassemble or otherwise reverse-engineer any such
Software, or (D) requires the licensing of any such Software for the
purpose of making derivative works (any such open source or other type of
license agreement or distribution model described in clause (A), (B), (C)
or (D) above, a “Limited
License”).
3.14 Contracts.
(a) Section 3.14(a)
of the Company Disclosure Schedule sets forth an accurate and complete list of
each Contract (or group of related Contracts) to which the Company is a party
(collectively, with the Company IP Agreements, the “Material Contracts”),
and by which the Company is bound or pursuant to which the Company is an obligor
or a beneficiary, which:
(i) is for
future expenditures required to be made by the Company in any calendar year in
excess of $100,000;
(ii) evidences
Indebtedness of the Company for, or a guarantee by the Company of Indebtedness
for, borrowed money in the amount of $50,000 or more;
(iii) creates
any legal partnership between the Company and any third party or provides for
any sharing of material profits or losses by the Company with any third
party;
(iv) contains
covenants limiting the operation of the business of the Company as currently
conducted;
20
(v) constitutes
a sales representative or consignment contract;
(vi) provides
for severance or change in control or similar pay to (A) any director,
officer, employee, of the Company or any Company Subsidiary, other than standard
offer letters or employment agreements provided to non-officer employees, or
(B) any temporary employee or independent contractor of the Company or any
Company Subsidiary whose compensation (calculated on an annualized basis)
exceeds $75,000;
(vii) constitutes
any lease (whether for real or personal property) providing for annual rentals
of $50,000 or more;
(viii) constitutes
a material contract with any Governmental Authority for performance of services
by the Company thereunder;
(ix) involves
payments based on profits, revenues or other financial performance measures of
Company;
(x) constitutes
a power of attorney granted by or on behalf of Company; or
(xi) constitutes
any other contract that is material to the business, properties or assets of
Company (x) providing for total payment obligations or liabilities of the
Company exceeding $50,000 or (y) which is not terminable within 60
days.
(b) The
Company has made available to the Purchaser an accurate and complete copy (in
the case of each written Contract), or an accurate and complete written summary
of the material terms (in the case of each oral Contract), of each of the
Material Contracts. With respect to each such Material
Contract:
(i) the
Material Contract is legal, valid, binding and an enforceable obligation of the
Company and in full force and effect against the Company or, to the Company’s
Knowledge, the other party or parties thereto, except to the extent it has
previously expired in accordance with its terms;
(ii) the
Company has and, to the Company’s Knowledge, the other parties to the Material
Contract have, performed all of their respective obligations required to be
performed under the Material Contract through the date hereof;
(iii) the
Company is not, nor to the Company’s Knowledge, is any other party to the
Material Contract, in breach of or default under the Contract and no event has
occurred or circumstance exists that (with or without notice, lapse of time or
both) would constitute a breach or default by the Company or, to the Company’s
Knowledge, by any such other party or permit termination, cancellation,
acceleration, suspension or modification of any obligation or loss of any
benefit under, result in any payment becoming due under, result in the
imposition of any Encumbrances (except for Permitted Encumbrances) on any of the
Company Capital Stock or any of the properties or assets of the Company under,
or otherwise give rise to any right on the part of any Person to exercise any
remedy or obtain any relief under, the Contract, nor has the Company given or
received notice or other communication alleging the same, except for any such
breach, default, termination, cancellation, acceleration, suspension,
modification, loss, payment, Encumbrance, remedy or relief which is not material
to the Company or its business; and
21
(iv) the
consummation of the transactions contemplated by this Agreement will not
constitute a default or result in cancellation under any Material Contract,
subject to the receipt of any required consents or approvals from the parties to
the Materials Contracts, as set forth in Section 3.14(b) of the Company
Disclosure Schedule, except for any such default or cancellation which is not
material to the Company or its business.
(c) The
Company is not, and the Company has not at any time since January 1, 2005
been, party to any Contract with (i) any Governmental Authority,
(ii) any prime contractor to any Governmental Authority or (iii) any
subcontractor with respect to any Contract described in clause (i) or
(ii).
3.15 Tax
Matters.
(a) All Tax
Returns of the Company and each Company Subsidiary required to be filed on or
before the Closing Date have been or will be timely filed in accordance with
applicable Laws (including any validly obtained extensions of any filing
deadlines), and each such Tax Return is or will be accurate and complete in all
material respects. The Company and each Company Subsidiary have
timely paid or will timely pay all Taxes due with respect to the taxable periods
covered by such Tax Returns and all other Taxes (whether or not shown on any Tax
Return). To the Company’s Knowledge, no claim has ever been made by a
Governmental Authority in a jurisdiction where neither the Company nor any
Company Subsidiary files a Tax Return that it is or may be subject to taxation
by that jurisdiction.
(b) Neither
the Company nor any Company Subsidiary has or will have additional Liability for
Taxes with respect to any Tax Return which was required by applicable Laws to be
filed on or before the Closing Date, other than those reflected as Liabilities
in line items on the Interim Balance Sheet and Liability for Taxes incurred in
the ordinary course of business after the date of the Interim Balance
Sheet. The amounts reflected as Liabilities in line items on the
Interim Balance Sheet for all Taxes are adequate to cover all unpaid Liabilities
for all Taxes, whether or not disputed, that have accrued with respect to, or
are applicable to, the periods or portions of periods through the date of the
Interim Balance Sheet.
(c) All Taxes
that the Company and each Company Subsidiary are required by Law to withhold or
collect, including sales and use Taxes and amounts required to be withheld or
collected in connection with any amount paid or owing to any employee,
independent contractor, creditor, stockholder or other Person, have been duly
withheld or collected and all such amounts have been duly paid over to the
proper Governmental Authority.
(d) To the
Company’s Knowledge, no federal, state, local or foreign audits or other
Proceedings are pending or being conducted with respect to the Company or any
Company Subsidiary. Neither the Company nor any Company Subsidiary
has received any (i) notice from any Governmental Authority that any such
audit or other Proceeding is pending, threatened or contemplated,
(ii) request for information related to Tax matters or (iii) notice of
deficiency or proposed adjustment for any amount of Tax proposed, asserted or
assessed by any Governmental Authority against the Company or any Company
Subsidiary, with respect to any Taxes due from or with respect to the Company or
any Company Subsidiary or any Tax Return filed by or with respect to the Company
or any Company Subsidiary.
(e) Neither
the Company nor any Company Subsidiary is or has ever been a member of an
affiliated group within the meaning of Section 1504(a) of the Code (or
any similar group defined under a similar provision of foreign, state or local
Law), other than a group of which the Company is the common parent, and neither
the Company nor any Company Subsidiary has Liability for Taxes of any other
Person under Section 1.1502-6 of the Treasury Regulations (or any similar
provision of foreign, state or local Law), as a transferee or successor, by
Contract or otherwise.
22
(f) There are
no Encumbrances upon any properties or assets of the Company arising from any
failure or alleged failure to pay any Tax.
3.16 Employee Benefit
Matters.
(a) Section 3.16(a) of
the Company Disclosure Schedule sets forth an accurate and complete list of all
Company Plans.
(b) The
Company has made available to the Purchaser an accurate and complete copy of
each writing that sets forth the terms of each Company Plan, including plan
documents, plan amendments, any related trusts, all summary plan descriptions
and other summaries and descriptions furnished to participants and beneficiaries
and all other material related documents.
(c) Neither
the Company nor any ERISA Affiliate has ever established, maintained or
contributed to, or had an obligation to maintain or contribute to, any
(i) multiemployer plan as defined in Section 3(37)(A) of ERISA (a
“Multiemployer
Plan”), (ii) pension plan, as defined in Section 3(3) of ERISA,
subject to Title IV of ERISA (a “Title IV Plan”),
(iii) voluntary employees’ beneficiary association under
Section 501(c)(9) of the Code, (iv) organization or trust described in
Section 501(c)(17) or 501(c)(20) of the Code, (v) welfare benefit fund
as defined in Section 419(e) of the Code or (vi) a Company Plan
that is an employee welfare plan described in Section 3(1) of ERISA that
has two or more contributing sponsors at least two of which are not under common
control within the meaning of Section 3(40) of ERISA.
(d) Each
Company Plan is and at all times has been maintained, funded, operated and
administered, and the Company has performed all of its current and past
obligations under each Company Plan, in each case in all material respects in
accordance with the terms of such Company Plan and in compliance in all material
respects with all applicable Laws, including ERISA and the Code. All
contributions required to be made to any Company Plan by applicable Law and the
terms of such Company Plan, and all premiums due or payable with respect to
insurance policies funding any Company Plan, for any period through the Closing
Date, have been timely made or paid in full to the extent required to be made or
paid on or before the Closing Date or, to the extent not required to be made or
paid on or before the Closing Date, have been fully reflected in line items on
the Interim Balance Sheet to the extent required to be so reflected under
GAAP. To the Company’s Knowledge, no transaction prohibited by
Section 406 of ERISA and no “prohibited transaction” under
Section 4975 of the Code has occurred with respect to any Company
Plan.
(e) Each
Qualified Plan of the Company has received a favorable determination or opinion
letter from the IRS that it is qualified under Section 401(a) of the
Code and that its related trust is exempt from federal income Tax under
Section 501(a) of the Code, and each such Qualified Plan complies in
form and in operation in all material respects with the requirements of the
Code. No event has occurred or circumstance exists that is reasonably
likely to give rise to disqualification or loss of Tax-exempt status of any such
Qualified Plan or trust.
(f) Except as
set forth in Section 3.16(f) of the Company Disclosure Schedule, the
consummation of the transactions contemplated by this Agreement (either alone or
in conjunction with any other event) will not cause accelerated vesting, payment
or delivery of, or increase the amount or value of any payment or benefit under
or in connection with any Company Plan with respect to, any director, officer,
employee, or former director, former officer or former employee of the
Company. Except as set forth in Section 3.16(f) of the Company
Disclosure Schedule, the Company has not made nor has it become obligated to
make, and the Company will not as a result of the consummation of the
transactions contemplated by this Agreement become obligated to make, any
payments that could be nondeductible by reason of Section 280G of the Code
(without regard to subsection (b)(4) thereof) or Section 162(m) of the Code
(or any corresponding provision of foreign, state or local Law), nor will the
Company be required to “gross up” or otherwise compensate any individual because
of the imposition of any excise Tax on such a payment to the
individual.
23
(g) The
Company has taken all actions necessary to terminate any and all Company Plans
that are subject to Section 401(k) of the Code, effective not later than
immediately prior to the Closing.
(a) The
Company has made available to the Purchaser an accurate and complete list of all
employees, temporary employee and independent contractors performing services
for the Company or any Company Subsidiary as of the date hereof whose annual
cash compensation (base salary and bonus whether deferred, contingent or
otherwise) is expected by the Company to exceed $100,000 in 2008, including each
employee on leave of absence or layoff status, along with, with respect to such
employees, temporary employees and independent contractors whose annual salary
is expected by the Company to exceed $100,000 in 2008, the position, service
date, compensation and bonuses (deferred, contingent or otherwise), scheduled or
contemplated increases in compensation and benefits, scheduled or contemplated
promotions, full-time or part-time status, exempt or non-exempt classification
where applicable, notice and severance payments in the event of termination of
employment, change in control, retention and other like benefits paid or payable
(in cash or otherwise), and work authorization with respect to such
Persons.
(b) Neither
the Company nor any Company Subsidiary is or has been a party to any collective
bargaining with any labor union, works council, employee representative or other
labor organization or group of employees. Further, neither the
Company nor any Company Subsidiary is or has been bound by any Contract with any
labor union, works council, employee representative or other labor organization
or group of employees. The Company has no Knowledge of any union
organizing, election or other activities made or threatened at any time within
the past three years by or on behalf of any union, works council, employee
representative or other labor organization or group of employees with respect to
any employees of the Company or any Company Subsidiary. There is no
union, works council, employee representative or other labor organization or
group of employees, which, pursuant to applicable Law, must be notified,
consulted or with which negotiations need to be conducted connection with the
transactions contemplated by this Agreement.
(c) Since
January 1, 2008, neither the Company nor any Company Subsidiary has implemented
any plant closing, collective dismissal or layoff of employees that could
implicate the Worker Adjustment and Retraining Notification Act of 1988, or any
similar foreign, state or local Law, and no such action will be implemented
without advance notification to the Purchaser. Section 3.17(c)
of the Company Disclosure Schedule sets forth an accurate and complete list of
all individuals whose employment with the Company has terminated during the
90-day period prior to the date of this Agreement.
3.18 Environmental, Health and
Safety Matters. To the Knowledge of the Company, the Company
possesses all material governmental permits and other governmental
authorizations (“Environmental
Permits”) required under Environmental Laws. The Company is in
material compliance with all terms and conditions of such Environmental Permits
and is in material compliance with all Environmental Laws, and any past
noncompliance known to the Company has been remedied without any ongoing
material costs, obligations or liabilities. To the Knowledge of the
Company, the Company has not released, discharged or emitted any Hazardous
Substance or Hazardous Waste in violation of any Environmental Law or that
require any investigation, remediation, cleanup, or corrective or remedial
action under any Environmental Law.
24
(a) Without
limiting the scope of any other representation in this Article 3, each of
the Company and the Company Subsidiaries has complied in all material respects
with all, and neither the Company nor any of the Company Subsidiaries has
violated in any material respect any, Laws, Judgments and Governmental
Authorizations applicable to it or to the conduct of its business as currently
conducted, including those related to employees, temporary employees or
independent contractors, or the ownership or use of any of its properties or
assets, the violation of which would have a Material Adverse Effect on the
Company. Neither the Company nor any of the Company Subsidiaries has
received at any time since January 1, 2005 any written or, to the Company’s
Knowledge, oral notice or other communication from any Governmental Authority or
any other Person regarding any actual, alleged or potential violation of, or
failure to comply with, any Law, Judgment or Governmental Authorization, except
such violation or failure to comply would not be material to the Company or its
business, or any actual, alleged or potential obligation on the part of the
Company or the Company Subsidiaries to undertake, or to bear all or any portion
of the cost of, any remedial action of any nature.
(b) Section 3.19(b)
of the Company Disclosure Schedule sets forth an accurate and complete list of
each Judgment to which the Company or any of the Company Subsidiaries, or any of
the assets owned or used by it, is currently subject. To the
Company’s Knowledge, no director or officer of the Company or a Company
Subsidiary is subject to any Judgment that prohibits such director or officer
from engaging in or continuing any conduct, activity or practice relating to the
business of the Company.
3.20 Legal
Proceedings. There are no pending Proceedings (a) by or
against the Company or that otherwise relate to or may affect the business of
the Company or any of the properties or assets owned, leased or operated by the
Company, (b) to the Company’s Knowledge, by or against any of the directors
or officers of the Company in their capacities as such or (c) that
challenge, or that would reasonably be expected to have the effect of
preventing, delaying, making illegal or otherwise interfering with, any of the
transactions contemplated by this Agreement. To the Company’s
Knowledge, no other such Proceeding has been threatened. The Company
has made available to the Purchaser accurate and complete copies of all
pleadings, correspondence, audit response letters and other documents relating
to such Proceedings. Such Proceedings will not, in the aggregate,
have a Material Adverse Effect on the Company.
3.21 Customers and
Suppliers. Section 3.21 of the Company Disclosure
Schedule sets forth an accurate and complete list of (a) the 20 largest
customers of the Company by revenue during the year ended December 31, 2007
and the 10-month period ended October 31, 2008, and the amount of revenues
accounted for by each such customer during those periods, and (b) the 20
largest suppliers from whom the Company purchases products, services or license
rights for resale in an aggregate amount of not less than $100,000
during the period ended December 31, 2007 and the 10-month period ended
October 31, 2008, and the dollar amount accounted for by each such supplier
during those periods. No customer of the Company has any right to any
credit or refund for products sold or services rendered or to be rendered by the
Company pursuant to any Contract with or practice of the Company other than
pursuant to the Company’s normal course return policy, which is attached as
Section 3.21 of the Company Disclosure Schedule.
25
3.22 Insurance.
(a) Section 3.22(a)
of the Company Disclosure Schedule sets forth an accurate and complete list of
all certificates of insurance, binders for insurance policies and insurance
maintained by the Company, or under which the Company has been the beneficiary
of coverage at any time within the past three years. The Company has
made available to the Purchaser true, correct and complete copies of all such
certificates of insurance, binders for insurance policies and
insurance. All such policies are in full force and effect and,
to the Knowledge of the Company, the Company is not in material default with
respect to its obligations thereunder. All premiums due and
payable under such insurance policies have been paid. The Company has
no Knowledge of any threatened termination of, or material premium increase with
respect to, any of those policies.
(b) Section 3.22(b)
of the Company Disclosure Schedule sets forth an accurate and complete list of
all claims (open and closed) asserted by the Company pursuant to any such
certificate of insurance, binder or policy since January 1, 2006, and describes
the nature and status of the claims, including the amounts paid for each claim
and the amounts reserved by insurers for each claim.
3.23 Relationships with
Affiliates. No current director or officer of the Company has
any interest in any material property (whether real, personal or mixed and
whether tangible or intangible) used in the Company’s business. No
director or officer of the Company owns, either of record or as a beneficial
owner, a material equity interest or any other material financial or profit
interest in a Person that (a) is a party to a Material Contract or
(b) engages in direct competition with the Company with respect to any line
of the products or services of the Company in any market presently served by the
Company. Except for amounts due as salaries or bonuses under
employment agreements or Company Plans, stock issuable upon exercise of
outstanding Options, amounts due as compensation to directors, amounts payable
in reimbursement of expenses in the ordinary course of business or
indemnification agreements, no director or officer of the Company is a party to
any Contract with, or has any claim or right against, the Company.
3.24 Brokers or
Finders. Except as set forth in that letter agreement dated
July 24, 2007 between the Company and Xxxxxx Brothers Inc., as assigned to
Barclays Capital Inc. on November 1, 2008, neither the Company nor any
Person acting on behalf of the Company has incurred any Liability for brokerage
or finders’ fees or agents’ commissions or other similar payment in connection
with any of the transactions contemplated by this Agreement.
3.25 Permits. Section 3.25
of the Company Disclosure Schedule sets forth an accurate and complete list of
each material Governmental Authorization that is held by the Company and the
Company Subsidiaries that relates to the business of, or any of the assets owned
or used by, the Company, all of which are valid and in full force and effect as
of the date hereof. The Governmental Authorizations listed in
Section 3.25 of the Company Disclosure Schedule collectively constitute all
of the Governmental Authorizations necessary to permit the Company to conduct
its business lawfully in the manner in which it conducts such business as of the
date hereof and to permit the Company to own and use its assets in the manner in
which it owns and uses such assets as of the date hereof.
3.26 Registration
Statement. None of the information supplied or to be supplied
by or on behalf of the Stockholders or the Company to the Purchaser in writing
for inclusion or incorporation by reference in the Registration Statement or the
Proxy Statement will, or at the time such Registration Statement becomes
effective, contain any untrue statement of material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading.
26
3.27 Disclaimer of Other
Representations and Warranties. The representations and
warranties contained in this Article 3 are the only representations and
warranties made by the Company. Except as specifically set forth in
this Agreement or any Ancillary Agreement, (a) the Company makes no
warranty, express or implied, as to any matter relating to the Company, the
business of the Company or any information relating to the business of the
Company, including any descriptive memoranda, summary business descriptions or
any information, documents or material provided to or made available to the
Purchaser or its representatives, whether orally or in writing, in certain “data
rooms,” responses to questions submitted on behalf of the Purchaser or in any
other form in expectation of the transactions contemplated by this Agreement
(“Company
Information”), and (b) other than the indemnification obligations of
the Stockholders set forth in Article 9 hereof and the Liability of a
Stockholder for fraud committed by such Stockholder as provided in Section
9.6(f) hereof, none of the Stockholders will have or will be subject to any
liability or indemnification obligation to the Purchaser or any other Person
resulting from the distribution to the Purchaser or its Affiliates, or the
Purchaser’s use of, any Company Information.
ARTICLE
4
The
Purchaser and Merger Sub represent and warrant to the Company that as of the
date of this Agreement and the Closing Date the statements set forth in this
Article 4 are true and correct:
4.1 Organization and Good
Standing. Each of the Purchaser and the Merger Sub is a
corporation duly organized, validly existing and in good standing under the Laws
of Delaware and has all requisite corporate power and authority to conduct its
business as presently conducted. The Purchaser is duly qualified or licensed to
do business and, where applicable as a legal concept, is in good standing as a
foreign corporation in each jurisdiction in which the character of the
properties it owns, operates or leases or the nature of its activities makes
such qualification or licensure necessary except where the failure to be so
qualified would not have a Material Adverse Effect on the
Purchaser.
4.2 Authority and
Enforceability. Each of the Purchaser and the Merger Sub has
all requisite corporate power and authority to execute and deliver this
Agreement and each of the Ancillary Agreements to which it is a party and to
perform its obligations under this Agreement and each such Ancillary Agreement,
except for the approval of the stockholders of the Purchaser in connection with
the Note Satisfaction. The execution, delivery and performance of
this Agreement and the Ancillary Agreements have been duly authorized by all
necessary action on the part of the Purchaser and the Merger Sub, except for the
approval of the stockholders of the Purchaser in connection with the Note
Satisfaction. The Stockholder Support Agreement in the form attached
hereto as Exhibit
F (the “Support
Agreement”) has been duly executed and delivered by the Purchaser and
certain of its stockholders, or will have been duly executed and delivered by
the Purchaser and such stockholders no later than two Business Days following
the date hereof, and such Support Agreement constitutes or will constitute a
legal, valid and binding obligation by each of the signatories
thereto. This Agreement has been duly executed and delivered by each
of the Purchaser and the Merger Sub and, assuming the due authorization,
execution and delivery by each of the other parties to the Agreement,
constitutes the legal, valid and binding obligation of the Purchaser and the
Merger Sub, enforceable against the Purchaser and the Merger Sub in accordance
with its terms, subject to (a) laws of general application relating to
bankruptcy, insolvency, and the relief of debtors, and (b) rules of law
governing specific performance, injunctive relief and other equitable
remedies. Upon the execution and delivery by the Purchaser and the
Merger Sub of the Ancillary Agreements to which they are a party, and assuming
the due authorization, execution and delivery by each of the other parties to
each Ancillary Agreement, such Ancillary Agreements will constitute the legal,
valid and binding obligations of the Purchaser and the Merger Sub, enforceable
against the Purchaser and the Merger Sub in accordance with their terms, subject
to (a) laws of general application relating to bankruptcy, insolvency, and
the relief of debtors, and (b) rules of law governing specific performance,
injunctive relief and other equitable remedies.
27
4.3 No
Conflict. Except for (i) forms that may be required to be
filed in order to comply with NASDAQ rules, (ii) approval by the stockholders of
the Purchaser for the issuance of the Note Satisfaction Shares and (iii) the
declaration of the effectiveness of the Registration Statement by the SEC,
neither the execution, delivery and performance of this Agreement by the
Purchaser, nor the consummation by the Purchaser of the transactions
contemplated by this Agreement, will directly or indirectly (with or without
notice, lapse of time or both), conflict with, result in a breach or violation
of, constitute a default (or give rise to any right of termination,
cancellation, acceleration, suspension or modification of any obligation or loss
of any benefit)
under, constitute a change in control under, result in any payment becoming due
under, or result in the imposition of any Encumbrance on any of the properties
or assets of the Purchaser or the Merger Sub under (i) the certificate of
incorporation or bylaws of the Purchaser or the Merger Sub, (ii) any
Governmental Authorization or Contract to which the Purchaser or the Merger Sub
is a party or by which the Purchaser or the Merger Sub is bound or by which any
of their respective properties or assets is subject or (iii) any Law or
Judgment applicable to the Purchaser or the Merger Sub or any of their
respective properties or assets, except in any case that would not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect on the Purchaser or (b) require the Purchaser or the Merger Sub to obtain
any material consent, waiver, approval, ratification, permit, license,
Governmental Authorization or other authorization of, give any notice to, or
make any filing or registration with, any Governmental Authority or other
Person.
4.4 Financial
Statements. The unaudited consolidated balance sheet of the
Purchaser as of September 30, 2008 (the “Purchaser’s Interim Balance
Sheet”) and the related unaudited consolidated statements of income,
changes in stockholders’ equity and cash flow for the nine-months then ended
made available to the Company (i) have been prepared in accordance with
GAAP applied on a consistent basis throughout the periods indicated (other than
the provision of notes in connection with interim financial statements) and (ii)
fairly represent the consolidated financial position of the Purchaser at the
respective dates thereof and the consolidated financial position of Purchaser at
the periods indicated (subject to normal recurring year-end
adjustments). There has been no change in the Purchaser’s accounting
policies since the date of the Purchaser’s Interim Balance Sheet other than as
required by applicable Law.
4.5 No Undisclosed
Liabilities. The Purchaser has no Liability of a nature
required to be disclosed on a balance sheet or in the related notes to the
financial statements prepared in accordance with GAAP except for
(a) Liabilities accrued or expressly reserved for in specific line items on
the Purchaser’s Interim Balance Sheet, (b) Liabilities incurred in the
ordinary course of business after the date of the Purchaser’s Interim Balance
Sheet, (c) Liabilities incurred in the ordinary course pursuant to
contractual obligations or (d) Liabilities incurred directly in connection
with the transactions contemplated by this Agreement and as expressly
contemplated by this Agreement.
4.6 SEC
Filings. Except for the Purchaser’s failure to file with the
SEC the Purchaser’s Periodic Report on Form 8-K dated November 26,
2007 within the required time period, the Purchaser has timely filed all forms,
reports, registration statements and documents required to be timely filed by
the Purchaser under the Securities Act and the Exchange Act, including pursuant
to Section 13(a) or 15(d) thereof, with the SEC. As of their
respective filing dates, all such required forms, reports and documents
(a) complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such forms, reports and
documents and (b) did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. As of the date hereof, no amendments
to any of the foregoing filings were required to have been made. The
financial statements of the Purchaser included in the SEC filings comply in all
material respects with applicable accounting requirements with respect thereto
as in effect at the time of filing.
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4.7 Issuance of
Securities. The Shares, when issued in accordance with this Agreement and
Ancillary Agreements, will be duly authorized and validly issued, fully paid and
nonassessable, free and clear of all Encumbrances imposed by Purchaser other
than restrictions on transfer due to applicable federal and state securities
Laws or as otherwise contemplated by the Agreement or the Ancillary
Agreements. The Purchaser has reserved from its duly authorized
capital stock the maximum number of shares of Purchaser Common Stock issuable
pursuant to this Agreement as of the Closing Date.
4.7 Legal
Proceedings. There are no pending Proceedings (a) by or
against the Purchaser or Merger Sub or that otherwise relate to or may affect
the business of the Purchaser or Merger Sub or any of the properties or assets
owned, leased or operated by the Purchaser or Merger Sub except as disclosed in
any SEC filing, or (b) that challenge, or that would reasonably be expected
to have the effect of preventing, delaying, making illegal or otherwise
interfering with, any of the transactions contemplated by this
Agreement. To the Purchaser’s Knowledge, no other such Proceeding has
been threatened in writing.
4.8 Xxxxxxxx-Xxxxx; Internal
Accounting Controls. The Purchaser is in compliance, in all material
respects, with all provisions of the Xxxxxxxx-Xxxxx Act of 2002 which are
applicable to it. The Purchaser maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences. The Purchaser has established disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for
the Purchaser and designed such disclosure controls and procedures to ensure
that material information relating to the Purchaser, including its Subsidiaries,
is made known to the certifying officers by others within those entities,
particularly during the period in which the Purchaser’s most recently filed
periodic report under the Exchange Act, is being prepared. The Purchaser’s
certifying officers have evaluated the effectiveness of the Purchaser’s
disclosure controls and procedures as of a date prior to the filing date of the
most recently filed periodic report under the Exchange Act (such date, the
“Evaluation
Date”). The Purchaser presented in its most recently filed periodic
report under the Exchange Act the conclusions of the certifying officers about
the effectiveness of the Purchaser’s disclosure controls and procedures based on
their evaluations as of the Evaluation Date. Since the Evaluation Date, there
have been no changes in the Purchaser’s internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under
the Exchange Act) that have materially affected, or are reasonably likely to
materially affect, the Purchaser’s internal control over financial reporting.
Since September 30, 2008, (A) neither the Purchaser nor any of its Subsidiaries
nor, to the knowledge of the Purchaser, any director, officer, employee,
auditor, accountant or representative of the Purchaser or any of the
Subsidiaries of the Purchaser has received or otherwise had or obtained
knowledge of any complaint, allegation, assertion or claim, whether written or
oral, regarding the accounting or auditing practices, procedures, methodologies
or methods of the Purchaser or any of its Subsidiaries or their respective
internal accounting controls, including any complaint, allegation, assertion or
claim that the Purchaser or any of its Subsidiaries has engaged in questionable
accounting or auditing practices, and (B) no attorney representing the Purchaser
or any Subsidiary of the Purchaser, whether or not employed by the Purchaser or
any Subsidiary of the Purchaser, has reported evidence of a material violation
of securities Laws, material breach of fiduciary duty or similar violation by
the Purchaser or any of its officers, directors, employees or agents to the
board of directors or any committee thereof or to any director or officer of the
Purchaser.
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4.9 Listing and Maintenance
Requirements. The Purchaser Common Stock is registered pursuant to
Section 12(g) of the Exchange Act, and the Purchaser has taken no action
intended to terminate the registration of the Purchaser Common Stock under the
Exchange Act nor has the Purchaser received any written notification that the
SEC is contemplating terminating such registration. The Purchaser is,
and has been in the 12 months preceding the date hereof, in compliance with
the listing or maintenance requirements of the NASDAQ Global
Market.
4.10 Application of Takeover
Protections. The Purchaser and its board of directors have taken all
necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the
Purchaser’s certificate of incorporation or the DGCL that is or could become
applicable to the Company as a result of the Company and the Purchaser
fulfilling their obligations or exercising their rights under the Merger
Agreement and Ancillary Agreements, including the Purchaser’s issuance of the
Shares and the Stockholders’ ownership of the Purchaser Common
Stock.
4.11 Approvals. The
issuance and listing on the NASDAQ Global Market of the Shares requires no
further approvals, except that (a) a Notification Form: Listing of Additional
Shares may be required to be filed in order to comply with NASDAQ rules and (b)
approval by the stockholders of the Purchaser is required for the issuance of
the Note Satisfaction Shares.
4.12 Brokers or
Finders. Neither the Purchaser nor the Merger Sub nor any
Person acting on behalf of the Purchaser or Merger Sub has incurred any
Liability for brokerage or finders’ fees or agents’ commissions or other similar
payment in connection with any of the transactions contemplated by this
Agreement.
4.13 Proxy Statement. None
of the disclosures included or incorporated by reference in the Proxy Statement
will, on the date it is first mailed to the stockholders of the Purchaser or at
the time of the Special Meeting, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The Proxy Statement will comply as to
form in all material respects with the requirements of the Exchange
Act. Notwithstanding the preceding sentence, no representation or
warranty is made by the Purchaser with respect to statements made the Proxy
Statement based on information supplied in writing by or on behalf of the
Stockholders or the Company expressly for inclusion therein. The affirmative vote of
the holders of shares representing a majority of the shares of Purchaser Common
Stock entitled to vote on the approval of the Note Satisfaction at the Special
Meeting is the only vote or approval of the holders of any class or series of
capital stock of the Purchaser necessary to so approve the issuance of the Note
Satisfaction Shares in accordance with the rules of the NASDAQ Global
Market.
4.14 S-3
Eligibility. As of
the date hereof, the Purchaser meets all eligibility requirements under the
Securities Act and SEC rules to file a registration statement on Form
S-3.
4.15 Merger
Sub. Merger Sub was formed solely for the purpose of engaging
in the transactions contemplated by this Agreement, and has engaged in no other
business activities.
30
4.16 Independent
Investigation. The Purchaser has conducted its own independent
investigation, review and analysis of the business, operations, results of
operations and financial condition of the Company, which investigation, review
and analysis was done by the Purchaser and its representatives. In
entering into this Agreement, the Purchaser acknowledges that it has relied
solely upon the aforementioned investigation, review and analysis and not on any
factual representations or opinions of the Company or its representatives
(except the representations and warranties set forth in Article 3 hereof and the
Company Disclosure Schedule). The Purchaser hereby acknowledges and
agrees that (a) other than the representations and warranties set forth in
Article 3 hereof, none of the Company or any Stockholder makes or has made any
representation or warranty, express or implied, at law or in equity, with
respect to the Company, the business of the Company or the Company Information,
and (b) other than the indemnification obligations of the Stockholders set
forth in Article 9 hereof and the Liability of a Stockholder for fraud
committed by such Stockholder as provided in Section 9.6(f) hereof, none of the
Stockholders will have or will be subject to any Liability or indemnification
obligation to the Purchaser or any other person resulting from the distribution
to the Purchaser or representatives of, or the Purchaser’s use of, any Company
Information.
ARTICLE
5
5.1 Conditions to the Obligation
of the Purchaser and the Merger Sub. The obligations of the
Purchaser and the Merger Sub to consummate the transactions contemplated by this
Agreement are subject to the satisfaction, on or before the Closing Date, of
each of the conditions set forth in this Section 5.1 (any of which may be
waived by the Purchaser and the Merger Sub, in whole or in part, but only in a
writing signed by the Purchaser).
(a) Performance of
Covenants. The covenants and obligations of the Company set
forth in Section 6.2(b) must have been duly performed and complied with in
all respects.
(b) No
Action. No Governmental Authority of competent jurisdiction
will have issued a Judgment or taken any other formal action, and there must not
have been commenced or threatened any Proceeding, that would be reasonably
expected to (i) temporarily or permanently restrain, enjoin or otherwise
prohibit any of the transactions contemplated by this Agreement or any of the
Ancillary Agreements, or (ii) cause any of the transactions contemplated by
this Agreement or any of the Ancillary Agreements to be rescinded following
consummation.
(c) Deliveries. The
Company will have made each of the following deliveries:
(i) a
certificate of merger, signed on behalf of the Company, in accordance with the
DGCL and in form reasonably satisfactory to the Purchaser;
(ii) a
certificate, dated as of the Closing Date, executed by the chief executive
officer or chief financial officer of the Company confirming the satisfaction of
the conditions specified in Sections 5.1(a) and 5.1(b);
(iii) a
certificate in the form of Exhibit J of the
Secretary or assistant secretary of the Company dated as of the Closing Date and
attaching with respect to the Company (A) the Company’s certificate of
incorporation and all amendments thereto, certified by the Secretary of State of
the state of Delaware not more than five Business Days prior to the Closing
Date, (B) the Company’s bylaws and all amendments thereto, (C) a
certificate of good standing of the Company certified by the Secretary of State
of the state of Delaware and issued not more than five Business Days prior to
the Closing Date, (D) all resolutions of the board of directors or other
authorizing body (or a duly authorized committee thereof) of the Company and the
stockholders relating to this Agreement and the transactions contemplated by
this Agreement and (E) incumbency
and signatures of the officers of the Company executing this Agreement, any
Ancillary Agreement or any other agreement or instrument contemplated by this
Agreement;
31
(iv) the Final
Merger Consideration Allocation Schedule; and
(v) the
Escrow Agreement.
(d) Company Stockholder
Approval. The stockholders of the Company will have approved
and adopted this Agreement, the Merger and the transactions contemplated by this
Agreement by the requisite vote under applicable Law and the Company’s
certificate of incorporation, as amended to date.
(e) Ancillary
Agreements. Each of the Ancillary Agreements must have been
executed and delivered by each of the other parties thereto, and each such
Ancillary Agreement will be in full force and effect.
(f) Dissenter’s
Rights. The maximum number of shares of Company Capital Stock
which, as of the Closing, have become or could be entitled to become Dissenting
Shares will not exceed ten percent (10%) of the aggregate number of shares of
capital stock of the Company outstanding as of the Effective
Time. The Company will have furnished to the Purchaser in writing the
names, addresses and number of shares held by any holders of such actual or
potential dissenting shares, together with the names and addresses and number of
shares held by holders of Company Capital Stock who have given written consent
to the Agreement and the Merger, certified by the Company’s
Secretary.
(g) Securities Law
Exemption. The shares of Purchaser Common Stock to be issued
in connection with the transactions contemplated by this Agreement will have
been issued in a transaction exempt from registration under federal and state
securities laws. In connection therewith, each Stockholder who will
receive any portion of the Merger Consideration pursuant to the terms of this
Agreement must have completed, executed and delivered to the Purchaser a
representation letter, in the form attached hereto as Exhibit H, and no
later than three Business Days prior to the Closing.
(h) Comerica. The
Company must have delivered to the Purchaser the following: (i) a release
and termination of the warrant(s) outstanding and held by Comerica Bank to
purchase shares of any capital stock of the Company; and (ii) either
(A) a payoff and release letter providing for the repayment in full of any
outstanding Indebtedness and the corresponding release of any Encumbrance that
Comerica Bank may have with respect to the Company, any Company Subsidiary or
any of its respective assets, or (B) the written consent of Comerica to the
Merger and the other transactions contemplated by this Agreement; in each case
in form and substance reasonably satisfactory to the Purchaser.
5.2 Conditions to the Obligation
of the Company. The obligation of the Company to consummate
the transactions contemplated by this Agreement is subject to the satisfaction,
on or before the Closing Date, of each of the conditions set forth in this
Section 5.2 (any of which may be waived by the Company, in whole or in
part, but only in a writing signed by the Company).
(a) Performance of
Covenants. All of the covenants and obligations that the
Purchaser or the Merger Sub is required to perform or comply with under this
Agreement on or before the Closing Date must have been duly performed and
complied with in all material respects (with materiality being measured
individually and on an aggregate basis with respect to all breaches of covenants
and obligations).
32
(b) No
Action. No Governmental Authority of competent jurisdiction
will have issued a Judgment or taken any other formal action, and there must not
have been commenced or threatened any Proceeding, that would be reasonably
expected to (i) temporarily or permanently restrain, enjoin or otherwise
prohibit any of the transactions contemplated by this Agreement or any of the
Ancillary Agreements, or (ii) cause any of the transactions contemplated by
this Agreement or any of the Ancillary Agreements to be rescinded following
consummation.
(c) Deliveries. The
Purchaser will have made each of the following deliveries:
(i) a
certificate of merger, signed on behalf of the Purchaser and the Merger Sub, in
accordance with the DGCL and in form reasonably satisfactory to the
Company;
(ii) a
certificate, dated as of the Closing Date, executed by the chief executive
officer or chief financial officer of the Purchaser confirming the satisfaction
of the conditions specified in Sections 5.2(a) and 5.2(b);
(iii) a
certificate in the form of Exhibit K of the
Secretary or assistant secretary of the Purchaser dated as of the Closing Date
and attaching with respect to the Purchaser (A) the Purchaser’s certificate
of incorporation and all amendments thereto, certified by the Secretary of State
of the state of Delaware not more than five Business Days prior to the Closing
Date, (B) the Purchaser’s bylaws and all amendments thereto, (C) a
certificate of good standing of the Purchaser certified by the Secretary of
State of the state of Delaware and issued not more than five Business Days prior
to the Closing Date, (D) all resolutions of the board of directors or other
authorizing body (or a duly authorized committee thereof) of the Purchaser
relating to this Agreement and the transactions contemplated by this Agreement
and (E) incumbency and signatures of the officers of the Purchaser
executing this Agreement, any Ancillary Agreement or any other agreement or
instrument contemplated by this Agreement;
(iv) the
documents contemplated by Section 5.2(f) hereof.
(d) Company Stockholder
Approval. The stockholders of the Company will have approved
and adopted this Agreement, the Merger and the transactions contemplated by this
Agreement by the requisite vote under applicable Law and the Company’s
certificate of incorporation, as amended to date.
(e) Ancillary
Agreements. Each of the Ancillary Agreements must have been
executed and delivered by each of the other parties thereto, and each such
Ancillary Agreement will be in full force and effect.
(f) Securities Law
Exemption. The shares of Purchaser Common Stock to be issued
in connection with the transactions contemplated by this Agreement will have
been issued in a transaction exempt from registration under federal and state
securities laws.
ARTICLE
6
6.1 Access and
Investigation. Upon reasonable advance notice from the
Purchaser, the Company will use commercially reasonable efforts to
(a) afford the Purchaser and its directors, officers, employees, agents,
consultants and other advisors and representatives full access during normal
business hours to
all of its properties, books, Contracts, personnel and records as the Purchaser
may reasonably request, and (b) furnish promptly to the Purchaser and its
directors, officers, employees, agents, consultants and other advisors and
representatives all other information concerning its business, properties,
assets and personnel as the Purchaser may reasonably request, to the extent
permitted by applicable Law.
33
(a) From the
date of this Agreement until the Closing, and other than as expressly
contemplated by this Agreement, as requested in writing by the Purchaser or as
determined by the board of directors of the Company, which determination would
not constitute a violation of its fiduciary responsibilities, the Company will
use commercially reasonable efforts to, and will use commercially reasonable
efforts to cause each Company Subsidiary to, (a) conduct its business only
in the ordinary course of business, and (b) preserve and protect its
business organization, assets, employment relationships, and relationships with
customers, strategic partners, suppliers, distributors, landlords and others
doing business with it. Without limiting the generality of the
foregoing and except as otherwise expressly permitted by this Agreement, the
Company will use commercially reasonable efforts to not take, and will use
commercially reasonable efforts to cause the Company Subsidiaries to not take,
any of the actions set forth or disclosed in Section 3.10 hereof without
the prior written consent of the Purchaser, which consent will not be
unreasonably withheld, delayed or conditioned.
(b) Without
limiting the generality of the foregoing, and other than the Permitted Interim
Activities, the Company will not take, and will cause the Company Subsidiaries
to not take, any of the following actions without the prior written consent of
the Purchaser which will not be unreasonably withheld, delayed or
conditioned:
(i) disburse
or otherwise pay any cash or equivalent funds to any Person;
(ii) enter
into any Contract with any Person; and
(iii) except
for the issuance of Company Capital Stock upon the exercise of Options
outstanding as of the date of this Agreement, issue, sell, grant, pledge or
otherwise dispose of or Encumber any shares of its capital stock or other voting
securities or any securities convertible, exchangeable or redeemable for, or any
options, warrants or other rights to acquire, any such securities.
6.3 Consents and Filings;
Reasonable Efforts. Each of the parties will use their
respective commercially reasonable efforts (i) to take promptly, or cause
to be taken (including actions after the Closing), all actions, and to do
promptly, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement
and (ii) subject to Sections 7.1, 7.3 and 7.4 (solely with respect to the
Purchaser), as promptly as practicable after the date of this Agreement, to
obtain all Governmental Authorizations from, give all notices to, and make all
filings with, all Governmental Authorities, and to seek to obtain all other
consents, waivers, approvals and other authorizations from, and give all other
notices to, all other third parties, that are necessary or advisable in
connection with the authorization, execution and delivery of this Agreement and
the consummation of the transactions contemplated by this Agreement, including
with respect to the Company those listed in Section 6.3 of the Company
Disclosure Schedule.
34
6.4 No
Negotiation. The Company will not (and it will not permit or
authorize, as applicable, any of its respective Affiliates, directors, officers,
stockholders, employees, agents, consultants and other advisors and
representatives to), directly or indirectly (a) solicit, initiate,
encourage, knowingly facilitate, or entertain any inquiry or the making of any
proposal or offer, (b) enter into, continue or otherwise participate in any
discussions or negotiations, or enter into any Contract, (c) furnish to any
Person any non-public information or grant any Person access to its properties,
books, Contracts, personnel and records, or (d) approve or recommend, or
propose to approve or recommend, or execute or enter into, any letter of intent,
agreement in principal, merger agreement, acquisition agreement, option
agreement or other similar agreement or propose, whether publicly or to any
director or stockholder, or agree to do any of the foregoing for the purpose of
encouraging or facilitating any proposal, offer, discussions or negotiations; in
each case regarding any business combination transaction involving the Company
or any other transaction to acquire all or substantially all of the assets
(including, without limitation, Company Intellectual Property), business, or
properties of the Company or any amount of the capital stock of the Company
(whether or not outstanding), whether by merger, purchase of assets, purchase of
stock, tender offer, license or otherwise, other than with the Purchaser (an
“Acquisition
Transaction”). The Company will immediately cease and cause to
be terminated any such negotiations, discussion or Contracts (other than with
the Purchaser) that are the subject of clauses (a) or (b) above and
will immediately cease providing and secure the return of any non-public
information and terminate any access of the type referenced in clause
(c) above. If the Company or any of its Affiliates, directors,
officers, employees, agents, consultants or other advisors and representatives
receives, prior to the Closing, any offer, proposal or request, directly or
indirectly, of the type referenced in clause (a) or (b) above or any
request for disclosure or access as referenced in clause (c) above, the
Company will immediately suspend any discussions with such offeror or Person
with regard to such offers, proposals or requests and notify the Purchaser
thereof, including information as to the identity of the offeror or Person
making any such offer or proposal and the specific terms of such offer or
proposal, as the case may be, and such other information related thereto as the
Purchaser may reasonably request. Promptly following the Closing, the
Company will notify each person with which the Company has entered into a
nondisclosure agreement with respect to the evaluation of the sale of the
Company that it is required to return or destroy (pursuant to the terms of such
agreements) any materials or information provided to such parties that would be
deemed confidential for purposes of the Confidentiality Agreement, and,
beginning on the date hereof, neither the Company nor any of its Affiliates will
waive affirmatively any right under any such agreement without the prior written
consent of the Purchaser.
6.5 Confidentiality.
(a) For
purposes of securities law compliance, each party agrees not to issue any press
release or make any other public announcement relating to this Agreement without
the prior written approval of the other party, except that the Purchaser
reserves the right, without the Company’s prior consent, to make any public
disclosure it believes in good faith is required by applicable securities Laws
or securities listing standards (in which case the Purchaser agrees to use
reasonable efforts to advise the Company prior to making such
disclosure).
(b) Each
party agrees to continue to abide by that certain Non-Disclosure Agreement dated
as of October 28, 2008 (the “Confidentiality
Agreement”), the terms of which are incorporated by reference in this
Agreement and which terms will survive until the Closing, at which time the
Confidentiality Agreement will terminate; provided, however, that if this
Agreement is, for any reason, terminated prior to the Closing, the
Confidentiality Agreement will continue in full force and
effect. Except as contemplated by Section 6.5(a), the existence
of this Agreement and the other Ancillary Agreement and the terms hereof and
thereof (including the exhibits and schedules appended hereto) will be deemed to
be confidential for purposes of the Confidentiality Agreement.
35
6.6 Company Stockholder
Materials. Within five Business Days of the execution of this
Agreement, the Company will deliver an information statement, the form of
written consent required pursuant to other provisions of this Agreement and all
information that may be required to be given to the Stockholders pursuant to the
DGCL in connection with the Merger, including, to the extent applicable,
adequate notice of the Merger and information concerning dissenters’ rights
under the DGCL (the “Stockholder
Materials”) to all Stockholders entitled to receive such under the
DGCL. Prior to the delivery of the Stockholder Materials, the Company
will have given the Purchaser and its counsel a reasonable opportunity (but in
no event fewer than two Business Days) to review and comment on reasonably final
drafts of the Stockholder Materials. The form of written consent will
include language to the effect that each consenting Stockholder agrees to be
bound by the indemnification provisions of Article 9 of this Agreement as
if the consenting Stockholder were a signatory to this Agreement and will
otherwise be in form and substance reasonably satisfactory to the
Purchaser. The Stockholder Materials will also specify the address to
which any notices concerning dissenters’ rights must be sent and will request
that a copy of such notice be sent to the Purchaser at an address specified by
the Purchaser. At the time it is sent and at all times subsequent
thereto (through and including the Effective Time), the Stockholder Materials
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, not misleading; provided, however, that the
Company will not be responsible for information about the Purchaser which is
accurately stated from or incorporated by reference to information which the
Purchaser has publicly released or filed or otherwise provided by the Purchaser
or its representatives (including counsel), in writing, for use in the
Stockholder Materials. If, at any time prior to the Effective Time,
any event or information should be discovered by the Company which should be set
forth in an amendment or supplement to the Stockholder Materials, then the
Company will promptly inform the Purchaser of such occurrence, and the Company
will deliver to the Stockholders such amendment or supplement. The
Stockholder Materials will include the recommendation of the board of directors
of the Company in favor of this Agreement and the Merger and the conclusion of
the board of directors of the Company that the terms and conditions of the
Merger are in the best interests of the Stockholders.
6.7 Meeting or Consent of
Stockholders. Without limiting the provisions of Section 6.6,
the Company will within five Business Days after the date hereof take all action
necessary in accordance with the DGCL and its certificate of incorporation and
bylaws to deliver a solicitation for the written consent of the Stockholders to
approve this Agreement and the Merger. The Company will use
commercially reasonable efforts to obtain promptly from all of the Stockholders
written consents in favor of the Merger and take all other action necessary to
secure the approval of all such Stockholders.
6.8 Satisfaction of Conditions
Precedent. Each of the parties hereto will use its
commercially reasonable efforts to satisfy or cause to be satisfied all of the
conditions precedent which are set forth in Article 5, and each of the
parties hereto will use its best efforts to cause the transactions contemplated
in this Agreement to be consummated.
6.9 Company
Plans. Prior to the Effective Time, the Company will take all
actions necessary to terminate any and all Company Plans subject to Section
401(k) of the Code, effective not later than immediately prior to the Effective
Time. In addition, the Company will take all actions necessary to
amend any Company Plan, as applicable, to comply with Section 409A of the
Code and the rules and regulations adopted thereunder.
6.10 Employment
Arrangements. The Company and Purchaser will cooperate in
identifying those employees of the Company or any Company Subsidiary with whom
Purchaser may wish to continue employment upon the consummation of the
Merger.
6.11 Further
Actions. Subject to the other express provisions of this
Agreement, upon the request of any party to this Agreement, the other parties
will (a) execute and deliver, at their own expense, any other documents and
(b) take any other actions as the requesting party may reasonably require
to more effectively carry out the intent of this Agreement and the transactions
contemplated by this Agreement.
36
ARTICLE
7
(a) Promptly
after the Closing Date, the Purchaser will take all commercially reasonable
actions in accordance with the DGCL and the Purchaser’s certificate of
incorporation and bylaws to call, hold and convene a meeting of its stockholders
for the purpose of voting on the approval of the Note Satisfaction (the “Special Meeting”), to
be held as promptly as practicable. Subject to its fiduciary
obligations under applicable Law, the board of directors of the Purchaser will
recommend approval of the Note Satisfaction to the Purchaser’s stockholders in
the Proxy Statement (as hereinafter defined). In connection with the
Special Meeting, the Purchaser will (i) prepare preliminary proxy materials and
any amendments or supplements thereof which will constitute the proxy statement
of the Purchaser (such proxy statement, and any amendments or supplements
thereto, the “Proxy
Statement”) for purposes of soliciting proxies in connection with the
Special Meeting, (ii) mail and file with the SEC the definitive Proxy Statement
to the Purchaser’s stockholders, (iii) use its commercially reasonable
efforts to secure the approval of its stockholders for the Note Satisfaction,
(iv) otherwise comply with all legal requirements applicable to the Special
Meeting, and (v) to actively solicit, consistent with past practice,
proxies from its stockholders with full power and authority to vote such proxies
in favor of the Note Satisfaction. The Proxy Statement will comply as
to form in all material respects with the applicable provisions of the Exchange
Act and the rules and regulations thereunder. The Purchaser will
promptly provide copies to the Stockholder Representative and prepare written
responses with respect to any written comments received from the SEC with
respect to the Proxy Statement and promptly advise the Stockholder
Representative of any oral comments received from the SEC. The
Purchaser agrees that none of the information supplied or to be supplied by the
Purchaser for inclusion or incorporation by reference in the Proxy Statement and
each amendment or supplement thereto, at the time of mailing thereof and at the
time of the Special Meeting, will contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The Stockholder Representative agrees that none
of the information supplied by it in writing on behalf of the Stockholders, and
the Company agrees that none of the information supplied by it in writing,
expressly for inclusion in the Proxy Statement and each amendment or supplement
thereto, at the time of mailing thereof and at the time of the
Special Meeting, will contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(b) Each of
the individuals listed as signatories in the Support Agreement has executed and
delivered to the Company the Support Agreement concurrently with the Purchaser’s
execution and delivery of this Agreement, or will have executed and delivered
such executed Support Agreement no later than two Business days following the
date hereof, pursuant to which such individuals (a) agree to vote or cause
to be voted in favor of the Note Satisfaction, all shares of Purchaser Common
Stock now or later held of record or beneficially owned by such individuals,
(b) agree to take or refrain from such other actions in the manner
specified in the Support Agreement, and (c) have granted to the Purchaser
an irrevocable proxy allowing the Purchaser to vote the Parent Common Stock held
of record or beneficially owned by such individuals at the Special Meeting in
favor of the Note Satisfaction. The Purchaser agrees to vote any
proxy received from any such signatory in favor of the Note
Satisfaction.
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7.2 D&O
Indemnification. The Purchaser will cause the Surviving
Corporation to maintain and perform, and will not take any action to alter or
impair, any indemnification provisions or similar exculpatory provisions
eliminating personal liability of directors for monetary damages existing in the
Company’s or any Company Subsidiary’s certificate of incorporation, bylaws,
existing indemnification agreements between the Company and its directors and
officers, or any similar written agreement in effect as of the Effective Time,
only to the extent a copy of which has been made available to the Purchaser or
otherwise described in Section 3.23 of the Company Disclosure Schedule, for a
period of not less than six years after the Effective Time, except for any
changes in such certificates of incorporation or bylaws which, in each instance,
do not directly or indirectly adversely affect the application of such
provisions to acts or omissions of such individuals prior to the Effective Time
or materially alter or impair the rights of such individuals
thereunder. Without limiting the foregoing, the Purchaser will
continue the Company’s and each Company Subsidiary’s directors’ and officers’
insurance policy in effect as of the Effective Time for such six-year period, so
long as the aggregate premium for such policy does not exceed $50,000 in the
aggregate over such six-year period. Notwithstanding anything to the
contrary in this Agreement, the provisions of this Section 7.2 will survive
the consummation of the Merger and are intended to be for the benefit of, and
will be enforceable by, each present and former directors and officers of the
Company and his or her heirs and representatives. Following the
Effective Time, the obligations of the Purchaser under this Section 7.2
will not be terminated or modified in such a manner as to adversely affect the
rights of any present and former directors and officers of the Company under
this Section 7.2 without the consent of such affected present and former
directors and officers of the Company.
7.3 Form
S-3.
(i) As soon
as commercially practicable but in no event later than 15 days after the Closing
Date (or such later date as the Purchaser and the Stockholder Representative
will agree in writing), the Purchaser will file a registration statement on Form
S-3 (the “Registration
Statement”) with the SEC covering the Shares (for the purposes of this
Section 7.3, the “Registrable
Securities”), make any required filings with the National Association of
Securities Dealers and Financial Industry Regulatory Authority and thereafter
use its commercially reasonable efforts to cause such Registration Statement to
become effective as soon as practicable and to remain effective as provided
herein, provided, however, that before filing a
Registration Statement or any amendments or supplements thereto, the Purchaser
will, at the Purchaser’s expense, furnish or otherwise make available to the
Stockholder Representative’s counsel copies of all such documents proposed to be
filed and keep the Stockholder Representative reasonably apprised of the status
of such Registration Statement .
(ii) The
Purchaser will use its commercially reasonable
efforts to prepare and file with the SEC such amendments and supplements
to the Registration Statement as may be necessary to keep the Registration
Statement effective continuously and re-file the Registration Statement upon its
expiration, until the date all of the Registrable Securities have been disposed
of by the Stockholders, and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such Registration
Statement until such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the Stockholders set
forth in such Registration Statement, and cause the related prospectus to be
supplemented by any prospectus supplement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of the
securities covered by such Registration Statement, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act.
38
(iii) The
Purchaser will furnish to each Stockholder such number of copies, without
charge, of such Registration Statement, each amendment and supplement thereto,
including each preliminary prospectus, final prospectus, any other prospectus
(including any prospectus filed under Rule 424, Rule 430A or Rule 430B under the
Securities Act and any “issuer free writing prospectus” as such term is defined
under Rule 433 promulgated under the Securities Act), all exhibits and other
documents filed therewith and such other documents as such Stockholder may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Stockholder, and upon request a copy of any and all
transmittal letters or other correspondence to, or received from, the SEC or any
other Governmental Authority relating to such offer.
(iv) The
Purchaser will use its commercially reasonable
efforts to register or qualify (or exempt from registration or
qualification) such Registrable Securities, and keep such registration or
qualification (or exemption therefrom) effective, under such other securities or
blue sky laws of such jurisdictions as any Stockholder reasonably requests for
the purpose of permitting the offers and sales of the Registrable Securities
owned by such Stockholder in such jurisdictions (provided that the Purchaser
will not be required to (x) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this subsection, (y)
subject itself to taxation in any such jurisdiction or (z) consent to general
service of process in any such jurisdiction).
(v) The
disclosures included or incorporated by reference in the Registration Statement
will not contain any untrue statement of material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, not misleading, and in the case of any prospectus, will not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statement therein, in light of the circumstances in which
they were made, not misleading. Notwithstanding the preceding sentence, the
Purchaser will not be liable for statements made in the Registration Statement,
related prospectus and any supplements and amendments thereto, based on
information supplied in writing by the Stockholder Representative on behalf of
the Stockholders or by the Company expressly for inclusion
therein. The Purchaser will notify each Stockholder at any time when
a prospectus relating thereto is required to be delivered under the Securities
Act, upon discovery that, or upon the discovery of the happening of any event
that makes any statement made in the Registration Statement or related
prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of any
changes in such Registration Statement, prospectus or documents and, as soon as
reasonably practicable, prepare and furnish to such Stockholder a reasonable
number of copies of a supplement or amendment to such prospectus so that, in the
case of the Registration Statement, it will not contain any untrue statement of
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, not misleading, and that in the
case of any prospectus, it will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the statement
therein, in light of the circumstances in which they were made, not
misleading.
(vi) The
Purchaser will notify each Stockholder who is selling any Registrable Securities
covered by such Registration Statement and its counsel (i) when such
Registration Statement or the prospectus or any prospectus supplement or
post-effective amendment has been filed and, with respect to such Registration
Statement or any post-effective amendment, when the same has become effective,
(ii) of any request by the SEC for amendments or supplements to such
Registration Statement or to amend or to supplement such prospectus or for
additional information, (iii) of the issuance by the SEC of any stop order
suspending the effectiveness of such Registration Statement or the initiation of
any proceedings for any of such purposes and (iv) of the receipt by the
Purchaser of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
proceeding for such purpose.
39
(vii) The
Purchaser will use its commercially reasonable
efforts to cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Purchaser are then
listed.
(viii) The
Purchaser will use its commercially reasonable
efforts to provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such Registration
Statement.
(ix) At the
Stockholders’ expense, the Purchaser will, in the case of certificated
Registrable Securities, cooperate with the Stockholders selling such Registrable
Securities to facilitate the timely preparation and delivery of certificates
(not bearing any legends) representing Registrable Securities to be sold after
receiving written representations from each such Stockholder that the
Registrable Securities represented by the certificates so delivered by such
Stockholder will be transferred in accordance with the Registration Statement,
and enable such Registrable Securities to be in such denominations and
registered in such names as the Stockholders may request at least two Business
Days prior to any sale of Registrable Securities.
(x) The
Purchaser will otherwise comply with all applicable rules and regulations of the
SEC and any applicable national securities exchange.
(xi) The
Purchaser will, in the event of the issuance of any stop order suspending the
effectiveness of a Registration Statement, or of any order suspending or
preventing the use of any related prospectus or ceasing trading of any
securities included in such Registration Statement for sale in any jurisdiction,
in each case other than because all Registrable Securities have been resold, use
every reasonable effort to promptly obtain the withdrawal of such
order.
(xii) The
Purchaser will otherwise use its commercially reasonable
efforts to obtain any required regulatory approval necessary for the
Stockholder to sell its Registrable Securities in an offering.
(xiii) As a
condition precedent to registering Registrable Securities, the Purchaser may
require each Stockholder as to which any registration is being effected to
furnish the Purchaser with such information regarding such Person and pertinent
to the disclosure requirements relating to the registration and the distribution
of such securities as the Purchaser may from time to time reasonably request in
writing. Each such Stockholder will promptly notify the Purchaser in
writing of any changes in the information set forth in the Registration
Statement after it is prepared regarding the Stockholder to the extent required
by applicable Law.
(xiv) For the
purposes of this Section 7.3, “a Stockholder” or “the Stockholders” refers
solely to a holder or holders of Registrable Securities as of the Closing
Date.
Notwithstanding
the foregoing, the Purchaser will not be required to maintain the effectiveness
of such Registration Statement if fewer than 900,000 Shares have not been sold
by the initial holders thereof as of a particular date, excluding Shares that an
initial holder thereof may not freely sell without any restriction or limitation
pursuant to Rule 144.
40
(b) Effect of
Delay. If such Registration Statement is not filed within 15
days of the Closing Date, not declared effective within 120 days from the date
of filing or, following effectiveness, not available for any reason for resale
of the Shares by the initial holders thereof (each, an “Effectiveness
Delay”), then the Purchaser will pay to such holders an amount in cash
equal to 8% per annum of the aggregate value of the Shares then-held by each
such holder (including for such purpose, any Note Satisfaction Shares) for each
day that such Registration Statement is so delinquent (through the date of cure)
or so unavailable. For purposes of this payment, the “value of the
Shares” will equal the Purchaser Closing Stock Price, and will not include any
Shares that may be freely sold pursuant to Rule 144 as of the initial date of
delinquency or unavailability without any limitations on the number of Shares so
sold.
(c) Indemnification.
(i) To the
extent permitted by law, the Purchaser will indemnify and hold harmless each
Stockholder, the partners or officers, directors and stockholder of each
Stockholder, legal counsel and accountants for each Stockholder and each Person,
if any, who controls such Stockholder, with respect to which registration,
qualification or compliance has been effected pursuant to this Section 7.3,
against any losses, claims, damages or liabilities (joint or several) to which
they may become subject under the Securities Act, the Exchange Act or any state
securities laws, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon any of the following
(collectively a “Violation”):
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, including any preliminary prospectus or
final prospectus contained therein or any amendments or supplements thereto,
(ii) the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation by the Purchaser of the Securities Act,
the Exchange Act, any state securities laws or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any state securities
laws applicable to the Purchaser; and the Purchaser will reimburse each such
Stockholder or controlling Person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this subsection 6.3(c) will not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Purchaser, nor will
the Purchaser be liable in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon a
Violation that occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
any such Stockholder or Person who controls such Stockholder; provided further, that the foregoing
indemnity agreement with respect to any preliminary prospectus will not inure to
the benefit of any Stockholder or any Person controlling such Stockholder from
whom the Person asserting any such losses, claims, damages or liabilities
purchased shares in the offering, if a copy of the prospectus (as then amended
or supplemented if the Purchaser will have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Stockholder
to such Person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the shares to such Person, and if the
prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage or liability.
(ii) To the
extent permitted by law, each selling Stockholder will indemnify and hold
harmless the Purchaser, its directors, officers, employees and each Person who
controls the Purchaser within the meaning of the Exchange Act, legal counsel and
accountants for the Purchaser, any other Stockholder selling securities in such
Registration Statement and any controlling Person of any such other Stockholder,
against any losses, claims, damages or liabilities (joint or several) to which
any of the foregoing Persons may become subject, under the Securities Act, the
Exchange Act or any state securities laws, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or are based
upon any Violation, in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity with written
information furnished by such Stockholder expressly for use in connection with
such registration; and each such Stockholder will reimburse any Person intended
to be indemnified pursuant to this subsection 7.3(c), for any legal or other
expenses reasonably incurred by such Person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this subsection 7.3(c) will not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Stockholder (which
consent will not be unreasonably withheld), and that in no event will any
indemnity under this subsection 7.3(c) exceed the gross proceeds from the
offering received by such Stockholder.
41
(iii) The
obligations of the Purchaser and Stockholders under this Section 7.3(c)
will survive the completion of any offering of registrable securities in a
Registration Statement under this Section 7, and otherwise. The
indemnification rights of the Purchaser and Stockholders pursuant to this
Section 7.3(c) will be the sole and exclusive remedy of the Purchaser and
Stockholders, as the case may be, under Section 7.3 hereof with respect to any
Losses suffered or incurred thereby and arising in connection with any
Violation, other than any rights or remedies the Purchaser or the Stockholders,
as the case may be, may have under applicable securities Laws.
7.4 Rule
144. The Purchaser will use its reasonable best efforts to
timely file all reports and other documents required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations adopted by the
SEC thereunder (or, if the Purchaser is not required to file such reports, it
will, upon the request of any Stockholder or transferee, make publicly available
such information as necessary to permit sales pursuant to Rule 144 or Regulation
S under the Securities Act), and it will take such further action as any
Stockholder or transferee may reasonably request, to the extent required from
time to time to enable such Stockholder or transferee to sell shares of
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (i) Rule 144 promulgated under the
Securities Act, as such rules may be amended from time to time, or (ii) any
similar rule or regulation hereafter adopted by the SEC. Upon written request by
any Stockholder or transferee, so long as such Person owns any Registrable
Securities, the Purchaser will deliver to such Person a written statement as to
whether it has complied with such information requirements, and, if not, the
specifics thereof.
ARTICLE
8
8.1 Termination
Events. This Agreement may, by written notice given before or
at the Closing, be terminated:
(a) by mutual
consent of the Purchaser and the Company;
(b) by either
the Purchaser or the Company if any Governmental Authority of competent
jurisdiction has issued a nonappealable final Judgment or taken any other
nonappealable final action, in each case having the effect of permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement; or
(c) by either
party if the Closing has not occurred on or before February 28, 2009; provided, however, that the
right to terminate this Agreement pursuant to this Section 8.1(c) will
not be available if the terminating party’s curable breach of a representation,
warranty or covenant made under this Agreement results in the failure of any
condition set forth in Article 5 to be fulfilled or satisfied on or before
such date.
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8.2 Effect of
Termination. Each party’s rights of termination under
Section 8.1 are in addition to any other rights it may have under this
Agreement or otherwise, and the exercise of such rights of termination is not an
election of remedies. If this Agreement is terminated pursuant to
Section 8.1, all obligations of the parties under this Agreement terminate,
except that (a) the provisions of Section 6.5(b), this
Section 8.2, Section 8.3 and Article 10 will remain in full force
and survive any termination of this Agreement and (b) if this Agreement is
terminated by a party because of the breach of this Agreement by another party
or because one or more of the conditions to the terminating party’s obligations
under this Agreement is not satisfied as a result of the other party’s failure
to comply with its obligations under this Agreement, the terminating party’s
right to pursue all legal remedies will survive such termination
unimpaired.
8.3 Disposition of
Documents. In the event of the termination of this Agreement
by either the Company or the Purchaser as provided in Section 8.1 hereof,
each party, if so requested by the other party, will (a) return promptly
every document (other than documents publicly available and other than one copy
thereof to be retained by outside counsel for such party) furnished to it by the
other party (or any Subsidiary, division, associate or affiliate of such other
party) in connection with the transactions contemplated hereby, whether so
obtained before or after the execution of this Agreement, and any copies thereof
which may have been made, and will cause its representatives and others to whom
such documents were furnished promptly to return such documents and any copies
thereof any of them may have made, or (b) destroy such documents and cause
its representatives and such other representatives to destroy such documents,
and so certify such destruction to the other party.
ARTICLE
9
9.1 Indemnification by the
Stockholders. Subject to the limitations expressly set forth
in Sections 9.5 through 9.8 hereof, each Stockholder, severally, and solely
and exclusively through the Escrow Fund except as otherwise expressly provided
in Section 9.6(c) hereof, will have an obligation to indemnify, defend and hold
harmless the Purchaser, each of the Purchaser’s controlled Affiliates, the
Surviving Corporation and each of their respective directors, officers and
employees (collectively, the “Purchaser Indemnified
Parties”) from and against, and will pay to the Purchaser Indemnified
Parties the value of, any and all Losses incurred or suffered by the Purchaser
Indemnified Parties directly or indirectly arising out of, relating to or
resulting from any of the following:
(a) any
breach of any representation or warranty of the Company contained in Article 3
of this Agreement;
(b) any
breach of any covenant or agreement of the Company contained in this Agreement
or any Ancillary Agreement to which the Company is a party; and
(c) any
assertion or recovery by any Stockholder of the fair value, interest and
expenses or other amounts pursuant to dissenters’ rights exercised or
purportedly exercised pursuant to the DGCL (it being understood that any such
Losses will not include the pro rata share of the Merger Consideration such
asserting or recovering Stockholder would have received pursuant to this
Agreement).
9.2 Indemnification by the
Purchaser. Subject to the limitations expressly set forth in
Section 9.6 hereof, the Purchaser will have an obligation to indemnify,
defend and hold harmless the Stockholders, the Stockholder Representative and
each of their respective partners, members, directors, officers and employees
(collectively, the “Stockholder Indemnified
Parties”) from and against, and will pay to the Stockholder Indemnified
Parties the value of, any and all Losses incurred or suffered by the Stockholder
Indemnified Parties directly or indirectly arising out of, relating to or
resulting from any of the following:
43
(a) any
breach of any representation or warranty of the Purchaser or the Merger Sub
contained in Article 4 of this Agreement; and
(b) any
breach of any covenant or agreement of the Purchaser or Merger Sub contained in
this Agreement or any Ancillary Agreement to which the Purchaser or the Merger
Sub is a party.
9.3 Claim
Procedure.
(a) A party
that seeks indemnity under this Article 9 (an “Indemnified Party”)
will give written notice (a “Claim Notice”) to the
party from whom indemnification is sought (an “Indemnifying Party”)
containing (i) a description and, if known, the estimated amount of any
Losses incurred or reasonably expected to be incurred by the Indemnified Party,
(ii) a reasonable explanation of the basis for the Claim Notice to the
extent of the facts then known by the Indemnified Party and (iii) a demand
for payment of those Losses.
(b) Within 30
days after delivery of a Claim Notice, the Indemnifying Party will deliver to
the Indemnified Party a written response in which the Indemnifying Party will
either:
(i) agree
that the Indemnified Party is entitled to receive all or a portion of the Losses
at issue in the Claim Notice; or
(ii) dispute
the Indemnified Party’s entitlement to indemnification by delivering to the
Indemnified Party a written notice (an “Objection Notice”)
setting forth in reasonable detail each disputed item, the basis for each such
disputed item and certifying that all such disputed items are being disputed in
good faith.
(c) If the
Indemnifying Party fails to take either of the foregoing actions within 30 days
after delivery of the Claim Notice, then the Indemnifying Party will be deemed
to have irrevocably accepted the Claim Notice and the Indemnifying Party will be
deemed to have irrevocably agreed to pay the Losses at issue in the Claim
Notice.
(d) If the
Indemnifying Party delivers an Objection Notice to the Indemnified Party within
30 days after delivery of the Claim Notice, then the dispute will be resolved
exclusively in accordance with the provisions of
Section 10.11.
(e) If any
Purchaser Indemnified Party is the Indemnified Party with respect to any claim
for indemnification pursuant to this Article 9, the parties will
contemporaneously deliver to the Escrow and Exchange Agent copies of each Claim
Notice and Objection Notice in connection with such claim.
(f) Any
indemnification of the Stockholders pursuant to this Article 9 will be
effected by wire transfer of immediately available funds to an account
designated by the Stockholder Representative. All indemnification
payments to be received by the Stockholders in accordance with this
Article 9 will be allocated among the Stockholders in proportion to each
Stockholder’s pro rata share of the Escrow Fund, as set forth on the Final
Merger Consideration Allocation Schedule.
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(g) Any
indemnification of the Purchaser Indemnified Parties pursuant to this
Article 9 will be effected, at the binding election of the Stockholder
Representative to be made no later than two Business Days following a final
determination of the indemnifiable Losses hereunder, by either (i) wire
transfer of immediately available funds to an account designated by the
Purchaser (in which case the number of Shares equal to such cash amount, with a
deemed value equal to the Purchaser Closing Stock Price, will be released to the
Stockholder Representative), or (ii) the return of all or a portion of the
Shares received by the Stockholders, whether held in the Escrow Fund or
otherwise, with each Share having a deemed value equal to the Purchaser Closing
Stock Price, in each event in proportion to the Merger Consideration payable to
them pursuant to this Agreement.
(h) The
foregoing indemnification payments will be made within five Business Days after
the date on which (i) the amount of such payments are determined by mutual
agreement of the parties, (ii) the amount of such payments are determined
pursuant to Section 9.3(c) if an Objection Notice has not been timely
delivered in accordance with Section 9.3(b) or (iii) both such
amount and the Indemnifying Party’s obligation to pay such amount have been
finally determined in accordance with the dispute resolution procedures set
forth in Section 10.11.
9.4 Third Party
Claims.
(a) In the
event that the Indemnified Party is entitled, or is seeking to assert rights, to
indemnification under this Article 9 relating to a claim by another Person,
then the Indemnified Party will deliver a Claim Notice to the Indemnifying Party
and will include in such Claim Notice (i) notice of the commencement of any
Proceeding relating to such claim within 30 days after the Indemnified Party has
received written notice of the commencement of such Proceeding and (ii) the
facts constituting the basis for such Proceeding and the amount of the damages
claimed by the other Person, in each case to the extent known to the Indemnified
Party. Notwithstanding the foregoing, no delay or deficiency on the
part of the Indemnified Party in so notifying the Indemnifying Party will
relieve the Indemnifying Party of any Liability or obligation under this
Agreement except to the extent the Indemnifying Party’s ability to defend such
claim is prejudiced thereby.
(b) Within 30
days after the Indemnified Party’s delivery of notice of the commencement of
such Proceeding under this Section 9.4, the Indemnifying Party may assume
control of the defense of such Proceeding by giving to the Indemnified Party
written notice of the intention to assume such defense, but if and only if the
Indemnifying Party further:
(i) acknowledges
in writing to the Indemnified Party that any Losses that may be assessed in
connection with such Proceeding constitute Losses for which the Indemnified
Party will be indemnified pursuant to this Article 9 without contest or
objection and that the Indemnifying Party will advance all expenses and costs of
defense, which writing will not be construed as an admission of any other
Liability to any third party; and
(ii) retains
counsel for the defense of such Proceeding reasonably satisfactory to the
Indemnified Party and furnishes to the Indemnified Party evidence satisfactory
to the Indemnified Party that the Indemnifying Party has and will have
sufficient financial resources to fund on a current basis the cost of such
defense and paying all Losses that may arise under the claim.
45
An
Indemnifying Party will lose any previously acquired right to control the
defense of any Proceeding if for any reason the Indemnifying Party ceases to
actively, competently and diligently conduct the defense. However, in
the event that the Stockholders are the Indemnifying Party, in no event may the
Indemnifying Party assume, maintain control of, or participate in, the defense
of any Proceeding (A) involving criminal liability, (B) involving
claims relating to any Company Intellectual Property or the Intellectual
Property of another Person, (C) in which any relief other than monetary
damages is sought against the Indemnified Party or (D) in which the outcome
of any Judgment or settlement in the matter would be reasonably likely to
materially adversely affect the business of any of the Purchaser, the Company or
the Surviving Corporation (collectively, clauses (A)-(D), the “Special
Claims”).
(c) If the
Indemnifying Party does not, or is not able to, assume or maintain control of
such defense in compliance with Section 9.4(b), the Indemnified Party will
have the right to control such defense. If the Indemnified Party
controls such defense, the Indemnifying Party agrees to pay to the Indemnified
Party promptly upon demand from time to time all reasonable attorneys’ fees and
other costs and expenses of defense. To the extent that the
underlying claim does not constitute a Special Claim, the party not controlling
such defense (the “Noncontrolling
Party”) may participate therein at its own expense. However,
if the Indemnifying Party assumes control of such defense in accordance with
this Section 9.4 and the Indemnified Party reasonably concludes that the
Indemnifying Party and the Indemnified Party have conflicting interests or
different defenses available with respect to such Proceeding, then the
reasonable fees and expenses of counsel to the Indemnified Party will be
considered and included as “Losses” for purposes of this
Agreement. The party controlling such defense (the “Controlling Party”)
will reasonably advise the Noncontrolling Party of the status of such Proceeding
and the defense thereof and, with respect to any Proceeding that does not relate
to a Special Claim, the Controlling Party will consider in good faith
recommendations made by the Noncontrolling Party. The Noncontrolling
Party will furnish the Controlling Party with such information as it may have
with respect to such Proceeding (including copies of any summons, complaint or
other pleading which may have been served on such party and any written claim,
demand, invoice, billing or other document evidencing or asserting the same) and
will otherwise cooperate with and assist the Controlling Party in the defense of
such Proceeding.
(d) If the
Indemnified Party is controlling the defense of such Proceeding, the Indemnified
Party has the right to agree in good faith to any compromise or settlement of,
or the entry of any Judgment arising from, such Proceeding with prior notice but
without the consent of the Indemnifying Party. All amounts paid or
payable under such settlement or Judgment are Losses that the Indemnifying Party
owes to the Indemnified Party under this Article 9. The
Indemnifying Party will not agree to any compromise or settlement of, or the
entry of any Judgment arising from, any such Proceeding without the prior
written consent of the Indemnified Party, which consent the Indemnified Party
will not unreasonably withhold or delay. The Indemnified Party will
have no Liability with respect to any compromise or settlement of, or the entry
of any Judgment arising from, any such Proceeding effected without its
consent.
(e) Notwithstanding
the other provisions of this Article 9, if a Person not a party to this
Agreement asserts that a Purchaser Indemnified Party is liable to such Person
for a monetary or other obligation which relates to any Special Claim for which
the Purchaser Indemnified Party may be entitled to indemnification pursuant to
this Article 9, and the Purchaser Indemnified Party determines that it has
a business reason to fulfill such obligation, then (i) the Purchaser
Indemnified Party will be entitled to satisfy such obligation, without notice to
or consent from the Indemnifying Party, (ii) the Purchaser Indemnified
Party may subsequently make a claim for indemnification in accordance with the
provisions of this Article 9 and (iii) the Purchaser Indemnified Party
will be reimbursed, in accordance with the provisions of this Article 9,
for any such Losses for which it is entitled to indemnification pursuant to this
Article 9, subject to the right of the Indemnifying Party to dispute the
Purchaser Indemnified Party’s entitlement to indemnification.
46
(a) All
representations, warranties, covenants and obligations of the Company contained
in this Agreement and any certificate delivered in connection with the closing
of the transactions contemplated by this Agreement, and all representations and
warranties of the Purchaser contained in this Agreement and any certificate
delivered in connection with the closing of the transactions contemplated by
this Agreement, will survive the Closing, for a period of 12 months from the
Closing Date (the “Indemnification
Period”) and will thereafter be of no further force or effect; provided, however, that
(i) representations and warranties of the Company set forth in
Sections 3.1 (Corporate
Matters), 3.2 (Authority and
Enforceability), 3.3 (No Conflict), 3.4 (Capitalization and Ownership)
and 3.24 (Brokers and
Finders) (collectively, the “Company Excluded
Representations”), and the corresponding right to make claims thereunder
exclusively in accordance with this Agreement, will survive until 24 months from
the Closing Date, (ii) the Company’s covenants in Article 6 shall terminate as
of the Effective Time and (iii) representations and warranties of the
Purchaser set forth in Sections 4.1 (Organization and Good
Standing) and 4.2 (Authority and Enforceability)
(collectively, the “Purchaser Excluded
Representations”), and the corresponding right to make claims thereunder
exclusively in accordance with this Agreement, will survive until 24 months from
the Closing Date. The foregoing notwithstanding, any covenant or
obligation contained herein that expressly contemplates performance after the
end of the Indemnification Period for such covenant or obligation will continue
through the period of such contemplated performance.
(b) If an
Indemnified Party delivers to an Indemnifying Party, before expiration of
a representation, warranty, covenant or obligation, either a Claim Notice
expressly relating to a breach of any such representation, warranty, covenant or
obligation, or a notice that, as a result of a Proceeding instituted or claim
made by a Person not a party to this Agreement, the Indemnified Party reasonably
expects to incur Losses, then the applicable representation, warranty, covenant
or obligation will survive until, but only for purposes of, the resolution of
the matter covered by such notice in accordance with Article 9 and Section
10.11. If the Proceeding or written claim with respect to which such
notice has been given is definitively withdrawn or resolved in favor of the
Indemnified Party, the Indemnified Party will promptly so notify the
Indemnifying Party.
(a) Notwithstanding
any other provision hereof, neither the Stockholders nor the Purchaser will be
liable under this Article 9 for breaches of their respective
representations and warranties unless and until the aggregate Losses for which
they or it, respectively, would otherwise be liable under this Agreement exceed
one percent (1%) of the Merger Consideration (and only with respect to such
amounts in excess of this one percent (1%) threshold), with the underlying
shares of Purchaser Common Stock having a deemed per share value equal to the
Purchaser Closing Stock Price; provided, however, that the
foregoing limitation does not apply to the following:
(i) claims
under Section 9.1(a) relating to a breach of a Company Excluded
Representation;
(ii) claims
under Sections 9.1(c) or 9.2(b); or
(iii) claims
under Section 9.2(a) relating to a breach of a Purchaser Excluded
Representation.
47
(b) Except as
otherwise provided in this Section 9.6, from and after the Effective Time,
the indemnification rights of a Purchaser Indemnified Party pursuant to
Section 9.1 hereof will be the sole and exclusive remedy of a Purchaser
Indemnified Party under this Agreement including any Losses of a Purchaser
Indemnified Party with respect to any misrepresentation or inaccuracy in, or
breach of, any representations or warranties or any breach or failure in
performance of any covenants, agreements or obligations made by the Company, the
Stockholder Representative or any Stockholder in this Agreement or in any
exhibit or schedules hereto or any certificate delivered
hereunder. Recovery from the Escrow Fund, solely to the extent of the
Escrow Fund, constitutes the Purchaser Indemnified Parties’ sole and exclusive
source for payment of the indemnification provided by the Stockholders in
Section 9.1 including any other Losses or other claims relating to or
arising from this Agreement or in connection with the transactions contemplated
hereby or any exhibit, schedule or certificate delivered hereunder and the
Purchaser Indemnified Parties will have no recourse to or remedy against the
Stockholder Representative or any Stockholder for any such indemnification or
any other Loss; provided, however, that each
Stockholder will be liable for the indemnification provided individually by such
Stockholder pursuant to Sections 9.1 and 9.6(c) for breach of the Company
Excluded Representations (but subject to the limitations on such indemnification
set forth in Section 9.6(c)) to the extent that the Purchaser Indemnified
Parties have not been able to first recover for their Losses from such breach
from the amounts in the Escrow Fund.
(c) The
Stockholders will not be liable for any Loss under this Article 9 or otherwise,
and the Purchaser Indemnified Parties may not seek indemnification from the
Stockholders pursuant to Section 9.1 for any Loss, (i) if the aggregate amount
of such Losses exceeds the amount then available in the Escrow Fund for such
purpose, it being understood and agreed that the initial sources for the
Purchaser Indemnified Parties to recover Losses for which they may be entitled
under this Article 9 or otherwise will be to set off, recover and retain
such Losses from the Escrow Fund; provided, however, that at such
time and only to the extent that the Losses for which the Purchaser Indemnified
Parties may seek indemnification under Section 9.1(a) relate to a breach of
a Company Excluded Representation exceed the amount of the Escrow Fund, the
Purchaser Indemnified Parties will have the right to recover such remaining
Losses in excess of the Escrow Fund from each Stockholders on an individual and
several basis (and not jointly as to or with any other Stockholder) in an amount
not to exceed such Stockholder’s Escrow Payment Percentage multiplied by the
amount of such remaining Losses; (ii) with respect to each Stockholder, in
excess of the aggregate amount of the Merger Consideration actually paid to or
on behalf of such Stockholder (including any Escrow Shares, except to the extent
delivered to the Purchaser to satisfy an indemnification obligation hereunder);
or (iii) arising out of any breach of this Agreement by the Company of which
such Purchaser Indemnified Party had actual knowledge prior to the date of this
Agreement. Such indemnification by the individual Stockholder will be
payable at such Stockholder’s election in accordance with Section 9.3 hereof (i)
in cash or (ii) return of all or a portion of shares the Purchaser’s Common
Stock received as Merger Consideration, with each share of stock having a deemed
value equal to the Purchaser Closing Stock Price; provided, however, in no event
in either (i) or (ii) in an amount greater than the amount of actual Losses, net
of any amounts paid from the Escrow Fund; provided, further, that, to the
extent that any portion of such Merger Consideration is deposited into an escrow
account or similar arrangement pursuant to the Stockholder Matters Agreement,
such escrow account or similar arrangement will provide for the automatic
release of the applicable portion of such Merger Consideration for the benefit
of the applicable Purchaser Indemnified Party upon demand and otherwise in
accordance herewith. Notwithstanding any other provision of this
Agreement, the Losses of the Purchaser Indemnified Parties will not include, and
no Purchaser Indemnified Party may seek to recover indemnification or other
relief for, consequential damages, lost profits or exemplary or punitive damages
(unless exemplary or punitive damages are incurred by a Purchaser Indemnified
Party as a result of a third-party claim and pursuant to a final and
nonappealable Order).
48
(d) Except as
provided in Sections 7.3(c) and 9.6(e) hereof, the indemnification rights
of a Stockholder pursuant to Section 9.2 hereof will be the sole and
exclusive remedy of a Stockholder under this Agreement, and in no event will the
Purchaser’s Liability exceed an amount, payable in cash, equal to the Escrow
Amount (the “Purchaser
Indemnity Cap”); provided, however, at such time
and to the extent that the Losses for which the Stockholders may seek indemnity
under Section 9.2(a) relating to a breach of a Purchaser Excluded
Representation exceed the Purchaser Indemnity Cap, the Stockholders will have
the right to recover such remaining Losses from the Purchaser up to a maximum,
in the aggregate, of an amount equal to the Merger Consideration Closing
Value.
(e) The
amount of any Loss subject to indemnification hereunder or of any claim therefor
will be calculated net of (i) any Tax Benefit (as defined below) inuring to
the Purchaser, the Company or any of their Subsidiaries on account of such Loss
and (ii) any insurance proceeds (net of direct collection expenses)
received by the Purchaser, the Company or any of their Subsidiaries on account
of such Loss. If the Purchaser, the Company or such Subsidiaries
receives a Tax Benefit after an indemnification payment is made and such Tax
Benefit was not taken into account in computing such indemnification payment,
the Purchaser will promptly pay to the Stockholder Representative (on behalf of
the Stockholders in accordance with their respective Escrow Payment Percentages)
the amount of such Tax Benefit at such time or times as and to the extent that
such Tax Benefit is realized. For purposes hereof, “Tax Benefit” will
mean any refund of Taxes paid or reduction in the amount of Taxes which
otherwise would have been paid, in each case computed at the highest marginal
tax rates. The Purchaser, the Company and such Subsidiaries will seek
full recovery under all insurance policies covering any Loss to the same extent
as they would if such Loss were not subject to indemnification
hereunder. In the event that an insurance recovery is made by the
Purchaser, the Company or such Subsidiaries with respect to any Loss for which
any such Person has received an indemnification payment, then a refund equal to
the aggregate amount of the recovery (net of all direct collection expenses)
will be made promptly to the Stockholder Representative (on behalf of the
Stockholders in accordance with their respective Escrow Payment
Percentages). The Stockholders will be subrogated to all rights of
the Purchaser Indemnified Parties in respect of any Losses indemnified by the
Stockholders.
(f) Notwithstanding
any other provision of this Agreement, nothing in this Agreement limits the
Liability of a party to another party for fraud committed by such party or, with
respect to the Purchaser only, under applicable securities Laws; provided, however, that for the
purposes of this Section 9.6(f), fraud will expressly exclude negligent
misrepresentation. For the avoidance of doubt, the limitations of the
Purchaser’s indemnification liability set forth herein will not be deemed to be
any way a limitation of any rights or remedies a Stockholder may have under
applicable securities Laws.
(g) All
indemnification payments made hereunder will be treated by all parties as
adjustments to the Merger Consideration.
9.7 No Right of Indemnification
or Contribution. Subject to the indemnification obligations of
Purchaser in Section 7.2 hereof (in the event a Stockholder is a former or
present director or officer of the Company), no Stockholder has any right of
indemnification or contribution against the Company with respect to any breach
by the Company or the Surviving Corporation of any of its representations,
warranties, covenants or agreements in this Agreement or any Ancillary
Agreement, whether by virtue of any contractual or statutory right of indemnity
or otherwise, and all claims to the contrary are hereby waived and
released.
9.8 Exercise of
Remedies. No Purchaser Indemnified Party (other than the
Purchaser or any successor or assignee of the Purchaser) is entitled to assert
any indemnification claim or exercise any other remedy under this Agreement
unless the Purchaser (or any successor or assignee of the Purchaser) consents to
the assertion of the indemnification claim or the exercise of any other
remedy. No Stockholder is entitled to assert any indemnification
claim or exercise any other remedy under this Agreement unless the Stockholder
Representative consents to the assertion of the indemnification claim or the
exercise of any other remedy.
49
ARTICLE
10
(a) Upon the
adoption of this Agreement and the approval of the Merger and the transactions
contemplated hereby by the Stockholders and without further act of any
Stockholder, each Stockholder designates and appoints the Stockholder
Representative as such Stockholder’s agent and attorney-in-fact with full power
and authority to act for and on behalf of each Stockholder (i) to give and
receive notices and communications, (ii) to accept service of process on behalf
of the Stockholder pursuant to Section 10.11, (iii) to authorize delivery
to Purchaser of cash or Shares from the Escrow Fund in satisfaction of claims
for indemnification made by Purchaser under Article 9, (iv) to agree to,
negotiate, enter into settlements and compromises of, and comply with Judgments
of courts or other Governmental Authorities and awards of arbitrators, with
respect to, any claims by any Purchaser Indemnified Party against any
Stockholder or by any Stockholder against any Purchaser Indemnified Party, or
any other dispute between any Purchaser Indemnified Party and any Stockholder,
in each case relating to this Agreement or the transactions contemplated by this
Agreement, (v) to hold the Note for the Stockholders and to exercise
all rights and remedies under the Note on behalf of the Stockholders and (vi) to
take all actions that are either (x) necessary or appropriate in the
judgment of the Stockholder Representative for the accomplishment of the
foregoing or (y) specifically mandated by the terms of this
Agreement. Notices or communications to or from the Stockholder
Representative constitute notice to or from each of the Stockholders for all
purposes under this Agreement. The rights of the Stockholders to
receive disbursements under this Agreement will be conditioned upon and subject
to the right of the Stockholder Representative to take any and all actions and
make any and all decisions required or permitted to be taken or made by the
Stockholder Representative under this Agreement or the Escrow
Agreement.
(b) The
Stockholder Representative may delegate its authority as Stockholder
Representative to any one of the Stockholders for a fixed or indeterminate
period of time upon not less than 10 Business Days’ prior written notice to the
Purchaser in accordance with Section 10.2. In the event of the
dissolution or incapacity of the Stockholder Representative, a successor
Stockholder Representative will be elected promptly by the Stockholders whose
interests constitute, in the aggregate, not less than a majority of the Merger
Consideration and the Stockholders will so notify the Purchaser. Each
successor Stockholder Representative has all of the power, authority, rights and
privileges conferred by this Agreement upon the original Stockholder
Representative, and the term “Stockholder Representative” as used in this
Agreement includes any successor Stockholder Representative.
(c) A
decision, act, consent or instruction of the Stockholder Representative
constitutes a decision of all Stockholders and is final, binding and conclusive
upon the Stockholders, and the Purchaser, Escrow Agent and any Indemnified Party
may rely upon any such decision, act, consent or instruction of the Stockholder
Representative as being the decision, act, consent or instruction of the
Stockholders. The Purchaser and Escrow Agent are hereby relieved from
any Liability to any Person for any acts done or omissions by the Purchaser or
Escrow Agent, as applicable, in accordance with such decision, act, consent or
instruction of the Stockholder Representative. Without limiting the
generality of the foregoing, the Purchaser and Escrow Agent are entitled to
rely, without inquiry, upon any document delivered by the Stockholder
Representative as being genuine and correct and having been duly signed or sent
by the Stockholder Representative.
(d) The
Stockholder Representative will have no Liability to any Person for any act done
or omitted under this Agreement as the Stockholder Representative absent
intentional fraud. The Stockholders will severally indemnify and hold
harmless the Stockholder Representative from and against any Losses the
Stockholder Representative may suffer as a result of any such action or
omission. All of the immunities and powers granted to the Stockholder
Representative under this Agreement will survive the Closing and/or any
termination of this Agreement and the Escrow Agreement.
50
(e) The
Stockholder Representative will receive no compensation for services as the
Stockholder Representative. The Stockholders will reimburse, on a pro
rata basis in proportion to their interest in the Merger Consideration, the
Stockholder Representative for professional fees and expenses of any attorney,
accountant or other advisors retained by the Stockholder Representative and
other reasonable out-of-pocket expenses incurred by the Stockholder
Representative in connection with the performance of the Stockholder
Representative’s duties under this Agreement. The Company and the
Stockholder Representative will, within five Business Days of the Closing Date,
direct by joint written notice(s) to the Escrow and Exchange Agent, that on the
Closing Date a portion of the Closing Disbursement having a value of or as near
as possible to $100,000 (the “Stockholder Representative
Fund Shares”), calculated based the Purchaser Closing Stock Price, will
be withheld and issued directly by the Escrow and Exchange Agent to an account
maintained by the Escrow and Exchange Agent or such other financial institution
selected by the Stockholder Representative pursuant to, and in accordance with,
the Escrow Agreement as designated in such notice, solely as a fund for the fees
and expenses (including legal fees and expenses) of the Stockholder
Representative incurred in connection with this Agreement (the “Stockholder Representative
Fund”), with any balance of the Stockholder Representative Fund not
incurred for such purposes to be returned to the Stockholders in accordance with
the Escrow Agreement, and such Stockholder Representative Fund will not be
available to any Purchaser Indemnified Party in satisfaction of any
indemnification obligations of the Stockholders hereunder. In the event
that the Stockholder Representative Fund will be insufficient to satisfy the
expenses of the Stockholder Representative, and in the event there are any
remaining funds or Merger Consideration in the Escrow Fund to be distributed to
the Stockholders immediately prior to the final distribution from the Escrow
Fund to the Stockholders pursuant to the Escrow Agreement, the Stockholder
Representative will be entitled to recover any such expenses from the Escrow
Fund to the extent of such funds or Merger Consideration immediately prior to
the distribution of funds to the Stockholders following expiration of the
Indemnification Period. The Stockholders agree that all interest or
other income earned from the investment of the Stockholder Representative Fund
in any Tax year will be reported as allocated to the Stockholders in proportion
to their interests in the Stockholder Representative Fund. Each
Stockholder will deliver to the Escrow and Exchange Agent a properly executed
IRS Form W-9 or appropriate IRS Form W-8. This appointment and grant
of power and authority by the Stockholders to the Stockholder Representative
pursuant to this Section 10.1 is coupled with an interest, is in
consideration of the mutual covenants made in this Agreement, is irrevocable and
may not be terminated by the act of any Stockholder or by operation of Law,
whether upon the death or incapacity of any Stockholder, or by the occurrence of
any other event.
(f) From and
after the Effective Time, Purchaser will cause the Surviving Corporation to
provide the Stockholder Representative with reasonable access to information
about the Surviving Corporation and the reasonable assistance of the officers
and employees of Purchaser and the Surviving Corporation for purposes of
performing its duties and exercising its rights under this
Agreement.
10.2 Notices. All
notices and other communications under this Agreement must be in writing and are
deemed duly delivered when (a) delivered if delivered personally or by
nationally recognized overnight courier service (costs prepaid), (b) sent
by facsimile with confirmation of transmission by the transmitting equipment
(or, the first Business Day following such transmission if the date of
transmission is not a Business Day) or (c) received or rejected by the
addressee within five Business Days of dispatch, if sent by certified mail,
return receipt requested; in each case to the following addresses or facsimile
numbers and marked to the attention of the individual (by name or title)
designated below (or to such other address, facsimile number or individual as a
party may designate by notice to the other parties):
51
If
to the Purchaser or the Merger Sub:
|
PLX
Technology, Inc.
000
X. Xxxxx Xxxxxx
Xxxxxxxxx,
XX 00000
Attention: Chief
Financial Officer
Facsimile:
x0.000.000.0000
|
With
copies to:
|
Xxxxx
& XxXxxxxx LLP
Xxx
Xxxxxxxxxxx Xxxxxx, Xxx. 0000
Xxx
Xxxxxxxxx, XX 00000
Attention:
Xxxxxxx X. Xxxxxxxx
Facsimile:
x0.000.000.0000
Xxxxx
& XxXxxxxx LLP
000
Xxxxxx Xxx
Xxxx
Xxxx, XX 00000
Attention:
Xxxxxxx X. Xxxxxxx
Facsimile:
x0.000.000.0000
|
If
to the Company:
|
Oxford
Semiconductor, Inc.
0000
XxXxxxxx Xxxx., Xxxxx 000
Xxxxxxxx,
XX, 00000
Attention:
Chief Financial Officer
Facsimile:
x0 000.000.0000
|
With
a copy to:
|
Xxxxxx,
Xxxxxxxxxx & Xxxxxxxxx LLP
The
Xxxxxx Building
000
Xxxxxx Xxxxxx
Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention:
Xxxxxxx X. Xxxxx
Xxxxxxxx
Xxx
Facsimile:
x0.000.000.0000
|
If
to the Stockholder Representative:
|
c/o
VantagePoint Venture Partners
0000
Xxxxxxx Xxxxx, Xxxxx 000
Xxx
Xxxxx, XX 00000
Attention:
General Counsel
Facsimile:
x0.000.000.0000
|
10.3 Amendment. This
Agreement may not be amended, supplemented or otherwise modified except in a
written document signed by each party to be bound by the amendment and that
identifies itself as an amendment to this Agreement. Any amendment of
this Agreement signed by the Stockholder Representative is binding upon and
effective against each Stockholder regardless of whether or not such Stockholder
has in fact signed such amendment.
52
10.4 Waiver and
Remedies. The parties may (a) extend the time for
performance of any of the obligations or other acts of any other party to this
Agreement, (b) waive any inaccuracies in the representations and warranties
of any other party to this Agreement contained in this Agreement or in any
certificate, instrument or document delivered pursuant to this Agreement or
(c) waive compliance with any of the covenants, agreements or conditions
for the benefit of such party contained in this Agreement. Any such
extension or waiver by any party to this Agreement will be valid only if set
forth in a written document signed on behalf of the party or parties against
whom the waiver or extension is to be effective. Any such extension
or waiver signed by the Stockholder Representative is binding upon and effective
against each Stockholder regardless of whether or not such Stockholder has in
fact signed the extension or waiver. No extension or waiver will
apply to any time for performance, inaccuracy in any representation or warranty,
or noncompliance with any covenant, agreement or condition, as the case may be,
other than that which is specified in the written extension or
waiver. No failure or delay by any party in exercising any right or
remedy under this Agreement or any of the documents delivered pursuant to this
Agreement, and no course of dealing between the parties, operates as a waiver of
such right or remedy, and no single or partial exercise of any such right or
remedy precludes any other or further exercise of such right or remedy or the
exercise of any other right or remedy. Any enumeration of a party’s
rights and remedies in this Agreement is not intended to be exclusive, and a
party’s rights and remedies are intended to be cumulative to the extent
permitted by law and include any rights and remedies authorized in law or in
equity.
10.5 Entire
Agreement. This Agreement (including the Ancillary Agreements
and the schedules and exhibits hereto and the documents and instruments referred
to in this Agreement that are to be delivered at the Closing) constitutes the
entire agreement among the parties and supersedes any prior understandings,
agreements or representations by or among the parties, or any of them, written
or oral, with respect to the subject matter of this Agreement.
10.6 Assignment and
Successors. This Agreement binds and benefits the parties and
their respective heirs, executors, administrators, successors and assigns,
except that the Company may not assign any rights under this Agreement without
the prior written consent of the Purchaser. Except as provided in
Section 10.1, no party may delegate any performance of its obligations under
this Agreement. Except as set forth in Section 7.2 hereof,
nothing expressed or referred to in this Agreement will be construed to give any
third party or other Person, other than the parties to this Agreement (including
the Stockholders), any legal or equitable right, remedy or claim under or with
respect to this Agreement or any provision of this Agreement except such rights
as may inure to a successor or permitted assignee under this
Section.
10.7 Severability. If
any provision of this Agreement is held invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions of this
Agreement are not affected or impaired in any way and the parties agree to
negotiate in good faith to replace such invalid, illegal and unenforceable
provision with a valid, legal and enforceable provision that achieves, to the
greatest lawful extent under this Agreement, the economic, business and other
purposes of such invalid, illegal or unenforceable provision.
10.8 Exhibits and
Schedules. The exhibits and schedules to this Agreement are
incorporated herein by reference and made a part of this
Agreement. The Company Disclosure Schedule is arranged in sections
and paragraphs corresponding to the numbered and lettered sections and
paragraphs of Article 3. The disclosure in any section or
paragraph of the Company Disclosure Schedule qualifies other sections and
paragraphs in this Agreement to the extent the relevance of such information is
reasonably apparent on the face of such sections and will be deemed to modify
the representations and warranties in Article 3 whether or not such
representations and warranties refer to such Company Disclosure
Schedule. The inclusion of any specific item in the Company
Disclosure Schedule, including higher or lower dollar amounts than the dollar
amount specified in the representations and warranties contained in this
Agreement, is not intended to imply that such items so included are or are not
required to be disclosed, and neither party will use the fact of the inclusion
of any such item in the Company Disclosure Schedule in any dispute or
controversy with any party as to whether any obligation, item or matter not
described herein or included in a section is or is not required to be
disclosed. The information contained in the Company Disclosure
Schedule is disclosed solely for the purposes of this Agreement, and no
information contained therein will be deemed to be an admission by any party
hereto to any third party of any matter whatsoever, including of any violation
of Law or breach of any agreement.
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10.9 Interpretation. The
language used in this Agreement is the language chosen by the parties to express
their mutual intent, and no provision of this Agreement will be interpreted for
or against any party because that party or its attorney drafted the
provision.
10.10 Governing
Law. Other than the Escrow Agreement and Exchange Agent
Agreement, the internal laws of the State of Delaware (without giving effect to
any choice or conflict of law provision or rule (whether of the State of
Delaware or any other jurisdiction) that would cause the application of laws of
any other jurisdiction) govern all matters
arising out of or relating to this Agreement and its exhibits and schedules and
all of the transactions it contemplates, including its validity, interpretation,
construction, performance and enforcement and any disputes or controversies
arising therefrom.
10.11 Disputes. Any
dispute, controversy or claim (including any dispute arising under Article 9),
whether based on contract, tort, statute, fraud, misrepresentation or any other
legal theory arising out of or relating to this Agreement or the Ancillary
Agreements or any right or obligation under this Agreement or the Ancillary
Agreements, including as to this Agreement’s or the Ancillary Agreements’
existence, enforceability, validity, interpretation, performance,
indemnification, breach or damages, including claims in tort, whether arising
before or after the termination of this Agreement or the Ancillary Agreements,
will be settled exclusively by confidential binding arbitration conducted in San
Francisco, California in accordance with the JAMS Comprehensive Arbitration
Rules and Procedures then in effect as modified by the following provisions of
this Agreement:
(a) To the
extent that any misunderstanding or dispute cannot be resolved agreeably in a
friendly manner, either the Purchaser or the Stockholder Representative may
demand arbitration of the matter, and in such event the matter will be settled
by binding arbitration. The arbitration will be conducted by one
arbitrator mutually selected by the Purchaser and the Stockholder
Representative; provided that if the Purchaser and the Stockholder
Representative are unable to reach agreement with respect to the arbitrator, the
arbitrator will be chosen in accordance with the JAMS appointment
rules.
(b) Any such
arbitration will be conducted on an expedited basis in San Francisco,
California, under the Commercial Arbitration Rules then in effect of the
Judicial Arbitration and Mediation Services. The arbitration
proceedings will be scheduled to begin no more than 30 days after the filing of
the request for arbitration of such dispute and to conclude no later than 120
days after the filing of such request. Each party will bear its own
fees and expenses relating to the arbitration (including, reasonable attorneys’
fees and costs of investigation).
(c) The
Purchaser and the Stockholder Representative will be permitted to obtain and
take discovery, including requests for production, interrogatories, requests for
admissions and depositions, as provided by the Federal Rules of Civil Procedure;
provided, however, that the
arbitrator(s) will be permitted, in his/her discretion, to set parameters on the
timing and/or completion of this discovery and to order additional pre-hearing
exchange of information, including exchange of summaries of testimony or
exchange of statements of positions. The arbitration proceedings and
all testimony, filings, documents and information relating to or presented
during the arbitration proceedings will be disclosed exclusively for the purpose
of facilitating the arbitration process and for no other purpose.
54
(d) The
arbitrator(s) will only be authorized to, and will only have the consent of the
parties to, interpret and apply the terms and provisions of this Agreement in
accordance with the laws of the State of Delaware. The arbitrator(s)
will not be authorized to, and will not, order any remedy not permitted by this
Agreement and will not change any term or provision of this Agreement, deprive
either party of any remedy expressly provided hereunder or provide any right or
remedy that has not been expressly provided hereunder. In the event
that the arbitrator(s) exceed his or her authority under this Agreement and
violate this provision, either the Purchaser or the Stockholder Representative
will be entitled to petition a court of competent jurisdiction to vacate the
arbitration award on the grounds that the arbitrator exceeded his or her
authority.
(e) The
decision of the arbitrator or a majority of the three arbitrators, as
applicable, as to the dispute will be final, binding, and conclusive upon the
parties to this Agreement and will not be appealable. Such decision
must be in English, written and supported by written findings of fact and
conclusions which set forth the award, judgment, decree or order awarded by the
arbitrator(s).
(f) Judgment
upon any award rendered by the arbitrator(s) may be entered in any court having
jurisdiction.
10.12 Injunctive
Relief. Each of the parties hereto acknowledges and agrees
that, in the event of any breach of, or any failure to perform, any specific
provision of this Agreement, the non-breaching party would be irreparably and
immediately harmed and could not be made whole by monetary damages. It is
accordingly agreed that the parties hereto (x) will be entitled, in
addition to any other remedy to which they may be entitled at law or in equity,
to compel specific performance of any specific provision of this Agreement or to
obtain injunctive relief to prevent breaches of any specific provision of this
Agreement exclusively pursuant to Section 10.11, (y) will waive, in
any action for specific performance or injunctive relief, the defense of the
adequacy of a remedy at law, and (z) will waive any requirement for the
securing or posting of any bond in connection with the obtaining of any such
specific performance or injunctive relief.
10.13 Waiver of Jury
Trial. EACH OF THE PARTIES HERETO EXPRESSLY WAIVES AND
FOREGOES ANY RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY SUIT, ACTION OR
PROCEEDING SEEKING ENFORCEMENT OF SUCH PARTY’S RIGHTS UNDER THIS AGREEMENT, ANY
ANCILLARY AGREEMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR
THEREBY OR ENTERED INTO IN CONNECTION HEREWITH OR THEREWITH OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
10.14 Limitation of
Liabilities. IN NO EVENT WILL ANY PARTY WHICH IS A SIGNATORY
TO THIS AGREEMENT BE LIABLE TO ANY PARTY OR OTHER PERSON FOR ANY LOST PROFITS,
OTHER CONSEQUENTIAL, SPECIAL, INCIDENTAL, INDIRECT, COLLATERAL OR PUNITIVE
DAMAGES OF ANY KIND, REGARDLESS OF WHETHER SUCH PARTY WILL BE ADVISED, WILL HAVE
OTHER REASON TO KNOW, OR IN FACT WILL KNOW OF THE POSSIBILITY OF THE FOREGOING
UNLESS, SOLELY WITH RESPECT TO CONSEQUENTIAL OR SPECIAL (TO THE EXTENT THAT SUCH
DAMAGES ARE DEEMED TO BE CONSEQUENTIAL), ANY SUCH DAMAGES ARE PART OF A JUDGMENT
IN CONNECTION WITH A CLAIM OF A THIRD PERSON AGAINST AN INDEMNIFIED
PARTY.
10.15 Counterparts. The
parties may execute this Agreement in multiple counterparts, each of which
constitutes an original as against the party that signed it, and all of which
together constitute one agreement. This Agreement is effective upon
delivery of one executed counterpart from each party to the other
parties. The signatures of all parties need not appear on the same
counterpart. The delivery of signed counterparts by facsimile or
email transmission that includes a copy of the sending party’s signature is as
effective as signing and delivering the counterpart in person.
55
10.16 Expenses. Each
party will bear its respective direct and indirect expenses incurred in
connection with the preparation and negotiation of this Agreement and the
consummation of the transactions contemplated by this Agreement, including all
fees and expenses of its advisors and representatives.
10.17 Construction. Any
reference in this Agreement to an “Article,” “Section,” “Exhibit” or “Schedule”
refers to the corresponding Article, Section, Exhibit or Schedule of or to
this Agreement, unless the context indicates otherwise. Any reference
in this Agreement to “hereof” or “herein” refers to this Agreement as a whole
and not to any specific Section, subsection, paragraph, exhibit or
schedule. The table of contents and the headings of Articles and
Sections are provided for convenience only and are not intended to affect
the construction or interpretation of this Agreement. All words used
in this Agreement should be construed to be of such gender or number as the
circumstances require. The term “including” means “including without
limitation” and is intended by way of example and not limitation. Any
reference to a statute is deemed also to refer to any amendments or successor
legislation, and all rules and regulations promulgated thereunder, as in effect
at the relevant time. Any reference to a Contract or other document
as of a given date means the Contract or other document as amended, supplemented
and modified from time to time through such date.
[Signature
page follows]
56
“Purchaser”
PLX
TECHNOLOGY, INC., a Delaware corporation
By: /s/
Xxxxx X. Xxxxxxx
Name:
Xxxxx X. Xxxxxxx
Title:
President and CEO
“Merger
Sub”
OSPREY
ACQUISITION SUB, INC., a Delaware corporation
By: /s/
Xxxxx X.
Xxxxxxx
Name:
Xxxxx X. Xxxxxxx
Title: President and CEO
|
“Company”
OXFORD
SEMICONDUCTOR, INC., a Delaware corporation
By: /s/
Xxxxxxx Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title:
President and CEO
“Stockholder
Representative”
VANTAGEPOINT
VENTURE PARTNERS IV (Q) , L.P., solely for the purposes related to the
Stockholder Representative as set forth herein
By: /s/
Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Managing
Member
|