EXHIBIT 1.02
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (the "AGREEMENT"), dated as of November
11, 2004, by and among Transmeta Corporation, a Delaware corporation, with
headquarters located at 0000 Xxxxxxx Xxxxxx, Xxxxx Xxxxx, XX 00000 (the
"COMPANY"), and the investors listed on the Schedule of Buyers attached hereto
(individually, a "BUYER" and collectively, the "BUYERS").
WHEREAS:
A. The Company and each Buyer desire to enter into this transaction
to purchase the securities set forth herein pursuant to a currently effective
shelf registration statement on Form S-3, which has $16,625,000 in unallocated
securities registered thereunder (Registration Number 333-107113) (the
"REGISTRATION STATEMENT"), which Registration Statement has been declared
effective in accordance with the Securities Act of 1933, as amended (the "1933
ACT"), by the United States Securities and Exchange Commission (the "SEC").
B. Each Buyer wishes to purchase, and the Company wishes to sell,
upon the terms and conditions stated in this Agreement, that aggregate number of
shares of common stock, par value $0.00001 per share, of the Company (the
"COMMON STOCK"), set forth opposite such Buyer's name in column (3) on the
Schedule of Buyers (which aggregate amount for all Buyers together shall be
11,083,333 shares of Common Stock and shall collectively be referred to herein
as the "PURCHASED SHARES").
C. The Purchased Shares are sometimes referred to herein as the
"SECURITIES".
NOW, THEREFORE, the Company and each Buyer hereby agree as follows:
1. PURCHASE AND SALE OF PURCHASED SHARES.
(a) Purchase of Purchased Shares.
Subject to the satisfaction (or waiver) of the conditions
set forth in Sections 6 and 7 below, the Company shall issue and sell to each
Buyer, and each Buyer severally, but not jointly, agrees to purchase from the
Company on the Closing Date (as defined below), the number of Purchased Shares
as is set forth opposite such Buyer's name in column (3) on the Schedule of
Buyers (the "CLOSING"). The Closing shall occur on the Closing Date at the
offices of Xxxxxxx Xxxx & Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(b) Purchase Price. The purchase price for each Purchased Share
to be purchased by each Buyer at the Closing shall be $1.50 (the "PURCHASE
PRICE").
(c) Closing Date. The date and time of the Closing (the "CLOSING
DATE") shall be 10:00 a.m., New York City Time, on November 12, 2004, after
notification of satisfaction (or waiver) of the conditions to the Closing set
forth in Sections 6 and 7 below (or such later date as is mutually agreed to by
the Company and each Buyer).
(d) Form of Payment. On the Closing Date, (i) each Buyer shall
pay its Purchase Price to the Company for the Purchased Shares to be issued and
sold to such Buyer at the Closing, by wire transfer of immediately available
funds in accordance with the Company's written wire instructions, and (ii) the
Company shall cause the Company's transfer agent (the "TRANSFER AGENT") through
the Depository Trust Company ("DTC") Fast Automated Securities Transfer Program,
to credit such aggregate number of Purchased Shares that such Buyer is
purchasing as is set forth opposite such Buyer's name in column (3) of the
Schedule of Buyers to such Buyer's or its designee's balance account with DTC
through its Deposit Withdrawal Agent Commission system as specified by such
Buyer.
2. REPRESENTATIONS AND WARRANTIES OF EACH BUYER.
Each Buyer represents and warrants with respect to only itself
that:
(a) Validity; Enforcement. This Agreement has been duly and
validly authorized, executed and delivered on behalf of such Buyer and
constitutes the legal, valid and binding obligation of such Buyer enforceable
against such Buyer in accordance with its terms, except as such enforceability
may be limited by general principles of equity or to applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation and other similar laws
relating to, or affecting generally, the enforcement of applicable creditors'
rights and remedies.
(b) No Conflicts. The execution, delivery and performance by
such Buyer of this Agreement and the consummation by such Buyer of the
transactions contemplated hereby will not (i) result in a violation of the
organizational documents of such Buyer or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
such Buyer is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws) applicable to such Buyer, except in the case of clauses (ii) and (iii)
above, for such conflicts, defaults, rights or violations which would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Buyer to perform its obligations
hereunder.
(c) Residency. Such Buyer is a resident of that jurisdiction
specified below its address on the Schedule of Buyers.
(d) Certain Trading Activities. Neither such Buyer nor any of
its affiliates with knowledge of the transaction has engaged in any hedging
transactions with respect to the Common Stock since the time that such Buyer was
first contacted by the Company or the Agent (as defined below) regarding the
transaction contemplated hereby.
(e) No Other Representations and Warranties. Each Buyer hereby
acknowledges that, except for the representations and warranties contained in
the Transaction Documents (as defined below), the Company is not making any
other express or implied representation or warranty on its behalf in connection
with the transactions contemplated hereby. Each Buyer hereby further
acknowledges that it is not relying on any other party, including without
limitation the Agent (as defined below), to perform due diligence or any other
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investigation with respect to the Company or the transactions contemplated
hereby, and understands that no comfort letter will be delivered by the Company
to the Agent or any other party in connection with the transactions contemplated
hereby.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby makes the following representations and warranties
to each Buyer:
(a) Subsidiaries. The Company has no direct or indirect
subsidiaries (the "SUBSIDIARIES") other than those listed in the SEC Reports (as
defined below). Except as disclosed in the SEC Reports, the Company owns,
directly or indirectly, all of the capital stock of each Subsidiary free and
clear of any lien, charge, security interest, encumbrance, right of first
refusal or other restriction (collectively, "LIENS"), and all the issued and
outstanding shares of capital stock of each Subsidiary are validly issued and
are fully paid, non-assessable and free of preemptive and similar rights.
(b) Organization and Qualification. Each of the Company and each
Subsidiary is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted. Neither the Company nor any Subsidiary is in violation
of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents. Each of the
Company and the Subsidiaries is duly qualified to do business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which
the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not, individually or in the aggregate: (i)
adversely affect the legality, validity or enforceability of this Agreement and
any other documents or agreements executed in connection with the transactions
contemplated hereunder (the "TRANSACTION DOCUMENTS"), (ii) have or result in a
material adverse effect on the results of operations, assets, business or
condition (financial or otherwise) of the Company and the Subsidiaries, taken as
a whole, or (iii) adversely impair the Company's ability to perform fully on a
timely basis its obligations under any of the Transaction Documents (any of (i),
(ii) or (iii), a "MATERIAL ADVERSE EFFECT").
(c) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of the Company and no further consent or action is
required by the Company, its Board of Directors or its stockholders. Each of the
Transaction Documents has been (or upon delivery will be) duly executed by the
Company and is, or when delivered in accordance with the terms hereof, will
constitute, the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms.
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(d) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby do not and will not: (i) conflict
with or violate any provision of the Company's or any Subsidiary's certificate
or articles of incorporation, bylaws or other organizational or charter
documents, or (ii) subject to obtaining the Required Approvals (as defined
below), conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or
(iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which the Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not, individually or in the aggregate,
have or result in a Material Adverse Effect.
(e) Filings, Consents and Approvals. Neither the Company nor
any Subsidiary is required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than (i) the filings required under Section 4(f),
(ii) the filing with the SEC of the prospectus supplement required by the
Registration Statement pursuant to Rule 424(b) under the 1933 Act (the
"PROSPECTUS SUPPLEMENT") supplementing the base prospectus forming part of the
Registration Statement (such base prospectus, together with the Prospectus
Supplement and all information incorporated by reference to SEC Reports (as
defined below) therein, the "PROSPECTUS"), (iii) the notification to the Nasdaq
National Market (the "PRINCIPAL MARKET") of the listing of the Purchased Shares
for trading thereon in the time and manner required thereby, and (iv) any
applicable Blue Sky filings (collectively, the "REQUIRED APPROVALS"). "PERSON"
means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.
(f) Issuance of the Securities. The Securities are duly
authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens. The issuance by the Company of the
Securities has been registered under the 1933 Act and all of the Securities
will, when issued, be freely transferable and tradable by the Buyers without
restriction. The Purchased Shares are being issued pursuant to the Registration
Statement and the issuance of the Purchased Shares has been registered by the
Company under the 1933 Act. The Registration Statement is effective and
available for the issuance of the Securities thereunder and the Company has not
received any notice that the SEC has issued or intends to issue a stop-order
with respect to the Registration Statement or that the SEC otherwise has
suspended or withdrawn the effectiveness of the Registration Statement, either
temporarily or permanently, or intends or has threatened in writing to do so.
The "Plan of Distribution" section under the Prospectus
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permits the issuance and sale of the Securities hereunder. Upon receipt of the
Securities, the Buyers will have good and marketable title to such Securities
and the Purchased Shares will be freely tradable on the Principal Market. The
Purchased Shares will constitute less than 10% of the issued and outstanding
shares of Common Stock of the Company on the date of the issuance of the
Purchased Shares.
(g) Capitalization. The number of shares and type of all
authorized, issued and outstanding capital stock, options and other securities
of the Company (whether or not presently convertible into, or exercisable or
exchangeable for, shares of capital stock of the Company) is set forth in the
Prospectus. All outstanding shares of capital stock of the Company are duly
authorized, validly issued, fully paid and nonassessable and have been issued in
compliance with all applicable securities laws. No securities of the Company are
entitled to preemptive or similar rights, and no Person has any right of first
refusal, preemptive right, right of participation, or any similar right to
participate in the transactions contemplated by the Transaction Documents,
except as set forth in the Prospectus. Except as a result of the purchase and
sale of the Securities or except as disclosed in the Prospectus, there are no
outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for, or giving any Person any right
to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible into or exercisable or exchangeable for shares
of Common Stock. There are no anti-dilution or price adjustment provisions
contained in any security issued by the Company (or in any agreement providing
rights to security holders) that are not described in the Prospectus and the
issuance and sale of the Securities will not obligate the Company to issue
shares of Common Stock or other securities to any Person (other than the Buyers)
and will not result in a right of any holder of Company securities to adjust the
exercise, conversion, number of issuable shares, exchange or reset price under
such securities. The Company will not authorize the issuance of any additional
securities unless there are sufficient authorized shares of Common Stock (or any
successor security thereto) available, taking into account all potential
adjustments or anti-dilution provisions in such securities, to satisfy the
rights of the Buyers to acquire the Securities. Further, if at any time the
number of shares of Common Stock available for issuance were insufficient for
any reason to satisfy such rights of the Buyers, the Company would take
immediate action to cause sufficient authorized shares to be authorized or
effect a reverse stock split to provide sufficient shares to be available.
(h) SEC Reports; Financial Statements. The Company has filed all
reports required to be filed by it under the 1933 Act and 1934 Act, including
pursuant to Section 13(a) or 15(d) thereof, for the two (2) years preceding the
date hereof (or such shorter period as the Company was required by law to file
such material) (the foregoing materials being collectively referred to herein as
the "SEC REPORTS") on a timely basis or has received a valid extension of such
time of filing and has filed any such SEC Reports prior to the expiration of any
such extension. The Company has made available to each Buyer a true, correct and
complete copy of all SEC Reports filed within the ten (10) days preceding the
date hereof. As of their respective dates, the SEC Reports complied in all
material respects with the requirements of the 1933 Act and the 1934 Act and the
rules and regulations of the SEC promulgated thereunder, and none of
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the SEC Reports, when filed, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The Registration Statement, the Prospectus
and the Prospectus Supplement, complied in all material respects with the
requirements of the 1933 Act and the 1934 Act and the rules and regulations of
the SEC promulgated thereunder, and none of such Registration Statement or any
such prospectus contain or contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the case of any prospectus in the light
of the circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the SEC with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
("GAAP"), except as may be otherwise specified in such financial statements or
the notes thereto, and fairly present in all material respects the financial
position of the Company and its consolidated subsidiaries as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.
(i) Material Changes. Since the date of the latest audited
financial statements included within the SEC Reports, except as specifically
disclosed in the SEC Reports: (i) there has been no event, occurrence or
development that, individually or in the aggregate, has had or that could result
in a Material Adverse Effect, (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice and
(B) liabilities not required to be reflected in the Company's financial
statements pursuant to GAAP or required to be disclosed in filings made with the
SEC, (iii) the Company has not altered its method of accounting or the identity
of its auditors, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock, and (v) the Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company stock option plans or
the existing Company employee stock purchase plan. "AFFILIATE" means any Person
that, directly or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with a Person, as such terms are used
in and construed under Rule 144. "RULE 144" means Rule 144 promulgated by the
SEC pursuant to the 1933 Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the SEC having substantially
the same effect as such Rule.
(j) Litigation. There is no action, suit, inquiry, notice of
violation, proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company, any Subsidiary or any of
their respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an "ACTION") which: (i) adversely affects or challenges
the legality, validity or enforceability of any of the Transaction Documents or
the Securities or (ii) could, if there were an unfavorable decision,
individually or in the aggregate, have or result in a Material Adverse Effect.
Except as set forth in the SEC Reports, neither the Company nor any
6
Subsidiary, nor any director or officer thereof, is or has been the subject of
any Action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty that could, individually
or in the aggregate, have or result in a Material Adverse Effect. To the
knowledge of the Company, there is not pending or contemplated, any
investigation by the SEC involving the Company or any current or former director
or officer of the Company. The SEC has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by the Company
or any Subsidiary under the 1934 Act or the 1933 Act, including the Registration
Statement.
(k) Compliance. Neither the Company nor any Subsidiary: (i) is
in default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
the Company or any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) to the
knowledge of the Company, is in violation of any order of any court, arbitrator
or governmental body, or (iii) is or has been in violation of any statute, rule
or regulation of any governmental authority, except in each case as could not,
individually or in the aggregate, have or result in a Material Adverse Effect.
(l) Labor Relations. No strike, work stoppage, slow down or
other material labor problem exists or, to the knowledge of the Company, is
threatened or imminent with respect to any of the employees of the Company or
any Subsidiary.
(m) Regulatory Permits. The Company and the Subsidiaries possess
all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits could not, individually or in the aggregate, have or
result in a Material Adverse Effect ("MATERIAL PERMITS"), and neither the
Company nor any Subsidiary has received any notice of proceedings relating to
the revocation or modification of any Material Permit.
(n) Title to Assets. The Company and the Subsidiaries have good
and marketable title in fee simple to all real property owned by them that is
material to the business of the Company and the Subsidiaries and good and
marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Company and the Subsidiaries. Any real property and
facilities held under lease by the Company and the Subsidiaries are held by them
under valid, subsisting and enforceable leases of which the Company and the
Subsidiaries are in compliance.
(o) Patents and Trademarks. To the knowledge of the Company,
the Company and the Subsidiaries have, or have rights to use, all patents,
patent applications, trademarks, trademark applications, service marks, trade
names, copyrights, licenses and other similar rights that are necessary for use
in connection with their respective businesses as
7
described in the SEC Reports and where the failure to do so has or could have a
Material Adverse Effect (collectively, the "INTELLECTUAL PROPERTY RIGHTS"). None
of the Intellectual Property Rights has expired or terminated, or is expected to
expire or terminate within two years from the date of this Agreement. Neither
the Company nor any Subsidiary has received since the date of the latest audited
financial statements included within the SEC Reports, a written notice of a
claim or otherwise has any knowledge that the Intellectual Property Rights
violate or infringe upon the rights of any Person, except as would not have a
Material Adverse Effect. To the knowledge of the Company, all such Intellectual
Property Rights are enforceable.
(p) Insurance. To the knowledge of the Company, the Company and
the Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which the Company and the Subsidiaries are engaged. Neither
the Company nor any Subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business without a significant increase in cost, except for cost
increases being experienced by public companies in similar businesses and risk
categories.
(q) Transactions With Affiliates and Employees. Except as set
forth in SEC Reports filed at least ten (10) days prior to the date hereof, none
of the officers or directors of the Company and, to the knowledge of the
Company, none of the employees of the Company is presently a party to any
transaction with the Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the
Company, any entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner.
(r) Internal Accounting Controls. Except as set forth in the
Prospectus, the Company and the Subsidiaries maintain 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 generally accepted
accounting principles 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 financial records of the Company accurately
reflect in all material respects the information relating to the business of the
Company, the location and collection of its assets, and the nature of all
transactions giving rise to the obligations or accounts receivable of the
Company. Except as set forth in the Prospectus, the Company has established
disclosure controls and procedures (as defined in 1934 Act Rules 13a-14 and
15d-14) for the Company and designed such disclosures controls and procedures to
ensure that material information relating to the Company is made known to the
certifying officers by others within the Company, particularly during the period
in which the Company's Form 10-K or 10-Q, as the case may be, is being prepared.
The Company's certifying officers have evaluated the effectiveness of the
Company's controls and procedures as of a date within 90 days prior to the
filing date of the
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Form 10-K for the year ended December 31, 2003 (such date, the "EVALUATION
DATE"). The Company presented in the Form 10-K for the year ended December 31,
2003, the conclusions of the certifying officers about the effectiveness of the
disclosure controls and procedures based on their evaluations as of the
Evaluation Date. Except as set forth in the Prospectus, since the Evaluation
Date, there have been no significant changes in the Company's internal controls
(as such term is defined in Item 307(b) of Regulation S-K under the 0000 Xxx)
or, the knowledge of the Company, in other factors that could significantly
affect the Company's internal controls.
(s) Solvency. Based on the financial condition of the Company as
of date hereof and as of the Closing Date: (i) the Company's fair saleable value
of its assets exceeds the amount that will be required to be paid on or in
respect of the Company's existing debts and other liabilities (including known
contingent liabilities) as they mature; (ii) except as set forth in the
Prospectus, the Company's assets do not constitute unreasonably small capital to
carry on its business for the current fiscal year as now conducted and as
proposed to be conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the Company, and
projected capital requirements and capital availability thereof; and (iii) the
current cash flow of the Company, together with the proceeds the Company would
receive, were it to liquidate all of its assets, after taking into account all
anticipated uses of the cash, would be sufficient to pay all amounts on or in
respect of its debt when such amounts are required to be paid. The Company does
not intend to incur debts beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be payable on or in
respect of its debt).
(t) Certain Fees. Except for the fees described in the
Prospectus Supplement, all of which are payable by the Company to the registered
broker-dealers named therein, no brokerage or finder's fees or commissions are
or will be payable by the Company to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by this Agreement, and the Company
has not taken any action that would cause any Buyer to be liable for any such
fees or commissions. The Company agrees that the Buyers shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf of
any Person for fees of the type contemplated by this Section in connection with
the transactions contemplated by this Agreement.
(u) Integration. Neither the Company, nor any of its Affiliates,
nor any Person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security,
under circumstances that would cause this offering of the Securities to be
integrated with prior offerings by the Company for purposes of any applicable
stockholder approval provisions, including, without limitation, under the rules
and regulations of any exchange or automated quotation system on which any of
the securities of the Company are listed or designated, nor will the Company or
any of its Subsidiaries take any action or steps that would cause the offering
of the Securities to be integrated with other offerings.
(v) Listing and Maintenance Requirements. The Company has not,
in the 12 months preceding the date hereof, received notice from the Principal
Market on which the Common Stock is or has been listed or quoted to the effect
that the Company is not in
9
compliance with the listing or maintenance requirements of the Principal Market.
The Company is, and has no reason to believe that it will not in the foreseeable
future continue to be (except as a result of a failure in the future to comply
with minimum trading price requirements), in compliance with all such listing
and maintenance requirements. The issuance and sale of the Securities hereunder
does not contravene the rules and regulations of the Principal Market and no
shareholder approval is required for the Company to fulfill its obligations
under the Transaction Documents. The Common Stock is currently listed on the
Principal Market.
(w) Registration Rights. No holder of securities of the Company
has rights to the registration of any securities of the Company because of the
filing of the Registration Statement or the issuance of the Securities hereunder
that could expose the Company to material liability or any Holder to any
liability or that could impair the Company's ability to consummate the issuance
and sale of the Securities in the manner, and at the times, contemplated hereby,
which rights have not been waived by the holder thereof as of the date hereof.
(x) Application of Takeover Protections. The Company 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 Company's Certificate of Incorporation (or
similar charter documents) or the laws of its state of incorporation that is or
could become applicable to the Buyers as a result of the Buyers and the Company
fulfilling their obligations or exercising their rights under the Transaction
Documents, including, without limitation, as a result of the Company's issuance
of the Securities and the Buyers' ownership of the Securities.
(y) Investment Company. The Company is not, and is not an
Affiliate of, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(z) Xxxxxxxx-Xxxxx Act. The Company is in compliance with
any and all applicable requirements of the Xxxxxxxx-Xxxxx Act of 2002 that are
effective as of the date hereof, and any and all applicable rules and
regulations promulgated by the SEC thereunder that are effective as of the date
hereof, except where such noncompliance would not have a Material Adverse
Effect.
(aa) Disclosure. The Company confirms that neither it nor any
other Person acting on its behalf has provided any of the Buyers or their agents
or counsel with any information that the Company believes constitutes nonpublic
information. The Company understands and confirms that the Buyers will rely on
the foregoing representations in effecting transactions in securities of the
Company. The Company acknowledges and agrees that no Buyer makes or has made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 2.
10
4. COVENANTS.
(a) Best Efforts. Each party shall use its best efforts timely
to satisfy each of the covenants and the conditions to be satisfied by it as
provided in Sections 5, 6 and 7 of this Agreement.
(b) Prospectus Supplement and Blue Sky. On or before the
execution of this Agreement, the Company shall have delivered, and as soon as
practicable after the Closing the Company shall file, the Prospectus Supplement
with respect to the Securities as required under and in conformity with the 1933
Act, including Rule 424(b) thereunder. If required, the Company, on or before
the Closing Date, shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for or to qualify the
Securities for sale to the Buyers at the Closing pursuant to this Agreement
under applicable securities or "Blue Sky" laws of the states of the United
States (or to obtain an exemption from such qualification), and shall provide
evidence of any such action so taken to the Buyers on or prior to the Closing
Date. The Company shall make all filings and reports relating to the offer and
sale of the Securities required under applicable securities or "Blue Sky" laws
of the states of the United States following the Closing Date.
(c) Reporting Status. Until at least three months from the
Closing Date, the Company shall timely file all reports required to be filed
with the SEC pursuant to the 1934 Act, and the Company shall not terminate its
status as an issuer required to file reports under the 1934 Act even if the 1934
Act or the rules and regulations thereunder would otherwise permit such
termination.
(d) Listing. The Company shall promptly secure the listing of
all of the Purchased Shares upon each national securities exchange and automated
quotation system, if any, upon which the Common Stock is then listed (subject to
official notice of issuance) and shall maintain, so long as any other shares of
Common Stock shall be so listed, such listing of all shares of Common Stock from
time to time issuable under the terms of the Transaction Documents. The Company
shall maintain the Common Stock's authorization for listing on the Principal
Market until at least three months from the Closing Date. For at least three
months from the Closing Date, neither the Company nor any of its Subsidiaries
shall take any action for which would be reasonably expected to result in the
delisting or suspension of the Common Stock on the Principal Market. The Company
shall pay all fees and expenses in connection with satisfying its obligations
under this Section 4(d).
(e) Fees. The Company shall be responsible for the payment of
any placement agent's fees, financial advisory fees, or broker's commissions
(other than for Persons engaged by any Buyer) relating to or arising out of the
transactions contemplated hereby, including, without limitation, any fees or
commissions payable to X.X. Xxxxxxx & Sons' and Perseus Group (collectively, the
"Agent"). The Company shall pay, and hold each Buyer harmless against, any
liability, loss or expense (including, without limitation, reasonable attorney's
fees and out-of-pocket expenses) arising in connection with any claim relating
to any such payment. On the Closing Date, the Company shall reimburse the Buyers
for its expenses reasonably incurred in connection with this Agreement and the
Transaction Documents,
11
including, without limitation, legal fees and expenses, up to $30,000 in the
aggregate, which shall be allocated to Riverview Group, LLC (a Purchaser) or its
designee(s), which amount shall be withheld by such Buyer from its Purchase
Price at the Closing. Except as otherwise set forth in this Agreement or in the
Transaction Documents, each party to this Agreement shall bear its own expenses
in connection with the sale of the Securities to the Buyers.
(f) Disclosure of Transactions and Other Material Information.
The Company shall, on or before 8:30 a.m., New York City Time, on November 12,
2004, issue a press release reasonably acceptable to the Buyers disclosing all
material terms of the transactions contemplated hereby. On or before 8:30 a.m.,
New York City Time, on November 12, 2004, the Company shall file a Current
Report on Form 8-K describing the terms of the transactions contemplated by the
Transaction Documents in the form required by the 1934 Act, and attaching the
form of this Agreement as an exhibit to such filing (including all attachments,
the "8-K FILING"). The Company shall not, and shall cause each of its
Subsidiaries and each of their respective officers, directors, employees and
agents, not to, provide any Buyer with any material, nonpublic information
regarding the Company or any of its Subsidiaries from and after the filing of
the press release referred to in the first sentence of this Section without the
express written consent of such Buyer. In the event of a breach of the foregoing
covenant by the Company, any Subsidiary, or its each of respective officers,
directors, employees and agents, in addition to any other remedy provided herein
or in the Transaction Documents, a Buyer shall have the right to make a public
disclosure, in the form of a press release, public advertisement or otherwise,
of such material, nonpublic information without the prior approval by the
Company, its Subsidiaries, or any of its or their respective officers,
directors, employees or agents. No Buyer shall have any liability to the
Company, its Subsidiaries, or any of its or their respective officers,
directors, employees, shareholders or agents for any such disclosure. Subject to
the foregoing, neither the Company nor any Buyer shall issue any press releases
or any other public statements with respect to the transactions contemplated
hereby nor shall the Company disclose the name of any Buyer in any filing,
announcement, release or otherwise; provided, however, that the Company shall be
entitled, without the prior approval of any Buyer, to make any press release or
other public disclosure with respect to such transactions (i) in substantial
conformity with the 8-K Filing and contemporaneously therewith and (ii) as is
required by applicable law and regulations, including the applicable rules and
regulations of the Principal Market (provided that in the case of clause (i)
each Buyer shall be consulted by the Company in connection with any such press
release or other public disclosure prior to its release).
(g) Additional Issuances of Securities.
(i) For purposes of this Section 4(g), the following
definitions shall apply.
(1) "COMMON STOCK EQUIVALENTS" means, collectively,
Options and Convertible Securities.
(2) "CONVERTIBLE SECURITIES" means any stock or
securities (other than Options) convertible into or exercisable or exchangeable
for Common Stock.
12
(3) "OPTIONS" means any rights, warrants or options
to subscribe for or purchase Common Stock or Convertible Securities.
(ii) Except as set forth in subsection (iv) below, from the
date hereof until the date that is three (3) weeks after the Closing Date, the
Company will not, directly or indirectly, sell, grant any option to purchase, or
otherwise dispose of (or announce any sale, grant or any option to purchase or
other disposition of) any of its or its Subsidiaries' equity or equity
equivalent securities, including without limitation pursuant to any registration
statement, shelf registration statement, equity line or otherwise, or any debt,
preferred stock or other instrument or security that is, at any time during its
life and under any circumstances, convertible into or exchangeable or
exercisable for Common Stock or Common Stock Equivalents (any such sale, grant,
disposition or announcement being referred to as a "SUBSEQUENT PLACEMENT").
(iii) The restrictions contained in subsection (ii) of this
Section 4(g) shall not apply in shall not apply (A) in connection with any
employee benefit plan which has been approved by the Board of Directors or
Compensation Committee of the Company, pursuant to which the Company's
securities may be issued to any employee, officer, director or consultant for
services provided to the Company or any of its Subsidiaries, or pursuant to the
exercise of any securities of the Company issued thereunder; (B) upon exercise
or conversion of any Options or Convertible Securities that are outstanding on
the day immediately preceding the Closing Date, provided, that the terms of such
Options or Convertible Securities are not amended, modified or changed on or
after the date hereof; (C) in connection with any bona fide strategic
transaction or acquisition by the Company, whether through an acquisition for
stock or a merger, of any business, assets or technologies the primary purpose
of which is not to raise equity capital; (D) issuances to vendors or customers
or to other persons in similar commercial situations of the Company if approved
by the Company's Board of Directors and the primary purpose of which is not to
raise equity capital; (E) in connection with any bona fide strategic or
corporate partnering or other commercial transaction if approved by the
Company's Board of Directors and the primary purpose of which is not to raise
equity capital; and (F) pursuant to a bona fide firm commitment underwritten
public offering with a nationally recognized underwriter which generates gross
proceeds to the Company in excess of $35,000,000 (other than an "at-the-market
offering" as defined in Rule 415(a)(4) under the 1933 Act and "equity lines").
(a) Limitations on Trading. Each Buyer covenants and agrees,
other than at a time that the reported trading price of the Common Stock equals
or exceeds $2.00 per share, that it shall not sell, exchange or transfer any
shares of Common Stock on any trading day in an amount that would cause such
Buyer and its affiliates, directly or indirectly, to have made in excess of 15%
of the daily trading volume of the Common Stock on the Principal Market as
reported by Bloomberg Financial L.P. (based on a trading day from 9:30 a.m.
Eastern Time to 4:00 p.m. Eastern Time) on such trading day.
5. ISSUANCES; TRANSFER AGENT INSTRUCTIONS.
(a) Transfer Agent Instructions. The Company shall issue
irrevocable instructions to its transfer agent, and any subsequent transfer
agent, to issue certificates or credit
13
shares to the applicable balance accounts at DTC, registered in the name of each
Buyer or its respective nominee(s), for the Purchased Shares in such amounts as
specified from time to time by each Buyer to the Company. The Company represents
and warrants that no instruction other than the instructions referred to in this
Section 5 will be given by the Company to its transfer agent with respect to the
Securities, and that the Securities shall otherwise be freely transferable on
the books and records of the Company as and to the extent provided in this
Agreement and the other Transaction Documents.
(b) Breach. The Company acknowledges that a breach by it
of its obligations hereunder will cause irreparable harm to a Buyer.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Section 5 will be inadequate and agrees, in the event of
a breach or threatened breach by the Company of the provisions of this Section
5, that a Buyer shall be entitled, in addition to all other available remedies,
to an order and/or injunction restraining any breach and requiring immediate
issuance and transfer, without the necessity of showing economic loss and
without any bond or other security being required.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and sell the
Purchased Shares to each Buyer at the Closing is subject to the satisfaction, at
or before the Closing Date, of each of the following conditions, provided that
these conditions are for the Company's sole benefit and may be waived by the
Company at any time in its sole discretion by providing each Buyer with prior
written notice thereof:
(i) Such Buyer shall have executed each of the
Transaction Documents to which it is a party and delivered the same to the
Company.
(ii) Each Buyer shall have delivered to the Company
the Purchase Price for the Purchased Shares being purchased by such Buyer at the
Closing by wire transfer of immediately available funds pursuant to the wire
instructions provided by the Company.
(iii) The representations and warranties of such Buyer
shall be true and correct in all material respects as of the date when made and
as of the Closing Date as though made at that time (except for representations
and warranties that speak as of a specific date), and such Buyer shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by such Buyer at or prior to the Closing Date.
(iv) The Registration Statement shall be effective
and available for the issuance and sale of the Securities hereunder.
7. CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE.
The obligation of each Buyer hereunder to purchase the Purchased
Shares at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions, provided that these conditions are
for each Buyer's sole benefit and may be waived
14
by such Buyer at any time in its sole discretion by providing the Company with
prior written notice thereof:
(i) The Company shall have (i) executed and
delivered to such Buyer each of the Transaction Documents required to be
executed by the Company, and (ii) electronically delivered the Purchased Shares
being purchased by such Buyer at the Closing pursuant to this Agreement.
(ii) Such Buyer shall have received the opinion of
Fenwick & West LLP, the Company's outside counsel ("COMPANY COUNSEL"), dated as
of the Closing Date, substantially in the form attached hereto as Exhibit A.
(iii) The Company shall have delivered to such Buyer a
certificate evidencing the incorporation and good standing of the Company in its
jurisdiction of incorporation issued by the Secretary of State of such state of
incorporation as of a date within 10 days of the Closing Date.
(iv) The Common Stock (I) shall be listed on the
Principal Market and (II) shall not have been suspended, as of the Closing Date,
by the SEC or the Principal Market from trading on the Principal Market nor
shall suspension by the SEC or the Principal Market have been threatened, as of
the Closing Date, either (A) in writing by the SEC or the Principal Market or
(B) by falling below the minimum listing maintenance requirements of the
Principal Market.
(v) The Company shall have delivered to such Buyer a
certified copy of the Certificate of Incorporation, as amended to date (the
"CERTIFICATE") as certified by the Secretary of State of Delaware within 10 days
of the Closing Date.
(vi) The Company shall have delivered to such Buyer a
certificate, executed by the Secretary of the Company and dated as of the
Closing Date, as to (i) the resolutions consistent with this transaction as
adopted by the Company's Board of Directors in a form reasonably acceptable to
such Buyer, (ii) the Certificate and (iii) the Bylaws of the Company, each as in
effect at the Closing, in the form attached hereto as Exhibit B.
(vii) The representations and warranties of the
Company shall be true and correct in all material respects (except for such
representations and warranties qualified by materiality or Material Adverse
Effect in which case such representations and warranties shall be true and
correct in all respects) as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date) and the Company shall have performed, satisfied and
complied in all material respects (except for such covenants, agreements and
conditions qualified by materiality or Material Adverse Effect in which case
such covenants, agreements and conditions shall have been preformed, satisfied
or complied in all respects) with the covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by the Company at or prior to the Closing Date. Such Buyer shall have
received a certificate, executed by the Chief Executive Officer of the Company,
dated as of the Closing Date, to the foregoing effect and as to
15
such other matters as may be reasonably requested by such Buyer in the form
attached hereto as Exhibit C.
(viii) The Company shall have delivered to such Buyer
a letter from the Company's transfer agent certifying the number of shares of
Common Stock outstanding as of a date within five days of the Closing Date.
(ix) The Company shall have obtained all
governmental, regulatory or third party consents and approvals, if any,
necessary for the sale of the Purchased Shares.
(x) The Registration Statement shall be effective
and available for the issuance and sale of the Securities hereunder and the
Company shall have delivered to such Buyer the Prospectus required thereunder.
(xi) The Company shall have delivered to such Buyer
such other documents relating to the transactions contemplated by this Agreement
as such Buyer or its counsel may reasonably request.
8. TERMINATION. In the event that the Closing shall not have
occurred with respect to a Buyer on the Closing Date due to the Company's or
such Buyer's failure to satisfy the conditions set forth in Sections 6 and 7
above (and the nonbreaching party's failure to waive such unsatisfied
condition(s)), the nonbreaching party shall have the option to terminate this
Agreement with respect to such breaching party at the close of business on such
date without liability of any party to any other party; provided, however, that
if this Agreement is terminated pursuant to this Section 8 due to the Company's
failure to satisfy the conditions set forth in Section 7 above, the Company
shall remain obligated to reimburse the Buyers for the expenses described in
Section 4(e) above.
9. MISCELLANEOUS.
(a) Governing Law; Jurisdiction; Jury Trial. All questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of New
York. Each party hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in The City of New York, Borough of Manhattan
for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT
16
MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
(b) Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.
(c) Headings. The headings of this Agreement are for convenience
of reference and shall not form part of, or affect the interpretation of, this
Agreement.
(d) Severability. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
(e) Entire Agreement; Amendments. This Agreement supersedes all
other prior oral or written agreements between the Buyers, the Company, their
affiliates and Persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor any Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters. The Non-Disclosure
Agreement, dated October 12, 2004, between the Company and the Buyer shall be
terminated and be of no further force or effect. No provision of this Agreement
may be amended other than by an instrument in writing signed by the Company and
the holders of Purchased Shares representing at least a majority of the amount
of the Purchased Shares then held by the Buyers, or, if prior to the Closing
Date, the Buyers listed on the Schedule of Buyers as being obligated to purchase
at least a majority of the amount of the Purchased Shares. No provision hereof
may be waived other than by an instrument in writing signed by the party against
whom enforcement is sought. No such amendment shall be effective to the extent
that it applies to less than all of the holders of the Purchased Shares then
held by the Buyers. No consideration shall be offered or paid to any Person to
amend or consent to a waiver or modification of any provision of any of the
Transaction Documents unless the same consideration also is offered to all of
the parties to the Transaction Documents. The Company has not, directly or
indirectly, made any agreements with any Buyers relating to the terms or
conditions of the transactions contemplated by the Transaction Documents except
as set forth in the Transaction Documents.
(f) Notices. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
17
generated and kept on file by the sending party); or (iii) one business day
after deposit with an overnight courier service, in each case properly addressed
to the party to receive the same. The addresses and facsimile numbers for such
communications shall be:
If to the Company:
Transmeta Corporation
0000 Xxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy to:
Fenwick & West LLP
Silicon Valley Center
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
If to the Transfer Agent:
Mellon Investor Services
X.X. Xxx 0000
Xx. Xxxxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers,
With a copy (for informational purposes only) to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxx, Esq.
with copies to such Buyer's representatives as set forth on the Schedule of
Buyers, or to such other address and/or facsimile number and/or to the attention
of such other Person as the recipient party has specified by written notice
given to each other party five (5) days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an
18
image of the first page of such transmission or (C) provided by an overnight
courier service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from an overnight courier service in accordance with clause
(i), (ii) or (iii) above, respectively.
(g) Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
assigns, including any purchasers of the Purchased Shares. The Company shall not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the holders of Purchased Shares representing at least a
majority of the number of the Purchased Shares, including by merger or
consolidation. No Buyer may assign this Agreement or any rights or obligations
hereunder without the consent of the Company, which shall not be unreasonably
withheld or delayed.
(h) No Third Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
(i) Survival. Unless this Agreement is terminated under Section
8, the representations and warranties of the Company and the Buyers contained in
Sections 2 and 3, the agreements and covenants set forth in Sections 4, 5 and 9
shall survive the Closing and the delivery and exercise of Securities, as
applicable. Each Buyer shall be responsible only for its own representations,
warranties, agreements and covenants hereunder.
(j) Further Assurances. Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as any other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(k) Indemnification. (i) In consideration of each Buyer's
execution and delivery of the Transaction Documents and acquiring the Securities
thereunder and in addition to all of the Company's other obligations under the
Transaction Documents, the Company shall defend, protect, indemnify and hold
harmless each Buyer and each other holder of the Securities and all of their
shareholders, partners, members, officers, directors, employees and direct or
indirect investors and any of the foregoing Persons' agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the
"INDEMNITEES") from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and including
reasonable attorneys' fees and disbursements (the "INDEMNIFIED LIABILITIES"),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby or
(c) any cause of action, suit or claim brought or made against such Indemnitee
by a third party (including for these purposes a
19
derivative action brought on behalf of the Company) and arising out of or
resulting from (i) the execution, delivery, performance or enforcement of the
Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, (ii) any transaction financed or to be financed
in whole or in part, directly or indirectly, with the proceeds of the issuance
of the Purchased Shares, or (iii) the status of such Buyer or holder of the
Securities as an investor in the Company. To the extent that the foregoing
undertaking by the Company may be unenforceable for any reason, the Company
shall make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities which is permissible under applicable law.
(ii) Promptly after receipt by an Indemnitee under this
Section 9(k) of notice of the commencement of any action or proceeding
(including any governmental action or proceeding) involving an Indemnified
Liability, such Indemnitee shall, if a claim for indemnification in respect
thereof is to be made against any indemnifying party under this Section 9(k),
deliver to the indemnifying party a written notice of the commencement thereof,
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnitee; provided,
however, that an Indemnitee shall have the right to retain its own counsel with
the fees and expenses of not more than one counsel for such Indemnitee to be
paid by the indemnifying party, if, in the reasonable opinion of the Indemnitee,
the representation by such counsel of the Indemnitee and the indemnifying party
would be inappropriate due to actual or potential differing interests between
such Indemnitee and any other party represented by such counsel in such
proceeding. Legal counsel referred to in the immediately preceding sentence
shall be selected by the Investors holding at least a majority of the Purchased
Shares. The Indemnitee shall cooperate fully with the indemnifying party in
connection with any negotiation or defense of any such action or Indemnified
Liabilities by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Indemnitee that relates to
such action or Indemnified Liabilities. The indemnifying party shall keep the
Indemnitee fully apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding effected without
its prior written consent, provided, however, that the indemnifying party shall
not unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the prior written consent of the Indemnitee, consent to entry of
any judgment or enter into any settlement or other compromise which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnitee of a release from all liability in respect to such
Indemnified Liabilities or litigation. Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnitee with respect to all third parties, firms or corporations relating to
the matter for which indemnification has been made. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnitee under this Section 9(k), except to the extent that
the indemnifying party is prejudiced in its ability to defend such action.
(iii) The indemnification required by this Section 9(k)
shall be made by
20
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Liabilities are
incurred.
(iv) The indemnity agreements contained herein shall be in
addition to (i) any cause of action or similar right of the Indemnitee against
the indemnifying party or others, and (ii) any liabilities the indemnifying
party may be subject to pursuant to the law.
(l) No Strict Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
(m) Remedies. Each Buyer and each holder of the Securities shall
have all rights and remedies set forth in the Transaction Documents and all
rights and remedies which such holders have been granted at any time under any
other agreement or contract and all of the rights which such holders have under
any law. Any Person having any rights under any provision of this Agreement
shall be entitled to enforce such rights specifically (without posting a bond or
other security), to recover damages by reason of any breach of any provision of
this Agreement and to exercise all other rights granted by law. Furthermore, the
Company recognizes that in the event that it fails to perform, observe, or
discharge any or all of its obligations under the Transaction Documents, any
remedy at law may prove to be inadequate relief to the Buyers. The Company
therefore agrees that the Buyers shall be entitled to seek temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages and without posting a bond or other security.
(n) Rescission and Withdrawal Right. Notwithstanding anything to
the contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Buyer exercises a right, election, demand or
option under a Transaction Document and the Company does not timely perform its
related obligations within the periods therein provided, then such Buyer may
rescind or withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in whole or in
part without prejudice to its future actions and rights.
(o) Payment Set Aside. To the extent that the Company makes a
payment or payments to the Buyers hereunder or pursuant to any of the other
Transaction Documents or the Buyers enforce or exercise their rights hereunder
or thereunder, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other Person under any law (including, without limitation, any
bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred.
(p) Independent Nature of Buyers' Obligations and Rights. The
obligations of each Buyer under any Transaction Document are several and not
joint with the obligations of any
21
other Buyer, and no Buyer shall be responsible in any way for the performance of
the obligations of any other Buyer under any Transaction Document. Nothing
contained herein or in any other Transaction Document, and no action taken by
any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers
as a partnership, an association, a joint venture or any other kind of entity,
or create a presumption that the Buyers are in any way acting in concert or as a
group with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Buyer confirms that it has independently
participated in the negotiation of the transaction contemplated hereby with the
advice of its own counsel and advisors. Each Buyer shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of any other Transaction Documents,
and it shall not be necessary for any other Buyer to be joined as an additional
party in any proceeding for such purpose.
[SIGNATURE PAGE FOLLOWS]
22
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.
COMPANY:
TRANSMETA CORPORATION
By: /s/
---------------------------
Name:
Title:
[Signature Page to Securities Purchase Agreement]
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.
BUYERS:
RIVERVIEW GROUP, LLC
By: /s/
---------------------------
Name:
Title: Authorized Signatory
[Signature Page to Securities Purchase Agreement]
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.
BUYERS:
TRUK OPPORTUNITY FUND, LLC
By: /s/
--------------------------
Name:
Title:
[Signature Page to Securities Purchase Agreement]
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.
BUYERS:
TRUK INTERNATIONAL FUND, LP
By: /s/
--------------------------
Name:
Title:
