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EXHIBIT 2.3
AMENDED AND RESTATED COMPANY AFFILIATE AGREEMENT
THIS AMENDED AND RESTATED COMPANY AFFILIATE AGREEMENT (this "Agreement") is
made and entered into as of April , 2000, among VA Linux Systems, Inc., a
Delaware corporation ("Parent"), and the undersigned stockholder who may be
deemed an affiliate ("Affiliate") of Xxxxxxx.Xxx, Inc., a Delaware corporation
("Company") and hereby amends and restates the Company Affiliate Agreement among
Parent, Affiliate and Company dated February 2, 2000. Capitalized terms used but
not otherwise defined herein shall have the meanings ascribed to them in the
Reorganization Agreement (as defined below).
RECITALS
A. The Company, Merger Sub (as defined below) and Parent have entered into
an Agreement and Plan of Reorganization (the "Reorganization Agreement") which
provides for the merger (the "Merger") of a wholly-owned subsidiary of Parent
("Merger Sub") with and into the Company. Pursuant to the Merger, all
outstanding capital stock of the Company (the "Company Capital Stock") shall be
converted into the right to receive cash and Common Stock of Parent;
B. Affiliate has been advised that Affiliate may be deemed to be an
"affiliate" of the Company, as the term "affiliate" is used for purposes of Rule
144 of the Rules and Regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission"); and
C. The execution and delivery of this Agreement by Affiliate is a material
inducement to Parent to enter into the Reorganization Agreement.
NOW, THEREFORE, intending to be legally bound, the parties hereto agree as
follows:
1. Acknowledgments by Affiliate. Affiliate acknowledges and understands
that the representations, warranties and covenants by Affiliate set forth herein
shall be relied upon by Parent, the Company and their respective affiliates,
counsel and accounting firms, and that substantial losses and damages may be
incurred by these persons if Affiliate's representations, warranties or
covenants are breached. Affiliate has carefully read this Agreement and the
Reorganization Agreement and has discussed the requirements of this Agreement
with Affiliate's professional advisors, who are qualified to advise Affiliate
with regard to such matters.
2. Beneficial Ownership of Company Capital Stock. The Affiliate is the
beneficial owner of shares of and vested options to purchase Company Capital
Stock (the "Shares"). The Shares are not subject to any claim, lien, pledge,
charge, security interest or other encumbrance (other than restrictions under
the Securities Act (as defined below)) or to any rights of first refusal of any
kind. There are no options, warrants, calls, rights, commitments or agreements
of any character, written or oral, to which the Affiliate is party or by which
it is bound obligating the Affiliate to issue, deliver, sell, repurchase or
redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any
Shares or obligating the Affiliate to grant or enter into any such option,
warrant, call, right, commitment or agreement. The Affiliate has the sole right
to transfer such Shares. The Shares are not subject to preemptive rights created
by any agreement to which the Affiliate is party. All shares of Company Capital
Stock and common stock of Parent ("Parent Common Stock") acquired by Affiliate
in the Merger shall be subject to the provisions of this Agreement as if held by
Affiliate as of the date hereof (excluding Parent Common Stock acquired in the
open market).
3. Compliance with Rule 145 and the Securities Act.
(a) Affiliate has been advised that (x) the issuance of shares of Parent
Common Stock in connection with the Merger is expected to be effected pursuant
to a registration statement on Form S-4, and the resale of such shares shall be
subject to restrictions set forth in Rule 145 promulgated under the Securities
Act of 1933, as amended (the "Securities Act"), and (y) Affiliate may be deemed
to be an affiliate of the
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Company. Affiliate accordingly agrees not to sell, transfer or otherwise dispose
of any Parent Common Stock issued to Affiliate in the Merger unless one of the
following conditions is met: (i) such sale, transfer or other disposition is
made in conformity with the requirements of Rule 145(d) promulgated under the
Securities Act; (ii) such sale, transfer or other disposition is made pursuant
to an effective registration statement under the Securities Act or an
appropriate exemption from registration; (iii) Affiliate delivers to Parent a
written opinion of counsel, reasonably acceptable to Parent in form and
substance, that such sale, transfer or other disposition is otherwise exempt
from registration under the Securities Act; or (iv) an authorized representative
of the Commission shall have rendered written advice to Affiliate to the effect
that the Commission would take no action, or that the staff of the Commission
would not recommend that the Commission take any action, with respect to the
proposed disposition if consummated.
(b) Parent shall give stop transfer instructions to its transfer agent with
respect to any Parent Common Stock received by Affiliate pursuant to the Merger
and there shall be placed on the certificates representing such Common Stock, or
any substitutions therefor, a legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION TO
WHICH RULE 145 APPLIES AND MAY ONLY BE TRANSFERRED IN CONFORMITY WITH RULE
145(d) OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR IN ACCORDANCE WITH A WRITTEN OPINION
OF COUNSEL, REASONABLY ACCEPTABLE TO THE ISSUER IN FORM AND SUBSTANCE, THAT
SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED."
The legend set forth above shall be removed (by delivery of a substitute
certificate without such legend) and Parent shall so instruct its transfer
agent, if Affiliate delivers to Parent (i) satisfactory written evidence that
the shares have been sold in compliance with Rule 145 (in which case, the
substitute certificate shall be issued in the name of the transferee), or (ii)
an opinion of counsel, in form and substance reasonably satisfactory to Parent,
to the effect that public sale of the shares by the holder thereof is no longer
subject to Rule 145.
4. Rule 144/145 Reporting. Parent shall, for a period of two (2) years from
the date hereof, use commercially reasonable efforts to: (a) make and keep
public information available (as such terms are understood and defined in Rule
144 under the Securities Act) and (b) file with the Commission in a timely
manner all reports and other documents required of Parent under the Securities
Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and (c) furnish to Affiliate promptly upon request a written statement as to its
compliance with reporting requirements of Rule 144.
5. Market Stand-Off Agreement.
(a) Initial Lock-Up Restriction. The undersigned hereby agrees that during
the period commencing on the date hereof and ending on the later of (i) the
closing of the Merger and (ii) June 8, 2000, the undersigned will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly or indirectly,
any shares of Parent Common Stock or securities convertible into or exchangeable
or exercisable for any shares of Parent Common Stock, or publicly disclose the
intention to make any such offer, sale, pledge or disposal without the prior
written consent of Credit Suisse First Boston Corporation; provided, however,
that the restrictions set forth in the immediately prior sentence shall not
prohibit:
(i) the undersigned from exercising an option, warrant or other
convertible security into Parent Common Stock, where such exercise does not
result in such security being held by any person or entity other than the
undersigned;
(ii) the undersigned, if an individual, from transferring any Parent
Common Stock or rights to acquire Parent Common Stock either during his or
her lifetime or on death by will or intestacy to his or her immediate
family or to a trust the beneficiaries of which are exclusively the
undersigned and/or a member or members of his or her immediate family where
the person or entity receiving such transfer agrees to the same
restrictions set forth in this Agreement; or
(iii) transactions involving Parent Common Stock acquired by the
undersigned in open market transactions following the consummation of the
Merger.
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In furtherance of the foregoing, the Parent and its transfer agent and
registrar are hereby authorized to decline to make any transfer of shares of
Parent Common Stock if such transfer would constitute a violation or breach of
this Agreement.
(b) Ongoing Market Stand Off. Each Affiliate also agrees in connection with
a public offering of the Parent's securities that, upon request of the Parent or
the underwriters managing any underwritten offering of the Parent's securities,
the Affiliate shall not sell, make any short sale of, loan, grant any option for
the purchase of, or otherwise dispose of any securities of the Parent (other
than those included in the registration and those that the Affiliate purchases
in the public market or from underwriters in any secondary or follow-on offering
by the Parent) without the prior written consent of the Parent or such
underwriters, as the case may be, which consent may be withheld in their sole
and absolute discretion, for such period of time beginning on the date of filing
of such registration through 30 days from the effective date of such
registration, provided that the officers, directors of the Parent who own
securities of the Company and holders of 5% or more of the Parent's outstanding
equity securities also agree to such restrictions; provided however, that the
restrictions imposed by this sentence shall not apply to the Affiliate in
connection with any follow-on or secondary public offering following the second
anniversary of the Parent's initial public offering. The Affiliate agrees it
shall enter into such underwriter's standard form of agreement with respect to
such restrictions in form satisfactory to the Parent and such underwriter. The
shares held by all constituent partners of any entity holding registration
rights with respect to the Parents Common Stock shall be bound by this standoff
agreement.
In addition, each Affiliate also agrees that if it participates in a public
offering of the Parent's securities that the Affiliate shall not sell, make any
short sale of, loan, grant any option for the purchase of, or otherwise dispose
of any securities of the Parent (other than those included in the registration
and those that the Affiliate purchases in the public market or from underwriters
in any secondary or follow-on offering by the Parent) without the prior written
consent of the Parent or such underwriters, as the case may be, which consent
may be withheld in their sole and absolute discretion, for such period of time
beginning on the date of filing of such registration through 90 days from the
effective date of such registration, provided that the officers, directors of
the Parent who own securities of the Company and holders of 5% or more of the
Parent's outstanding equity securities also agree to such restrictions; provided
however, that the restrictions imposed by this sentence shall not apply to the
Affiliate in connection with any follow-on or secondary public offering
following the second anniversary of the Parent's initial public offering.
6. Termination. This Agreement shall be terminated and shall be of no
further force and effect in the event of the termination of the Reorganization
Agreement pursuant to Article VIII of the Reorganization Agreement.
7. Miscellaneous.
(a) Waiver; Severability. No waiver by any party hereto of any condition or
of any breach of any provision of this Agreement shall be effective unless in
writing and signed by each party hereto. In the event that any provision of this
Agreement, or the application of any such provision to any person, entity or set
of circumstances, shall be determined to be invalid, unlawful, void or
unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to persons, entities or circumstances other than
those as to which it is determined to be invalid, unlawful, void or
unenforceable, shall not be impaired or otherwise affected and shall continue to
be valid and enforceable to the fullest extent permitted by law.
(b) Binding Effect and Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, but, except as otherwise
specifically provided herein, neither this Agreement nor any of the rights,
interests or obligations of the parties hereto may be assigned by either of the
parties without prior written consent of the other party hereto.
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(c) Amendments and Modification. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto.
(d) Injunctive Relief. Each of the parties acknowledge that (i) the
covenants and the restrictions contained in this Agreement are necessary,
fundamental, and required for the protection of Parent and the Company and to
preserve for Parent the benefits of the Merger; (ii) such covenants relate to
matters which are of a special, unique, and extraordinary character that gives
each of such covenants a special, unique, and extraordinary value; and (iii) a
breach of any such covenants or any other provision of this Agreement shall
result in irreparable harm and damages to Parent and the Company which cannot be
adequately compensated by a monetary award. Accordingly, it is expressly agreed
that in addition to all other remedies available at law or in equity, Parent and
the Company shall be entitled to the immediate remedy of a temporary restraining
order, preliminary injunction, or such other form of injunctive or equitable
relief as may be used by any court of competent jurisdiction to restrain or
enjoin any of the parties hereto from breaching any such covenant or provision
or to specifically enforce the provisions hereof.
(e) Governing Law. This Agreement shall be governed by and construed,
interpreted and enforced in accordance with the internal laws of the State of
Delaware without giving effect to any choice or conflict of laws provision or
rule (whether of the State of Delaware or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
Delaware.
(f) Entire Agreement. This Agreement, the Reorganization Agreement and the
other agreements referred to in the Reorganization Agreement set forth the
entire understanding of Affiliate and Parent relating to the subject matter
hereof and thereof and supersede all prior agreements and understandings between
Affiliate and Parent relating to the subject matter hereof and thereof.
(g) Attorneys' Fees. In the event of any legal actions or proceeding to
enforce or interpret the provisions hereof, the prevailing party shall be
entitled to reasonable attorneys' fees, whether or not the proceeding results in
a final judgment.
(h) Further Assurances. Affiliate shall execute and/or cause to be
delivered to Parent such instruments and other documents and shall take such
other actions as Parent may reasonably request to effectuate the intent and
purposes of this Agreement.
(i) Third Party Reliance. Counsel to and independent auditors for Parent
and the Company shall be entitled to rely upon this Affiliate Agreement.
(j) Survival. The representations, warranties, covenants and other
provisions contained in this Agreement shall survive the Merger.
(k) Notices. All notices and other communications pursuant to this
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally,
telecopied, sent by nationally-recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following address (or at such other address for a party as shall
be specified by like notice):
If to Parent:
VA Linux Systems, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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With a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. XxXxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Affiliate:
To the address for notice set forth
on the signature page hereof.
(l) Counterparts. This Agreement shall be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Affiliate Agreement to be
duly executed on the day and year first above written.
VA LINUX SYSTEMS, INC. AFFILIATE
By: By:
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Name: Xxxxx X. Xxxxxxxx Affiliate's Address for Notice:
Title: President and Chief Executive Officer ---------------------------------------------
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[SIGNATURE PAGE TO AFFILIATE AGREEMENT]
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