STRATEGIC PARTNERS INVESTMENT AGREEMENT
This Strategic Partners Investment Agreement (this "Agreement"), dated as
of March 31, 2005 (the "Effective Date"), is entered into by and among Mobility
Electronics, Inc., a Delaware corporation ("Mobility"), RadioShack Corporation,
a Delaware corporation ("RadioShack"), and Motorola, Inc., a Delaware
corporation ("Motorola"). RadioShack and Motorola are sometimes each referred to
herein as an "Investor" and collectively, as the "Investors". Mobility,
RadioShack and Motorola are sometimes each referred to herein as a "Party" and
collectively, as the "Parties".
RECITALS
WHEREAS, Investors are interested in making an investment in Mobility on
the terms and conditions provided herein, and Mobility is agreeable to such
investment.
NOW, THEREFORE, in consideration of the foregoing, and for other adequate
consideration, the receipt and sufficiency of which is hereby acknowledged and
agreed, the parties hereto hereby agree as follows:
1. DEFINITIONS
1.1 As used in this Agreement, certain terms used but not otherwise
defined herein shall have the meanings ascribed thereto in Exhibit A attached
hereto.
2. PURCHASE AND SALE
2.1 The Securities. Subject to all of the terms and conditions of this
Agreement, at the Closing (as defined herein), Mobility agrees to issue and sell
to each Investor, and each Investor agrees to purchase from Mobility:
(a) 689,656 shares (the "Shares") of common stock, par value $0.01
per share, of Mobility (the "Common Stock"), at a purchase price of $7.25
per share (the "Per Share Price") ($5,000,006 in the aggregate);
(b) a warrant to purchase up to 595,238 shares of Common Stock, at
an exercise price of $8.40 per share ($4,999,999.20 in the aggregate), in
the form of Exhibit B attached hereto (the "First Level Warrant"); and
(c) an additional warrant to purchase up to 595,238 shares of Common
Stock, at an exercise price of $8.40 per share ($4,999,999.20 in the
aggregate), in the form of Exhibit C attached hereto (the "Second Level
Warrant").
The First Level Warrant and the Second Level Warrant to be issued to each
Investor hereunder are sometimes collectively referred to herein as the
"Warrants;" the Shares, the First Level Warrant and the Second Level Warrant to
be issued to each Investor hereunder are sometimes collectively referred to
herein as the "Securities;" and the shares of Common Stock issuable upon
exercise of the Warrants are sometimes collectively referred to herein as the
"Underlying Shares."
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2.2 Closing. The closing of the purchase and sale of the Securities
pursuant to this Agreement (the "Closing") shall take place at the executive
offices of Mobility, 00000 Xxxxx Xxxxxxxxx Xx., Xxxxx 000, Xxxxxxxxxx, Arizona,
on the date hereof (the "Closing Date"). At the Closing:
(a) Mobility shall deliver to each Investor: (i) a copy of the
irrevocable instruction letter to Mobility's transfer agent instructing
such transfer agent to register the issuance and ownership of the Shares
to each Investor in the stockholders' registry and records of Mobility,
and issue to each Investor a certificate evidencing ownership of such
Shares; (ii) the First Level Warrant, duly executed by Mobility; (iii) the
Second Level Warrant, duly executed by Mobility; and (iv) an opinion of
counsel to Mobility in the form appended hereto as Exhibit D; and
(b) each Investor shall deliver to Mobility the aggregate purchase
price for the Shares purchased by such Investor, payable by wire transfer
of immediately available funds to an account designated by Mobility.
3. OTHER COVENANTS AND AGREEMENTS
3.1 Lock-Up Agreements. Each Investor hereby agrees that during the
Lock-Up Period, such Investor will not, and will not cause or permit an
Affiliate of such Investor to, without the prior written approval of Mobility
(which consent may be withheld or delayed in the sole discretion of Mobility),
directly or indirectly, sell, offer to sell, contract to sell (including without
limitation, any short sale), grant any option to purchase or otherwise transfer
or dispose of any Shares (it being understood that the term "Shares"
specifically excludes the Underlying Shares).
3.2 Restrictions on Certain Activities. As long as an Investor or its
Affiliates owns any Shares, Warrants or Underlying Shares, such Investor hereby
agrees that, without the prior written approval of Mobility, which approval may
be withheld or delayed in the sole discretion of Mobility, such Investor will
not, and will not cause or permit an Affiliate of such Investor to (i) acquire
any securities of Mobility (other than the acquisition of any Underlying Shares
upon exercise of the Warrants); and (ii) directly or indirectly lead or initiate
a Change of Control of Mobility.
3.3 Registration Rights.
(a) Shelf Registration.
(i) Prior to the expiration of the Lock-Up Period, Mobility
will prepare and file or cause to be prepared and filed with the SEC a
Registration Statement for an offering to be made on a delayed or
continuous basis pursuant to Rule 415 of the Securities Act registering
the resale from time to time by the Investors of the Registrable
Securities. Mobility shall use its best efforts to cause the Registration
Statement to be declared effective under the Securities Act as of the
first anniversary of the Closing Date (the "Effectiveness Date"), and to
keep such Registration Statement continuously effective under the
Securities Act until the earlier of (A) the date that is the later of (I)
the second anniversary of the Effectiveness Date and (II) with respect to
a particular Investor, the date that neither such Investor nor any of its
Affiliates is an Affiliate of Mobility, (B) such date as all unsold
securities held by the Investors and registered on such Registration
Statement may be sold in a single three-month period in accordance with
Rule 144 under the Securities Act or (C) such date as all securities
registered on such Registration Statement have been resold (the earlier to
occur of (A), (B) and (C) is the "Effectiveness Termination Date"). At the
time the Registration Statement is declared effective, each Investor shall
be named as a selling securityholder in the Registration Statement and the
related prospectus
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in such a manner as to permit such Investor to deliver such prospectus to
purchasers of registered securities in accordance with applicable law.
(ii) In the event that the Registration Statement is not
declared effective by the SEC under the Securities Act by the
Effectiveness Date, Mobility shall pay to each Investor an amount in cash
equal to one-half of a percent (0.5%) of the aggregate purchase price paid
by such Investor for the Shares pursuant to Section 2.1(a) hereof for each
30-day period thereafter until the Registration Statement is declared
effective.
(b) Selling Procedure.
(i) Following the date that the Registration Statement is
declared effective by the SEC, each Investor shall be permitted, subject
to the other provisions hereof, to offer and sell the Registrable
Securities included thereon in the manner described in such Registration
Statement during the period of its effectiveness; provided, however, that
such Investor arranges for delivery of a current prospectus to the
transferee of the Registrable Securities.
(ii) Notwithstanding the foregoing, or anything contained in
this Agreement to the contrary, Mobility may suspend offers and sales of
Registrable Securities pursuant to such Registration Statement if in the
good faith judgment of the Board after consultation with counsel,
(A)(I)(a) such registration would be substantially contrary to the best
interests of Mobility because (1) it would materially interfere with a
material financing plan or other material transaction or negotiations
relating thereto then pending, or (2) it would require the disclosure of
any material non-public information prior to the time that such
information would otherwise be disclosed or be required to be disclosed,
if such early disclosure would be substantially contrary to the best
interests of Mobility, or (b) such Registration Statement contains or may
contain an untrue statement of material fact or omits or may omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and (II) the Board concludes, as a
result, that it is necessary and appropriate to defer the filing of such
Registration Statement at such time, and (B) Mobility shall furnish to the
Investor a certificate signed by the President or Chief Executive Officer
of Mobility stating the good faith judgment of the Board to such effect,
then Mobility shall have the right to defer such filing only for the
period during which such filing would be substantially contrary to the
best interests of Mobility (a "Suspension"); provided, however, that the
aggregate number of days included in such periods of Suspension shall not
exceed ninety (90) days in any twelve (12) month period. In the event of
any Suspension, each Investor shall discontinue disposition of Registrable
Securities covered by the Registration Statement until copies of a
supplemented or amended prospectus are distributed to such Investor or
until such Investor is advised in writing by Mobility that the use of the
applicable prospectus may be resumed.
(c) Expenses of Registration. All Registration Expenses incurred in
connection with the registrations pursuant to this Section 3.3 shall be borne by
Mobility. All Selling Expenses incurred in connection with any registrations
hereunder shall be borne by the Investors.
(d) Registration Procedures.
(i) In the case of a registration, and any qualification or
compliance effected by Mobility pursuant to this Section 3.3, Mobility
shall keep the Investors advised in writing as to the initiation of such
registration, qualification and compliance and as to the completion
thereof. Subject to the provisions hereof, and until the Effectiveness
Termination Date, Mobility shall take the following actions:
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(1) Prepare and file with the SEC the Registration Statement
in accordance with Section 3.3(a)) above;
(2) Furnish to each Investor such reasonable numbers of copies
of a prospectus, including a preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other
documents as such Investor may reasonably request in order to
facilitate the disposition of Registrable Securities owned by it;
(3) Use commercially reasonable efforts to register and
qualify the securities covered by such registration statement under
such other securities or Blue Sky laws of such jurisdictions as
shall be reasonably requested by an Investor for the purpose of
permitting the offers and sales of the securities in such
jurisdictions, provided that Mobility shall not be required in
connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any
such states or jurisdictions;
(4) Notify, as soon as reasonably practicable after Mobility
becomes aware, each Investor at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included
in such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances
then existing;
(5) If for any reason it shall be necessary to amend or
supplement the Registration Statement or the prospectus used in
connection with such Registration Statement in order to correct any
untrue statements, ensure that the Registration Statement is not
misleading or otherwise to comply with the Securities Act, as
promptly as reasonably practicable, prepare and file with the SEC
such amendments and supplements to such Registration Statement and
the prospectus as may be necessary to correct such untrue
statements, ensure that such Registration Statement is not
misleading or to comply with the provisions of the Securities Act,
provided, that to the extent that any statements to be corrected
relate to any information provided by an Investor, Mobility shall
not be obligated to amend the Registration Statement until Mobility
has received such corrected information from such Investor and has
had a reasonable opportunity to amend or supplement such
Registration Statement or prospectus;
(6) If the Registration Statement ceases to be effective for
any reason at any time prior to the Effectiveness Termination Date
(other than because all securities registered thereunder have been
resold pursuant thereto), use its best efforts to obtain the prompt
withdrawal of any order suspending the effectiveness thereof;
(7) Cause all such Registrable Securities registered hereunder
to be listed or included on each securities exchange or automated
quotation system on which similar securities issued by Mobility are
then listed or included; and
(8) Provide a transfer agent and registrar for all Registrable
Securities registered hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective
date of such registration.
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In addition, in the event of any underwritten public offering, Mobility shall
(I) enter into and perform its obligations under an underwriting agreement, in
usual and customary form, with the managing underwriter of such offering,
provided that each Investor shall also enter into and perform its obligations
under such an agreement, and (II) use its best efforts to furnish, at the
request of an Investor, on the date that such Registrable Securities are
delivered to the underwriters for sale in connection with a registration
pursuant to this Section 3.3, (a) an opinion, dated as of the date of the
Registration Statement with respect to such securities becomes effective, of the
counsel representing Mobility for the purposes of such registration, in form and
substance as is customarily given in an underwritten public offering (and
reasonably acceptable to the counsel for the Investors), addressed to the
underwriters, if any, and to the Investors, and (b) a letter dated such date,
from the independent certified public accountants of Mobility, in form and
substance as is customarily given by independent certified public accountants in
an underwritten public offering (and reasonably acceptable to the counsel for
the Investor), addressed to the underwriters, to the extent such letter is
permitted under generally recognized accounting practice.
(ii) Mobility shall reasonably cooperate with the Investors in
performing Mobility's obligations under this Section 3.3 and shall: (A)
permit the Investors to review and comment upon any offering pursuant to
this Section 3.3 and to review and comment upon (I) the Registration
Statement prior to its filing with the SEC and (II) all amendments and
supplements thereto (except for Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K and any similar or
successor reports) prior to their filing with the SEC; and (B) furnish to
each Investor, in accordance with Section 8.9 hereof and without charge,
(1) any correspondence from the SEC or the staff of the SEC to Mobility or
its representatives relating to any Registration Statement, (2) promptly
after the same is prepared and filed with the SEC, one copy of any
Registration Statement and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference
and all exhibits, and (3) upon the effectiveness of any Registration
Statement, one copy of the prospectus included in such Registration
Statement and all amendments and supplements thereto.
(e) Indemnification.
(i) Mobility shall indemnify each Investor, its respective
officers, directors, employees, partners, affiliates, agents,
representatives and legal counsel (including Investor Counsel), and each
person controlling (or deemed controlling) such Investor within the
meaning of the Securities Act, (collectively, the "Investor's Agents")
with respect to which registration, qualification or compliance has been
effected pursuant to this Section 3.3, against all claims, losses, damages
and liabilities (or actions in respect thereof), joint or several, arising
out of or based on (A) any untrue statement (or alleged untrue statement)
of a material fact contained in any prospectus, offering circular or other
similar document or any amendments or supplements thereto (including any
related registration statement and amendments or supplements thereto,
notification or the like) incident to any such registration, qualification
or compliance, (B) any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under
which they were made, or (C) any violation by Mobility of the Securities
Act, the Exchange Act or any rule or regulation promulgated thereunder
applicable to Mobility in connection with any such registration,
qualification or compliance, and shall reimburse each Investor, and such
Investor's Agents, for any legal and any other expenses reasonably
incurred in connection with investigating or defending any such claim,
loss, damage, liability or action, as incurred; provided, however, that
Mobility shall not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission based upon written information furnished to
Mobility by an instrument duly executed by such Investor and stated to be
specifically for use therein or furnished in writing by such Investor to
Mobility in
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response to a request by Mobility stating specifically that such
information shall be used by Mobility therein; provided further, however,
that the indemnity agreement provided in this Section 3.3(e)(i) shall not
apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the prior
written consent of Mobility, which consent shall not be unreasonably
withheld, unless such consent is obtained in accordance with subsection
(iii) hereof.
(ii) Each Investor shall, severally and not jointly, indemnify
Mobility, its officers, directors, employees, affiliates, agents,
representatives, and each person controlling Mobility within the meaning
of the Securities Act (collectively, the "Mobility's Agents"), against all
claims, losses, damages and liabilities (or actions in respect thereof)
arising out of or based on (A) any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus, offering
circular or other similar document or any amendments or supplements
thereto (including any related registration statements and any amendments
or supplements thereto, notification and the like) incident to any such
registration, qualification or compliance, or (B) any omission (or alleged
omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of
the circumstances under which they were made, or (C) any violation by
Investor of the Securities Act, the Exchange Act or any rule or regulation
promulgated thereunder applicable to Investor in connection with any such
registration, qualification or compliance, and shall reimburse Mobility
and Mobility's Agents for any legal and any other expenses reasonably
incurred in connection with investigating or defending any such claim,
loss, damage, liability or action, as incurred, in each case to the
extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such
prospectus, offering circular or other similar document or any amendments
or supplements thereto (including any related registration statements and
any amendments or supplements thereto, notification and the like) in
reliance upon and in conformity with written information furnished in
writing to Mobility by an instrument duly executed by such Investor and
stated to be specifically for use therein or furnished by such Investor to
Mobility in response to a request by Mobility stating specifically that
such information shall be used by Mobility therein; provided, however,
that the indemnity agreement provided in this Section 3.3(e)(ii) shall not
apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the prior
written consent of such Investor, which consent shall not be unreasonably
withheld, unless such consent is obtained in accordance with subsection
(iii) hereof. In no event shall an Investor's indemnification obligation
exceed the net proceeds received from its sale of Registrable Securities
in such offering.
(iii) Each party entitled to indemnification under this
Section 3.3(e) (the "Indemnified Party") shall give written notice to the
party required to provide indemnification (the "Indemnifying Party")
promptly after such Indemnified Party has received written notice of any
claim as to which indemnity may be sought, and shall permit the
Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, however, that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval
shall not be unreasonably withheld). The Indemnified Party may participate
in such defense at such party's expense; provided, however, that the
Indemnifying Party shall bear the expense of such defense of the
Indemnified Party if representation of both parties by the same counsel
would be inappropriate due to actual or potential conflicts of interest.
The failure of any Indemnified Party to give notice within a reasonable
period of time as provided herein shall relieve the Indemnifying Party of
its obligations under this Section 3.3(e), but only to the extent that
such failure to give notice shall materially adversely prejudice the
Indemnifying Party in the defense of any such claim or any such
litigation. No Indemnifying Party, in the defense of any such claim or
litigation, shall,
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except with the written consent of each Indemnified Party (which shall not
be unreasonably withheld), consent to entry of any judgment or enter into
any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release
from all liability in respect to such claim or litigation.
(iv) If the indemnification provided for in this Section
3.3(e) is held by a court of competent jurisdiction to be unavailable to
an Indemnified Party with respect to any loss, liability, claim, damage or
expense referred to therein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
liability, claim, damage, or expense in such proportion as is appropriate
to reflect the relative fault of the Indemnifying Party on the one hand
and of the Indemnified Party on the other in connection with the
statements or omissions that resulted in such loss, liability, claim,
damage or expense as well as any other relevant equitable considerations;
provided, however, that in no event shall any contribution by an Investor
under this Section 3.3(e) exceed the net proceeds from the offering
received by such Investor. The relative fault of the Indemnifying Party
and of the Indemnified Party shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the
parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
(v) The obligations of Mobility and the Investors under this
Section 3.3 shall survive the completion of any offering of the
Registrable Securities in a Registration Statement under this Section 3.3,
any investigation made by or on behalf of the Indemnified Party or any
officer, director or controlling Person of such Indemnified Party and
shall survive the transfer of securities.
(f) Information by the Investor. As a condition precedent to the
obligations of Mobility under this Section 3.3, each Investor shall
furnish to Mobility all such information and materials regarding such
Investor and the distribution proposed by such Investor as Mobility may
reasonably request in writing in connection with any registration,
qualification or compliance referred to in this Section 3.3. Each Investor
will promptly notify Mobility in writing of any changes in the information
set forth in the Registration Statement after it is prepared regarding the
Investor or its plan of distribution to the extent required by applicable
law.
(g) Inclusion of Additional Securities. Mobility may include
additional Mobility securities in any registration pursuant to this
Section 3.3 for its own account and by other parties in amounts as
determined by the Board, provided that any such inclusion does not (i)
reduce the number of Registrable Securities (or other securities of the
Investors) which are included in the registration statement filed pursuant
to this Section 3.3 or otherwise materially and adversely affect the
rights of the Investors hereunder, or (ii) cause Form S-3 to be
unavailable under the Securities Act for such registration due to the
nature of the additional securities to be so included.
(h) Termination of Registration Rights. All rights and obligations
provided for in this Section 3.3 (except for in Section 3.3(e), which
rights and obligations shall survive) shall terminate on the date on which
Mobility has no obligation to maintain the effectiveness of the
Registration Statement.
3.4 Reports Under Securities Exchange Act of 1934. With a view to making
available to the Investors the benefits of Rule 144 promulgated under the
Securities Act ("SEC Rule 144") and any other
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rule or regulation of the SEC that may at any time permit an Investor to sell
securities of Mobility to the public without registration or pursuant to a
registration on Form S-3, Mobility agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times so long as Mobility
remains subject to the periodic reporting requirements under Sections 13
or 15(d) of the Exchange Act;
(b) use its best efforts to take such action as is necessary to
enable each Investor to utilize a Registration Statement for the sale of
its Registrable Securities;
(c) file with the SEC in a timely manner all reports and other
documents required of Mobility under the Securities Act and the Exchange
Act; and
(d) furnish to each Investor, so long as such Investor owns any
Registrable Securities, forthwith upon request (i) a written statement by
Mobility that it has complied with the reporting requirements of the
Securities Act and the Exchange Act, or that it qualifies as a registrant
whose securities may be resold pursuant to Form S-3, (ii) a copy of the
most recent annual or quarterly report of Mobility and such other reports
and documents so filed by Mobility, and (iii) such other information as
may be reasonably requested in availing any Investor of any rule or
regulation of the SEC which permits the selling of any such securities
without registration or pursuant to such form.
3.5 Assignment of Rights. The rights to cause Mobility to register
Registrable Securities pursuant to Section 3.3 may be assigned by an Investor
only to its Affiliates. In the event of such assignment, the transferee shall
furnish to Mobility written notice of such assignment and agree in writing to be
bound by the obligations of such Investor hereunder.
3.6 Nasdaq Listing. Mobility shall file a listing application with Nasdaq
for the Registrable Securities and use its best efforts to maintain the listing
of its Common Stock on Nasdaq (or a comparable system then in use) or the New
York Stock Exchange or other national exchange for a period of not less than
three years from the date of original issuance.
3.7 Reasonable Efforts; Notification; Representations. Subject to the
other terms and conditions of this Agreement, each Party shall use reasonable
efforts to take promptly, or cause to be taken, all actions, and to do promptly,
or cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the Transactions. Each
Party shall give prompt notice to each other Party upon becoming aware that any
representation or warranty made by such party in this Agreement has become
untrue or inaccurate or that such party has failed to comply with or satisfy in
any material respect any covenant, condition or agreement to be complied with or
satisfied by such party under this Agreement.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF MOBILITY
As an inducement to the Investors to enter into this Agreement and to
consummate the Transactions, Mobility represents, warrants and agrees that:
4.1 Organization and Authority. Mobility has all required corporate power
and authority to own its own properties and to carry on its business as
presently conducted. Mobility has all required power and authority to execute
and deliver this Agreement, to issue and sell the Securities (and the Underlying
Shares), and to carry out the Transactions. Mobility is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and is duly licensed or qualified and in good
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standing as a foreign corporation in each jurisdiction where the properties
owned, leased, used or operated by it or the nature of the business conducted by
it require it to be so qualified.
4.2 Authority. Mobility has all requisite corporate power and authority to
execute and deliver this Agreement and the Warrants, to perform its obligations
under this Agreement, and to consummate the Transactions. The execution and
delivery of this Agreement and the Warrants by Mobility and the performance by
Mobility of its obligations hereunder and thereunder and the consummation by
Mobility of the Transactions, have been duly authorized by Mobility's board of
directors and no other corporate action on the part of Mobility or its
stockholders is necessary to authorize the execution and delivery by Mobility of
this Agreement or the consummation by it of the Transactions (including, for
such purpose, the issuance of the Underlying Shares). This Agreement and the
Warrants have been duly executed and delivered by Mobility and constitute the
legal, valid and binding obligations of Mobility, enforceable in accordance with
their terms, except to the extent that the enforceability hereof and thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally or by general principles of equity. None
of the execution or delivery of this Agreement or the Warrants, the performance
by Mobility of the terms hereof or thereof, or the consummation of the
Transactions (including, for such purpose, the issuance of the Underlying
Shares) (a) will result (upon notice, with lapse of time or otherwise) in a
breach of the terms or conditions of, a default under, a conflict with, or the
acceleration of (or the creation in any Person of any right to cause the
acceleration of) any performance or any increase in any payment required by, or
the termination, suspension, modification, impairment or forfeiture (or the
creation in any Person of any right to cause the termination, suspension,
modification, impairment or forfeiture) of any rights or privileges of Mobility
under its Certificate of Incorporation or Bylaws (each as amended to date), any
material agreement, instrument or undertaking (collectively, the "Material
Agreements") or any award, order, writ, decree, injunction or judgment of, or
any stipulation entered into in connection with any action or proceeding before,
any Governmental Authority (collectively, "Judgments") or regulatory or other
restriction or obligation to which Mobility or any of its Subsidiaries is a
party or by which Mobility, its Subsidiaries or their respective properties,
assets or business may be bound or affected, (b) will result (upon notice, with
the lapse of time or otherwise) in the creation, imposition or right to exercise
or foreclosure of a lien, charge, security interest, option, equity, claim or
other encumbrance of any nature whatsoever (collectively, "Liens") upon or in
any of the Securities or the Underlying Shares, or Lien upon any of the assets
or properties of Mobility or its Subsidiaries, (c) does or will conflict in any
respect with, or result in any violation of, any material ordinance, statute,
law, rule or regulation including, without limitation, the NASD Rules
(collectively "Laws") applicable to Mobility or its Subsidiaries or by which
Mobility, its Subsidiaries or their respective properties, assets or business
may be bound or affected, or (d) give rise to any rights of any holder of
Mobility capital stock or any other Person under that certain Rights Agreement
dated as of June 11, 2003, by and between Mobility and Computershare Trust
Company.
4.3 Capitalization. The authorized capital stock of Mobility consists of
90,000,000 shares of Common Stock and 15,000,000 shares of preferred stock, par
value $0.01 per share, of which 2,500 shares have been designated as Series A
Preferred Stock, 4,186 shares have been designated as Series B Preferred Stock,
4,500,000 have been designated as Series C Preferred Stock, 500,000 shares have
been designated as Series D Preferred Stock, 1,400,000 shares have been
designated as Series E Preferred Stock, 1,000,000 shares have been designated as
Series F Preferred Stock, and 50,000 shares have been designated as Series G
Junior Participating Preferred Stock. As of March 24, 2005, (i) 28,732,545
shares of Common Stock were issued and outstanding, (ii) no shares of Common
Stock were issued and held in the treasury of Mobility, (iii) 266,041 shares of
Series C Preferred Stock were issued and outstanding, (iv) 5,750,000 shares of
Common Stock were reserved for issuance upon exercise of Options under the
Mobility Option Plans, (v) 144,370 shares of Common Stock were reserved for the
exercise of options or similar rights granted outside the Mobility Option Plans,
and (vi) 2,000,000 shares of Common Stock were reserved for issuance pursuant to
the Mobility ESPP. All the outstanding shares of Mobility's
9
capital stock are, and all shares of Common Stock which may be issued pursuant
to the exercise of outstanding Options shall be, when issued in accordance with
the respective terms thereof, duly authorized, validly issued, fully paid and
nonassessable.
4.4 Validity of Shares and Underlying Shares. The Securities, when issued,
sold and delivered in accordance with the terms hereof for the consideration
expressed herein, will be duly and validly issued, fully paid and nonassessable
and will be free of restrictions on transfer, other than restrictions set forth
herein and under applicable federal and state securities laws. The Underlying
Shares, when issued, sold and delivered in accordance with the terms of the
Warrants for the consideration expressed therein, will be duly and validly
issued, fully paid and nonassessable and will be free of restrictions on
transfer, other than restrictions set forth herein and under applicable federal
and state securities laws.
4.5 Offering. Subject in part to the truth and accuracy of each Investor's
representations set forth in Section 4 hereof, the offer, sale and issuance of
the Securities as contemplated hereby are exempt from the registration
requirements of the Securities Act, and the qualification or registration
requirements of the applicable blue sky laws. Neither Mobility nor any
authorized agent acting on its behalf shall take any action hereafter that would
cause the loss of such exemptions.
4.6 No Conflicting Rights. The holders of the outstanding capital stock of
Mobility are not entitled to pre-emptive or other rights to subscribe for the
Securities or the Underlying Shares.
4.7 Legal Proceedings. Except as disclosed in SEC Reports, there is no
Legal Proceeding by or before any Governmental Authority or, to the knowledge of
Mobility, threatened in writing against or involving Mobility or its
Subsidiaries which either (a) is reasonably likely to result in material damages
to or any material injunctive relief against Mobility or its Subsidiaries or (b)
questions or challenges the validity of this Agreement, the Transactions or any
action taken or to be taken by Mobility or any of its Subsidiaries pursuant
hereto or in connection with the Transactions. Neither Mobility nor any of its
Subsidiaries is in, or has received written notice of, default under or in
violation of any Material Agreement, except as would not otherwise have a
Material Adverse Effect. Neither Mobility nor any of its Subsidiaries is subject
to any Judgment that materially restricts its business practices or its ability
to acquire any property or conduct its business as currently conducted.
4.8 Government Authorizations and Filings. Except for filings, permits,
authorizations, consents, notices and approvals as may be required under, and
other applicable requirements of, the Exchange Act, state securities laws or
blue sky laws, none of the execution or delivery of this Agreement or the
Warrants, the performance by Mobility of the terms hereof or thereof, or the
consummation of the Transactions requires (a) any material filing with, or
material permit, authorization, consent or approval of, any Governmental
Authority, or (b) any consent or approval of Mobility's stockholders including,
without limitation, under the NASD Rules.
4.9 Compliance with Laws. Mobility and each of its Subsidiaries are in
compliance in all material respects with, and have not violated in any material
respect any applicable law, rule or regulation of any United States federal,
state, local, or foreign Governmental Authority applicable to Mobility or any of
its Subsidiaries, except as would not otherwise have a Material Adverse Effect.
No written notice has been received by Mobility or any of its Subsidiaries or
has been filed, commenced or, to the knowledge of Mobility, threatened against
Mobility or any of its Subsidiaries alleging any such violation. All licenses,
permits and approvals required under such laws, rules and regulations are in
full force and effect except where the failure to be in full force and effect
would not reasonably be expected to result in a Material Adverse Effect.
10
4.10 SEC Reports. Mobility has timely filed with the SEC the SEC Reports.
As of their respective dates (or, if amended or superseded, as of the date of
the last such amendment or superseding report filed prior to the date hereof),
the SEC Reports, including any financial statements or schedules included
therein (a) 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 made therein, in the light of the circumstances under which
they were made, not misleading and (b) complied in all material respects with
the applicable requirements of the Exchange Act and the Securities Act, as the
case may be, and the applicable rules and regulations of the SEC thereunder. The
Chief Executive Officer and the Chief Financial Officer of Mobility have signed,
and Mobility has furnished to the SEC, all certifications required by Section
906 of the Xxxxxxxx-Xxxxx Act of 2002; such certifications contain no
qualifications or exceptions to the matters certified therein and have not been
modified or withdrawn; and neither Mobility nor any of it officers has received
notice from any Governmental Authority questioning or challenging the accuracy,
completeness, form or manner of filing or submission of such certifications.
None of Mobility's Subsidiaries is required to file any forms, reports or other
documents with the SEC.
4.11 Financial Statements. Each of the Financial Statements has been
prepared from, and are in accordance with, the books and records of Mobility and
its Subsidiaries. The Financial Statements complied, as of their respective
dates, in all material respects with applicable accounting requirements and
published rules and regulations of the SEC. The Financial Statements have been
prepared in accordance with generally accepted accounting principles ("GAAP"),
applied on a consistent basis (except as may be indicated in the notes thereto
and subject, in the case of interim condensed consolidated financial statements,
to normal, recurring and year-end adjustments which were not and are not
expected to be material in amount and the absence of certain notes) and fairly
present in all material respects as of their respective dates (i) the
consolidated financial position of Mobility and its Subsidiaries as of the dates
thereof and (ii) the consolidated results of operations, changes in
stockholders' equity and cash flows of Mobility and its Subsidiaries for the
periods presented therein (except as may be indicated in the notes thereto and
subject, in the case of interim condensed consolidated financial statements, to
normal, recurring and year-end adjustments which were not and are not expected
to be material in amount and the absence of certain notes).
4.12 No Undisclosed Liabilities. Except (a) as disclosed in the Financial
Statements, (b) for liabilities disclosed in SEC Reports, and (c) for
liabilities and obligations incurred in the ordinary course of business and
consistent with past practice since the Balance Sheet Date, neither Mobility nor
any of its Subsidiaries has any liability or obligation of any nature, whether
or not accrued, contingent or otherwise that would be required by GAAP to be
disclosed on a consolidated balance sheet of Mobility or in the notes thereto
and which, individually or in the aggregate, has had or is reasonably likely to
have a Material Adverse Effect. Mobility has not created any entities or entered
into any transactions or created any liabilities or obligations of any nature,
whether or not accrued, contingent or otherwise, for the purpose of avoiding
disclosure required by GAAP.
4.13 Absence of Changes. Except as set forth on Schedule 4.13, since the
Balance Sheet Date, (a) no event or development has occurred which has had, or
could reasonably be expected to have, a Material Adverse Effect, and (b) the
business and operations of Mobility and each of its Subsidiaries have been
conducted in the ordinary course consistent with past practice.
4.14 Finder's Fees. Except for the reasonable fees and expenses payable by
Mobility to Xxxxxxx & Company, no agent, broker, investment banker, financial
advisor or other firm or Person is or shall be entitled to any brokers' or
finder's fee or any other commission or similar fee in connection with any of
the Transactions.
11
4.15 Employee Benefit Plans. No Legal Proceeding is currently pending or,
to Mobility's knowledge, threatened in writing against or with respect to any
Mobility Benefit Plan (other than routine benefits claims) and there is no
pending audit or inquiry by the Internal Revenue Service or United States
Department of Labor with respect to any Mobility Benefit Plan. To the knowledge
of Mobility or any of its Subsidiaries, there exists no violations of any
Mobility Benefit Plan, nor has Mobility or any of its Subsidiaries received
written notice of any such violation, that could subject Mobility or any of its
Subsidiaries to any liability relating in any way to any Mobility Benefit Plan,
except as would not otherwise have a Material Adverse Effect.
4.16 Tax Matters. Mobility and each of its Subsidiaries have duly filed
all Tax Returns that are required to be filed and for which taxes are due and
owing, and have duly paid, caused to be duly paid in full, or accrued for all
Taxes reflected on such Tax Returns. All such Tax Returns are correct and
complete in all material respects and accurately reflect all liability for Taxes
for the periods covered thereby. All material unpaid Taxes owed by Mobility and
all of its Subsidiaries relating to periods or portions of periods through the
Balance Sheet Date (whether or not shown on any Tax Return) are reflected on the
Financial Statements. Since the Balance Sheet Date, Mobility and its
Subsidiaries have not incurred any liability for any Taxes other than in the
ordinary course of business. Neither Mobility nor any of its Subsidiaries has
received written notice of any claim made by an authority in a jurisdiction
where Mobility or such Subsidiary, as the case may be, does not file Tax
Returns, that Mobility or such Subsidiary is or may be subject to taxation by
that jurisdiction.
4.17 Title to Properties; Encumbrances. Except as set forth in Schedule
4.13, each of Mobility and each of its Subsidiaries has good, valid and
marketable title to all the material properties and assets which it purports to
own (real, personal and mixed, tangible and intangible) and which are reflected
in the Balance Sheet, and all the material properties and assets purchased by
Mobility and its Subsidiaries since the Balance Sheet Date, in each case free
and clear of all mortgages, title defects or objections, liens, claims, charges,
security interests or other encumbrances of any nature whatsoever including,
leases, chattel mortgages, conditional sales contracts, collateral security
arrangements and other title or interest retention arrangements, except, with
respect to all such properties and assets: (a) liens shown on the Balance Sheet
as securing specified liabilities or obligations, with respect to which no
default exists; (b) minor imperfections of title, if any, none of which are
substantial in amount, materially detract from the value or impair the use of
the property subject thereto, or impair the operations of Mobility or any of its
Subsidiaries and which have arisen only in the ordinary course of business and
consistent with past practice since the date of the Balance Sheet; and (c) liens
for current Taxes not yet due (collectively, "Permitted Liens"). Except as set
forth in Schedule 4.13, the rights, properties and other assets presently owned,
leased or licensed by Mobility and its Subsidiaries include all rights,
properties and other assets necessary to permit Mobility and its Subsidiaries to
conduct their businesses in all material respects in the same manner as their
businesses have been conducted prior to the date hereof.
4.18 Intellectual Property.
(a) Ownership; Sufficiency of IP Assets. Except as set forth in
Schedule 4.18, Mobility or one of its Subsidiaries owns or possesses
adequate licenses or other rights to use, free and clear of liens (other
than Permitted Liens), all of the Intellectual Property used in, and
material to, its respective businesses. The Mobility Intellectual
Property, together with rights under the licenses granted to Mobility
and/or its Subsidiaries with respect to any Intellectual Property of any
Person (other than Mobility or its Subsidiaries), constitutes all the
Intellectual Property rights used in the operation of Mobility's and its
Subsidiaries' businesses as they are currently conducted and are all the
Intellectual Property rights necessary to operate such businesses after
the Closing in substantially the same manner as such businesses have been
operated by Mobility and its Subsidiaries prior thereto; provided,
however, that the foregoing representation, as it relates
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solely to Intellectual Property rights with respect to patents owned by
any Person (other than Mobility and its Subsidiaries), is made only to the
knowledge of Mobility.
(b) Infringement.
(i) By Mobility. None of Mobility's products or Intellectual
Property used, sold or manufactured by Mobility or its Subsidiaries in the
conduct of Mobility's or its Subsidiaries' businesses as currently
conducted, infringes upon, violates or constitutes the unauthorized use of
any trade secret, copyright or mask work owned or controlled by any Person
(other than Mobility or its Subsidiaries), and to the knowledge of
Mobility, none of Mobility's products or Intellectual Property used, sold,
or manufactured by Mobility or its Subsidiaries in the conduct of
Mobility's or its Subsidiaries' businesses as currently conducted,
infringes upon any patent rights or other intellectual property rights
owned or controlled by any Person (other than Mobility or its
Subsidiaries). Except as disclosed in the SEC Reports and as set forth on
Schedule 4.18(b)(i) hereto, no Legal Proceeding to which Mobility is a
party is now pending and, to the knowledge of Mobility, no notice or claim
in writing has been received by Mobility or any of its Subsidiaries within
the six (6) years prior to the date hereof (A) alleging that Mobility or
any of its Subsidiaries has engaged in any activity or conduct that
infringes upon, violates or constitutes the unauthorized use of the
Intellectual Property rights of any Person (other than Mobility or its
subsidiaries) or (B) challenging the ownership, use, validity or
enforceability of any Intellectual Property owned by or exclusively
licensed to or by Mobility.
(ii) By Third Parties. Except as set forth on Schedule
4.18(b)(ii) hereto, no Person is misappropriating, infringing or violating
any Mobility Intellectual Property (other than Mobility patents) other
than instances that, either individually or in the aggregate, would not
result in a Material Adverse Effect, and, to the knowledge of Mobility, no
Person is infringing or violating any Mobility patents. Except as set
forth on Schedule 4.18(ii) hereto, no claims have been asserted against
any Person by Mobility or any of its Subsidiaries based upon any Mobility
Intellectual Property.
4.19 Employment Matters. Mobility and each of its Subsidiaries are in
compliance in all material respects with all currently applicable laws and
regulations respecting employment, discrimination in employment, terms and
conditions of employment, wages, hours and occupational safety and health and
employment practices, and is not engaged in any unfair labor practice except as
would not otherwise have a Material Adverse Effect. There is no controversy
pending or, to the knowledge of Mobility, threatened, between Mobility or any of
its Subsidiaries, on the one hand, and any of their respective employees, on the
other hand, which controversies have resulted, or could reasonably be expected
to result, in a Legal Proceeding before any Governmental Authority in which an
adverse decision would result in a Material Adverse Effect except as disclosed
in the SEC Reports. To the knowledge of Mobility, no officer or key employee of
Mobility is in violation of any material term of any employment contract, patent
disclosure agreement, noncompetition agreement, or any restrictive covenant to a
former employer relating to the right of any such employee to be employed by
Mobility or a Subsidiary of Mobility because of the nature of the business
conducted by Mobility or any of its Subsidiaries or to the use of trade secrets
or proprietary information of others.
4.20 Certain Corporate Matters.
(a) No state takeover, antitakeover, moratorium, fair price,
interested stockholder, business combination or similar statute or rule is
applicable to the Transactions. If any state takeover statute becomes or
is deemed to become applicable to this Agreement or the
13
Transactions, Mobility shall (and shall cause each of its applicable
Subsidiaries to) take all reasonable action necessary to render such
statute inapplicable to all of the foregoing.
(b) None of Mobility, its Subsidiaries or, to Mobility's knowledge,
any director, officer, agent, employee or other Person acting on behalf of
Mobility or any of its Subsidiaries, has used any corporate or other funds
for any unlawful contribution, payment, gift, or entertainment, or made
any unlawful expenditure relating to political activity to government
officials or others or established or maintained any unlawful or
unrecorded funds in violation of Section 30A of the Exchange Act. None of
Mobility, its Subsidiaries or, to Mobility's knowledge, any current
director, officer, agent, employee or other Person acting on behalf of
Mobility or any of its Subsidiaries, has accepted or received any unlawful
contribution, payment, gift or expenditure. Mobility and each of its
Subsidiaries which is required to file reports pursuant to Section 12 or
15(d) of the Exchange Act is in compliance in all material respects with
the provisions of Section 13(b) of the Exchange Act.
(c) Except as disclosed in SEC Reports, to Mobility's knowledge, no
executive officer or director of Mobility or any of its Subsidiaries has
any material interest in any material property, real or personal, tangible
or intangible, including any Intellectual Property used in or pertaining
to the business of Mobility or any of its Subsidiaries.
4.21 Disclosure. To the knowledge of Mobility, neither the Agreement nor
the Warrants (including all exhibits and schedules hereto or thereto) nor any
other statements or certificates made or delivered in writing in connection
herewith contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements herein or therein not misleading
in light of the circumstances under which they were made.
5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS BY INVESTOR
Each Investor, severally as to itself, hereby represents, warrants and
agrees that:
5.1 Authority. Such Investor has the full power and authority to enter
into this Agreement and it constitutes such Investor's legal, valid and binding
obligation, enforceable in accordance with its terms, except to the extent that
the enforceability hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
or by general principles of equity.
5.2 Purchase For Own Account. Such Investor is acquiring the Securities
for such Investor's own account, for investment purposes and not for resale or
with a view to any distribution, or in connection with any distribution thereof.
Such Investor is able to (i) bear the economic risk of its investment in the
Securities, (ii) hold the Shares and Underlying Shares for an indefinite period
of time, and (iii) afford a complete loss of its investment.
5.3 Investment Experience. Such Investor has the requisite knowledge and
experience in financial and business matters, including investments of this
type, to be capable of evaluating the merits and risks of an investment in the
Securities and of making an informed investment decision with respect thereto.
Such Investor acknowledges that the Securities are unregistered and may not be
sold or transferred in the absence of registration under the Securities Act and
applicable state securities laws, unless an exemption exists therefor.
5.4 Accredited Investor. Such Investor is an "Accredited Investor" as that
term is defined in Section 501(a) of Regulation D promulgated under the Act.
14
6. FURTHER AGREEMENTS
Each Investor acknowledges and agrees that:
6.1 Legends. Legends in substantially the following form will be placed on
all documents or certificates evidencing the Shares:
"THE SECURITIES EVIDENCED BY THIS INSTRUMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR UNDER THE SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION AND
SUCH SECURITIES MAY NOT BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER THE ACT, AND APPLICABLE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO MOBILITY THAT SUCH REGISTRATION
IS NOT REQUIRED."
7. SURVIVAL; INDEMNIFICATION
7.1 Survival of Representations, Warranties and Covenants. The
representations and warranties contained herein shall survive the Closing and
all statements contained in any certificate, exhibit or other instrument
delivered by or on behalf of any Party pursuant to this Agreement shall be
deemed to have been representations and warranties by such Party, and,
notwithstanding any provision in this Agreement to the contrary, shall survive
the Closing until the later of (i) the second anniversary of the Closing, or
(ii) the date on which the Warrants are no longer outstanding (i.e., terminated
or exercised in full), and shall in no way be affected by any investigation of
the subject matter thereof by or on behalf of any Investor. The covenants in
this Agreement shall continue until they expire by their express terms.
7.2 Indemnification by Mobility. Mobility agrees to indemnify and hold
harmless each Investor and its respective officers, directors, stockholders,
employees, and agents (collectively, the "Investor Indemnitees"), against any
claims, Legal Proceedings and for any expenses, damages, liabilities or losses
(joint or several) arising out of such claims, Legal Proceedings, to which the
Investor Indemnitee may become subject under the Securities Act, the Exchange
Act and any rules or regulations promulgated thereunder, the NASD Rules, or any
state law or regulation, or common law, arising out of, related to or in any way
attributable to any breach of any representation, warranty, agreement or
covenant of Mobility contained herein. Upon written request, Mobility agrees to
reimburse the Investor Indemnitees for any legal or other expenses reasonably
incurred in connection with investigating or defending any such claims, Legal
Proceedings, as such expenses or other costs are incurred. The Investor
Indemnitees may select one, joint counsel. The foregoing indemnity shall extend
upon the same terms and conditions to, and shall inure to the benefit of, each
Person, if any, who controls any Investor Indemnitee within the meaning of the
Securities Act or the Exchange Act. This indemnity shall be in addition to any
obligations that Mobility may otherwise have with respect to an Investor.
7.3 Confidentiality. The Parties have entered into that certain
Nondisclosure Agreement dated as of January 1, 2005, the terms of which are
incorporated by reference herein.
15
8. GENERAL AND MISCELLANEOUS
8.1 Publicity. Except for legally mandated disclosures, any press releases
or public announcements relating to this Agreement or the terms of the Agreement
shall be mutually agreed upon by the Parties in writing prior to being made or
issued by any Party. The Parties hereby acknowledge and agree that (i) upon
execution and delivery of this Agreement by the Parties, the Parties will use
commercially reasonable efforts to issue a mutually agreeable press release
after the close of business on Monday, April 4, 2005; and (ii) this Agreement
and the Warrants may be required to be filed with the SEC as an Exhibit under
the Exchange Act.
8.2 Independent Contractors. Nothing contained in this Agreement is
intended nor shall be construed to create or establish any agency, partnership,
joint venture or similar arrangement or relationship between the Parties. It is
understood and agreed that the Parties are, and at all times shall remain,
independent contractors. Except as otherwise expressly permitted in this
Agreement, no Party shall have any authority, express or implied, to create or
assume any obligation, enter into any agreement, make any representation or
warranty, file any document with any governmental body, or serve or accept legal
process on behalf of the other Party(ies), settle any claim by or against the
other Party(ies), or to bind or otherwise render the other Party(ies) liable in
any way to any other Person, without the prior express written consent of the
other Party(ies). Each Party shall be solely responsible for all of its
employees' salaries, benefits, and any applicable taxes, and in no event shall
the employees of a Party be considered common law employees of any other Party.
8.3 Entire Agreement. This Agreement, the Warrants and the agreements
contemplated hereby constitute the entire agreement of the parties regarding the
subject matter hereof, and supersede all prior agreements and understandings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof.
8.4 Parties In Interest; No Third Party Beneficiaries. Except as otherwise
provided herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective heirs, legal representatives,
successors and assigns of the parties hereto. Neither this Agreement nor any
other agreement contemplated hereby shall be deemed to confer upon any person
not a party hereto or thereto any rights or remedies hereunder or thereunder.
8.5 Assignment. A Party shall not assign or in any other way transfer this
Agreement or any right or obligation hereunder, whether by operation of law or
otherwise, without the prior written consent of the other Parties; provided,
however, such consent shall not be required in the event this Agreement, or any
rights or obligations hereunder, is assigned (i) by an Investor to a Person that
is an Affiliate of such Party provided the assigning Party is not released in
any way and such Affiliate agrees to be bound by all of the terms of this
Agreement, (ii) by any Party to a Person with which such Party merges or
consolidates provided such Person agrees to be bound by all of the terms of this
Agreement, or (iii) by any Party to a Person which purchases all or
substantially all of such Party's business or assets provided such Person agrees
to be bound by all of the terms of this Agreement.
8.6 Amendment. No supplement, modification or amendment of this Agreement
shall be binding, unless executed in writing by the Parties.
8.7 Remedies in General. No delay or omission on the part of any Party in
exercising any right or remedy shall operate as a waiver of said right or remedy
or any other right or remedy. A waiver on any one occasion shall not be
construed as a bar to or a waiver of any right on any future occasion. Every
right and remedy of a Party shall be cumulative and in addition to every other
right and remedy expressed in this Agreement or allowed by law or equity, and
may be exercised singularly or concurrently.
16
8.8 Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE SUBSTANTIVE LAWS (BUT NOT THE RULES GOVERNING CONFLICTS OF LAWS) OF THE
STATE OF DELAWARE.
8.9 Notices. Any notice, demand or other communication required or
permitted to be given under this Agreement must be in writing and shall be
deemed to be duly given and received: (i) if delivered personally, on the next
business day after the date of such delivery; (ii) if sent by reputable
overnight courier service, on the next business day after such courier service
delivers the communication; (iii) if sent by electronic means (i.e., by
telecopier or e-mail), on the date of transmission if made during normal
business hours (9:00 a.m. to 5:00 p.m. of the Party receiving the communication)
at the recipient's address listed below or the following business day if made
after normal business hours, provided that written confirmation of receipt is
obtained by the noticing Party; or (iv) if mailed postage prepaid, by certified
mail, return receipt requested, the earlier of the date of actual receipt by the
other Party(ies) or five (5) business days following deposit in the United
States Mail, addressed to the appropriate Party(ies) as follows:
RadioShack Mobility
RadioShack Corporation Mobility Electronics, Inc.
000 XxxxxXxxxx Xxxxxx 00000 X. Xxxxxxxxx Xxxxx, Xxxxx
Xxxx Stop CF3-203 200
Fort Worth, Texas 76102 Xxxxxxxxxx, Xxxxxxx 00000
Tel: 000-000-0000 Tel: 000-000-0000
Fax: 000-000-0000 Fax: 000-000-0000
With a copy (only of claims, With a copy to:
indemnity matters, notices of
default and termination) to: Xxxxxxx X. Xxxxxxx
Xxxxxxx Xxxxxx L.L.P.
Xxxxx X. Xxxxxxxx 0000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx
Xxxx President-Law and Assistant 000
Xxxxxxxxx Xxxxxxxxx Xxxxxxxxxx, Xxxxx 00000
RadioShack Corporation Tel: 000-000-0000
000 XxxxxXxxxx Xxxxxx Fax: 000-000-0000
Mail Stop CF3-203
Xxxx Xxxxx, Xxxxx 00000
Tel: 000-000-0000
Fax: 000-000-0000
Motorola
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xx.
Xxxxxxxxxx, XX 00000
Attn: Corporate Business Development
Tel: 000-000-0000
Fax: 000-000-0000
17
With a copy to:
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xx.
Xxxxxxxxxx, XX 00000
Attn: General Counsel
Tel: 000-000-0000
Fax: 000-000-0000
or to such other address as the Party(ies) to receive the notices shall from
time to time designate in writing to the other Parties.
8.10 Severability. If for any reason any clause or provision of this
Agreement, or the application of any such clause or provision in a particular
context or to a particular situation, circumstance, or Person, should be held
unenforceable, invalid or in violation of law by any court or other tribunal,
then the application of such clause or provision in contexts or to situations,
circumstances or Persons other than that in or to which it is held
unenforceable, invalid or in violation of law shall not be affected thereby, and
the remaining clauses and provisions hereof shall nevertheless remain in full
force and effect. In lieu of such illegal, invalid or unenforceable provision,
there shall be added automatically as part of this Agreement a provision as
similar in terms to such illegal, invalid or unenforceable provision as may be
legal, valid and enforceable. Further, where state or federal law governs any
aspect of matters or services covered by this Agreement, such state or federal
law shall prevail over inconsistent provisions in this Agreement.
8.11 Expenses. Each Party shall bear its own expenses incurred by such
Party in the negotiation and preparation of this Agreement.
8.12 Captions. The captions included in this Agreement have been inserted
as a matter of convenience only and in no way are intended to define, limit or
to be used in connection with the interpretation of this Agreement.
8.13 Counterparts. This Agreement may be executed in two or more
counterparts, including counterparts transmitted by facsimile or electronic
transmission, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(This space intentionally left blank)
18
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first set forth above.
MOBILITY ELECTRONICS, INC. RADIOSHACK CORPORATION
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxx, Xxxxx X. Xxxxxxxxx,
President and C.E.O. President and Chief Operating
Officer
MOTOROLA, INC.
By: /s/ Xxxxx X. Xxxxxxx
Xxx Xxxxxxx
Corporate Vice President, General Manager,
Consumer Solutions & Accessories, Mobile Devices
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EXHIBIT A
DEFINITIONS
"AFFILIATE" means a Person, however organized, that, directly or
indirectly, Controls, is Controlled by, or is under common Control with another
Person.
"BALANCE SHEET" means the most recent audited consolidated balance sheet
of Mobility and its Subsidiaries included in the Financial Statements.
"BALANCE SHEET DATE" means the date of the Balance Sheet.
"CHANGE OF CONTROL" shall mean (a) the consummation of a reorganization,
merger or consolidation or sale or other disposition of all or substantially all
of the assets of any Party; or (b) the acquisition by any Person or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of more than fifty percent (50%) of either: (i) the then
outstanding shares of common stock of any Party hereto; (ii) the combined voting
power of the then outstanding voting securities of any Party hereto entitled to
vote generally in the election of directors; or (iii) the income and profits
interest of the general partners or limited partners where the entity is a
limited partnership. "Change of Control" shall not include any transaction
solely involving a Party and any one or more of its parent or subsidiary
entities, or any Affiliate of the foregoing.
"CONTROL" shall be defined as (i) ownership of a majority of the voting
power of those classes of voting stock entitled to vote in the election of
directors, (ii) ownership of a majority of the beneficial interests in income
and capital of an entity other than a corporation, or (iii) the power, directly
or indirectly, either to direct or cause the direction of the management and
policies of such Person, whether through ownership of voting securities or
equity interests, by membership or involvement in the board of directors,
management committee or other management structure of such Person, by contract
or otherwise.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FINANCIAL STATEMENTS" means each of the audited consolidated financial
statements and unaudited condensed consolidated interim financial statements of
Mobility (including any related notes and schedules) included (or incorporated
by reference) in the SEC Reports.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
political subdivision thereof, any federal or state court and any other agency,
body, authority or entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government including,
without limitation, the SEC and the National Association of Securities Dealers,
Inc.
"INTELLECTUAL PROPERTY" mean all of the following: (i) U.S. and foreign
registered and unregistered trademarks, trade dress, service marks, logos, trade
names, corporate names and all registrations and applications to register the
same; (ii) issued U.S. and foreign patents and pending patent applications,
patent disclosures, and any and all divisions, continuations,
continuations-in-part, reissues, reexaminations, and extension thereof, any
counterparts claiming priority therefrom, utility models, patents of
importation/confirmation, certificates of invention and like statutory rights;
(iii) U.S. and foreign registered and unregistered copyrights (including those
in computer software and databases), moral rights, rights of publicity and all
registrations and applications to register the same; and (iv) all trade secrets;
and, to the extent actually protected as a trade secret under the law, computer
software,
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databases, other confidential information, technology, know-how, proprietary
processes, formulae, algorithms, models, user interfaces, customer lists,
inventions, discoveries, concepts, ideas, techniques, methods, source codes,
object codes, methodologies and, with respect to all of the foregoing, related
confidential data or information.
"LEGAL PROCEEDING" means any action, suit, litigation, proceeding,
mediation, arbitration or investigation or audit (other than activities
performed in the ordinary course by Mobility's independent auditors) by any
Person.
"LOCK-UP PERIOD" means the period from the Closing Date until the first
anniversary thereof.
"MATERIAL ADVERSE EFFECT" means any circumstance affecting, change in, or
effect on Mobility and its Subsidiaries that is, or imminently shall be,
materially adverse to the business, properties, assets, prospects, financial
condition, liabilities (absolute, accrued, or contingent), operations, or
results of operation of Mobility and its Subsidiaries, taking Mobility together
with its Subsidiaries as a whole.
"MOBILITY BENEFIT PLAN" means any employee benefit fund, plan, program,
arrangement or contract (including any "pension" plan, fund or program, as
defined in Section 3(2) of ERISA, and any "employee benefit plan", as defined in
Section 3(3) of ERISA and any plan, program, arrangement or contract providing
for severance; medical, dental or vision benefits; life insurance or death
benefits; disability benefits, sick pay or other wage replacement; vacation,
holiday or sabbatical; pension or profit-sharing benefits; stock options or
other equity compensation; bonus or incentive pay or other material fringe
benefits), whether written or not, of Mobility and its Subsidiaries.
"MOBILITY ESPP" means Mobility's Employee Stock Purchase Plan.
"MOBILITY INTELLECTUAL PROPERTY" means all Intellectual Property owned by
Mobility or any of its Subsidiaries as of the date hereof.
"MOBILITY OPTION PLANS" means Mobility's 1996 stock option plan, the
Mobility Electronics, Inc. Omnibus Long-Term Incentive Plan, and the
Mobility Electronics, Inc. Non-Employee Director Long-Term Incentive Plan.
"NASD RULES" means the rules, regulations policies adopted by the National
Association of Securities Dealers, Inc. concerning companies listed on the
Nasdaq Stock Market.
"OPTION" means any right or option to purchase shares of Common Stock
which is granted by the Board and is outstanding as of the date hereof.
"PERSON" means any individual, corporation, limited liability company,
partnership, association, trust or any other entity or organization of any kind
or character, including any Governmental Authority.
"REGISTRATION EXPENSES" means all expenses incurred by Mobility in
complying with Section 3.3 hereof including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of one
counsel for Mobility and all reasonable fees and disbursements of Investor
Counsel not to exceed $15,000, blue sky fees and expenses, and the expense of
any special audits incident to or required by any such registration (but
excluding the compensation of regular employees of Mobility which shall be paid
in any event by Mobility and Selling Expenses).
"REGISTRABLE SECURITIES" means the Shares, the Underlying Shares and any
other shares of Common Stock issued as (or issuable upon the conversion or
exercise of any warrant, right or other
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security which is issued as) a dividend or other distribution with respect to,
or in exchange for, or in replacement of, any Shares or Underlying Shares.
"REGISTRATION STATEMENT" means a registration statement on Form S-3 under
the Securities Act or any registration form under the Securities Act
subsequently adopted by the SEC which similarly permits the inclusion or
incorporation of substantial information by reference to other documents filed
by Mobility with the SEC, including the prospectus, amendments and supplements
to such registration statements, including post-effective amendments, all
exhibits and all materials incorporated by reference or explicitly deemed to be
incorporated by reference in such registration statements, and/or as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered thereby; provided, however, that the
term "REGISTRATION STATEMENT" shall refer to any other registration form under
the Securities Act available to Mobility including, without limitation, a Form
S-1 (or any successor form thereto) if Mobility is not eligible to register
securities on Form S-3 or such similar registration form.
"SEC" means the United States Securities and Exchange Commission.
"SEC REPORTS" shall mean each form, report, schedule, statement and other
document filed or required to be filed by Mobility since January 1, 2004 through
the date hereof under the Exchange Act or the Securities Act, including any
filed amendment to such document, whether or not such amendment is required to
be so filed.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLING EXPENSES" means all underwriting discounts, selling commissions
and other similar expenses incurred by Investors applicable to a sale of the
Registrable Securities.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
partnership or other entity of which shares of capital stock or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other similar managing body of such corporation, partnership or
other entity are at the time owned by such Person, or (ii) the management of
which is otherwise Controlled, directly or indirectly, through one or more
intermediaries by such Person.
"TRANSACTIONS" means each of the transactions contemplated by this
Agreement including, without limitation, (i) the execution and delivery of this
Agreement, (ii) the purchase and sale of the Securities, and (ii) the execution
and delivery of the Warrants.
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EXHIBIT B
Form of First Level Warrant
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EXHIBIT C
Form of Second Level Warrant
C-1
EXHIBIT D
Legal Opinion of Mobility Counsel
