Exhibit 10.1
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") is made as of
March 29, 2001, by and between NAVIGATION TECHNOLOGIES CORPORATION, a
corporation organized under the laws of Delaware (the "Company"); and PHILIPS
CONSUMER ELECTRONIC SERVICES B.V., a corporation organized under the laws of The
Netherlands (which, together with its Affiliates (other than the Company and its
controlled Affiliates) is herein referred to collectively as "Philips").
WHEREAS, the Company has determined that it is in the best
interests of the Company and its shareholders for Philips to make the further
investment in the Company provided for, and on the terms and conditions set
forth, in this Agreement;
WHEREAS, Philips desires to make such investment on such terms
and conditions;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and conditions herein contained, the Company and Philips hereby
agree as follows:
SECTION 1
AUTHORIZATION AND SALE OF THE SHARES
1.1 Authorization of the Shares. The Company has, or before
each Closing Date (as defined below) will have, authorized the sale and issuance
of:
(a) shares of its Series A preferred stock, par value $.001
per share (the "Series A Shares"), having the rights, restrictions,
privileges and preferences as set forth in the Certificate of
Designations of Series A Cumulative Convertible Preferred Stock of the
Company (the "Series A Certificate of Designations") attached to this
Agreement as Exhibit A, sufficient in number to meet the purposes of
Section 1.2(a) and (b) below; and
(b) shares of its Series B preferred stock, par value $.001
per share (the "Series B Shares" and, together with the Series A
Shares, the "Shares"), having the rights, restrictions, privileges and
preferences as set forth in the Certificate of Designations of Series B
Cumulative Convertible Preferred Stock of the Company (the "Series B
Certificate of Designations") attached to this Agreement as Exhibit B,
sufficient in number to meet the purposes of Section 1.2(a) below.
1.2 Sale of the Shares. Subject to the terms and conditions
hereof and in reliance upon the representations, warranties and agreements
contained herein, the Company agrees to issue and sell to Philips, and Philips
agrees to purchase from the Company:
(a) on the date hereof (the "Initial Closing Date"),
2,405,968.805 Series A Shares at a purchase price of $10 per Series A
Share for an aggregate purchase price of $24,059,688.05, and
42,600,002.533 Series B Shares at a purchase price of $10 per Series B
Share for an aggregate purchase price of $426,000,025.33;
(b) on each date prior to the Termination Date that is
designated as such in a Call Notice given by the Company pursuant to
Section 1.4 (each such date, a "Subsequent Closing Date"; each of the
Initial Closing Date and the Subsequent Closing Dates being a "Closing
Date"), such number of Series A Shares as are so designated in such
Call Notice at a purchase price of $10 per Series A Share; provided
that the aggregate purchase price of such Series A Shares the subject
of any one Call Notice shall not exceed the Company's Expected Monthly
Shortfall for the calendar month immediately following the month in
which such Call Notice is delivered; provided further that the
aggregate purchase price for all Series A Shares issued and sold by the
Company pursuant to this Agreement (including the Series A Shares
issued and sold by the Company on the Initial Closing Date) shall not
exceed the Maximum Amount.
1.3 Delivery. On each Closing Date, the Company shall deliver
to Philips a certificate representing the Shares purchased on such date,
registered in the name of Philips, and Philips shall make payment of the
purchase price for such Shares in the manner set forth below:
1. On the Initial Closing Date, for the Series A Shares
purchased on such date:
(i) $16,959,688.05 by cancellation of those certain
demand promissory notes dated January 19, 2001, January 26,
2001, March 1, 2001 and March 22, 2001, in the stated
principal amounts of $4,300,000, $7,300,000, $3,000,000 and
$2,000,000, respectively, plus all accrued and capitalized
interest thereon and all accrued but not yet capitalized
interest thereon through the date hereof, payable to Philips
by the Company (the "Demand Promissory Notes");
(ii) the balance of $7,100,000, by wire transfer of
federal or other immediately available funds, or such other
form of payment as shall be mutually agreed upon by Philips
and the Company.
(b) On the Initial Closing Date, for the Series B Shares
purchased on such date, $426,000,025.33, by return and endorsement in
favor of the Company of any and all outstanding promissory notes issued
by the Company under a certain Amended and Restated Master Loan
Agreement, by and between the Company and Philips, dated as of April 1,
1997 (the "Master Loan Agreement"), in the aggregate stated principal
amount of $298,300,000, plus all accrued and capitalized interest
thereon and all accrued but not yet capitalized interest thereon
through the date hereof (the "Promissory Notes").
(c) On any Subsequent Closing Date, for the Series A Shares
purchased by Philips on such date, an amount equal to the number of
such Series A Shares multiplied by the purchase price per share of $10,
by wire transfer of federal or other immediately available funds, or
such other form of payment as shall be mutually agreed upon by Philips
and the Company.
1.4. Call Notices. After the Initial Closing Date, but before
the Termination Date, the Company may require Philips to purchase additional
Series A Shares for an aggregate purchase price up to the Maximum Amount by
delivering to Philips a Call Notice not less than ten days prior to the relevant
Subsequent Closing Date therefor; provided that only one Call Notice may be
delivered during any calendar month. Each Call Notices shall be in the minimum
aggregate amount of $1,000,000. In addition to setting forth the number of
Series A Shares the Company is requiring Philips to purchase, each Call Notice
shall set forth the details of the calculation pursuant to Section 1.2(b) above
by which such number of Series A Shares was determined and such calculation
shall be certified as accurate by the Chief Financial Officer of the Company.
SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Philips as
follows:
2.1. Organization, Good Standing and Qualification. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate power to
own the properties owned by it and to conduct business as now conducted and as
proposed to be conducted in the future. The Company is duly qualified to
transact business and is in good standing in each jurisdiction in which the
failure to so qualify would have a Material Adverse Effect. Attached hereto as
Exhibits C and D, respectively, are true, complete and correct copies of the
Company's Amended and Restated Certificate of Incorporation (the "Restated
Certificate"), as amended and restated prior to the date hereof in accordance
with the second paragraph of Section 4.1(c) of this Agreement and as in effect
on the Initial Closing Date, and the Company's Bylaws ("Bylaws"), as in effect
on the Initial Closing Date.
2.2 Corporate Power. The Company has all requisite corporate
power (i) to enter into this Agreement, the Registration Rights Agreement and
all other documents, agreements and instruments to be executed by the Company
and delivered to Philips in connection with this Agreement and the performance
by the Company of its obligations hereunder, (ii) to issue, sell and deliver the
Shares, and (iii) to carry out and perform its obligations under the terms of
this Agreement.
2.3 Authorization. All corporate action on the part of the
Company, its directors and its stockholders necessary (i) for the authorization,
execution, delivery and performance by the Company of this Agreement and the
Registration Rights Agreement, (ii) for the authorization, issuance and delivery
of the Shares, and (iii) for the performance of all obligations of the Company
hereunder has been taken. This Agreement and the Registration Rights Agreement
constitute the valid and binding obligation of the Company, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization and moratorium laws and other laws of general application
affecting enforcement of creditors' rights and remedies generally and rules of
law governing specific performance, injunctive relief and other equitable
remedies.
2.4 No Conflict. The execution, delivery and performance by
the Company of this Agreement and the Registration Rights Agreement, and the
issuance, sale and delivery of the Shares will not result in any material
violation of, and will not materially conflict with, or result in a material
breach of any of the material terms of, or constitute a material default under,
any provision of state or Federal law to which the Company is subject, the
Restated Certificate or Bylaws or any material mortgage, indenture, agreement,
instrument, judgment, decree, order, rule or regulation or other restriction to
which the Company is a party or by which it is bound.
2.5 No Waivers. No stockholder other than Philips has any
preemptive rights or rights of first refusal granted by the Company or pursuant
to applicable law by reason of the issuance of the Shares, which rights have not
been duly and validly exercised or waived.
2.6 Valid Issuance of the Shares. Upon payment by Philips of
the purchase price thereof, the Shares will be validly issued, fully paid and
nonassessable, and are free of any liens or encumbrances; provided, however,
that the Shares may be subject to restrictions on transfer under state and
Federal securities laws.
2.7 Capitalization. As of the Initial Closing Date, the
Company's authorized capital stock consists of 1,600,000,000 shares of common
stock, par value $.001 per share (the "Common Stock"), and 50,000,000 shares of
preferred stock, par value $.001 per share, including 5,000,000 authorized
Series A Shares and 45,000,000 authorized Series B Shares. Immediately prior to
the date hereof, (x) 398,108,963 shares of Common Stock were issued and
outstanding, (y) no Series A Shares were issued and outstanding, and (z) no
Series B Shares were issued and outstanding. All issued and outstanding shares
of the Company's capital stock have been and shall be duly authorized
and validly issued, fully paid and nonassessable, and offered, issued, sold and
delivered by the Company in compliance with applicable Federal and state
securities laws. As of the Initial Closing Date, there are no outstanding
preemptive, conversion or other rights, options, warrants or agreements, granted
or issued by or binding upon the Company for the purchase or acquisition of any
shares of its capital stock, except as set forth in the Bylaws or the Restated
Certificate, as granted to Philips hereunder or as otherwise disclosed on the
Schedule of Exceptions. To the Company's Knowledge, there are no voting trusts
or any other agreements or understandings with respect to the voting of any
shares of Common Stock other than those so created pursuant to the Restated
Certificate or those to which Philips is a party, if any, or as set forth on the
Schedule of Exceptions. The Company holds no shares of its capital stock in its
treasury.
2.8 Subsidiaries. Each of the subsidiaries of the Company
(each, a "Subsidiary") is an entity duly organized and existing under the laws
of its jurisdiction of organization and is in good standing under such laws. All
of the issued shares of, or other interests in, capital stock or of each
Subsidiary have been duly and validly authorized and issued, are fully paid and
nonassessable and are owned by the Company, free and clear of all liens,
encumbrances, equities or claims. There are no outstanding preemptive,
conversion or other rights, options, warrants or agreements granted or issued by
or binding upon each Subsidiary for the purchase or acquisition of any shares
of, or other interests in, the Subsidiary's capital stock.
2.9 Financial Condition. The Company has delivered on or prior
to the Initial Closing Date, or will deliver promptly thereafter, its financial
statements to Philips, consisting of audited consolidated balance sheets and the
related consolidated statements of operations, shareholders' equity (deficit)
and cash flows as of and for the year ended on December 31, 1999, as well as the
unaudited consolidated balance sheets and the related consolidated statements of
operations, shareholders' equity (deficit) and cash flows as of and for the year
ended on December 31, 2000 (the "Financial Statements"). The Financial
Statements present fairly in all material respects the financial position and
results of operations of the Company at the dates and for the periods to which
they relate, have been prepared in accordance with generally accepted accounting
principles consistently followed throughout the period involved and show all
material liabilities, absolute or contingent, of the Company required to be
recorded thereon in accordance with generally accepted accounting principles as
at the respective dates thereof. There are no material liabilities (whether
known or unknown, direct or indirect, fixed or contingent, and of any nature
whatsoever) of the Company or any Subsidiary as of the date of such Financial
Statements that are required to be set forth in such Financial Statements and
are not reflected therein or otherwise disclosed in the Schedule of Exceptions.
Since December 31, 2000, there has been no development or event which has had or
could be reasonably expected to have a Material Adverse Effect.
2.10 Taxes. The Company has filed or caused to be filed all
tax returns that are required to be filed and paid all material taxes that are
required to be shown to be due and payable on said returns or on any assessment
made against it or any of its
property and all other taxes, assessments, fees, liabilities, penalties or other
charges imposed on it or any of its property by any governmental authority,
except for any taxes, assessments, fees, liabilities, penalties or other charges
which are being contested in good faith and (unless the amount thereof is not
material to the Company's consolidated financial condition) for which adequate
reserves have been established in accordance with GAAP.
2.11. Adverse Contracts. Except as set forth on the Schedule
of Exceptions, the Company is not a party to, nor is it or any of its property
subject to or bound by, any agreement or instrument which restricts its ability
to conduct its business and could reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
2.12. Insurance. To the Company's Knowledge, all of the
properties and operations of the Company and each Subsidiary of a character
usually insured by companies of established reputation engaged in the same or a
similar business similarly situated are reasonably insured (after taking into
account the current operations and financial condition of the Company and its
Subsidiaries) by financially sound and reputable insurers, against loss or
damage of the kinds and in amounts customarily insured against by such Persons.
2.13. Litigation. There are no proceedings or investigations
now pending or, to the Company's Knowledge, threatened before any court or
arbitrator or before or by any governmental authority which, individually or in
the aggregate, if determined adversely to the interests of the Company or any
subsidiary, could reasonably be expected to have a Material Adverse Effect.
2.14. Consents. No consent, approval, qualification, order or
authorization of, or filing with, any governmental authority is required in
connection with the Company's valid execution, delivery or performance of this
Agreement, or the offer, sale or issuance of the Shares by the Company, or the
consummation of any other transaction contemplated on the part of the Company
hereby, which has not been granted, given, made or waived prior to the Initial
Closing Date.
2.15. Title to Properties; Liens and Encumbrances. The Company
has licenses for, title to, or a valid leasehold interest in, all properties and
assets used in the business of the Company, except to the extent failure to have
such license, title or interest could not reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect.
2.16. Permits and Licenses. The Company has all
authorizations, consents, approvals, registrations, franchises, licenses and
permits, with or from governmental authorities and other persons as are
necessary for it to own its properties and conduct its business as now conducted
and the absence of which could reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
2.17 Issuance Taxes. All taxes imposed by law that have been
identified in writing by Philips to the Company in connection with the issuance,
sale and delivery of the Shares shall have been fully paid, and all laws
imposing such taxes shall have been fully complied with, prior to the Initial
Closing Date.
2.18 Offering. Subject to the truth and accuracy of Philips's
representations set forth in this Agreement, the offer, sale and issuance of the
Shares as contemplated by this Agreement are exempt from the registration
requirements of the Securities Act, and from the registration or qualification
requirements of the laws of any applicable state or other jurisdiction, and
neither the Company nor any authorized agent acting on its behalf will take any
action hereafter that would cause the loss of such exemption.
2.19 Registration Rights. Except as provided for in the
Registration Rights Agreement, as of the Initial Closing Date the Company is not
under any obligation to register any of its currently outstanding securities or
any of its securities which may hereafter be issued upon conversion, exchange or
exercise of any of its currently outstanding securities.
2.20 Compliance with Other Instruments. The Company is not in
violation of any term of its Restated Certificate or Bylaws. The Company is not
in violation of any term of any mortgage, indenture, contract, agreement,
instrument, judgment, decree, order, statute, rule or regulation to which the
Company is subject and a violation of which could reasonably be expected to have
a Material Adverse Effect.
2.21 Disclosure. This Agreement, the Registration Rights
Agreement, the Schedule of Exceptions, and the Financial Statements and notes
thereto, as well as any other document, certificate, schedule or written
statement furnished to Philips by or on behalf of the Company pursuant to
Section 4 in connection with the transactions contemplated hereby, do not
contain any untrue statement of a material fact and do not omit to state a
material fact necessary in order to make the statements contained therein or
herein not misleading in the light of the circumstances under which they were
made.
SECTION 3
REPRESENTATIONS, WARRANTIES AND COVENANTS OF PHILIPS
Philips represents and warrants to the Company as follows:
3.1 No Registration. Philips is acquiring the Shares for its
own account and not with the view to, or for resale in connection with, any
distribution thereof. Philips understands that the Shares have not been
registered under the Securities Act of 1933, as amended (the "Securities Act,"
which term shall include any successor federal statute) and that the Shares may
be resold only pursuant to an effective registration statement under the
Securities Act or an exemption from registration.
3.2 Restrictive Legend. Each certificate representing the
Shares and or any other securities issued in respect of the Shares upon any
stock split, stock dividend, recapitalization, merger, consolidation or similar
event, shall (unless otherwise permitted or unless the securities evidenced by
such certificate shall have been registered under the Securities Act) be stamped
or otherwise imprinted with a legend in the following form (in addition to any
legend required under applicable state securities laws):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD
OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND
ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
3.3 Further Assurances. In connection with any registration of
shares of Common Stock or other equity securities of the Company for the account
of the Company (other than under Section 3 of the Registration Rights
Agreement), Philips agrees to execute all letters, agreements or other documents
requested by the Company or its underwriters with terms that are customary in
similar types of transactions and under similar circumstances (including without
limitation lock-up undertakings), but always subject to agreement between
Philips and the underwriters at that time.
SECTION 4.
CONDITIONS TO CLOSING OF PHILIPS
4.1 Conditions to the Initial Closing. The obligation of
Philips to purchase the Shares to be purchased on the Initial Closing Date is
subject to the fulfillment or waiver of each of the following conditions on or
prior to the Initial Closing Date:
(a) Representations and Warranties Correct. The
representations and warranties made by the Company in Section 2 hereof
shall be true and correct in all material respects at and as of the
Initial Closing Date, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all
material respects on and as of such earlier date).
(b) Performance. All covenants, agreements and conditions
contained in this Agreement to be performed or complied with by the
Company on or prior
to the Initial Closing Date shall have been performed or complied with
in all material respects.
(c) Amendment to the Certificate of Incorporation. Prior to
the Initial Closing Date and subsequent to the filings, if any, and the
expiration of the waiting period, if any, under Section 4.1(f), the
Certificate of Incorporation of the Company shall have been amended and
restated by filing an Amended and Restated Certificate of Incorporation
in a form reasonably acceptable to Philips, and Philips shall have
received a copy of such Amended and Restated Certificate of
Incorporation, certified by the Secretary of State of the State of
Delaware.
(d) Legal Opinion. Philips shall have received from Xxxxxxxx
& Xxxxx, an opinion addressed to Philips, dated the Initial Closing
Date, and in the form set forth in Exhibit E.
(e) Shareholder Approval. Prior to the Initial Closing Date,
the transactions contemplated hereby shall have been approved, either
by written consent or in a duly convened shareholders meeting, by
shareholders of the Company representing a majority of the outstanding
voting securities of the Company, which majority shall include the
affirmative vote of Mr. T. Xxxxxxx Xxxxxxx and members of the Xxxxxxx
Group representing a majority of the outstanding voting securities of
the Company held by the Xxxxxxx Group as of the date hereof.
(f) HSR Approval. Prior to the Initial Closing Date, unless
Philips and the Company shall conclude that no such filings are
necessary, Philips and the Company shall have filed all documentary
materials required by, or deemed by Philips and the Company to be
necessary under, the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act"), including any notification and report
form required under the HSR Act, with respect to the purchase of Shares
by Philips, and the waiting period required by the HSR Act, including
any extensions thereof obtained by request or other action of the
Federal Trade Commission ("FTC") or the Antitrust Division of the
Department of Justice (the "Antitrust Division") shall have expired or
been earlier terminated by the FTC or the Antitrust Division.
(g) Other Consents and Approvals. All other material consents,
approvals and authorizations and all material filings with and
notifications of governmental authorities and regulatory agencies or
other entities which regulate the business of the Company or Philips,
necessary on the part of the Company or Philips or their respective
Affiliates for the execution and delivery of this Agreement and the
transactions contemplated hereby, shall have been obtained or effected.
(h) Legal Investment. The purchase of the Shares to
be purchased by Philips shall be legally permitted by all laws and
regulations to which Philips and the Company are subject.
(i) Securities Law Compliance. All actions and steps necessary
to assure compliance with applicable Federal and state securities laws,
including all authorizations, approvals or permits, if any, of any
governmental authority or regulatory body in any states where the
Shares are being sold that are required in connection with the lawful
issuance and sale of the Shares pursuant to this Agreement, shall have
been duly obtained and shall be effective on and as of the Initial
Closing Date except for any such filings as may under applicable law be
made subsequent to the Initial Closing Date, which such filings the
Company agrees it will make in a timely manner thereafter.
(j) Compliance Certificate. The Company shall have delivered
to Philips a certificate of the Chief Executive Officer of the Company,
dated as of the Initial Closing Date, certifying to the fulfillment of
the conditions specified in Section 4.1(a) and 4.1(b) of this Agreement
and that there has been no Material Adverse Effect in the business or
prospects of the Company since the date of the Financial Statements.
(k) Accounting Advice. KPMG, LLP shall have advised Philips in
writing, in a form reasonably satisfactory to Philips, that, under
United States generally accepted accounting principles ("US GAAP") as
in effect as of the Initial Closing Date, (i) the full amount of
consideration received by the Company for the Shares to be sold to
Philips on the Initial Closing Date should be accounted for as equity
in the consolidated balance sheet and related statement of
shareholders' equity (deficit) of the Company and (ii) no portion of
the consideration paid by Philips for such Shares is required to be
deducted currently from the carrying value of Philips' investment in
the Company on the balance sheet of Philips or reflected as a current
loss in the related statement of operations of Philips.
(l) Registration Rights Agreement. The execution and delivery
of all parties thereto of a Registration Rights Agreement in the form
attached hereto as Exhibit F (the "Registration Rights Agreement"),
shall have occurred prior to or simultaneously with the execution and
delivery of this Agreement.
(m) Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated hereby and
all documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to Philips.
4.2 Conditions to the Subsequent Closings. The obligation of
Philips to purchase the Shares to be purchased on any Subsequent Closing Date is
subject to the
fulfillment or waiver of each of the following conditions on or prior to the
relevant Subsequent Closing Date:
(a) Call Notice. Philips shall have received a Call
Notice in the form and manner set forth herein for such requests.
(b) Representations and Warranties Correct. The
representations and warranties made by the Company in Section 2 hereof
shall have been true in all material respects when made (except to the
extent such representations and warranties expressly relate to an
earlier date, in which case such representations and warranties shall
have been true and correct in all material respects on and as of such
earlier date) and shall be true and correct in all material respects as
though such representations and warranties had been made as of the
Subsequent Closing Date (except to the extent such representations and
warranties expressly relate to an earlier date, in which case such
representations and warranties shall have been true and correct in all
material respects on and as of such earlier date).
(c) Performance. All covenants, agreements and conditions
contained in this Agreement to be performed or complied with by the
Company on or prior to the relevant Subsequent Closing Date shall have
been performed or complied with in all material respects.
(d) Material Adverse Effect. Since the Initial Closing Date,
there shall have been no development or event which shall have had
or could be reasonably expected to have a Material Adverse Effect.
(e) Legal Investment. The purchase of the Shares to be
purchased by Philips shall be legally permitted by all laws and
regulations to which Philips and the Company are subject.
(f) Securities Law Compliance. All actions and steps necessary
to assure compliance with applicable Federal and state securities laws,
including all authorizations, approvals or permits, if any, of any
governmental authority or regulatory body in any states where the
Shares are being sold that are required in connection with the lawful
issuance and sale of the Shares pursuant to this Agreement, shall have
been duly obtained and shall be effective on and as of the relevant
Subsequent Closing Date except for any such filings as may under
applicable law be made subsequent to such Subsequent Closing Date,
which such filings the Company agrees it will make in a timely manner
thereafter.
(g) HSR Approval. Prior to the relevant Subsequent Closing
Date, unless Philips and the Company shall conclude that no such
filings are necessary, Philips and the Company shall have filed all
documentary materials required by, or deemed by Philips and the Company
to be necessary under, the HSR Act, including any notification and
report form required under the HSR Act, with
respect to the purchase of Shares by Philips, and the waiting period
required by the HSR Act, including any extensions thereof obtained by
request or other action of the FTC or the Antitrust Division shall have
expired or been earlier terminated by the FTC or the Antitrust
Division.
(h) Compliance Certificate. The Company shall have delivered
to Philips a certificate of the Chief Executive Officer of the Company,
dated as of the relevant Subsequent Closing Date, certifying to the
fulfillment of the conditions specified in Section 4.2(b), 4.2(c) and
4.2(d) of this Agreement.
(i) Accounting Advice. KPMG, LLP shall have advised Philips in
writing, in a form reasonably satisfactory to Philips, that, under US
GAAP as in effect as of the relevant Subsequent Closing Date, (i) the
full amount of consideration received by the Company for the Shares to
be sold to Philips on such Subsequent Closing Date should be accounted
for as equity in the consolidated balance sheet and related statement
of shareholders' equity (deficit) of the Company and (ii) no portion of
the consideration paid by Philips for such Shares is required to be
deducted currently from the carrying value of Philips' investment in
the Company on the balance sheet of Philips or reflected as a current
loss in the related statement of operations of Philips.
SECTION 5
CONDITIONS TO CLOSING OF COMPANY
The Company's obligation to sell the Shares to be purchased is
subject to the fulfillment or waiver of each of the following conditions on or
prior to any Closing Date:
5.1 Representations. The representations made by Philips
pursuant to Section 3 hereof shall be true and correct in all respects at and as
of each Closing Date as if made at and as of such date (except to the extent
such representations and warranties expressly relate to an earlier date, in
which case such representations and warranties shall have been true and correct
in all material respects on and as of such earlier date).
5.2 Legal Investment. The purchase of the Shares to be
purchased by Philips hereunder shall be legally permitted by all laws and
regulations to which Philips and the Company are subject.
5.3 Securities Law Compliance. All actions and steps necessary
to assure compliance with applicable Federal and state securities laws,
including all authorizations, approvals or permits, if any, of any governmental
authority or regulatory body in any state where the Shares are being sold that
are required in connection with the lawful issuance and sale of the Shares
pursuant to this Agreement shall have been duly obtained and shall be effective
on and as of the relevant Closing Date except for any such
filings as may under applicable law be made subsequent to such Closing Date,
which such filings the Company agrees it will make in a timely manner
thereafter.
SECTION 6
COVENANTS OF THE COMPANY
The Company hereby covenants and agrees as follows:
6.1 Basic Financial Information. The Company will furnish the
following reports to Philips:
(a) Subject to Section 6.1(d) below, as soon as practicable
after the end of each fiscal year of the Company, a consolidated
balance sheet of the Company and its subsidiaries, if any, as at the
end of such fiscal year, and consolidated statements of operations,
shareholders' equity (deficit) and cash flows of the Company and its
subsidiaries, if any, for such year, prepared in accordance with
generally accepted accounting principles consistently applied and
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and certified by
independent public accountants of recognized national standing selected
by the Company, and a Company prepared comparison to budget.
(b) Subject to Section 6.1(d) below, as soon as practicable
after the end of the first, second and third quarterly accounting
periods in each fiscal year of the Company, a consolidated balance
sheet of the Company and its subsidiaries, if any, as of the end of
each such quarterly period, and consolidated statements of operations
and related statements of cash flows of the Company and its
subsidiaries for such period and for the current fiscal year to date,
prepared in accordance with generally accepted accounting principles
consistently applied and setting forth in comparative form the figures
in the current budget, subject to changes resulting from year-end audit
adjustments, all in reasonable detail and certified by the principal
financial or accounting officer of the Company, except that such
financial statements will not contain the notes normally required by
generally accepted accounting principles.
(c) From the date the Company becomes subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act," which shall include any successor Federal statute), and
in lieu of the financial information required pursuant to Sections
6.1(a) and (b), upon request by Philips, copies of its annual reports
on Form 10-K and its quarterly reports on Form 10-Q, respectively.
(d) The Company agrees to use its reasonable best efforts
to deliver the financial information described in Sections 6.1(a)
and (b) above within the time
periods requested by Philips, which information, for purposes of this
Section 6.1(d) may include estimates, provided that such estimates are
subsequently corrected by the Company as soon as practicable. The
Company and Philips each agree to appoint appropriate representatives
to discuss in good faith the development of accounting and financial
reporting procedures and time schedules that will ensure that the
Company will provide the financial information described in Sections
6.1(a) and (b) above to Philips in a timely manner that will enable
Koninklijke Philips Electronics N.V., a company organized under the
laws of The Netherlands and an indirect holder of all of the
outstanding common stock of Philips ("Philips Parent"), timely to
incorporate the Company's financial information in Philips Parent's
consolidated accounts in accordance with its accounting procedures and
time schedule. The Company and Philips each further agree to use its
reasonable best efforts to implement such accounting and financial
reporting procedures and time schedules as soon as practicable after
the date hereof, but in no event later than December 31, 2001.
6.2 Additional Information.
(a) The Company will permit Philips (or a representative of
Philips) to visit and inspect any of the properties of the Company,
including its books of account and other records, and to discuss its
affairs, finances and accounts with the Company's officers and its
independent public accountants, all at such reasonable times and as
often as any such person may reasonably request.
(b) Subject to Section 6.2(c), until the earlier to occur of
(i) the date on which the Company is subject to the reporting
requirements of Sections 13(a) or 15(d) of the Exchange Act, or (ii)
the date on which quotations for the Common Stock of the Company are
reported by the automated quotations systems operated by the National
Association of Securities Dealers, Inc., or by an equivalent quotations
system, the Company will deliver the reports described below in this
Section 6.2 to Philips:
(i) As soon as practical after the end of each
month, a consolidated balance sheet of the Company and its
subsidiaries, if any, as at the end of such month and
consolidated statements of operations of the Company and its
subsidiaries, for each month and for the current fiscal year
of the Company to date, all subject to customary year-end
audit adjustments, prepared in accordance with generally
accepted accounting principles consistently applied and
certified by the principal financial or accounting officer of
the Company.
(ii) As soon as available (but in any event not
later than sixty (60) days after the commencement of each
fiscal year of the Company) the business plan of the Company,
in such manner and form as approved by the Board of Directors
of the Company, which business plan shall include
a projection of operations and cash flows for such fiscal year
and a projected balance sheet as of the end of such fiscal
year. Any material changes in such business plan shall be
submitted as promptly as practicable after such changes have
been approved by the Board of Directors of the Company.
(iii) With reasonable promptness, such other
information and data with respect to the Company and its
Subsidiaries as Philips may from time to time reasonably
request.
(c) The Company agrees to use its reasonable best efforts to
deliver the financial information described in Sections 6.2(b) above
within the time period requested by Philips, which information, for
purposes of this Section 6.2(c) may include estimates, provided that
such estimates are subsequently corrected by the Company as soon as
practicable. The Company and Philips each agree to appoint appropriate
representatives to discuss in good faith the development of accounting
and financial reporting procedures and time schedules that will ensure
that the Company will provide the financial information described in
Section 6.2(b) above to Philips in a timely manner that will enable
Philips Parent timely to incorporate the Company's financial
information in Philips Parent's consolidated accounts in accordance
with its accounting procedures and time schedule. The Company and
Philips each further agree to use its reasonable best efforts to
implement such accounting and financial reporting procedures and time
schedules as soon as practicable after the date hereof, but in no event
later than December 31, 2001.
(d) The provisions of Section 6.1 and this Section 6.2 shall
not be in limitation of any rights which Philips may have with respect
to the books and records of the Company and its subsidiaries, or to
inspect their properties or discuss their affairs, finances and
accounts, under the laws of the jurisdictions in which they are
incorporated.
6.3 Prompt Payment of Taxes, etc. The Company will promptly
pay and discharge, or cause to be paid and discharged, when due and payable, all
lawful taxes, assessments and governmental charges or levies imposed upon the
income, profits, property or business of the Company or any subsidiary;
provided, however, that any such tax, assessment, charge or levy need not be
paid if the validity thereof shall currently be contested in good faith by
appropriate proceedings and if the Company shall have set aside on its books
adequate reserves with respect thereto, and provided, further, that the Company
will pay all such taxes, assessments, charges or levies forthwith upon the
commencement of proceedings to foreclose any lien which may have attached as
security therefor. The Company will promptly pay, or cause to be paid, when due,
or in conformance with customary trade terms or otherwise in accordance with
policies related thereto adopted by the Company's Board of Directors, all other
indebtedness incident to operations of the Company.
6.4 Maintenance of Properties and Leases. The Company will
keep its properties and those of its subsidiaries in good repair, working order
and condition, reasonable wear and tear excepted, and from time to time make all
needful and proper repairs, renewals, replacements, additions and improvements
thereto; and the Company and its subsidiaries will at all times comply with each
material provision of all leases to which any of them is a party or under which
any of them occupies property if the breach of such provision might have a
material and adverse effect on the condition, financial or otherwise, or
operations of the Company.
6.5 Insurance. The Company will keep its assets and those of
its subsidiaries which are of a character to the Company's Knowledge usually
insured by companies of established reputation engaged in the same or a similar
business similarly situated reasonably insured (after taking into account the
then current operations and financial condition of the Company and its
Subsidiaries) by to the Company's Knowledge financially sound and reputable
insurers, against loss or damage of the kinds and in amounts customarily insured
against by such Persons.
6.6 Accounts and Records. The Company will keep true records
and books of account in which full, true and correct entries will be made of all
dealings or transactions in relation to its business and affairs in accordance
with generally accepted accounting principles applied on a consistent basis.
6.7 Independent Accountants. In the event the services of
KPMG, LLP, or any firm of independent public accountants hereafter employed by
the Company, are terminated, the Company will promptly thereafter notify Philips
and will request the firm of independent public accountants whose services are
terminated to deliver to Philips a letter from such firm setting forth the
reasons for the termination of their services. In the event of such termination,
the Company will promptly thereafter engage another firm of independent public
accountants of recognized national standing. In its notice to Philips the
Company shall state whether the change of accountants was recommended or
approved by the Board of Directors of the Company or any committee thereof.
6.8 Compliance with Requirements of Governmental Authorities.
The Company and all its subsidiaries shall duly observe and conform to all valid
requirements of governmental authorities relating to the conduct of their
businesses or to their properties or assets.
6.9 Maintenance of Corporate Existence, etc. The Company shall
maintain in full force and effect its corporate existence, rights and franchises
and all licenses and other rights in or to use patents, processes, licenses,
trademarks, trade names or copyrights owned or possessed by it or any subsidiary
and deemed by the Company to be necessary to the conduct of its business
without, to the Company's Knowledge, any conflict with any interest in or rights
of others to use such patents, processes, licenses, trademarks, trade names or
copyrights.
6.10 Availability of Stock for Conversion. The Company will,
from time to time, in accordance with the laws of the State of Delaware,
increase the authorized amount of Common Stock if at any time the number of
shares of Common Stock remaining unissued and available for issuance shall be
insufficient to permit conversion of all the then outstanding convertible
Preferred Stock held by Philips.
6.11 Incentive Stock Agreements. The Company will not, without
the approval of the Board of Directors, issue any of its capital stock, or grant
an option or right to subscribe for, purchase or acquire any of its capital
stock, to any employee, former employee, founder, consultant, officer, supplier,
customer or director of the Company or a subsidiary except for the issuance
hereafter of up to the number of shares of Common Stock that represent 15% of
the outstanding capital stock of the Company on a fully diluted and converted
basis pursuant to a stock option plan, stock purchase plan or other arrangement,
hereafter or heretofore, adopted by the Board of Directors.
6.12 Indebtedness, Restricted Payments, Etc.. The Company
shall not, without Philips' prior consent:
(a) Create, incur, assume or suffer to exist any
Indebtedness, except (i) Indebtedness secured by Permitted
Encumbrances; (ii) at any time after October 1, 2001, Indebtedness of
the Company, not to exceed a balance outstanding at any time of the
greater of $15,000,000 or the average balance of the Company's trade
receivables for the two-month period prior to any such time, under a
revolving credit facility entered into by the Company for the exclusive
purpose of financing its working capital needs; provided, however, that
the Company may only enter into such revolving credit facility for an
amount and to the extent that the Board of Directors shall determine
would not delay, defer or otherwise hinder the timing of an initial
public offering of Common Stock of the Company; and (iii) Indebtedness
of the Company, not to exceed a balance of $15,000,000 outstanding at
any time, under Capital Leases entered into by the Company with respect
to information technology equipment and secured on a nonrecourse basis
by such information technology equipment. Notwithstanding the foregoing
sentence of this Section 6.12(a), any Indebtedness to be created,
incurred, assumed or suffered to exist by the Company pursuant to
Section 6.12(a)(ii) or (iii) will not require Philips' prior consent
only if such Indebtedness is specifically approved by a majority of the
Board of Directors of the Company.
(b) Declare or make any Restricted Payment.
(c) Create, incur, assume or suffer to exist any Lien of any
kind upon or in any of its property or assets, whether now owned or
hereafter acquired, except Permitted Encumbrances or in connection with
revolving credit facilities pursuant to Section 6.12(a) above.
(d) Enter into any merger or consolidation or acquire assets
of any Person, or sell, lease, or otherwise dispose of any of the
Company's assets, except in the ordinary course of its business.
(e) Assume, guarantee, endorse, contingently agree to purchase
or otherwise become liable upon the obligation of any other Person,
except in the ordinary course of its business.
(f) Make any material Capital Expenditures, other than as
provided for in a business plan and budget approved by the Board of
Directors and in effect at the time of the expenditure.
(g) Sell, license or otherwise dispose of any part of the
Database, except that the Company may grant licenses in the ordinary
course of business.
(h) Purchase or acquire the obligations or stock of, or any
other interest in, or make loans or advances to, any Person other than
a wholly-owned subsidiary, except (i) direct obligations of the United
States of America with a maturity not exceeding one year, (ii) time
deposits, certificates of deposit, eurodollar time deposits, bankers
acceptances or eurodollar certificates of deposits with a maturity not
exceeding one year issued by a commercial bank having a combined
capital and surplus of at least $500 million, chartered under the laws
of the United States or one of the States thereof and a member of the
Federal Reserve System, (iii) commercial paper with a minimum rating of
A1/P1 or the equivalent thereof, (iv) repurchase agreements with member
banks of the Federal Reserve System and primary dealers limited to
United States government securities, provided that the market value of
the securities used as collateral for such repurchase agreements must
equal or exceed the principal and interest due under such repurchase
agreements, (v) advances to suppliers made in the ordinary course of
business, and (vi) acquisition of stock of other Persons in exchange
for license fees that would otherwise be due to the Company.
(i) Except pursuant to existing contracts previously approved
by Board of Directors, enter into any transactions with Affiliates
other than on terms not less favorable to the Company than would
reasonably be expected to be obtained on an arm's length basis.
6.13 Board Approval. Whenever this Agreement calls for or
refers to the consent or approval on any matter by Philips, such consent or
approval shall be deemed given by Philips if each of Philips' designees on the
Board of Directors has, in his or her capacity as a director of the Company,
given his or her consent or approval with respect to such matter at a duly
convened meeting of the Board of Directors or pursuant to an effective written
consent of the Board of Directors.
6.14 Right of First Refusal. (a) The Company shall give
Philips notice in writing each time the Company proposes to offer or issue any
shares of Common Stock, or securities convertible into or exercisable for shares
of Common Stock, or any other rights, options, warrants or agreements for the
purchase or acquisition of shares of Common Stock, of the Company. Within thirty
(30) days of receiving such notice, Philips may agree to purchase all, but not
less than all, of such shares, securities or other rights at the same price as
such offer or issuance.
(b) The right of first refusal set forth in paragraph (a)
above shall not be applicable (i) to the issuance of shares, securities
or other rights to employees, directors, or consultants pursuant to
plans or agreements approved by the Board of Directors of the Company,
(ii) to the issuance of shares of Common Stock pursuant to the
conversion or exercise of convertible or exercisable securities or
rights, or as a result of any reclassification, stock split or stock
dividend, (iii) to the issuance of shares, securities or other rights
in an initial public offering of securities of the Company, (iv) to the
issuance of shares, securities or other rights in connection with a
business acquisition of or by the Company, whether by merger,
consolidation, sale of assets, sale or exchange of stock or otherwise
that has been approved by the Board of Directors, or (v) to the
issuance of shares, securities or other rights to strategic partners,
licensors, financial institutions or lessors in connection with
transactions approved by the Board of Directors of the Company and not
primarily for equity-financing purposes, so long as no shareholder of
the Company participates in such transaction.
6.15 Termination of Covenants. The covenants set forth in
Sections 6.3 through 6.12 shall terminate and be of no further force and effect
on the Termination Date, or earlier if for any reason Philips ceases to hold at
least 50% of the Shares issued to it hereunder. The right set forth in Section
6.14 shall terminate and be of no further force and effect on the Termination
Date.
SECTION 7
MISCELLANEOUS
7.1. Governing Law. This Agreement shall be governed in all
respects by the laws of the State of New York.
7.2. Survival. The representations, warranties, covenants
and agreements made herein shall survive the execution and delivery of this
Agreement and the issuance of the Shares.
7.3. Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto.
7.4 Entire Agreement; Amendment. This Agreement (including the
Schedules and Exhibits hereto) and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof. Neither this Agreement nor any
term hereof may be amended, waived, discharged or terminated, except by a
written instrument signed by all parties hereto.
7.5 Notices, etc. All notices and other communications
required or permitted hereunder shall be in writing and shall be mailed by
certified or registered mail, postage prepaid, delivered either by hand or by
messenger, or transmitted by electronic telecopy (fax) addressed:
If to Philips, at:
Philips Consumer Electronic Services B.V.
c/o Philips Electronics North America Corp.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: General Counsel
If to the Company, at:
00000 X. Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: General Counsel
or at such other address as either party shall have furnished to the other in
writing. All such notices and other written communications shall be effective
(i) if mailed, seven (7) days after mailing, (ii) if delivered, upon delivery,
or (iii) if faxed, within one business day after transmission.
7.6 Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to either party hereto upon any breach or
default of the other party under this Agreement shall impair any such right,
power or remedy of such party nor shall it be construed to be a waiver of any
such breach or default, or any acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party hereto of any breach or default under this
Agreement or any waiver on the part of any party hereto of any provisions or
conditions of this Agreement must be made in writing and shall be effective only
to the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any party, shall be cumulative
and not alternative.
7.7 Separability. In case any provision of the Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
7.8 Agent's Fees. (a) The Company hereby agrees to indemnify
and to hold Philips harmless of and from any liability for commission or
compensation in the nature of an agent's fee to any broker or other person or
firm (and the costs and expenses of defending against such liability or asserted
liability) arising from any act by the Company or any of its employees or
representatives.
(b) Philips (i) represents and warrants that it has retained
no finder or broker in connection with the transactions contemplated by
this Agreement and (ii) hereby agrees to indemnify and to hold the
Company harmless from any liability for any commission or compensation
in the nature of an agent's fee to any broker or other person or firm
(and the costs and expenses of defending against such liability or
asserted liability) for which Philips, or any of Philips' employees or
representatives, are responsible.
7.9 Expenses. Each party shall pay all reasonable closing
costs and fees, including without limitation legal fees and expenses, incurred
on its behalf in connection with the execution of this Agreement and the
agreements entered into in connection with the transactions contemplated hereby.
7.10 Titles and Subtitles. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
7.11 Definitions. (a) As used in this Agreement (including
Exhibits and Schedules), the following terms have the meanings set forth below:
"Affiliate" of any specified Person means any other
Person which, directly or indirectly, is in control of, is
controlled by, or is under common control with such specified
Person. For purposes of this definition, control of a Person
means the power, direct or indirect, to direct or cause the
direction of the management and policies of such Person
whether by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Business Day" means each Monday, Tuesday, Wednesday,
Thursday or Friday on which banking institutions in New York,
New York, or Chicago, Illinois, are not authorized or
obligated by law, regulation or executive order to close.
"Call Notice" means each of the written notices
delivered by the Company to Philips from time to time setting
forth the number of Series A
Shares to be sold by the Company and purchased by Philips and
such other information as required by Section 1.4.
"Capital Expenditures" means, for any period, the
aggregate of all expenditures (whether paid in cash or accrued
as liabilities but excluding that portion of Capital Leases
which is capitalized on the balance sheet of the Company) by
the Company during that period that are included in the
property, plant or equipment reflected in the balance sheet of
the Company.
"Capital Lease" means, with respect to any Person,
any obligation of such Person to pay rent or other amounts
under a lease with respect to any property (whether real,
personal or mixed) acquired or leased by such Person that is
required to be accounted for as a liability on a balance sheet
of such Person.
"Capital Lease Obligations" means the obligation of
any Person to pay rent or other amounts under a Capital Lease.
"Company's Knowledge" means the actual knowledge of
the Persons listed on the Knowledge Schedule.
"Database" means (i) the Company's navigable
database, as it may be updated or expanded from time to time,
which is a digital representation of road transportation
networks currently covering the United States and selected
European countries, and (ii) all software and tools used in
database creation, updating, modification, distribution, and
other operations of the Company related to such navigable
database either currently conducted or contemplated to be
conducted, including (a) tools for automated data capture from
machine-readable sources, including post office and public
domain government spatial data files; (b) comparison and
validation tools for merging data from multiple sources; (c)
verifica tion tools to validate connectivity and consistency;
(d) integration tools for merging new data into the database
structure; (e) statistical and reporting tools for extracting
information in human readable form; and (f) translation
software for generating versions of the database in a variety
of formats.
"Expected Monthly Shortfall" for any calendar month
means the amount by which (x) the Company's Operating Cash
Outflows (pursuant to the most recent business plan and budget
approved and as amended from time to time by the Company's
Board of Directors) projected for such calendar month by the
Company exceed (y) the sum of (i) expected cash receipts for
such month (pursuant to such business plan and budget)
excluding any amounts to be received from Philips as the
aggregate
purchase price for any Series A Shares to be issued in such
calendar month, plus (ii) the expected balances in all of the
Company's bank accounts at the beginning of such month (net of
$5,000,000 of ordinary operating cash balances).
"Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person guaranteeing or having
the economic effect of guaranteeing any Indebtedness of any
other Person (the "primary obligor") in any manner, whether
directly or indirectly, and including any obligation of such
Person, (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or to purchase
(or to advance or supply funds for the purchase of) any
security for the payment of such Indebtedness, (ii) to
purchase property, securities or services for the purpose of
assuring the holder of such Indebtedness of the payment of
such Indebtedness, or (iii) to maintain working capital,
equity capital or other financial statement condition or
liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness (and "Guaranteed,"
"Guaranteeing" and "Guarantor" shall have meanings correlative
to the foregoing).
"Indebtedness" of any Person means, without
duplication, (a) all indebtedness of such Person for borrowed
money or for the deferred purchase price of property or
services (including all obligations, contingent or otherwise,
of such Person in connection with letter of credit facilities,
acceptance facilities, interest rate protection agreements or
other similar facilities, including currency swaps) other than
indebtedness to trade creditors and service providers incurred
in the ordinary course of business, (b) all obligations of
such Person evidenced by bonds, notes, debentures or other
similar instruments, (c) all indebtedness created or arising
under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though
the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession
or sale of such property), (d) all Capital Lease Obligations
of such Person, (e) all Indebtedness of others of the type
referred to in clause (a), (b), (c) or (d) above secured by
(or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien
upon or in property (including accounts and contract rights)
owned by such Person, even though such Person has not assumed
or become liable for the payment of such Indebtedness, (f) all
preferred stock issued by such Person which is mandatorily
redeemable prior to the occurrence of a Conversion Event under
the Series A Certificate of Designations or the Series B
Certificate of Designations; (g) all Indebtedness of others
Guaranteed by such Person; (h) all obligations of such Person
as an account party (including reimbursement obligations to
the issuer of a letter of credit) in respect of bankers'
acceptances and letters of credit Guaranteeing Indebtedness,
and (i) all non-contingent obligations or secured obligations
(whether or not contingent) of such Person as an account party
(including reimbursement provisions to the issuers of letters
of credit) in respect of letters of credit obtained in the
ordinary course of business of such Person other than those
referred to in (h) above.
"Lien" means, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, encumbrance, charge or
security interest in or on such asset, (b) the interest of a
vendor or lessor under any conditional sale agreement, capital
lease or title retention agreement relating to such asset, (c)
in the case of securities, any purchase option, call or
similar right of a third party with respect to such
securities, and (d) any assignment of interest filed with the
United States Copyright Office or the United States Patent and
Trademark Office; provided, however, that licenses in and to
the Database (or any portion thereof) shall not be considered
Liens for any purposes hereof.
"Material Adverse Effect" means, with respect to the
Company, (i) any material adverse effect on the business,
properties, condition (financial or otherwise), prospects or
operations of the Company since any reference date; (ii) any
material adverse effect on the ability of the Company to
perform its obligations hereunder or under the Registration
Rights Agreement, or (iii) any material adverse effect on the
legality, validity, binding effect or enforceability of this
Agreement or the Registration Rights Agreement.
"Maximum Amount" means $50,000,000; provided, that in
determining the remaining portion of the Maximum Amount
available for demand under subsequent Call Notices, such
amount shall be decreased by all amounts converted under the
Demand Promissory Notes, the amount provided to the Company on
the Initial Closing Date, and all amounts provided to the
Company under previous Call Notices; provided, further, that
to the extent the Company hereafter issues and sells any
equity securities, including but not limited to Series A
Shares, to one or more of its existing shareholders other than
Philips on or before the date on which Philips has purchased
Series A Shares for an aggregate purchase price equal to the
Maximum Amount, then the Maximum Amount shall be further
reduced by the aggregate purchase price paid or agreed to be
paid to the Company by such other shareholders.
"Operating Cash Outflows" shall mean, for any period
with respect to any Person, cash expenditures by such Person
during such period.
"Permitted Encumbrances" means (i) Liens for taxes
not delinquent or being contested in good faith and by
appropriate proceedings and for which reserves adequate under
GAAP are being maintained, (ii) deposits or pledges to secure
obligations under workers' compensation, social security or
similar laws, or under unemployment insurance, (iii) deposits
or pledges to secure bids, tenders, contracts (other than
contracts for the payment of money), leases, statutory
obligations, surety and appeal bonds and other obligations of
like nature arising in the ordinary course of business, (iv)
mechanics', worker's, materialmen's or other like Liens
arising in the ordinary course of business with respect to
obligations which are not due or which are being contested in
good faith, (v) minor imperfections of title on real estate,
provided such imperfections do not render title unmarketable;
(vi) Liens with respect to Indebtedness permitted under
Section 6.12(a)(ii) and (iii); provided, however, that
Permitted Encumbrances shall not include any Liens of any kind
voluntarily created by the Company on the Database other than
those permitted under (vi) of this definition of Permitted
Encumbrances.
"Person" means any individual, partnership,
corporation, business trust, joint stock company, limited
liability company, trust, unincorporated association, joint
venture, governmental authority or other entity of whatever
nature.
"Restricted Payments" means any dividends on any
shares of any class of the Corporation's capital stock, or
application of any of its property or assets to the purchase,
redemption or other retirement of, or the setting apart of any
sum for the payment of any dividends on, or for the purchase,
redemption or other retirement of, or any other payment or
distribution of assets in respect of, shares of the
Corporation's capital stock; provided that the Company's
purchases or redemption of capital stock from a former
employee, officer, director or consultant shall not be deemed
a Restricted Payment.
"Xxxxxxx Group" means the Persons listed on the Xxxxxxx
Group Schedule.
"Termination Date" means the earliest date on which
any Conversion Event under the Series A Certificate of
Designations or the Series B Certificate of Designations shall
occur.
(b) As used in this Agreement (including Exhibits and
Schedules), the following terms have the respective meanings set forth
in the Section or other provision of this Agreement indicated below:
Agreement Recitals
Antitrust Division 4.1(f)
Bylaws 2.1
Common Stock 2.7
Company Recitals
Closing Date 1.2(b)
Demand Promissory Notes 1.3(a)(i)
Exchange Act 6.1(c)
Financial Statements 2.9
FTC 4.1(f)
HSR Act 4.1(f)
Initial Closing Date 1.2(a)
Master Loan Agreement 1.3(b)
Philips Recitals
Philips Parent 6.1(d)
Promissory Notes 3.1(b)
Registration Rights Agreement 4.1(l)
Restated Certificate 2.1
Securities Act 3.1
Series A Certificate of Designations 1.1(a)
Series B Certificate of Designations 1.1(b)
Series A Shares 1.1(a)
Series B Series 1.1(b)
Shares 1.1(b)
Subsequent Closing Date 1.2(b)
Subsidiary 2.8
US GAAP 4.1(k)
(c) All references to "the Company" in Sections 2 and 4 are
deemed to mean "the Company and its subsidiaries, collectively and
singly" unless the context could be reasonably interpreted to require
the reference to mean "the Company singly."
7.12. Initial Public Offering. Insofar as a majority of the
Board of Directors of the Company (which majority must include at least one of
Philips' designees on the Board of Directors) determines that an initial public
offering of Common Stock of the Company would be in the best interest of both
the Company and its shareholders, Philips will support such decision. As of the
date hereof, Philips acknowledges its independent position in favor of
conducting such initial public offering as soon as commercially reasonable,
subject to prevailing market conditions.
7.13. Scope. Each party hereto shall be responsible for the
actions of all entities under its control and cause such entities to abide by
the terms of this Agreement wherever applicable.
7.14 Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
7.15 Reconciliation of Results of Calculations. Philips and
the Company acknowledge that they have each arrived at results that differ from
those arrived at by the other party in their respective calculations of the
aggregate amount of interest accrued, whether capitalized or not, in respect of
the Demand Promissory Notes and the Promissory Notes through the date hereof.
Philips and the Company agree to appoint appropriate representatives to review
the parties' respective calculations in order to reconcile their results and to
agree upon the correct total amount of such interest (the "Total Interest
Amount"), as soon as possible after the date hereof, but in no event later than
thirty (30) days hereafter. Philips and the Company further agree that to the
extent that the Total Interest Amount is greater or less than $130,059,713.38 by
an amount that is less than or equal to $15,000.00 (such amount, the "Interest
Adjustment"), (i) the parties shall appropriately amend the provisions of
Sections 1.2 and 1.3 of this Agreement to reflect the Interest Adjustment, with
retroactive effect as of the date hereof, (ii) Philips shall promptly deliver to
the Company the certificates representing the Shares purchased on the date
hereof, and (iii) the Company shall issue replacement certificates, dated as of
the date hereof, representing the number of Shares purchased by Philips pursuant
to the amended provisions of Sections 1.2 and 1.3 of this Agreement. Philips and
the Company agree that if the Interest Adjustment is more than $15,000.00, the
Interest Adjustment shall be deemed to be $15,000.00 for purposes of the
foregoing sentence.
IN WITNESS WHEREOF, each of the parties has executed this
Agreement as of the date first above written.
NAVIGATION TECHNOLOGIES
CORPORATION
By: /s/ Xxxxxx Xxxxx
-----------------------------------------
Name: Xxxxxx Xxxxx
Title: President and CEO
PHILIPS CONSUMER ELECTRONIC
SERVICES B.V.
By: /s/ Xxxxxxx X. Xxxx
---------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Attorney-in-fact
