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EXHIBIT 2.1
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AGREEMENT AND PLAN OF REORGANIZATION
among
IMMERSION CORPORATION,
a California corporation
("Immersion"),
IMMERSION ACQUISITION CORPORATION,
a Delaware corporation and wholly-owned
subsidiary of Immersion,
("Sub")
CYBERNET SYSTEMS CORPORATION,
a Delaware corporation
("Cybernet"),
and
CYBERNET HAPTIC SYSTEMS CORPORATION,
a Michigan corporation and
wholly-owned subsidiary of Cybernet
("Cybernet Sub")
Dated March 4, 1999
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION is made and entered into as of
March 4, 1999, by and among Immersion Corporation, a California corporation
("Immersion"), Immersion Acquisition Corporation, a Delaware corporation and a
wholly-owned subsidiary of Immersion ("Sub"), Cybernet Systems Corporation, a
Delaware corporation ("Cybernet"), and Cybernet Haptic Systems Corporation, a
Michigan corporation and a wholly-owned subsidiary of Cybernet ("Cybernet Sub")
(the "Agreement").
RECITALS
A. The Boards of Directors of Immersion, Sub, Cybernet and Cybernet Sub
deem it advisable and in the best interests of each corporation and their
respective shareholders that Immersion and Cybernet Sub combine in order to
advance the long-term business interests of Immersion, Cybernet Sub and
Cybernet;
B. The combination of Immersion and Cybernet Sub shall be effected by the
terms of this Agreement through a transaction (the "Merger") in which Sub will
merge with and into Cybernet Sub, with Cybernet Sub becoming a wholly-owned
subsidiary of Immersion and with Cybernet, the sole stockholder of Cybernet Sub,
becoming a shareholder of Immersion; and
C. The parties intend, by approving resolutions authorizing this
Agreement, to adopt this Agreement as a plan of reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations thereunder, and to cause the Merger to qualify as a
reorganization within the meaning of Section 368(a) of the Code.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth below, the
parties agree as follows:
ARTICLE I
THE MERGER
Section 1.1 Effective Time of the Merger. Subject to the provisions of
this Agreement, certificate of merger (the "Merger Certificates") containing the
substantive provisions of this Article I and Article II and in such form as is
required by the relevant provisions of the Michigan Business Corporation Act
(the "Michigan Law") and of the Delaware General Corporation Law (the "DGCL")
shall be duly prepared, executed and acknowledged by Sub and by Cybernet Sub as
the Surviving Corporation (as defined in Section Section 1.3) and thereafter
delivered to the Department of Consumer & Industry Services of the State of
Michigan and the Secretary of State of the State of Delaware for filing as soon
as practicable on or after the Closing Date (as defined in Section Section 1.2).
The Merger shall become effective upon the filing of the Merger Certificate with
the Secretary of State of the State of Delaware and upon acceptance of the
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Merger Certificate by the Department of Consumer & Industry Services of Michigan
in accordance with the Michigan Law and DGCL or at such time thereafter as is
provided in such Merger Certificates (the "Effective Time").
Section 1.2 Closing. The closing of the transactions contemplated in this
Agreement (the "Closing") shall take place at the offices of Immersion
Corporation, 0000 Xxxxxxx Xxxxx, Xxx Xxxx, XX 00000, upon the satisfaction or
waiver of all conditions set forth in Article VI or at such other time and
location as Immersion, Cybernet and Cybernet Sub may agree (the "Closing Date").
Section 1.3 Effects of the Merger. At the Effective Time (i) the separate
existence of Sub shall cease and Sub shall be merged with and into Cybernet Sub
(the "Surviving Corporation"), (ii) the Certificate of Incorporation of Cybernet
Sub as in effect immediately prior to the Effective time and as set forth in
Exhibit A herein shall be the Certificate of Incorporation of the Surviving
Corporation, (iii) the Bylaws of Cybernet Sub as in effect immediately prior to
the Effective Time and as set forth in Exhibit B herein shall be the Bylaws of
the Surviving Corporation. (Sub and Cybernet Sub are sometimes referred to
herein as the "Constituent Corporations.")
Section 1.4 Directors and Officers. The directors and officers of Sub
immediately prior to the Effective Time shall be the initial directors and
officers of the Surviving Corporation, each of whom will hold office in
accordance with the Certificate of Incorporation and Bylaws of the Surviving
Corporation, in each case until their respective successors are duly elected or
appointed.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of Immersion, Sub,
Cybernet or Cybernet Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of
the capital stock of Sub shall be converted into and become one fully paid and
nonassessable share of Common Stock, $.001 par value, of the Surviving
Corporation.
(b) Exchange Ratio for Cybernet Sub Capital Stock. Subject to
the provisions of Section Section 2.2, (i) each issued and outstanding share of
Common Stock of Cybernet Sub shall be converted into the right to receive 160
fully paid and nonassessable shares of Common Stock of Immersion (the "Merger
Stock"), which amounts shall be subject to adjustment to reflect any stock split
or stock dividend effected between the date of this Agreement and the Effective
Time. All such shares of Common Stock of Cybernet Sub (the "Cybernet Sub
Stock"), when so converted, shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each holder
of a certificate representing any such shares shall cease to have any rights
with respect thereto, except the right
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to receive the shares of Merger Stock to be issued in consideration therefor
upon the surrender of such certificate in accordance with this Article II.
(c) Certificate Legends. The shares of Merger Stock to be
issued pursuant to this Article II shall not have been registered and shall be
characterized as "restricted securities" under the federal securities laws, and
under such laws such shares may be resold without registration under the
Securities Act of 1933, as amended (the "Securities Act"), only in certain
limited circumstances. Each certificate evidencing shares of Merger Stock to be
issued pursuant to this Article II shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
SUCH SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION WITHOUT AN EXEMPTION UNDER THE SECURITIES ACT OR AN
OPINION OF LEGAL COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED."
Section 2.2 Exchange of Certificates. The procedures for exchanging
outstanding shares of Cybernet Sub for Merger Stock pursuant to the Merger are
as follows:
(a) Exchange Agent. As of the Effective Time, Immersion shall
deposit with Xxxx Xxxx Xxxx & Freidenrich LLP (the "Exchange Agent"), Merger
Stock for the benefit of the holders of Cybernet Sub Stock for exchange in
accordance with this Section Section 2.2.
(b) Exchange Procedures. At the Closing, the Exchange Agent
shall deliver to Cybernet, which immediately prior to the Effective Time held
all certificates of the outstanding shares of Cybernet Sub Stock (the
"Certificates") (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent and shall be in
such form and have such other provisions as Immersion and Cybernet Sub may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for certificates representing shares of Merger
Stock. Upon surrender of the Certificates for cancellation to the Exchange
Agent, together with a duly executed letter of transmittal, Cybernet shall be
entitled to receive in exchange therefor a certificate representing that number
of whole shares of Merger Stock which Cybernet has the right to receive pursuant
to the provisions of Section Section 2.1, and the Certificates so surrendered
shall immediately be canceled. Until surrendered as contemplated by this Section
Section 2.2, each Certificate shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender the certificate
representing shares of Merger Stock. The instructions for effecting the
surrender of the Certificates shall set forth procedures that must be taken by
the holder of any Certificate that has been lost, destroyed or stolen. It shall
be a condition to the right of such holder to receive a certificate representing
shares of Merger Stock that the Exchange Agent shall have received,
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along with the letter of transmittal, a duly executed lost certificate affidavit
or lost note affidavit, including an agreement to indemnify Immersion, signed
exactly as the name or names of the registered holder or holders appeared on the
books of Cybernet Sub immediately prior to the Effective Time, together with
such other documents as Immersion or the Exchange Agent may reasonably require
in connection therewith.
(c) Fractional Shares. No Certificates representing fractional
shares of Merger Stock shall be issued to Cybernet upon the surrender for
exchange of Certificates, and Cybernet shall not be entitled to any voting
rights, rights to receive any dividends or distributions or other rights as a
stockholder of Cybernet Sub with respect to any fractional shares that would
otherwise be issued to Cybernet.
(d) No Further Ownership Rights in Cybernet Sub Stock. All
shares of Merger Stock issued upon the surrender for exchange of shares of
Cybernet Sub Stock in accordance with the terms hereof shall be deemed to have
been issued in full satisfaction of all rights pertaining to such shares of
Cybernet Sub Stock, and there shall be no further registration of transfers on
the stock transfer books of the Surviving Corporation of Cybernet Sub Stock
which were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for any
reason, they shall be canceled and exchanged as provided in this Section Section
2.2.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CYBERNET AND CYBERNET SUB
Cybernet and Cybernet Sub represent and warrant to Immersion that the
statements contained in this Article III are true and correct, except as
disclosed in the disclosure schedule delivered by Cybernet and Cybernet Sub to
Immersion on or before the date of this Agreement and attached hereto as Exhibit
C (the "Cybernet Disclosure Schedule"). For purposes of this Agreement, any
reference to a "Material Adverse Effect" with respect to any entity or group of
entities means a material adverse effect on the business, assets (including
intangible assets), financial condition, or results of operations of such entity
and its subsidiaries, taken as a whole.
Section 3.1 Organization, Standing and Power. Each of Cybernet and
Cybernet Sub is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, has all
requisite corporate power to own, lease and operate its properties and to carry
on its business as currently being conducted, and is duly qualified to do
business and is in good standing in each jurisdiction in which the failure to be
so qualified and in good standing would have a Material Adverse Effect on
Cybernet Sub. Cybernet Sub has delivered true and correct copies of the
Certificate of Incorporation and Bylaws of Cybernet Sub, each as amended to
date, to Immersion. Cybernet Sub is not in violation of any of the provisions of
its Certificate of Incorporation, Bylaws or other charter documents.
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Section 3.2 Cybernet Sub Capital Structure.
(a) The authorized capital stock of Cybernet Sub consists of
60,000 shares of Cybernet Sub Common Stock. As of the date hereof, 10,000 shares
of Cybernet Sub Common Stock are issued and outstanding, and held of record by
those persons set forth in Schedule Section 3.2((a)) of the Cybernet Disclosure
Schedule. All such outstanding shares of Cybernet Sub Common Stock have been
duly authorized, validly issued, fully paid and are nonassessable, have been
issued in compliance with all applicable federal and state securities laws, and
are subject to no preemptive rights or rights of first refusal created by
statute, the Certificate of Incorporation or Bylaws of Cybernet Sub or any
agreement to which Cybernet Sub is a party or by which it is bound.
(b) Except as set forth in this Section Section 3.2 or
Schedule 3.2(b) of the Cybernet Disclosure Schedule, there are (i) no equity
securities of any class of Cybernet Sub, or any securities exchangeable into or
exercisable for such equity securities, issued, reserved for issuance, or
outstanding and (ii) no outstanding subscriptions, options, warrants, puts,
calls, rights, or other commitments or agreements of any character to which
Cybernet Sub is a party or by which it is bound obligating Cybernet Sub to
issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered,
sold, repurchased or redeemed, any equity securities of Cybernet Sub or
obligating Cybernet Sub to grant, extend, accelerate the vesting of, change the
exercise price of, or otherwise amend or enter into any such option, warrant,
call, right, commitment or agreement. There are no contracts, commitments or
agreements relating to voting, purchase or sale of Cybernet Sub' capital stock
(i) between or among Cybernet Sub and any of its stockholders or (ii) to the
knowledge of Cybernet Sub, between or among any of Cybernet Sub' stockholders.
Section 3.3 Authority; No Conflict; Required Filings and Consents.
(a) Cybernet and Cybernet Sub have all requisite corporate
power and authority to enter into this Agreement and all other documents
required to be executed and delivered by Cybernet Sub hereunder, including the
Merger Certificate (collectively, the "Transaction Documents"), and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the other Transaction Documents to which Cybernet
and Cybernet Sub is or will be a party and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of Cybernet and Cybernet Sub, subject only to the
approval of the Merger by Cybernet under Michigan Law and the DGCL. This
Agreement and the other Transaction Documents to which Cybernet and Cybernet Sub
are or will be parties have been or will be duly executed and delivered by
Cybernet and Cybernet Sub, as applicable, and constitute or will constitute the
valid and binding obligations of Cybernet and Cybernet Sub, as applicable,
enforceable against Cybernet and Cybernet Sub in accordance with their
respective terms, except as such enforceability may be limited by (i)
bankruptcy, insolvency, moratorium or other similar laws affecting or relating
to creditors' rights generally, and (ii) general principles of equity,
regardless of whether asserted in a proceeding in equity or at law.
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(b) The execution and delivery by Cybernet and Cybernet Sub of
this Agreement and the other Transaction Documents to which they are or will be
parties does not, and the consummation of the transactions contemplated hereby
and thereby will not, (i) conflict with, or result in any violation or breach of
any provision of, the Certificate of Incorporation or Bylaws of Cybernet Sub or
the Articles of Incorporation or Bylaws of Cybernet, (ii) to the knowledge of
Cybernet and Cybernet Sub, result in any violation or breach of, or constitute
(with or without notice or lapse of time, or both) a default under, or give rise
to a right of termination, cancellation or acceleration of any material
obligation or loss of any material benefit under, any note, mortgage, indenture,
lease, contract or other agreement or obligation to which Cybernet Sub or
Cybernet is a party or by which Cybernet Sub or Cybernet or any of its
properties or assets may be bound, (iii) conflict with or violate any permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Cybernet Sub or Cybernet or any of
its properties or assets or (iv) result in the creation or imposition of any
lien, claim, restriction, charge or encumbrance upon the Intellectual Property
or the Related Materials (as defined in Section 3.6).
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality ("Governmental
Entity") is required by, or with respect to, Cybernet Sub or Cybernet in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby, except for (i) the filing of the Merger
Certificates with the Department of Consumer & Industry Services of the State of
Michigan in accordance with Michigan Law and the Secretary of State of the State
of Delaware in accordance with the DGCL, (ii) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal and state securities laws, and (iii) such other consents,
authorizations, filings, approvals and registrations which, if not obtained or
made, would not have a Material Adverse Effect on Cybernet Sub and would not
prevent or materially alter or delay any of the transactions contemplated by
this Agreement.
Section 3.4 No Liabilities. Cybernet Sub has no debt, liability or
obligation of any nature, whether accrued, absolute, contingent, or otherwise,
and whether due or to become due.
Section 3.5 Tangible Assets and Real Property.
(a) Cybernet Sub owns or leases all tangible assets and
properties set forth in Schedule 3.5(a) (the "Cybernet Sub Assets"). The
Cybernet Sub Assets are in good operating condition and repair, subject to
reasonable wear and tear.
(b) Cybernet Sub has good and marketable title to all Cybernet
Sub Assets that it owns, free and clear of all mortgages, liens, pledges,
charges or encumbrances of any kind or character, except for liens for current
taxes not yet due and payable.
(c) Assuming the due execution and delivery thereof by the
other parties thereto, all leases of Cybernet Sub Assets to which Cybernet Sub
is a party are in full force and effect and valid, binding and enforceable in
accordance with their respective terms, except as such enforceability may be
limited by (i) bankruptcy laws and other similar laws
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affecting creditors' rights generally and (ii) general principles of equity,
regardless of whether asserted in a proceeding in equity or at law.
Section 3.6 Intellectual Property.
(a) Exhibit D ("Intellectual Property and Related Materials")
correctly sets forth all intellectual property rights of Cybernet Sub consisting
of certain force feedback intellectual property (including but not limited to
patents (the "Patents"), copyrights, trade secrets, trademarks and certain
software, documentation, prototypes and materials related to the Patents) (the
"Intellectual Property and Related Materials"). Except as set forth on Schedule
3.6(a) of the Cybernet Disclosure Schedule (which Cybernet Disclosure Schedule
identifies acknowledgment of Government licenses and march-in rights), Cybernet
Sub is the sole and exclusive owner of all Intellectual Property and Related
Materials and Cybernet Sub has good and marketable title to, and possession of
the Intellectual Property and Related Materials in each case free and clear of
all licenses, security interests, mortgages, liens, pledges, charges, judgments,
claims, encumbrances, or rights, title and interest in others. Cybernet Sub's
rights in all Intellectual Property and Related Materials are freely
transferable. Cybernet Sub does not have any disputes with or, claims against
any third party for infringement by such third party of any of the Intellectual
Property and Related Materials. Cybernet and Cybernet Sub represent and warrant
that the inventors named in the Patents were employees of Cybernet at the time
of the conception of the invention described in each Patent.
(b) Cybernet and Cybernet Sub have taken all steps reasonably
necessary to establish and preserve Cybernet Sub 's right, title and interest in
and to the Intellectual Property and Related Materials including, but not
limited to making all required disclosures of subject inventions incorporated
into or embodied in the Intellectual Property and Related Materials and which
were conceived and reduced to practice in the performance of U.S. Government
contracts, and timely electing to retain title of such subject inventions. All
Patents and Patent applications which are owned by Cybernet Sub and included in
the Intellectual Property and Related Materials have been duly registered in,
filed in or issued by the United States Patent and Trademark Office or the
United States Copyright Office, as applicable. All Patents and trademarks
included in the Intellectual Property and Related Materials have been properly
maintained and renewed by Cybernet and Cybernet Sub in accordance with all
applicable provisions of the law and administrative regulations in the United
States.
(c) Cybernet and Cybernet Sub represent that all inventions
embodied in patent applications prior to issuance of the related Patent and all
source code included in the Related Materials has been treated as and maintained
by Cybernet and Cybernet Sub as Cybernet and Cybernet Sub's confidential
information. To its knowledge, neither Cybernet nor Cybernet Sub have made any
confidential information regarding the Intellectual Property and Related
Materials available to any person without written agreements requiring the
recipients to maintain the confidentiality of such information and appropriately
restricting the use thereof and copies of all such agreements have been provided
to Immersion.
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(d) Neither Cybernet nor Cybernet Sub has received any notice
of, and does not have any knowledge of any basis for, a claim by a third party
against Cybernet or Cybernet Sub that any of its operations or activities
related to the Intellectual Property and Related Materials or the use of the
Intellectual Property and Related Materials infringes on any patent, copyright,
trademark or other property right of a third party, or that Cybernet or Cybernet
Sub has obtained the trade secrets, formulae or any property rights of others
through improper means or that either Cybernet and Cybernet Sub's use of the
same is a misappropriation. Neither Cybernet nor Cybernet Sub has received any
notice of, or has any knowledge of any basis for, a challenge by a third party
to the validity or enforceability of any Patent rights included in the
Intellectual Property and Related Materials, including but not limited to the
Patents.
(e) Cybernet represents and warrants that it has transferred
to Cybernet Sub all Intellectual Property and Related Materials set forth in
Exhibit D hereto.
Section 3.7 Contracts.
(a) Except as set forth in Schedule 3.7 to the Cybernet
Disclosure Schedule, neither Cybernet nor Cybernet Sub has entered into any
contract, agreement, license or commitment with any other party to sell or
license the Intellectual Property or Related materials and neither Cybernet nor
Cybernet Sub has previously sold, disposed of, transferred or licensed or
otherwise encumbered the Intellectual Property or Related Materials.
(b) Cybernet Sub is not in default under or in breach or
violation of, nor is there any valid basis for any claim of default by Cybernet
Sub under, or breach or violation by Cybernet Sub of, any contract, commitment
or restriction to which Cybernet Sub is a party or by which Cybernet Sub or any
of its properties or assets is bound or affected, where such defaults, breaches,
or violations would, in the aggregate, have a Material Adverse Effect on
Cybernet Sub. To Cybernet Sub' knowledge, no other party is in default under or
in breach or violation of, nor, to Cybernet Sub' knowledge, is there any valid
basis for any claim of default by any other party under, or any breach or
violation by any other party of, any contract, commitment, or restriction to
which Cybernet Sub is a party or by which Cybernet Sub or any of its properties
or assets is bound or affected, where such defaults, breaches, or violations
would, individually or in the aggregate, have a Material Adverse Effect on
Cybernet Sub.
Section 3.8 Compliance with Laws. Cybernet Sub has complied with, is not
in violation of, and has not received any notices of violation with respect to,
any federal, state or local statute, law or regulation applicable to the
ownership or operation of its business or otherwise affecting the Intellectual
Property and Related Materials.
Section 3.9 Employees and Consultants. Each inventor of each Patent has
executed an employee inventions and confidentiality agreement in the form
previously provided to counsel for Immersion (a "Confidentiality Agreement")
and, to the knowledge of Cybernet and Cybernet Sub, each other person currently
or formerly employed by Cybernet or Cybernet Sub has executed a Confidentiality
Agreement. Such Confidentiality Agreements constitute valid and binding
obligations of Cybernet or Cybernet Sub and such person, enforceable in
accordance with their respective terms, except as enforceability may be limited
by general equitable
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principles or the exercise of judicial discretion in accordance with such
principles. To the knowledge of Cybernet and Cybernet Sub, as applicable, none
of its employees is in violation of any term of any Confidentiality Agreement,
employment contract, patent disclosure agreement or any other contract or
agreement relating to the relationship of any such person with Cybernet or
Cybernet Sub.
Section 3.10 Litigation. There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal) or investigation pending
or, to the knowledge of Cybernet or Cybernet Sub, threatened, against Cybernet
or Cybernet Sub with respect to the Intellectual Property and Related Materials,
or the transaction contemplated hereby, or which may adversely affect the
Cybernet or Cybernet Sub's ability to perform its obligations hereunder, and
there is no valid basis for any such claim. There are no orders, judgments or
decrees affecting the Intellectual Property and Related Materials.
Section 3.11 Governmental Authorization. Cybernet and Cybernet Sub have
obtained each governmental consent, license, permit, grant or other
authorization of a Governmental Entity that is required for the operation of the
business of Cybernet Sub (collectively, the "Cybernet Sub Authorizations"), and
all of such Cybernet Sub Authorizations are in full force and effect.
Section 3.12 Interested Party Transactions. To the knowledge of Cybernet
and Cybernet Sub, no director, officer or stockholder of Cybernet or Cybernet
Sub has any interest in (i) any material equipment or other property or asset,
real or personal, tangible or intangible, including, without limitation, any of
the Intellectual Property or Related Materials, (ii) any entity that competes
with Cybernet or Cybernet Sub, or with which Cybernet or Cybernet Sub is
affiliated or has a business relationship, or (iii) any agreement, obligation or
commitment, written or oral, to which Cybernet or Cybernet Sub is a party;
provided, however, that no such person shall be deemed to have such an interest
solely by virtue of ownership of less than five percent (5%) of the outstanding
stock or debt securities of any publicly held company, the stock or debt
securities of which are traded on a recognized stock exchange or on the Nasdaq
National Market.
Section 3.13 Real Property Holding Corporation. Cybernet Sub is not a
"United States real property holding corporation" within the meaning of Section
897(c)(2) of the Code.
Section 3.14 Investment Intent.
(a) The Merger Stock is being acquired for investment for
Cybernet's own account, and not with a view to, or for resale in connection
with, any distribution or public offering thereof within the meaning of the
Securities Act or the California Corporate Securities Law of 1968, as amended
("California Law").
(b) Cybernet understands that the Merger Stock has not been
registered under the Securities Act by reason of the issuance of the Merger
Stock in a transaction exempt from the registration requirements of the
Securities Act pursuant to Section 4(2) thereof, that the Merger Stock must be
held by such Cybernet indefinitely, and that such Cybernet must
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therefore bear the economic risk of such investment indefinitely, unless a
subsequent disposition thereof is registered under the Securities Act or is
exempt from such registration. Cybernet further understands that the Merger
Stock has not been qualified under the California Law by reason of their
issuance in a transaction exempt from the qualification requirements of the
California Law pursuant to Section 25102(f) thereof, which exemption depends
upon, among other things, the bona fide nature of such Cybernet's investment
intent expressed above.
(c) Cybernet covenants that in no event will Cybernet dispose
of any of the Merger Stock (other than in conjunction with an effective
registration statement for the Merger Stock under the Act or in compliance with
Rule 144 promulgated under the Act) unless and until (i) there is an effective
registration statement under the Securities Act of 1933, as amended, (the
"Securities Act") covering such proposed distributed is made in accordance with
said registration statement; or (ii) Cybernet shall have (A) notified Immersion
of the proposed disposition and furnished Immersion with a detailed statement of
circumstances surrounding the proposed disposition and (B) furnished Immersion
with an opinion of its own counsel to the effect that such disposition will not
require registration of such shares under the Securities Act, such opinion of
Cybernet counsel shall have been concurred in by counsel for Immersion, and
Immersion shall have advised Cybernet of such concurrence.
(d) During the negotiation of the transactions contemplated
herein, Cybernet and its agents or counsel have been afforded full access to the
corporate books, records, documents, and other information concerning Immersion
and have been afforded an opportunity to ask such questions of Immersion's
officers and representatives concerning Immersion's business, operations,
financial condition, assets, liabilities and other relevant matters as they have
deemed necessary or desirable, and have been given all such information as has
been requested, in order to evaluate the merits and risks of the prospective
investment contemplated herein.
(e) Cybernet has such knowledge and experience in financial
and business matters that Cybernet is capable of evaluating the merits and risks
of the acquisition of the Merger Stock pursuant to the terms of this Agreement.
Section 3.15 Corporate Documents. Cybernet Sub has furnished to Immersion,
or its representatives, for its examination (i) its minute book containing all
records required to be set forth of all proceedings, consents, actions, and
meetings of the stockholders, the Board of Directors and any committees thereof,
(ii) all permits, orders, and consents issued by any Governmental Entity with
respect to Cybernet Sub and (iii) all consents, assignments and other
documentation related to the Intellectual Property and Related Materials. The
corporate minute books and other corporate records of Cybernet Sub are complete
and accurate in all material respects, and the signatures appearing on all
documents contained therein are the true signatures of the persons purporting to
have signed the same. All actions reflected in such books and records were duly
and validly taken in compliance with the laws of the applicable jurisdiction.
Cybernet Sub has delivered or made available to Immersion or its representatives
true and complete copies of all documents which are referred to in this Article
III or in the Cybernet Sub Disclosure Schedule.
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Section 3.16 No Misrepresentation. No representation or warranty by
Cybernet or Cybernet Sub in this Agreement, or any statement, certificate or
schedule furnished or to be furnished by or on behalf of Cybernet Sub pursuant
to this Agreement, when taken together, contains or shall contain any untrue
statement of a material fact or omits or shall omit to state a material fact
required to be stated therein or necessary in order to make such statements, in
light of the circumstances under which they were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF IMMERSION AND SUB
Immersion and Sub represent and warrant to Cybernet and Cybernet Sub that
the statements contained in this Article IV are true and correct, except as set
forth in the disclosure schedule delivered by Immersion to Cybernet Sub on or
before the date of this Agreement and attached hereto Exhibit E (the "Immersion
Disclosure Schedule").
Section 4.1 Organization. Each of Immersion and Sub are corporations duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, have all requisite corporate power to own,
lease and operate its property and to carry on its business as now being
conducted, and is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the failure to be so qualified
would have a Material Adverse Effect on Immersion.
Section 4.2 Capitalization.
(a) The authorized common stock of Immersion ("Common Stock")
as of the Effective Time and immediately prior to the Closing will consist of
100,000,000 shares of Common Stock, of which 5,284,186 shares will be issued and
outstanding.
(b) The authorized preferred stock of Immersion as of the
Effective Time and immediately prior to the Closing will consist of (i) 618,500
shares of Series A Preferred Stock ("Series A Preferred"), of which 611,000
shares will be issued and outstanding; (ii) 116,334 shares of Series B Preferred
("Series B Preferred"), of which 98,334 shares will be issued and outstanding;
(iii) 1,071,428 shares of Series C Preferred Stock ("Series C Preferred"), of
which 1,071,428 will be issued and outstanding and (iv) 1,721,068 shares of
Series D Preferred Stock ("Series D Preferred"), 1,706,232 of which are issued
and outstanding.
(c) All such issued and outstanding shares have been duly
authorized and validly issued, are fully paid and nonassessable and were issued
in compliance with all applicable state and federal laws concerning the issuance
of securities.
(d) Except as provided in the Immersion Disclosure Schedule,
there are no outstanding rights, plans, options, warrants, conversion rights or
agreements for the purchase or acquisition from Immersion of any shares of its
capital stock, except that (i) 3,055,000 shares of Common Stock have been
reserved for issuance upon conversion of the
13
outstanding shares of Series A Preferred; (ii) 491,670 shares of Common Stock
have been reserved for issuance upon conversion of the outstanding shares of
Series B Preferred; (iii) 1,071,428 shares of Common Stock have been reserved
for issuance upon conversion of the outstanding shares of Series C Preferred;
(iv) 1,721,068 shares of Common Stock (the "Conversion Shares") have been
reserved upon conversion of the shares to be issued hereunder; (v) 2,963,141
shares of Common Stock have been reserved for issuance under Immersion's 1994
Stock Option Plan (the "1994 Plan") (inclusive of the 1,822,187 shares subject
to outstanding options under the 1994 Plan and the 1,128,739 shares issued upon
exercise of options granted under the 1994 Plan); (vi) 2,511,859 shares of
Common Stock have been reserved for issuance under Immersion's 1997 Stock Option
Plan (the "1997 Plan") (inclusive of the 1,335,815 shares subject to outstanding
options under the 1997 Plan and the 239,562 shares issued upon exercise of
options granted under the 1997 Plan); (vii) 525,000 shares of Common Stock have
been reserved for issuance pursuant to Individual Stock Option Grants (inclusive
of the 450,000 shares subject to outstanding options and the 75,000 shares
issued upon exercise of individual stock options); (viii) common stock warrants
to purchase 121,750 shares of Common Stock; (ix) 121,750 shares of Common Stock
have been reserved for issuance upon exercise of the common stock warrants; (x)
Series A Preferred Stock warrants to purchase 7,500 shares of Series A
Preferred; (xi) 7,500 shares of Series A Preferred Stock have been reserved for
issuance upon exercise of the Series A warrants and 37,500 shares of Common
Stock have been reserved for issuance upon conversion of such shares of Series A
Preferred Stock; (xii) Series B Preferred Stock warrants to purchase 18,000
shares of Series B Preferred; (xiii) 18,000 shares of Series B Preferred Stock
have been reserved for issuance upon exercise of the Series B warrants and
90,000 shares of Common Stock have been reserved for issuance upon conversion of
such shares of Series B Preferred Stock; (xiv) Series D Preferred Stock warrants
to purchase 14,836 shares of Series D Preferred; and (xv) 14,836 shares of
Series D Preferred Stock have been reserved for issuance upon exercise of the
Series D warrant and 14,836 shares of Common Stock have been reserved for
issuance upon conversion of such shares of Series D Preferred Stock.
Section 4.3 Authority; No Conflict; Required Filings and Consents.
(a) Immersion and Sub have all requisite corporate power and
authority to enter into this Agreement and the other Transaction Documents to
which they are or will be parties and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the other Transaction Documents to which Immersion or Sub is or will be a
party and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action on the part of
Immersion and Sub, respectively. This Agreement and the other Transaction
Documents to which Immersion and/or Sub are parties have been or will be duly
executed and delivered by Immersion and/or Sub and constitute or will constitute
the valid and binding obligations of Immersion and/or Sub, enforceable in
accordance with their terms, except as such enforceability may be limited by (i)
bankruptcy laws and other similar laws affecting creditors' rights generally and
(ii) general principles of equity, regardless of whether asserted in a
proceeding in equity or at law.
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(b) The execution and delivery by Immersion and Sub of this
Agreement and the other Transaction Documents to which they are or will be
parties does not, and the consummation of the transactions contemplated hereby
and thereby will not, (i) conflict with, or result in any violation or breach of
any provision of the Certificate of Incorporation or Bylaws of Immersion or Sub,
(ii) result in any violation or breach of, or constitute (with or without notice
or lapse of time, or both) a default under, or give rise to a right of
termination, cancellation or acceleration of any material obligation or loss of
any material benefit under, any note, mortgage, indenture, lease, contract or
other agreement, instrument or obligation to which Immersion or Sub is a party
or by which either of them or any of their properties or assets may be bound, or
(iii) conflict with or violate any permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to Immersion or Sub or any of its or their properties or assets, except in the
case of clauses (ii) and (iii) above for any such conflicts, violations,
defaults, terminations, cancellations or accelerations which would not be
reasonably likely, either individually or in the aggregate, to have a Material
Adverse Effect on Immersion.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required by
or with respect to Immersion or any of its subsidiaries in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) the filing of the Merger Certificates with
the Department of Consumer & Industry Services of the State of Michigan in
accordance with Michigan Law and the Secretary of State of the State of Delaware
in accordance with the DGCL, (ii) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal and state securities laws and the laws of any foreign country
and (iii) such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, would not be reasonably likely to
have a Material Adverse Effect on Immersion and would not prevent or materially
alter or delay any of the transactions contemplated by this Agreement.
Section 4.4 Financial Statements. Immersion has delivered to Cybernet its
audited balance sheet as of December 31, 1997 and its audited income statement
and cash flow statement for the twelve (12) month period ended December 31, 1997
(the above financial statements are hereinafter collectively referred to as the
"Financial Statements"). The Financial Statements are complete and correct in
all material respects and have been prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the relevant period, except that the unaudited Financial Statements do not
contain the footnotes required by GAAP. Immersion has delivered to Cybernet its
unaudited statement of operations as of September 30, 1998 (the "September
Statement"). The September Statement was prepared for internal use by Immersion
and has not been prepared in accordance with GAAP. As a result, there may be
material differences between the treatment of items on the September Statement
and the audited financial statements as of December 31, 1998.
Section 4.5 Litigation, etc. There are no actions, suits or proceedings
pending which, either in any case or in the aggregate, could reasonably be
expected to result in any material adverse change in the business, prospects,
affairs or operations of Immersion or in any of its properties or assets, or in
any material impairment of the right or ability of Immersion to carry on
15
its business as now conducted, or in any material liability on the part of
Immersion, and none which questions the validity of this Agreement or any action
taken or to be taken in connection herewith or therewith. Immersion is not a
party or subject to any writ, order, decree or judgment and there is no action,
suit or proceeding by Immersion currently pending.
Section 4.6 Taxes. Immersion has filed all tax returns that are required
to have been filed with appropriate federal, state, county and local
governmental agencies or instrumentalities, except where the failure to do so
would not have a material adverse effect on Immersion, taken as a whole.
Immersion has made adequate provisions on its books of account for all taxes,
assessments and governmental charges with respect to its business, properties
and operations for such period. There is no pending dispute with any taxing
authority relating to any of such returns, and Immersion has no knowledge of any
proposed liability for any tax to be imposed upon the properties or assets of
Immersion.
Section 4.7 Title to Properties and Assets; Liens, etc. Immersion owns its
tangible property and assets, including the properties and assets reflected in
the Financial Statements (as defined in Section Section 4.4), free and clear of
all liens, mortgages, loans or encumbrances except liens for current taxes, and
such liens resulting from taxes which have not yet become delinquent and liens
and encumbrances which do not in any case materially detract from the value of
the property subject thereto or materially impair the operations of Immersion,
and which have not arisen otherwise than in the ordinary course of business.
Section 4.8 Patents and Trademarks.
(a) Ownership. To Immersion's knowledge, Immersion has full
title and ownership of, or has license to, all patents, patent applications,
trademarks, service marks, trade names, copyrights, maskworks and trade secrets
incorporated into Immersion's products (all of the foregoing collectively
hereinafter referred to as the "Proprietary Assets") necessary to enable it to
carry on its business as now conducted.
(b) No Breach by Employee. Immersion is not aware that any
employee or consultant of Immersion is obligated under any agreement (including
licenses, covenants or commitments of any nature) or subject to any judgment,
decree or order or any administrative agency, or any other restriction that
would interfere with the use of his or her best efforts to carry out his or her
duties for Immersion. The carrying on of Immersion's business by the employees
and contractors of Immersion and the conduct of Immersion's business as
presently conducted, will not, to Immersion's knowledge, conflict with or result
in a breach of the terms, conditions or provisions of, or constitute a default
under, any contract, covenant or instrument under which any of such employees or
contractors or Immersion is now obligated. Immersion does not believe it is
necessary or will be necessary to utilize any inventions of any employees of
Immersion (or persons Immersion currently intends to hire) made prior to their
employment by Immersion. To Immersion's knowledge, at no time during the
conception of or reduction of any of Immersion's Proprietary Assets to practice
was any developer, inventor or other contributor to such patents operating under
any grants from any governmental entity or agency or private source or subject
to any employment agreement or invention assignment or
16
nondisclosure agreement or other obligation with any third party that Immersion
believes could adversely affect Immersion's rights in such Proprietary Assets.
Section 4.9 Contracts.
(a) Except as set forth in the Immersion Disclosure Schedule,
Immersion has not entered into any contract, agreement, license or commitment
with any other party to sell or license the Intellectual Property or Related
materials and Immersion has not previously sold, disposed of, transferred or
licensed or otherwise encumbered the Intellectual Property or Related Materials.
(b) Sub is not in default under or in breach or violation of,
nor is there any valid basis for any claim of default by Sub under, or breach or
violation by Sub of, any contract, commitment or restriction to which Immersion
Sub is a party or by which Sub or any of its properties or assets is bound or
affected, where such defaults, breaches, or violations would, in the aggregate,
have a material adverse effect on Sub. To Sub's knowledge, no other party is in
default under or in breach or violation of, nor, to Immersion Sub's knowledge,
is there any valid basis for any claim default by any other party under, or any
breach or violation by any other party of, any contract, commitment, or
restriction to which Immersion Sub is a party or by which Immersion Sub or any
of its properties or assets is bound or affected, where such defaults, breaches,
or violation would, Individually or in the aggregate, have a material adverse
effect on Sub.
Section 4.10 Compliance with Law. To its knowledge, Immersion has complied
with, is not in violation of, and has not received any notices of violation with
respect to, any federal, state or local statute, law or regulations which would
have a material adverse effect on its business or otherwise affecting the
Intellectual Property and Related Materials.
Section 4.11 Governmental Authorization. Immersion has obtained each
governmental consent, license, permit, grant or other authorization of a
Governmental Entity that is required for the operation of the business of
Immersion (collectively, the "Immersion Authorizations"), and all of such
Immersion Authorizations are in full force and effect, except where the failure
to obtain the same would not be reasonably likely to have a Material Adverse
Effect on Immersion.
Section 4.12 Interim Operations of Sub. Sub was formed solely for the
purpose of engaging in the transactions contemplated by this Agreement, has
engaged in no other business activities and has conducted its operations only as
contemplated by this Agreement.
Section 4.13 Cybernet Sub. Immersion has no plan or intention to liquidate
Cybernet Sub.
Section 4.14 Insurance. Immersion has obtained fire and casualty insurance
policies, sufficient in amount (subject to reasonable deductibles) to allow
Immersion to replace any of its properties that might be damaged or destroyed.
17
Section 4.15 No Misrepresentation. No representation or warranty by
Immersion or Sub in this Agreement, or any statement, certificate or schedule
furnished or to be furnished by or on behalf of Immersion or Sub pursuant to
this Agreement, when taken together, contains or shall contain any untrue
statement of a material fact or omits or shall omit to state a material fact
required to be stated therein or necessary in order to make such statements, in
light of the circumstances under which they were made, not misleading.
ARTICLE V
ADDITIONAL OBLIGATIONS OF PARTIES
Section 5.1 Proprietary Information: Following the date hereof, Cybernet
and Cybernet Sub shall hold in confidence and shall use its best efforts to have
all of the officers, directors and personnel hold in confidence all knowledge
and information of a confidential nature with respect to the Intellectual
Property and Related Materials. Neither Cybernet nor Cybernet Sub shall
disclose, publish or otherwise disseminate or make use of the same without the
consent of Immersion, except to the extent that such information (a) shall
become public knowledge other than by breach of this Section Section 5.1 by
Cybernet or Cybernet Sub, (b) was developed by employees or agents of Cybernet
after the date of this Agreement independently of and without reference to any
such confidential information, or (c) is required to be disclosed by Cybernet or
Cybernet Sub by law, regulation or court order.
Section 5.2 Notice of Breach of Representation and Warranties and of
Material Developments. Promptly upon Cybernet or Cybernet Sub becoming aware of
the occurrence of, or the impending or threatened occurrence of, any event which
would cause or constitute a breach, or would have caused or constituted a breach
had such event occurred or been known to Cybernet or Cybernet Sub prior to the
date hereof, of any of the representations and warranties of Cybernet or
Cybernet Sub contained in this Agreement, Cybernet and Cybernet Sub shall give
Immersion written notice thereof in reasonable detail and shall use reasonable
efforts to prevent or promptly remedy the same. No disclosure pursuant to this
Section Section 5.2 ("Notice of Breach of Representation and Warranties and of
Material Developments") shall be deemed to amend or supplement any of the
representations and warranties of Cybernet or Cybernet Sub set forth herein.
Section 5.3 Immersion Appointed Special Attorney-in-Fact for Cybernet.
Effective as of the Effective Time and except as otherwise limited below,
Cybernet hereby constitutes and appoints the Immersion, its successors and
assigns, the true and lawful attorney of Cybernet , in the name of either
Immersion or Cybernet (as Immersion shall determine in its sole discretion) but
for the benefit and at the expense of Immersion (except as otherwise herein
provided), exclusively for the purposes of (i) instituting and prosecuting all
proceedings which Immersion may deem proper in order to collect, assert or
enforce any claim, right or title of any kind in or to any of the Intellectual
Property and Related Materials as provided for in this Agreement; (ii) defending
or compromising any and all actions, suits or proceedings in respect of any of
the Intellectual Property and Related Materials, and to do all such acts and
things in relation thereto as Immersion shall deem advisable; and (iii) taking
all action which Immersion may reasonably
18
deem proper in order to provide for Immersion the benefits under any of the
Intellectual Property and Related Materials where any required consent of
another party to the sale or assignment thereof to Immersion pursuant to this
Agreement shall not have been obtained. Cybernet acknowledges that the foregoing
powers are coupled with an interest and shall be irrevocable. Immersion shall be
entitled to retain for its own account any amounts collected pursuant to the
foregoing powers, including any amounts payable as interest in respect thereof.
The foregoing provisions of this Section Section 5.3 ("Immersion Appointed
Special Attorney-in-Fact for Cybernet") shall be applicable only if Cybernet,
upon first being notified in writing by Immersion of a circumstance set forth in
(i), (ii) or (iii) of this Section Section 5.3 ("Immersion Appointed Special
Attorney-in-Fact for Cybernet") giving rise to a requirement by Cybernet to
institute or prosecute a proceeding pursuant to (i), to defend or compromise an
action, suit or proceeding pursuant to (ii) or to take action as provided in
(iii), fails to take appropriate action within thirty (30) days of such
notification or within such shorter period as may be required to take action.
Section 5.4 Consents. Cybernet, Cybernet Sub, Immersion and Sub shall
obtain any and all consents necessary for the execution and delivery of this
Agreement and the consummation of the transactions contemplated thereby.
Section 5.5 No Solicitation by Cybernet Sub.
(a) During the period from the date of this Agreement until
the earlier of the termination of this Agreement or the Effective Time, neither
Cybernet nor Cybernet Sub shall, directly or indirectly, through any officer,
director, employee, representative or agent, (i) solicit, initiate, or encourage
any inquiries or proposals that constitute, or could reasonably be expected to
lead to, a proposal or offer for a merger, consolidation, business combination,
sale of substantial assets, sale of shares of capital stock (including without
limitation by way of a tender offer) or similar transactions involving Cybernet
or Cybernet Sub, other than the transactions contemplated by this Agreement (any
of the foregoing inquiries or proposals being referred to in this Agreement as a
"Cybernet Proposal"), (ii) engage in negotiations or discussions concerning, or
provide any non-public information to any person or entity relating to, any
Cybernet Proposal, or (iii) agree to, approve or recommend any Cybernet
Proposal.
(b) Cybernet Sub shall notify Immersion no later than
twenty-four (24) hours after receipt by Cybernet or Cybernet Sub (or its
advisors) of any Cybernet Proposal or any request for nonpublic information in
connection with a Cybernet Proposal or for access to the properties, books or
records of Cybernet or Cybernet Sub by any person or entity that informs
Cybernet or Cybernet Sub that it is considering making, or has made, a Cybernet
Proposal. Such notice shall be made orally and in writing and shall indicate in
reasonable detail the identity of the offeror and the terms and conditions of
such proposal, inquiry or contact.
Section 5.6 Approval of Stockholders. Cybernet Sub shall promptly after
the date hereof take all action necessary in accordance with the law of the
State of Michigan and its Certificate of Incorporation to seek the approval of
the Merger by the stockholders of Cybernet Sub as soon as possible.
19
Section 5.7 Legal Conditions to Merger. Each of Immersion, Cybernet and
Cybernet Sub will take all reasonable actions necessary to comply promptly with
all legal requirements which may be imposed on itself with respect to the Merger
(which actions shall include, without limitation, furnishing all information in
connection with approvals of or filings with any Governmental Entity) and will
promptly cooperate with and furnish information to each other in connection with
any such requirements imposed upon either of them or any of their Subsidiaries
in connection with the Merger. Each of Immersion, Cybernet and Cybernet Sub will
take all reasonable actions necessary to obtain (and will cooperate with each
other in obtaining) any consent, authorization, order or approval of, or any
exemption by, any Governmental Entity or other third party, required to be
obtained or made by Cybernet, Cybernet Sub, Immersion or any of their
subsidiaries in connection with the Merger or the taking of any action
contemplated thereby or by this Agreement.
Section 5.8 Public Disclosure.
(a) Immersion, Cybernet and Cybernet Sub shall consult with
and cooperate with the other with respect to the content and timing of all press
releases and other public announcements concerning this agreement and the
transactions contemplated hereby; provided however, that if Immersion, Cybernet
and Cybernet Sub cannot come to agreement on the terms of a press release
announcing the execution of this Agreement within three (3) months of this
Agreement, then Immersion shall have the right to issue a press release
indicating that Immersion has acquired the Intellectual Property and Related
Materials from Cybernet.
(b) Except as otherwise provided in this Agreement or as may
be required by law, neither Cybernet nor Cybernet Sub shall disclose any of the
provisions of this Agreement without the prior written consent of Immersion;
provided however, that (i) the parties shall be entitled to disclose provisions
of press releases and other public announcements regarding the description of
the transaction that have been previously approved by both parties, and (ii)
Cybernet will be entitled to disclose the amount of its capital ownership in
Immersion to potential investors, subject to nondisclosure agreements.
Notwithstanding the foregoing, disclosures of the contents hereof made to
accountants, legal advisors, consultants or other parties of Cybernet and
Cybernet Sub who have a need to know for the purpose of providing the services
to Cybernet and Cybernet Sub for which they are retained, and subject to
restriction against further disclosure, are expressly permitted. Neither
Cybernet nor Cybernet Sub shall disclose the existence of this Agreement nor
identify Immersion with regard to the subject matter of this Agreement,
including but not limited to any advertising, solicitation or promotional
activity, without the prior written consent and approval of Immersion, which
consent and approval shall be required for each such specific use.
Section 5.9 Tax-Free Reorganization. Immersion, Cybernet and Cybernet Sub
shall each use its best efforts to cause the Merger to be treated as a
reorganization within the meaning of Section 368(a) of the Code. Immersion,
Cybernet and Cybernet Sub have not taken any action or know of any fact,
arrangement, or other circumstance that is reasonably likely to prevent the
Merger from qualifying as a reorganization within the meaning of Section 368(a)
of the Code.
20
Section 5.10 Brokers or Finders. Other than the fee payable to Xxxxxxx
Associates, Inc. ("Xxxxxxx") pursuant to that certain agreement dated October 7,
1998 by and between Cybernet and Xxxxxxx, each of Immersion and Cybernet
represents, as to itself, its subsidiaries and its affiliates, that no agent,
broker, investment banker, financial advisor or other firm or person is or will
be entitled to any broker's or finder's fee or any other commission or similar
fee in connection with any of the transactions contemplated by this Agreement,
and each of Immersion, Cybernet and Cybernet Sub agrees to indemnify and hold
the other harmless from and against any and all claims, liabilities or
obligations with respect to any other fees, commissions or expenses asserted by
any person on the basis of any act or statement alleged to have been made by
such party or its affiliate.
Section 5.11 Expenses. The parties shall each pay their own legal,
accounting and financial advisory fees and other out-of-pocket expenses related
to the negotiation, preparation and carrying out of this Agreement and the
transactions herein contemplated.
Section 5.12 Additional Agreements; Reasonable Efforts. Subject to the
terms and conditions of this Agreement, each of the parties agrees to use all
reasonable efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including cooperating fully with the other party, including by
provision of information. In case at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement or to vest the Surviving Corporation with full title to all
properties, assets, rights, approvals, immunities and franchises of either of
the Constituent Corporations, the proper officers and directors of each party to
this Agreement shall take all such necessary action.
Section 5.13 Business of Cybernet Sub. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement or the Effective Time, Cybernet Sub agrees (except to the extent that
Immersion shall otherwise consent in writing), to carry on its business in the
usual, regular and ordinary course in substantially the same manner as
previously conducted, to pay its debts and taxes when due, subject to good faith
disputes over such debts or taxes, to pay or perform its other obligations when
due, and, to the extent consistent with such business, to use all reasonable
efforts consistent with past practices and policies to (i) preserve intact its
present business organization, (ii) keep available the services of its present
officers and key employees and (iii) preserve its relationships with customers,
suppliers, distributors, licensors, licensees and others having business
dealings with it. Cybernet Sub shall promptly notify Immersion of any event or
occurrence not in the ordinary course of business of Cybernet Sub where such
event or occurrence would result in a breach of any covenant of Cybernet Sub set
forth in this Agreement or cause any representation or warranty of Cybernet Sub
set forth in this Agreement to be untrue as of the date of, or giving effect to,
such event or occurrence.
Section 5.14 Put Option. Except as provided in Section Section 5.14((e))
below and subject to the terms and conditions of this Section Section 5.14 and
to the restrictions of applicable law, at any time during the ninety (90) day
period commencing on the date five (5)
21
years after the Effective Time (the "Put Period"), Cybernet shall have the right
to sell to Immersion one million shares (1,000,000) of Merger Stock acquired
pursuant to this Merger (the "Put Option"), as adjusted to reflect any stock
split, stock dividend, stock distribution, consolidation or similar event.
(a) Exercise of Put Option. Cybernet may exercise the Put
Option by written notice to Immersion during the Put Period, accompanied by the
certificate or certificates evidencing the shares of Merger Stock being sold by
Cybernet and a duly executed stock power or powers prepared for transfer of the
shares to Immersion. The written notice must be signed by Cybernet and must be
delivered in person, by certified or registered mail, return receipt requested,
by confirmed facsimile transmission, or by such other means as Immersion may
permit, to the Chief Financial Officer of Immersion, or other authorized
representative of Immersion. The Put Option shall be considered to be exercised
upon receipt by Immersion of such written notice, stock certificate(s) and stock
power(s).
(b) Payment for Shares. In full consideration for the payment
of the Merger Stock being purchased upon exercise of the Put Option, Immersion
shall assign to Cybernet all right, title and interest, worldwide, in and to the
Patents, on an "as is" basis, subject to the reservation of a non-exclusive
license paid up, perpetual worldwide license in and to any continuations with
respect to the Patents. The foregoing assignment and non-exclusive license shall
be implemented through a single agreement.
(c) Payment of the consideration shall be made by Immersion
within thirty (30) days of exercise of the Put Option by delivery of the
Assignment and License Agreement so as to vest in Cybernet title to the Patents
on an "as is" basis.
(d) Assignment. Cybernet may not assign the Put Option without
the prior written consent of Immersion.
(e) Early Termination of Put Option. The Put Option shall
terminate early and be of no further force and effect upon the first to occur of
(a) the existence of a public market, as defined below, for the class of shares
acquired hereunder, (b) except with respect to 500,000 shares of Merger Stock,
the sale, exchange, transfer, pledge or other disposition by Cybernet of any of
the shares acquired by Cybernet hereunder or (c) a Corporate Sale (as defined
below). A "public market" shall be deemed to exist if (i) such stock is listed
on a national securities exchange (as that term is used in the Exchange Act) or
(ii) such stock is traded on the over-the-counter market and prices therefor are
published daily on business days in a recognized financial journal. A "Corporate
Sale" means the occurrence of one of the following events: (i) a consolidation
or merger of Immersion with or into any other corporation or corporations (other
than a wholly-owned subsidiary) in which the shareholders of Immersion
immediately prior to such transaction hold fifty percent (50%) or less of the
total voting power for the election of directors of the acquiring or surviving
entity immediately following the transaction, or (ii) the sale, transfer or
other disposition of all or substantially all of the assets of Immersion or
(iii) the consummation of any transaction or series of related transactions
which results in Immersion's
22
shareholders immediately prior to such transaction holding fifty percent (50%)
or less of the voting power of the acquiring or surviving entity immediately
following the transaction.
Section 5.15 Maintenance of Patents. Immersion covenants that for a period
of five (5) years, it shall pay all maintenance fees required by the U.S. Patent
and Trademark Office.
ARTICLE VI
CONDITIONS TO MERGER
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction prior to the Closing Date of the following
conditions:
(a) Approval of Merger and Merger Certificates. This Agreement
and the Merger Certificate shall have been approved and adopted by the requisite
vote of the holders of the outstanding shares of Cybernet Sub Common Stock. The
Merger Certificates (including all required officers' certificates) shall have
been filed with, and accepted by, the Department of Consumer & Industry Services
of the State of Michigan in accordance with Michigan Law and the Secretary of
State of the State of Delaware in accordance with the DGCL.
(b) Authorizations and Consents. All authorizations, consents,
orders or approvals of, or declarations or filings with, or expirations of
waiting periods imposed by, any Governmental Entity the failure of which to
obtain or comply with would be reasonably likely to have a Material Adverse
Effect on Immersion or Cybernet Sub shall have been filed, occurred or been
obtained.
(c) No Restraining Order or Injunction. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal or regulatory restraint or
prohibition preventing the consummation of the Merger or limiting or restricting
Immersion's conduct or operation of the business of Immersion or Cybernet Sub
after the Merger shall have been issued, nor shall any proceeding brought by a
domestic administrative agency or commission or other domestic Governmental
Entity, seeking any of the foregoing be pending; nor shall there be any action
taken, or any statute, rule, regulation or order enacted, entered, enforced or
deemed applicable to the Merger which makes the consummation of the Merger
illegal.
Section 6.2 Additional Conditions to Obligations of Immersion and Sub. The
obligations of Immersion and Sub to effect the Merger are subject to the
satisfaction of each of the following conditions, any of which may be waived in
writing exclusively by Immersion and Sub:
(a) Representations and Warranties. All representations and
warranties made herein by Cybernet and Cybernet Sub shall be true and correct in
all material respects when made and on and as of the Closing with the same force
and effect as if such representations and warranties had been made at the
Closing.
(b) Compliance with Agreement. Cybernet and Cybernet Sub shall
have performed, satisfied and complied in all material respects with all
covenants, agreements and conditions contained herein and required to be
performed, satisfied and complied with by Cybernet Sub on or before the
Effective Time.
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(c) Consents and Approvals from Cybernet and Cybernet Sub.
Cybernet and Cybernet Sub shall have received any and all approvals of
governmental authorities, permits and consents of any person necessary in the
consummation of the transactions contemplated herein.
(d) Transaction Documents. Cybernet and Cybernet Sub shall
have executed all applicable Transaction Documents.
(e) Officer's Certificate. Immersion shall have received at
Closing a certificate executed by the Chief Executive Officer or President of
Cybernet and Cybernet Sub certifying that the conditions specified in Sections
6.2(a), 6.2(b) and 6.2(c) have been satisfied.
(f) Good Standing. Immersion shall have received from each of
Cybernet and Cybernet Sub a certificate of legal existence and good standing and
a certificate of incorporation certified by the Secretary of State of its
jurisdiction or incorporation.
(g) State Blue Sky. Immersion shall have received all permits
and other authorizations required under applicable state blue sky laws for the
issuance of shares of Merger Stock pursuant to the Merger.
(h) Stockholder Approval. The Merger shall have been approved
by the affirmative vote of the holders of not less than 100% of the outstanding
shares of Cybernet Sub Common Stock.
Section 6.3 Additional Conditions to Obligations of Cybernet Sub. The
obligation of Cybernet Sub to effect the Merger is subject to the satisfaction
of each of the following conditions, any of which may be waived, in writing,
exclusively by Cybernet Sub:
(a) Representations and Warranties. All representations and
warranties made herein by Immersion shall be true and correct in all material
respects when made and on and as of the Closing with the same force and effect
as if such representations and warranties had been made at the Closing.
(b) Compliance with Agreement. Immersion shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions contained herein and required to be performed, satisfied and
complied with by Immersion on or before the Effective Time.
(c) Consents and Approvals. Immersion shall have received any
and all approvals of governmental authorities, permits and consents of any
person necessary in the consummation of the transactions contemplated herein
shall have been obtained.
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(d) Transaction Documents. Immersion shall have executed all
the applicable Transaction Documents.
(e) Registration and Board Attendance Rights Agreement.
Immersion shall have executed the Registration and Board Attendance Rights
Agreement in the form attached hereto as Exhibit F.
(f) Officer's Certificate. Cybernet shall have received at
Closing a certificate executed by the Chief Executive Officer or President of
Immersion certifying that the conditions specified in Sections 6.3(a), 6.3(b),
6.3(c) and 6.3(e) have been satisfied.
(g) Good Standing. Cybernet shall have received a certificate
of legal existence and good standing of Immersion and the Articles of
Incorporation certified by the California Secretary of State.
(h) Approval. Cybernet Sub shall have received from Immersion
and Sub written evidence that the execution, delivery and performance of
Immersion's and Sub's obligations under this Agreement have been duly and
validly approved and authorized by the Boards of Directors of Immersion and Sub.
ARTICLE VII
TERMINATION AND AMENDMENT
Section 7.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time (with respect to Sections Section 7.1(a) through
Section 7.1((d)), by written notice by the terminating party to the other
party):
(a) by the mutual written consent of Immersion and Cybernet
Sub;
(b) by either Immersion or Cybernet Sub if a court of
competent jurisdiction or other Governmental Entity shall have issued a
nonappealable final order, decree or ruling or taken any other action, in each
case having the effect of permanently restraining, enjoining or otherwise
prohibiting the Merger, except if the party relying on such order, decree or
ruling or other action has not complied with its obligations under Section
Section 5.12 of this Agreement;
(c) by Immersion, if the Board of Directors of Cybernet Sub
shall have withdrawn or modified its recommendation of this Agreement or the
Merger in a manner adverse to Immersion or shall have publicly announced or
disclosed to any third party its intention to do any of the foregoing; or
(d) by Immersion or Cybernet Sub, if there has been a material
breach of any representation, warranty, covenant or agreement on the part of the
other party set forth in this Agreement, which breach (i) causes the conditions
set forth in Section 6.2((a)) or 6.2(b) (in the case of termination by
Immersion) or 6.3(a) or 6.3(b) (in the case of termination by Cybernet
25
Sub) not to be satisfied and (ii) shall not have been cured within ten (10)
business days following receipt by the breaching party of written notice of such
breach from the other party.
Section 7.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section Section 7.1, there shall be no liability or
obligation on the part of Immersion, Cybernet, Cybernet Sub, Sub or their
respective officers, directors, stockholders or affiliates, except to the extent
that such termination results from the willful breach by a party of any of its
representations, warranties or covenants set forth in this Agreement; provided
that, the provisions of 5.2, 5.13 and 5.14 of this Agreement shall remain in
full force and effect and survive any termination of this Agreement.
Section 7.3 Amendment. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time before or after approval of the matters presented in connection with
the Merger by the stockholders of Cybernet Sub, but, after any such approval, no
amendment shall be made which by law requires further approval by such
shareholders or stockholders without such further approval. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties hereto.
Section 7.4 Extension; Waiver. At any time prior to the Effective Time,
the parties hereto, by action taken or authorized by their respective Boards of
Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (iii) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Survival of Representations and Warranties. If the Merger
occurs, all of the representations and warranties contained in this Agreement
shall survive the Effective Time and shall continue in full force and effect
until one (1) year following the Effective Time, except for the representations
and warranties of Cybernet and Cybernet Sub set forth in Section 3.6, which
shall continue in full force and effect until five (5) years following the
Effective Time.
Section 8.2 Indemnification by Cybernet. Subject to the terms and
conditions contained herein, Cybernet shall indemnify, defend and hold harmless
Immersion, its officers, directors, employees and attorneys, all subsidiaries
and affiliates of Immersion, and the respective officers, directors, employees
and attorneys of such entities (all such persons and entities being collectively
referred to as the "Immersion Group") from, against, for and in respect of any
and all losses, damages, costs and expenses (including reasonable legal fees and
expenses) (collectively, the "Losses") which any member of the Immersion Group
may sustain or incur
26
which are caused by or arise out of (i) any misrepresentation or breach of
warranty on the part of Cybernet or Cybernet Sub under this Agreement or of any
misrepresentation in, or omission from, any certificate or other instrument
furnished or to be furnished to Immersion hereunder; (ii) nonfulfillment of any
agreement, covenant or undertaking on the part of Cybernet or Cybernet Sub under
this Agreement; or (iii) a claim based on an assertion of ownership in any of
the assets or equity of Cybernet Sub which, if true, would demonstrate a
misrepresentation or breach of warranty on the part of Cybernet or Cybernet Sub
under this Agreement or from any misrepresentation in, or omission from, any
certificate or other instrument furnished or to be furnished to Immersion
hereunder; provided, however, that Cybernet will not be obligated to indemnify
Immersion pursuant to this clause (iii) of Section 8.2 if (aa) the obligation
for indemnification under this clause (iii) arises solely by virtue of the facts
that a third party has asserted a counterclaim in response to a lawsuit
initiated by Immersion alleging infringement by such third party of any of the
Intellectual Property and Related Materials and (bb) the Third Party Claim (as
defined below) asserted in such counterclaim is not true; and provided further
that, to the extent that any member of the Immersion Group is entitled to
indemnification exclusively pursuant to this Section 8.2(iii), then, without
derogation of any of the rights of any member of the Immersion Group under
Section 8.2(i) or Section 8.2(ii), the members of the Immersion Group shall not
be entitled to indemnification for attorney fees incurred by the Immersion Group
pursuant to this Section 8.2(iii) in the defense of a Third Party Claim.
Section 8.3 Procedures for Indemnification.
(a) As used in this Article VIII, the term "Indemnitee" means
the member or members of the Immersion Group seeking indemnification hereunder.
(b) A claim for indemnification hereunder (an "Indemnification
Claim") shall be made by Indemnitee by delivery of a written notice to Cybernet
specifying the basis on which indemnification is sought in reasonable detail
(and shall include relevant documentation related to the Indemnification Claim),
the amount or an estimate of the amount of the asserted Losses and, in the case
of a Third Party Claim (as defined in Section Section 8.4), containing (by
attachment or otherwise) such other information as Indemnitee shall have
concerning such Third Party Claim.
(c) If the Indemnification Claim involves a Third Party Claim,
the procedures set forth in Section Section 8.4 shall be observed by Indemnitee
and Cybernet.
Section 8.4 Defense of Third Party Claims. Should any claim be made, or
suit or proceeding be instituted against an Indemnitee which, if prosecuted
successfully, would be a matter for which such Indemnitee is entitled to
indemnification under this Article VIII (a "Third Party Claim"), the obligations
and liabilities of the parties hereunder with respect to such Third Party Claim
shall be subject to the following terms and conditions:
(a) Indemnitee shall give Cybernet written notice of any such
claim promptly after receipt by Indemnitee of notice thereof, and Cybernet may
undertake control of the defense thereof by counsel of its own choosing
reasonably acceptable to Indemnitee; provided however, that any delay in giving
such a notice shall not affect the rights of the
27
Indemnitee under this Article VIII, unless and only to the extent that Cybernet
demonstrates that such delay materially prejudices the rights of Cybernet with
respect to the Third Party Claim. Indemnitee may participate in the defense
through its own counsel at its own expense. The assumption of the defense of any
Third Party Claim by Cybernet shall be an acknowledgment by Cybernet that such
Third Party Claim is subject to indemnification under the provisions of this
Article VIII. If, however, Cybernet fails or refuses to undertake the defense of
such Third Party Claim within fifteen (15) days after written notice of such
claim has been delivered to Cybernet by Indemnitee, Indemnitee shall have the
right to undertake the defense, compromise and, subject to Section Section 8.5,
settlement of such Third Party Claim with counsel of its own choosing reasonably
acceptable to Cybernet. In the circumstances described in the preceding
sentence, Indemnitee shall, promptly upon its assumption of the defense of such
Third Party Claim, make an Indemnification Claim as specified in Section Section
8.3((b)), which shall be deemed an Indemnification Claim that is not a Third
Party Claim for the purposes of the procedures set forth herein. Failure of
Indemnitee to furnish written notice to Cybernet of a Third Party Claim shall
not release Cybernet from its obligations hereunder, except to the extent they
are prejudiced by such failure.
(b) Indemnitee and Cybernet shall cooperate with each other in
all reasonable respects in connection with the defense of any Third Party Claim,
including making available records relating to such claim and furnishing
employees of Indemnitee as may be reasonably necessary for the preparation of
the defense of any such Third Party Claim or for testimony as witness in any
proceeding relating to such claim. In the event that Indemnitee defends a Third
Party Claim, the fact that Indemnitee prevails in any litigation with respect to
such Third Party Claim shall not be viewed as evidence that Indemnitee is not
entitled indemnification under this Article VIII.
Section 8.5 Settlement of Third Party Claims. Unless Cybernet has failed
to fulfill its obligations under this Article VIII, no settlement by Indemnitee
of a Third Party Claim shall be made without the prior written consent by or on
behalf of Cybernet, which consent shall not be unreasonably withheld or delayed.
If Cybernet has assumed the defense of a Third Party Claim as contemplated by
Section 8.4, no settlement of such Third Party Claim may be made by Cybernet
without the prior written consent by or on behalf of Indemnitee, which consent
shall not be unreasonably withheld or delayed, unless such settlement includes a
complete release of all claims against Indemnitee.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with confirmation of receipt) to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice):
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if to Immersion to: Immersion Corporation
0000 Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx
with a copy to: Xxxx Xxxx Xxxx & Freidenrich LLP
000 Xxxxxxxx Xxx.
Xxxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx
Xxxxx Snowman
if to Cybernet or
Cybernet Sub: Cybernet Systems Corporation
000 Xxxxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxx Xxxxxxx
with a copy to: Xxxxxxx & Xxxxxxxxx
0000 Xxxxxxxx, Xxxxx 000
Xxxx, Xxxxxxxx 00000-0000
Attn: Xxxx Xxxxxxx
Section 9.2 Interpretation. When a reference is made in this Agreement to
an Article or Section, such reference shall be to an Article or Section of this
Agreement unless otherwise indicated. The words "include," "includes" and
"including" when used herein shall be deemed in each case to be followed by the
words "without limitation." The phrase "made available" in this Agreement shall
mean that the information referred to has been made available if requested by
the party to whom such information is to be made available. The phrases "the
date of this Agreement," "the date hereof," and terms of similar import, unless
the context otherwise requires, shall be deemed to refer to the date set forth
in the first sentence of this Agreement. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
Section 9.3 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
Section 9.4 Severability. In the event that any provision of this
Agreement, or the application thereof, becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder of
this Agreement will continue in full force and effect and the application of
such provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further agree
to replace such void or unenforceable provision of this Agreement with a valid
and enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of such void or unenforceable provision.
29
Section 9.5 Entire Agreement. This Agreement (including the documents and
the instruments referred to herein) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof, other than the
Confidentiality Agreement.
Section 9.6 Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of California without regard to any
applicable conflicts of law.
Section 9.7 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns.
30
IN WITNESS WHEREOF, Immersion, Sub, Cybernet and Cybernet Sub have caused
this Agreement to be signed by their respective officers thereunto duly
authorized, and the Stockholder Representative has signed this Agreement, as of
the date first written above.
"IMMERSION" "CYBERNET"
IMMERSION CORPORATION CYBERNET SYSTEMS CORPORATION
By: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxxxx Xxxxxxx
---------------------------- -----------------------------
Printed: Xxxxx Xxxxxxxxx Printed: Xxxxxxx Xxxxxxx
---------------------------- -----------------------------
Title: President Title: President
---------------------------- -----------------------------
"SUB" "CYBERNET SUB"
IMMERSION ACQUISITION CYBERNET HAPTIC SYSTEMS CORPORATION
CORPORATION
By: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxxxx Xxxxxxx
---------------------------- -----------------------------
Printed: Xxxxx Xxxxxxxxx Printed: Xxxxxxx Xxxxxxx
---------------------------- -----------------------------
Title: President Title: President
---------------------------- -----------------------------
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION]
