EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
iXL ENTERPRISES, INC.,
iXL-MASSACHUSETTS, INC.,
AND
TESSERA ENTERPRISE SYSTEMS, INC.
Dated as of October 4, 1999
AGREEMENT AND PLAN OF MERGER
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THIS AGREEMENT AND PLAN OF MERGER is entered into as of this 4th day of
October, 1999, by and among Tessera Enterprise Systems, Inc., a Massachusetts
corporation ("Tessera"), iXL Enterprises, Inc., a Delaware corporation
("Parent"), and iXL-Massachusetts, Inc., a Delaware corporation, or its
successors or assigns ("Sub").
R E C I T A L S:
- - - - - - - -
A. Tessera is engaged in the business of furnishing Internet consulting
and solutions integration, including customer relations management and data
warehousing (the "Tessera Business").
B. Tessera and Sub each desire to merge their respective companies and
business operations, all on the terms and subject to the conditions set forth
herein (the "Merger").
C. Contemporaneously herewith, and as a condition and inducement to
Parent's and Sub's willingness to enter into this Agreement, certain of the
stockholders of Tessera as listed on the signature page thereto (collectively,
the "Tessera Stockholders") have entered into a Voting and Indemnity Agreement
with Parent and Sub (the "Voting and Indemnity Agreement").
D. Of the issued and outstanding capital stock of Tessera (the "Tessera
Stock"), a majority is owned by the Tessera Stockholders.
E. The respective Boards of Directors of Parent, Sub and Tessera, and the
stockholder of Sub, have approved the Merger, upon the terms and subject to the
conditions set forth herein. The Board of Directors of Tessera has determined
to recommend that the stockholders of Tessera adopt and approve this Agreement
and approve the Merger.
F. The parties hereto intend for the Merger to qualify, for federal income
tax purposes, as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the mutual covenants, representations,
conditions and agreements set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, it
is hereby agreed as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions hereof, at
the Effective Time (as defined in Section 1.3), (a) Tessera shall be merged with
and into Sub, (b) the separate existence of Tessera shall cease, and (c) Sub
shall continue as the surviving corporation in the
Merger under the laws of the State of Delaware under the name iXL-Massachusetts,
Inc. For purposes of this Agreement, Sub shall be referred to, from and after
the Effective Time, as the "Surviving Corporation."
1.2 Closing and Closing Date. Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been abandoned
pursuant to Section 8.1, and subject to the satisfaction or waiver of the
conditions set forth in Article VII, the closing of the Merger (the "Closing")
will take place as promptly as practicable (and in any event within five
business days after satisfaction of the conditions set forth in Sections 7.1 and
7.2) (the "Closing Date") at the offices of Xxxxxx & Xxxxxx, a Professional
Corporation, One Buckhead Plaza, 0000 Xxxxxxxxx Xx., Xxx. 0000, Xxxxxxx, XX
00000, unless another date or place is agreed to by the parties.
1.3 Effective Time of the Merger. At the Closing, the parties hereto
shall cause (a) a certificate of merger (the "Delaware Certificate of Merger")
to be filed with the office of the Secretary of State of Delaware in accordance
with the provisions of the Delaware General Corporation Law, as amended (the
"DGCL"); and (b) Articles of Merger (the "Massachusetts Articles of Merger";
collectively with the Delaware Certificate of Merger, the "Certificate of
Merger") to be filed with the office of the Secretary of the Commonwealth of
Massachusetts in accordance with the provisions of the Massachusetts Business
Corporation Law (the "MBCL"). When used herein, the term "Effective Time" shall
mean the time when the Certificate of Merger has been accepted for filing both
by the Secretary of State of Delaware and by the Secretary of the Commonwealth
of Massachusetts, respectively, or such time as otherwise specified therein.
1.4 Effect of the Merger. The Merger shall, from and after the
Effective Time, have all of the effects provided by the DGCL and the MBCL. If at
any time after the Effective Time, any further action is deemed necessary or
desirable to carry out the purposes hereof, then the Surviving Corporation and
its proper officers and directors shall be authorized to take, and shall take,
any and all such action.
ARTICLE II
THE SURVIVING CORPORATION
2.1 Certificate of Incorporation. The Certificate of Incorporation of
Sub, a form of which is attached to a Closing and incumbency certificate,
substantially in the form of Exhibit "A" ("Sub's Closing Certificate"), shall be
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the Certificate of Incorporation of the Surviving Corporation from and after the
Effective Time, until thereafter changed or amended as provided therein or by
applicable law.
2.2 Bylaws. The Bylaws of Sub as in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation, until
thereafter changed or amended as provided therein or by applicable law. A copy
of the Bylaws of Sub is attached to Sub's Closing Certificate.
2.3 Board of Directors; Officers. The Board of Directors and officers
of Sub immediately prior to the Effective Time shall be the Board of Directors
and officers, respectively, of the Surviving Corporation, until the earlier of
their respective resignations or the time that their respective successors are
duly elected or appointed and qualified.
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ARTICLE III
CONVERSION OF SHARES
3.1 Merger Consideration. As of the Effective Time:
(a) All shares of Tessera Stock owned by Tessera shall, by virtue
of the Merger and without any action on the part of any stockholder,
officer or director of Tessera or Sub, be canceled and retired and shall
cease to exist, and no consideration shall be delivered in exchange
therefor.
(b) Each issued and outstanding share of Tessera common stock owned
by the stockholders of Tessera other than Tessera (including all
outstanding shares of Tessera Series A and Series D Preferred Stock, which
shall have been converted into Tessera common stock in accordance with
Section 6.6(d)) shall, upon surrender to Sub (or Parent's designated
transfer agent), at the Closing, of the underlying share certificates
("Certificates"), be converted into, and become exchangeable for, a number
of shares of validly issued, fully paid and nonassessable Common Stock of
Parent, $.01 par value ("Parent Stock") based on the following equation:
PS = $120 million [(D - $732,000) + F + B + C]
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PSV x (S + O)
where: PS = the number of shares of Parent Stock for which each
share of Tessera Stock owned by a stockholder of Tessera other
than Tessera shall be exchanged pursuant to the Merger;
D = any debt for borrowed money of Tessera and accrued interest
thereon (the "Tessera Debt"), to be determined as of three
business days prior to the Closing Date;
F = any banker's, legal, accounting, broker's, finder's or other
agency or advisory fees and expenses of Tessera related to the
Merger, to be paid off by Parent at the Closing;
B = the aggregate amount of cash, including accrued dividends,
required to redeem all of Tessera's outstanding Series B
Preferred Stock immediately prior to Closing in accordance with
the provisions of Article IV, Section C.2.c of Tessera's
Articles of Organization;
C = the aggregate amount of cash required to be paid to the
holder of Tessera's outstanding Series C Preferred Stock at the
Closing in accordance with the provisions of Articles IV,
Section D.2.c.ii.A of Tessera's Articles of Organization;
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PSV = $29.49, the price per share of Parent Stock, based on the
average of the daily closing price thereof, as reflected in The
Wall Street Journal for the 30 business days prior to the date
hereof;
S = the total number of shares of Tessera common stock which
would be issued and outstanding on the Closing Date if all the
outstanding shares of Tessera Series A, Series C and Series D
Preferred Stock were converted into Tessera common stock
immediately prior thereto but excluding any shares of Series B
Preferred Stock; and
O = 803,768, representing the total number of options to
purchase Tessera Stock outstanding on the date hereof, pursuant
to Tessera's stock option plan(s) which, subject to Sections 6.1
and 6.6(b), will be assumed by Parent at the Effective Time.
(c) Each issued and outstanding share of Series C Preferred Stock
shall, up on surrender to Sub (or Parent's designated transfer agent), at
the Closing, of the Certificates therefor, be converted into, and become
exchangeable for (i) a number of shares of validly issued, fully paid and
nonassessable Parent Stock equal to PS multiplied by the number of shares
of Tessera common stock issuable upon conversion of such Series C Preferred
Stock, plus (ii) the amount payable as item "C" under Section 3.1(b) above.
(d) With respect to the exchange of Certificates for Parent Stock, the
following provisions shall apply:
(i) If any Certificate has been lost, stolen or destroyed, then
Parent's policies generally concerning lost, stolen or
destroyed certificates of Parent Stock, which may include
requirements of affidavits, bonds and indemnities, shall
apply.
(ii) No fractional shares of Parent Stock shall be issued; in
lieu thereof, a stockholder of Tessera will receive an
amount of cash equal to the product of (x) such fraction,
multiplied by (y) PSV.
(iii) Parent Stock certificates shall not be issued in a name
other than that in which the Certificates surrendered in
exchange therefor are registered absent compliance with
Parent's policies concerning proper endorsements and
evidence of payment of applicable transfer or other taxes.
(e) Each issued and outstanding share of common stock of Sub shall,
by virtue of the Merger and without any action on the part of any
stockholder, officer or director of Tessera or Sub, be converted into and
become one fully paid and nonassessable share of common stock of the
Surviving Corporation.
3.2 Dissenting Shares. Subject to Section 7.2(k), but notwithstanding any
other provision hereof to the contrary, any shares of Tessera Stock held by a
Dissenting Stockholder (as
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hereinafter defined) shall not be converted as described in Section 3.1(b), but
instead shall be converted into the right to receive the consideration due a
Dissenting Stockholder pursuant to the DGCL or MBCL, as applicable, provided,
however, that if a Dissenting Stockholder shall fail to perfect his demand,
withdraw his demand or otherwise lose his right for appraisal under the terms of
the DGCL or MBCL, as applicable, then the Tessera Stock held by such Dissenting
Stockholder (the "Dissenting Shares") shall be deemed to be converted as of the
Effective Time in accordance with the provisions of Section 3.1. Tessera shall
not voluntarily make any payment with respect to, settle, or offer to settle or
otherwise negotiate, any such demands. All amounts paid to Dissenting
Stockholders shall be paid without interest thereon (to the extent permitted by
applicable law) by the Surviving Corporation. For purposes hereof, the term
"Dissenting Stockholder" shall mean a stockholder of Tessera who (a) objects to
the Merger; and (b) complies with the applicable provisions of the DGCL or MBCL
concerning dissenter's rights.
3.3 No Further Rights. From and after the Effective Time, holders of
certificates theretofore evidencing Tessera Stock shall cease to have any rights
as stockholders of Tessera, except as provided herein or by applicable law.
3.4 Closing of Tessera's Transfer Books. At the Effective Time, the stock
transfer books of Tessera shall be closed and no transfer of Tessera Stock shall
be made thereafter. If after the Effective Time, certificates for Tessera Stock
are presented to Parent or the Surviving Corporation, then they shall be
canceled and exchanged for a consideration as set forth in Section 3.1, subject
to applicable law in the case of Dissenting Stockholders.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TESSERA
Tessera represents and warrants to Parent and Sub as follows, which
representations and warranties shall survive the Closing in accordance with
Section 9.1.
4.1 Organization and Qualification. Tessera is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts. Tessera has the requisite corporate power and
authority to carry on the Tessera Business as it is now being conducted and is
duly qualified or licensed to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities makes such qualification necessary, except where
the failure so to qualify could not have a material adverse effect on the
Tessera Business or on Tessera's properties or assets. Set forth on Schedule 4.1
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is a list of any states in which Tessera is qualified to do business. Complete
and correct copies of the Articles of Organization and Bylaws of Tessera as in
effect on the date hereof are attached to a Closing and incumbency certificate,
substantially in the form of Exhibit "B" ("Tessera's Closing Certificate"). The
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minute book of Tessera, a correct and complete copy of which has been delivered
to Parent, (a) accurately reflects all action taken by the directors and
stockholders of Tessera at meetings of Tessera's Board of Directors or
stockholders, as the case may be; and (b) contains correct and complete copies,
or originals, of the respective minutes of all meetings or consent actions of
the directors or stockholders.
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4.2 Authority. Tessera has the necessary corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery hereof and the consummation of
the transactions contemplated hereby by Tessera have been duly and validly
authorized and approved by Tessera's Board of Directors and, and, except for
approval and adoption hereof and approval of the Merger by the stockholders of
Tessera, no other corporate or stockholder proceedings on the part of Tessera,
its Board of Directors or the stockholders of Tessera is necessary to authorize
or approve this Agreement or to consummate the transactions contemplated hereby
(including the Merger). Tessera's Board of Directors has determined to
recommend that the stockholders of Tessera approve and adopt this Agreement and
approve the Merger. This Agreement has been duly executed and delivered by
Tessera, and assuming the due authorization, execution and delivery by Parent
and Sub, constitutes the valid and binding obligation of Tessera, enforceable
against Tessera in accordance with its terms, subject, in each case, to
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
application relating to or affecting creditors' rights and to general principles
of equity, including principles of commercial reasonableness, good faith and
fair dealing.
4.3 Capitalization.
(a) The authorized capital stock of Tessera consists of
(i) 7,500,000 shares of common stock, no par value, of which 2,515,604
shares are validly issued and outstanding, fully paid and nonassessable,
(ii) 58,700 shares of Series A preferred stock, $0.01 par value, of which
50,200 shares are validly issued and outstanding, fully paid and
nonassessable, (iii) 48,700 shares of Series B preferred stock, $0.01 par
value, of which 48,700 shares are validly issued and outstanding, fully
paid and nonassessable (iv) 18,204 shares of Series C preferred stock,
$0.01 par value, of which 18,204 shares are validly issued and outstanding,
fully paid and nonassessable, and (v) 43,831 shares of Series D preferred
stock, $0.01 par value, of which 40,991 shares are validly issued and
outstanding, fully paid and nonassessable. All outstanding capital stock of
Tessera was issued in accordance with applicable federal and state
securities laws. Except as set forth on Schedule 4.3(a), there are no
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options, warrants, calls, convertible notes, agreements, commitments or
other rights outstanding at present that would obligate Tessera or any of
its stockholders to issue, deliver or sell shares of its or their capital
stock, or to grant, extend or enter into any such option, warrant, call,
convertible note, agreement, commitment or other right. In addition to the
foregoing, as of the date hereof, Tessera has no bond, debenture, note or
other indebtedness issued or outstanding that has voting rights in Tessera.
Schedule 4.3(a) sets forth a list of (i) all holders of record of (A)
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Tessera Stock, and (B) options, warrants, convertible notes or other rights
to purchase capital stock of Tessera (collectively, "Tessera Stock
Rights"); (ii) the number of shares held by each stockholder of Tessera and
the number of shares of capital stock of Tessera represented by the Tessera
Stock Rights; (iii) the exercise price for each Tessera Stock Right; and
(iv) the number of authorized but unissued options remaining under
Tessera's stock option plan(s). As of the Closing, all Tessera warrants
shall have been exercised, and any exercise price thereunder paid in
exchange for Tessera Stock, such that all rights of the holder(s)
thereunder shall have been extinguished.
(b) All of the issued and outstanding shares of capital stock of
Tessera are validly issued, fully paid and nonassessable.
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(c) Except as set forth on Schedule 4.3(c), the Tessera Stock held
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by any stockholder of Tessera other than the Tessera Stockholders is free
and clear of any lien, charge, security interest, pledge, option, right of
first refusal, voting proxy or other voting agreement, or encumbrance of
any kind or nature other than restrictions on transfer imposed by federal
and state securities laws (any of the foregoing, a "Lien").
4.4 Subsidiaries. Except as set forth on Schedule 4.4, Tessera has no
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subsidiaries and does not otherwise own or control, directly or indirectly, any
equity interest, or any security convertible into an equity interest, in any
corporation, partnership, limited liability company, joint venture, association
or other business entity (any of the foregoing, an "Entity").
4.5 No Conflicts, Required Filings and Consents. Except as set forth on
Schedule 4.5, none of (i) the execution and delivery hereof by Tessera, (ii) the
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consummation by Tessera or the stockholders of Tessera of the transactions
contemplated hereby (including the Merger) or (iii) compliance by Tessera with
any of the provisions hereof will:
(a) conflict with or violate the Articles of Organization or Bylaws
of Tessera;
(b) result in a violation of any statute, ordinance, rule,
regulation, order, judgment or decree applicable to Tessera or any of the
stockholders of Tessera, or by which Tessera or any of its properties or
assets may be bound or affected;
(c) result in a violation or material breach of, or constitute a
material default (or an event that, with notice or lapse of time or both,
would become a material default) under, or give to any other party any
material right of termination, amendment, acceleration or cancellation of,
any note, bond, mortgage or indenture, or any material contract, agreement,
arrangement, lease, license, permit, judgment, decree, franchise or other
instrument or obligation, to which Tessera is a party or by which Tessera
or any of its properties or assets may be bound or affected;
(d) result in the creation of any Lien on any of the property or
assets of Tessera; or
(e) require any material consent, waiver, license, approval,
authorization, order, permit, registration or filing with, or notification
to (any of the foregoing being a "Consent") (i) any government or
subdivision thereof, whether domestic or foreign, or any administrative,
governmental or regulatory authority, agency, commission, court, tribunal
or body, whether domestic, foreign or multinational (any of the foregoing,
a "Governmental Entity"), except for (x) the filing of the Certificate of
Merger pursuant to the DGCL and the MBCL, (y) the filing under the HSR Act
(as defined in Section 6.7) and (z) the filing of the Registration
Statement (as defined in Section 5.3(e)) with the Securities and Exchange
Commission ("SEC"); or (ii) any other individual or Entity (collectively, a
"Person").
4.6 Financial Statements. Tessera has heretofore furnished Parent with a
correct and complete copy of (a) the audited financial statements of Tessera for
the period from February 15, 1995 through December 31, 1995 and for the years
ended December 31, 1996, 1997 and 1998; (b) the financial statements of Tessera,
as reviewed by PricewaterhouseCoopers LLP, for the six month periods ended
June 30, 1998 and 1999; and (c) the unaudited financial statements of Tessera
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for each of the months of July and August, 1999 (all of the foregoing
collectively herein referred to as the "Tessera Financial Statements"). Except
as disclosed therein, the Tessera Financial Statements have been prepared in
accordance with generally accepted accounting principles ("GAAP") (except for
the absence of footnotes and normal year end adjustments in the case of the
Tessera Financial Statements for the periods ended June 30, 1998 and 1999 and
for the months of July and August, 1999) consistently followed throughout the
period indicated, and present fairly, in all material respects, the financial
position and operating results of Tessera as of the dates, and during the
periods, indicated therein.
4.7 Absence of Changes. Except as provided in Schedule 4.7 and except as
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contemplated hereby, since June 30, 1999 (a) Tessera has not entered into any
material transaction that was not in the ordinary course of business; (b) except
for sales of services and licenses of software in the ordinary course of
business of Tessera, there has been no sale, assignment, transfer, mortgage,
pledge, encumbrance or lease of any material asset or property of Tessera; (c)
there has been (i) no declaration or payment of a dividend, or any other
declaration, payment or distribution of any type or nature to any stockholder of
Tessera in respect of his stock, whether in cash or property, and (ii) no
purchase or redemption of any share of the capital stock of Tessera; (d) there
has been no declaration, payment, or commitment for the payment, by Tessera, of
a bonus or other additional salary, compensation, severance or benefit to any
employee or consultant of Tessera that was not in the ordinary course of
business; (e) there has been no material release, compromise, waiver or
cancellation of any debt to or claim by Tessera, or waiver of any material right
of Tessera; (f) there have been no capital expenditures in excess of $25,000 for
any single item, or $100,000 in the aggregate; (g) there has been no change in
accounting methods or practices or revaluation of any asset of Tessera (other
than Tessera Accounts Receivable (as defined in Section 4.26) written down in
the ordinary course of business not in excess of $5,000 for any single Tessera
Accounts Receivable, or $25,000 in the aggregate); (h) there has been no
material damage or destruction to, or loss of, physical property (whether or not
covered by insurance) adversely affecting the Tessera Business or the operations
of Tessera; (i) there has been no loan by Tessera, or guaranty by Tessera of any
loan, to any employee of Tessera in excess of $5,000 other than travel advances
made in the ordinary course of Tessera's business consistent with past
practices; (j) Tessera has not ceased to transact business with any customer
that, as of the date of such cessation, represented more than 5% of the annual
gross revenues of Tessera; (k) there has been no termination or resignation of
any key employee or officer of Tessera, and to the knowledge of Tessera, no such
termination or resignation is threatened; (l) there has been no amendment or
termination of any material oral or written contract, agreement or license
related to the Tessera Business, to which Tessera is or was a party or by which
it is or was bound, except in the ordinary course of business or as expressly
contemplated hereby; (m) Tessera has not in any material manner failed to
satisfy any of its debts, obligations or liabilities related to the Tessera
Business or the assets of Tessera as the same become due and owing (except for
Tessera Accounts Payable (as defined in Section 4.27) payable in accordance with
past practices and in the ordinary course of business); (n) there has been no
agreement or commitment by Tessera to do any of the foregoing; and (o) there has
been no other event or condition of any character pertaining to and materially
and adversely affecting the assets, business or financial condition of Tessera.
4.8 Undisclosed Liabilities. Except as set forth on Schedule 4.8, Tessera
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has no debt, liability or obligation of any kind, whether accrued, absolute or
otherwise, including any liability or obligation on account of taxes or any
governmental charge or penalty, interest or fine, except (a)
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liabilities incurred in the ordinary course of business after June 30, 1999,
that would not, whether individually or in the aggregate, have a material
adverse impact on the business or financial condition of Tessera; (b)
liabilities reflected on the Tessera Financial Statements; and (c) liabilities
incurred as a result of the transactions contemplated hereby.
4.9 Title to Properties. Except as set forth on Schedule 4.9, Tessera has
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good and marketable title to all tangible property and assets used in the
Tessera Business, and good and valid title to its leasehold interests, in each
case, free and clear of any and all Liens other than Permitted Liens (as defined
in Section 9.9).
4.10 Equipment. Tessera has heretofore furnished Parent with a correct
and complete list, in all material respects, of all items of tangible personal
property (including computer hardware) necessary for or used in the operation of
the Tessera Business in the manner in which it has been and is now operated by
Tessera ("the Tessera Equipment"), except for personal property having a net
book value of less than $5,000. Except as set forth on Schedule 4.10, each
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material item of Tessera Equipment is in good condition and repair, ordinary
wear and tear excepted.
4.11 Intellectual Property; Year 2000 Compliance.
(a) Set forth on Schedule 4.11(a) is a correct and complete list,
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in all material respects, of all material proprietary technology, patents,
patent rights, trademarks, trademark rights, trade names, trade name
rights, service marks, service xxxx rights, and copyrights (and all pending
applications or current registrations for any of the foregoing) used by
Tessera in the conduct of the Tessera Business (together with trade secrets
and know how used in the conduct of the Tessera Business, the "Tessera
Intellectual Property Rights"). Tessera owns, or is validly licensed or
otherwise has the right to use or exploit, as currently used or exploited,
all of the Tessera Intellectual Property Rights, free of any Lien or any
obligation to make any payment (whether of a royalty, license fee,
compensation or otherwise). Except as set forth on Schedule 4.11(a), no
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claims are pending or, to the knowledge of Tessera, threatened, that
Tessera is infringing or otherwise adversely affecting the rights of any
Person with regard to any Tessera Intellectual Property Right or that any
Tessera Intellectual Property Right is invalid or unenforceable. No Person
is infringing the rights of Tessera with respect to any Tessera
Intellectual Property Right; nor, to Tessera's knowledge, has any Person
threatened to do so. Neither Tessera nor, to the knowledge of Tessera, any
employee, agent or independent contractor of Tessera, in connection with
the performance of such Person's services with Tessera, has used,
appropriated or disclosed, directly or indirectly, any trade secret or
other proprietary or confidential information or right of any other Person,
or otherwise violated any confidential relationship with any other Person.
(b) Set forth on Schedule 4.11(b) is a correct and complete list,
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in all material respects, of all material computer software used by Tessera
in the conduct of the Tessera Business (the "Tessera Software"). Tessera
currently owns, licenses or otherwise has the legal right to use all of the
Tessera Software (including any upgrade, alteration or enhancement with
respect thereto), and all of the Tessera Software is being used in
compliance with any applicable license or other agreement.
(c) Set forth on Schedule 4.11(c) is a correct and complete list,
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in all material respects, of all domain names (i) registered to or used by
Tessera, (ii) the registration fees for which
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are paid by Tessera or (iii) registered to any employee of Tessera relating
to the Tessera Business (collectively, "Domain Names"). Tessera owns and
has registered, or is validly licensed or otherwise has the right to use,
the Domain Names.
(d) Except as set forth on Schedule 4.11(d):
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(i) All former and current consultants or contractors of
Tessera have executed and delivered valid written
instruments with Tessera that assign to Tessera all rights
to any inventions, improvements, discoveries or
information developed by them for Tessera. All employees
of Tessera who participated in the creation or contributed
to the development of Tessera Intellectual Property Rights
or Domain Names were employees of Tessera at the time of
rendering such services and such services were within the
scope of their employment or such employees have otherwise
validly assigned such Intellectual Property Rights or
Domain Names to Tessera; and
(ii) Tessera has taken reasonable security measures,
including entering into appropriate confidentiality and
nondisclosure agreements with all of its employees,
consultants and contractors, and any other Persons with
access to Tessera's trade secrets or know how, to protect
the secrecy, confidentiality and value of all such trade
secrets or know how. To the knowledge of Tessera, there
has not been any breach by any party to any such
agreement.
(e) All material software, hardware and other computer and
information technology (collectively, "Information Technology") of Tessera
is or, prior to December 31, 1999, will be Year 2000 Compliant as that term
is hereinafter defined. "Year 2000 Compliant" means that any and all of the
Information Technology has the ability (i) to accept input and furnish
output of data involving dates or portions of dates correctly and without
ambiguity as to the 20th or 21st Centuries; (ii) to manage, store,
manipulate, sort, sequence and perform calculations with respect to
(collectively, "process") data involving dates or portions of dates before,
during and after January 1, 2000 (including single century or multi-century
date formulae) without malfunction and (iii) to process correctly leap
years, including the year 2000, provided that all other products (e.g.,
software or hardware) used with the Information Technology properly
exchange date data with it.
4.12 Real Property. Except as set forth on Schedule 4.12:
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(a) Tessera has a marketable and insurable fee simple absolute
interest, or good and valid leasehold interest, in all real property
(including all buildings, improvements and fixtures thereon) used in the
operation of the Tessera Business (the "Tessera Real Property"). Except
for Permitted Liens, and for the items set forth on Schedule 4.12, there
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are no Liens on Tessera's interest in any of the Tessera Real Property.
Schedule 4.12 lists each county and state where any Tessera Real Property
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is located. Tessera has heretofore furnished Parent with an accurate metes
and bounds description of all Tessera Real Property.
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(b) There are no parties in possession of any portion of the
Tessera Real Property other than Tessera, whether as sublessees, subtenants
at will or trespassers.
(c) To the knowledge of Tessera, there is no law, ordinance, order,
regulation or requirement now in existence or under active consideration by
any Governmental Entity that would require, under the provisions of any of
the Tessera Leases (as defined in Section 4.13) or otherwise, any material
expenditure by Tessera to modify or improve any of the Tessera Real
Property to bring it into compliance therewith.
4.13 Leases. Schedule 4.13 sets forth a list of all leases pursuant to
-------------
which Tessera leases, as lessor or lessee, real or personal property used in
operating the Tessera Business or otherwise (the "Tessera Leases"). Copies of
the Tessera Leases, all of which have previously been provided to Parent, are
correct and complete copies thereof. All of the Tessera Leases are in full force
and effect, unimpaired by any act or omission of Tessera, and are valid, binding
and enforceable against Tessera and, to the knowledge of Tessera, against the
other parties thereto, in accordance with their respective terms, and there is
not under any such Tessera Lease any existing default by Tessera, or, to the
knowledge of Tessera, by any other party thereto, or any condition or event
that, with notice or lapse of time or both, would constitute a default. Tessera
has not received notice that the lessor of any of the Tessera Leases intends to
cancel, suspend or terminate such Tessera Lease or to exercise or not exercise
any option thereunder.
4.14 Contracts. Schedule 4.14 sets forth a correct and complete list of
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all contracts, agreements and commitments (whether written or oral) to which
Tessera is, directly or indirectly, a party (in its own name or as a successor
in interest), or by which it or any of its properties or assets is otherwise
bound, including any service agreements, customer agreements, supplier
agreements, agreements to lend or borrow money, stockholder agreements,
employment agreements, confidentiality agreements, noncompetition or non-
solicitation agreements, agreements relating to Tessera Intellectual Property
Rights and the like (collectively, the "Tessera Contracts"); excepting only
those Tessera Contracts which involve less than $25,000 and are cancelable,
without penalty, on no more than 90 days' notice. The aggregate value of all
payment obligations and rights to receive payments, under agreements, contracts
and commitments (whether oral or in writing) to which Tessera is a party or by
which it or any of its properties or assets is otherwise bound, and that are not
listed on Schedule 4.14, is less than $150,000 (calculating such value by adding
-------------
together the value of rights and obligations, and not by determining the net
amount thereof).
Except as set forth on Schedule 4.14, correct and complete copies of all
-------------
Tessera Contracts (or a correct and complete narrative description of any oral
Tessera Contract) have previously been provided to Parent. Neither Tessera nor,
to the knowledge of Tessera, any other party to any of the Tessera Contracts (i)
is in default under (nor does there exist any condition that, with notice or
lapse of time or both, would cause such a default under) any of the Tessera
Contracts, or (ii) has waived any right it may have under any of the Tessera
Contracts, the waiver of which would have a material adverse effect on the
business, assets or financial condition or prospects of Tessera. All of the
Tessera Contracts constitute the valid and binding obligations of Tessera,
enforceable in accordance with their respective terms, and, to the knowledge of
Tessera, of the other parties thereto. Those Tessera Contracts marked with an
asterisk on Schedule 4.14 are customer contracts under which customer's payment
-------------
obligations and Tessera's performance obligations (other than
11
confidentiality covenants and Y2K warranties) have been fully satisfied and no
such Tessera Contracts provide for any exclusivity provisions which remain in
effect.
4.15 Directors and Officers. Schedule 4.15 sets forth an accurate list of
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the name of each director and officer of Tessera and the position(s) held by
each.
4.16 Payroll Information. Tessera has previously provided Parent with a
correct and complete copy, in all material respects, of the payroll report of
Tessera dated September 20, 1999, showing all current employees of Tessera and
their current levels of compensation, other than bonuses and other extraordinary
compensation, all of which bonuses and other extraordinary compensation are set
forth in Schedule 4.16. Tessera has paid all compensation required to be paid
-------------
to its employees on or prior to the date hereof other than compensation (and
bonuses pursuant to arrangements described in Schedule 4.16) accrued in the
-------------
current pay period.
4.17 Litigation. Except as set forth on Schedule 4.17, there is no suit,
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action, claim, investigation or proceeding pending or, to the knowledge of
Tessera, threatened against or affecting Tessera or the Tessera Business, nor is
there any judgment, decree, injunction or order of any applicable Governmental
Entity or arbitrator outstanding against Tessera.
4.18 Employee Benefit Plans/Labor Relations.
(a) Except as disclosed in Schedule 4.18, there are no employee
-------------
benefit plans, agreements or arrangements maintained by Tessera, including
(i) "employee benefit plans" within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"); (ii)
current or deferred compensation, pension, profit sharing, vacation or
severance plans or programs; or (iii) medical, hospital, accident,
disability or death benefit plans (collectively, "Tessera Benefit Plans").
All Tessera Benefit Plans are administered in accordance with, and are in
material compliance with, all applicable laws and regulations. No default
exists with respect to the obligations of Tessera under any Tessera Benefit
Plan.
(b) Tessera is not a party to any collective bargaining agreement;
no collective bargaining agent has been certified as a representative of
any of the employees of Tessera; no representation campaign or election is
now in progress with respect to any employee of Tessera; and there are no
labor disputes, grievances, controversies, strikes or requests for union
representation pending, or, to the knowledge of Tessera, threatened,
relating to or affecting the Tessera Business. To the knowledge of Tessera,
no event has occurred that could give rise to any such dispute,
controversy, strike or request for representation.
4.19 ERISA.
(a) All Tessera Benefit Plans that are subject to ERISA have been
administered in accordance with, and are in material compliance with, the
applicable provisions of ERISA. Each of the Tessera Benefit Plans that is
intended to meet the requirements of Section 401(a) of the Code has been
determined by the Internal Revenue Service to meet such requirements within
the meaning of such provision. No Tessera Benefit Plan is subject to Title
IV of ERISA or Section 412 of the Code. Tessera has not engaged in any
nonexempt "prohibited transactions," as such term is defined in Section
4975 of the Code or Section 406 of ERISA, involving Tessera Benefit Plans
that would
12
subject Tessera to the penalty or tax imposed under Section 502(i) of ERISA
or Section 4975 of the Code. Tessera has not engaged in any transaction
described in Section 4069 of ERISA within the last five years. Except as
disclosed in Schedule 4.19 or pursuant to the terms of the Tessera Benefit
-------------
Plans, neither the execution and delivery hereof nor the consummation of
the transactions contemplated hereby will (i) result in any payment
(including severance, unemployment compensation or golden parachute)
becoming due to any director or other employee of Tessera, (ii) increase
any benefit otherwise payable under any Tessera Benefit Plan or (iii)
result in the acceleration of the time of payment or vesting of any such
benefit to any extent.
(b) No notice of a "reportable event," within the meaning of
Section 4043 of ERISA, for which the 30-day reporting requirement has not
been waived, has been required to be filed for any Tessera Benefit Plan
that is an "employee pension benefit plan" within the meaning of Section
3(2) of ERISA and that is intended to meet the requirements of Section
401(a) of the Code, or by any entity that is considered one employer with
Tessera under Section 4001 of ERISA or Section 414 of the Code, within the
12-month period ending on the Closing Date. Tessera has not incurred any
liability to the Pension Benefit Guaranty Corporation in respect of any
Tessera Benefit Plan that remains unpaid.
4.20 Taxes. Except as set forth on Schedule 4.20:
-------------
(a) Tessera has duly and timely filed all federal, state and local
income, franchise, excise, real and personal property and other tax returns
and reports, including extensions, required to have been filed by Tessera
on or prior to the Closing Date. Tessera has duly and timely paid all taxes
and other governmental charges, and all interest and penalties with respect
thereto, required to be paid by Tessera (whether by way of withholding or
otherwise) to any federal, state, local or other taxing authority (except
to the extent the same are being contested in good faith, and adequate
reserves therefor have been provided in the Tessera Financial Statements).
As of the Closing Date, all deficiencies proposed as a result of any audit
have been paid or settled.
(b) Tessera is not a party to, or bound by, or otherwise in any way
obligated under, any tax sharing or similar agreement.
(c) Tessera has not consented to have the provisions of
Section 341(f)(2) of the Code (or comparable state law provisions) apply to
it, and Tessera has not agreed or been requested to make any adjustment
under Section 481(c) of the Code by reason of a change in accounting method
or otherwise.
4.21 Compliance with Applicable Laws. Tessera holds all material permits,
licenses, variances, exemptions, orders and approvals of all Governmental
Entities necessary to own, lease or operate all of the assets and properties of
Tessera, as appropriate, and to carry on the Tessera Business as now conducted
(the "Tessera Permits"). To the knowledge of Tessera, Tessera is in material
compliance with all applicable laws, ordinances and regulations and the terms
of the Tessera Permits. Except as set forth on Schedule 4.21, all of the Tessera
-------------
Permits are fully assignable by Tessera in connection with the Merger.
Schedule 4.21 sets forth a correct and complete list of all Tessera Permits,
-------------
correct and complete copies of which have previously been provided to Parent.
13
4.22 Board of Directors/Stockholders Consent. The Board of Directors of
Tessera has (a) adopted and approved this Agreement and the transactions
contemplated hereby (including the Merger); and (b) determined to recommend that
the stockholders of Tessera approve and adopt this Agreement and approve the
Merger.
4.23 Brokers. Except as set forth on Schedule 4.23, no broker or finder
-------------
is entitled to any broker's, banker's or finder's fee or other commission in
connection with the transactions contemplated hereby as a result of arrangements
made by or on behalf of Tessera.
4.24 Environmental Matters.
(a) To the knowledge of Tessera, no real property currently or
formerly owned or operated by Tessera is contaminated with any Hazardous
Substance (as hereinafter defined).
(b) Tessera is not a party to any litigation or administrative
proceeding nor, to the knowledge of Tessera, is any litigation or
administrative proceeding threatened against it, that, in either case,
asserts or alleges that Tessera (i) violated any Environmental Law (as
hereinafter defined); (ii) is required to clean up, remove or take remedial
or other responsive action due to the disposal, deposit, discharge, leak or
other release of any Hazardous Substance; or (iii) is required to pay all
or a portion of the cost of any past, present or future cleanup, removal or
remedial or other action that arises out of or is related to the disposal,
deposit, discharge, leak or other release of any Hazardous Substance.
(c) To the knowledge of Tessera, there are not now nor have there
previously been tanks or other facilities on, under, or at any real
property owned, leased, used or occupied by Tessera containing materials
that, if known to be present in soil or ground water, would require
cleanup, removal or other remedial action under Environmental Law.
(d) Tessera is not subject to any judgment, order or citation
related to or arising out of any Environmental Law and, to the knowledge of
Tessera, has not been named or listed as a potentially responsible party by
any Governmental Entity in a matter related to or arising out of any
Environmental Law.
(e) For purposes hereof, (i) the term "Environmental Law" means any
federal, state or local law (including statutes, regulations, ordinances,
codes, rules, judicial opinions and other governmental restrictions and
requirements) relating to the discharge of air pollutants, water
pollutants, noise, odors or process waste water, or otherwise relating to
the environment or hazardous or toxic substances; and (ii) the term
"Hazardous Substance" means any toxic or hazardous substance that is
regulated by or under authority of any Environmental Law, including any
petroleum products, asbestos or polychlorinated biphenyls.
4.25 Interest in Customers, Suppliers and Competitors. Except as provided
in Schedule 4.25, no officer, director, stockholder or employee of Tessera and
-------------
no family member (including a spouse, parent, sibling or lineal descendent of
any of the foregoing), has any direct or indirect material interest in any
material customer, supplier or competitor of Tessera, or in any Person from whom
or to whom Tessera leases any real or personal property, or in any other Person
with whom Tessera is doing business whether directly or indirectly (including as
a debtor or
14
creditor), whether in existence as of the Closing Date or proposed, other than
the ownership of stock of publicly traded corporations.
4.26 Accounts Receivable. All accounts, notes, contracts and other
receivables of Tessera (collectively, "Tessera Accounts Receivable") were
acquired by Tessera in the ordinary course of business arising from bona fide
transactions. There are no set-offs, counterclaims or disputes asserted with
respect to any Tessera Accounts Receivable that would result in claims in excess
of the reserve for bad debts set forth on the Tessera Financial Statements and,
subject to such reserve, all Tessera Accounts Receivable are collectible in
full. Tessera has previously furnished Parent with a correct and complete aging
report, prepared as of August 31, 1999, showing the time elapsed since invoice
date for all Tessera Accounts Receivable as of such date.
4.27 Accounts Payable. All material accounts, notes, contracts and other
amounts payable of Tessera (collectively, "Tessera Accounts Payable") are
currently within their respective terms, and are neither in default nor
otherwise past due by more than 90 days. Tessera has previously furnished
Parent with a correct and complete aging report, prepared as of August 31, 1999,
showing the time elapsed since invoice date for all Tessera Accounts Payable as
of such date.
4.28 Insurance. Tessera currently maintains, in full force and effect,
all insurance policies that are required or appropriate to be maintained for the
conduct of the Tessera Business or the ownership of Tessera's property (both
real and personal) (collectively, the "Tessera Insurance Policies"). The Tessera
Insurance Policies are listed on Schedule 4.28, and correct and complete copies
-------------
of all Tessera Insurance Policies have previously been provided to Parent.
Tessera (a) is not in default regarding the provisions of any Tessera Insurance
Policy; (b) has paid all premiums due thereunder; and (c) has not failed to
present any notice or material claim thereunder in a due and timely fashion.
4.29 Bankruptcy. Tessera has not filed a petition or request for
reorganization or protection or relief under the bankruptcy laws of the United
States or any state or territory thereof, made any general assignment for the
benefit of creditors, or consented to the appointment of a receiver or trustee,
including a custodian under the United States bankruptcy laws, whether such
receiver or trustee is appointed in a voluntary or involuntary proceeding.
4.30 Tessera Acknowledgement. Tessera acknowledges that each of the
Tessera Stockholders has received Parent's Prospectus, dated June 2, 1999 with
respect to its registration statement on Form S-1, its Prospectus, dated July
26, 1999, with respect to its registration statement on Form S-4, and its Form
10-Q dated August 16, 1999 (collectively, "Parent's Public Information").
4.31 Statements; Proxy Materials. The information supplied by Tessera for
inclusion in the Registration Statement shall not at the time the Registration
Statement is filed with the SEC or at the time it becomes effective under the
Securities Act of 1933, as amended (the "Securities Act") contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The proxy
materials that Tessera shall send to is stockholders in connection herewith and
with the Merger (the "Proxy Materials") will comply in all material respects
with the provisions of applicable law. If at any time prior to
15
the Effective Time any event relating to Tessera or any of its affiliates,
officers or directors should be discovered by Tessera which is required to be
set forth in an amendment to the Registration Statement, then Tessera shall
promptly notify Parent. Notwithstanding the foregoing, Tessera makes no
representation or warranty with respect to any information supplied by Parent or
Sub which is contained in any of the foregoing documents.
4.32 Disclosure. No statement of fact by Tessera contained herein and no
written statement of fact furnished by Tessera to Parent or Sub in connection
herewith contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements herein or therein
contained, in light of the circumstances in which they were made, not
misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Each of Parent and Sub jointly and severally represents and warrants to
Tessera as follows, which representations and warranties shall survive the
Closing in accordance with Section 9.1:
5.1 Organization and Qualification. Each of Parent and its Subsidiaries
is a corporation duly organized, validly existing and in good standing under the
laws of the state of its incorporation. Each of Parent and its Subsidiaries has
the requisite corporate power and authority to carry on its business as it is
now being conducted and is duly qualified or licensed to do business, and is in
good standing, in each jurisdiction where the character of its properties owned
or held under lease or the nature of its activities makes such qualification
necessary, except where the failure so to qualify could not have a material
adverse effect on the business, properties or assets of Parent and its
Subsidiaries, taken as a whole. Complete and correct copies of the Certificates
of Incorporation and Bylaws of Parent and Sub as in effect on the date hereof
are attached, respectively, to a Closing and incumbency certificate,
substantially in the form of Exhibit "C" ("Parent's Closing Certificate"), and
to Sub's Closing Certificate.
5.2 Authority. Each of Parent and Sub has the necessary corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery hereof and the
consummation of the transactions contemplated hereby by each of Parent and Sub
have been duly and validly authorized and approved by their respective board of
directors and by Parent, in its capacity as Sub's sole stockholder, and no other
corporate or stockholder proceedings on the part of either Parent or Sub, or
their respective board of directors or stockholders, are necessary to authorize
or approve this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by each of Parent and Sub,
and assuming the due authorization, execution and delivery hereof by Tessera,
constitutes the valid and binding obligation of each of Parent and Sub,
enforceable against each of Parent and Sub in accordance with its terms,
subject, in each case, to bankruptcy, insolvency, reorganization, moratorium and
similar laws of general application relating to or affecting creditors' rights
and to general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing.
16
5.3 No Conflicts, Required Filings and Consents. Except as set forth on
Schedule 5.3, none of the execution and delivery of this Agreement by Parent or
------------
Sub, the consummation by Parent and Sub of the transactions contemplated hereby,
or compliance by Parent and Sub with any of the provisions hereof, will:
(a) conflict with or violate the Certificate of Incorporation or
Bylaws of Parent or Sub, or the organizational documents of any other
Subsidiaries;
(b) result in a violation of any statute, ordinance, rule,
regulation, order, judgment or decree applicable to Parent or its
Subsidiaries, or by which Parent, any of its Subsidiaries, or their
respective properties or assets may be bound or affected;
(c) result in a violation or material breach of, or constitute a
material default (or an event that, with notice or lapse of time or both,
would become a material default) under, or give to any other party any
material rights of termination, amendment, acceleration or cancellation of,
any note, bond, mortgage, indenture, or any material contract, agreement,
arrangement, lease, license, permit, judgment, decree, franchise or other
instrument or obligation to which Parent or any of its Subsidiaries is a
party or by which Parent, any of its Subsidiaries or their respective
properties may be bound or affected;
(d) result in the creation of any Lien on any of the property or
assets of Parent or any of its Subsidiaries; or
(e) require any material Consent of (i) any Governmental Entity
(except for (x) compliance with any applicable requirements of any
applicable securities laws, including the filing of a registration
statement on Form S-4 (the "Registration Statement") with the SEC in
accordance with the Securities Act, (y) the filing of the Certificate of
Merger pursuant to the DGCL and the MBCL, and (z) the filing under the HSR
Act); or (ii) any other Person.
5.4 Litigation. Except as set forth on Schedule 5.4 or in Parent's Public
------------
Information, there is no suit, action, claim, investigation or proceeding
pending or, to the knowledge of Parent, threatened against or affecting Parent
or its Subsidiaries, nor is there any judgment, decree, injunction or order of
any applicable Governmental Entity or arbitrator outstanding against Parent or
its Subsidiaries that, either individually or in the aggregate, would have a
material adverse effect on the assets, business or financial condition of Parent
and its Subsidiaries, taken as a whole.
5.5 Brokers. Except as disclosed on Schedule 5.5, no broker or finder is
------------
entitled to any broker's or finder's fee in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of Parent or
Sub.
5.6 Parent Stock.
(a) The Parent Stock to be issued to the stockholders of Tessera in
the Merger will be registered on the Registration Statement, subject,
however, to contractual and other restrictions on any offer, transfer,
sale, pledge, hypothecation or other disposition (any of the foregoing, a
"Transfer") thereof, including resale, as provided in Sections 1.4 and
3.2(a) of the Voting and Indemnity Agreement.
17
(b) When delivered to the stockholders of Tessera in accordance
with the terms hereof, the Parent Stock will be (i) duly authorized, fully
paid and nonassessable, and (ii) free and clear of all Liens other than
restrictions imposed in accordance herewith (including the provisions of
Exhibits "E," "F" and "G" to the extent applicable) or with the Voting and
-------------------------
Indemnity Agreement, or by federal and state securities laws or by Parent's
xxxxxxx xxxxxxx policy with respect to employees.
5.7 Board of Directors/Stockholder's Consent. The board of directors of
Parent, and both the board of directors and stockholder of Sub, have, by
unanimous written consent or other action, adopted and approved this Agreement
and the Voting and Indemnity Agreement and the transactions contemplated hereby
and thereby (including the Merger).
5.8 Parent's Public Information. As of their respective filings dates
with the SEC, Parent's Public Information (a) did not contain any untrue
statements of material facts or omit to state material facts required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and (b) complied in
all material respects with the applicable requirements of the Securities Act and
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
rules and regulations promulgated thereunder.
5.9 Statements. The information supplied by Parent for inclusion in the
Registration Statement shall not at the time the Registration Statement is filed
with the SEC and at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. If at any time prior to the Effective Time, any event relating to
Parent or any of its affiliates, officers or directors should be discovered by
Parent which is required to be set forth in an amendment to the Registration
Statement, then Parent shall promptly inform Tessera. Notwithstanding the
foregoing, Parent makes no representation or warranty with respect to any
information supplied by Tessera which is contained in any of the foregoing
documents.
5.10 Absence of Changes. Since Parent's most recent filing under the
Exchange Act, there have been no changes in the operations, earning, assets,
properties, business or financial condition of Parent or its Subsidiaries, which
changes could reasonably be expected to have a Material Adverse Effect on Parent
and its Subsidiaries, taken as a whole; except, however, for any such change
that Parent discloses to Tessera in accordance herewith. For the purpose of
this provision "Material Adverse Effect" excludes any such change that is
attributable to or results from (i) the public announcement of the transactions
contemplated hereby; (ii) changes in general economic conditions or changes
affecting the industry in which Parent operates, or capital markets, generally;
(iii) any public announcement of Parent's intention to file a registration
statement on Form S-1 under the Securities Act; (iv) the filing of the
Registration Statement; (v) the possible adoption by Parent of a new employee
stock option plan; or (vi) changes in the trading prices of Parent Stock not
caused primarily by material changes in the operations, earnings, assets,
properties, business or financial condition of Parent or its Subsidiaries.
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ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Conduct of Business by Tessera Pending the Merger. From and after the
date hereof, prior to the Effective Time, except as contemplated hereby, unless
Parent shall otherwise agree in advance in writing, Tessera shall carry on its
business in the usual and ordinary course in substantially the same manner as
heretofore conducted, use commercially reasonable efforts to preserve intact its
present business organization, keep available the services of its employees and
preserve its relationships with customers, suppliers, licensors, licensees,
distributors and others having business dealings with Tessera to the end that
its goodwill and on-going businesses shall not be impaired in any material
respect at the Effective Time. Without limiting the generality of the
foregoing, and except as contemplated hereby, unless Parent shall otherwise
agree in advance in writing, prior to the Effective Time, Tessera shall not,
directly or indirectly:
(a) (i) declare, set aside, or pay any dividend on, or make any other
distribution in respect of, any of its capital stock, (ii) split, combine
or reclassify any of its capital stock, or issue or authorize the issuance
of any other securities in respect of, in lieu of or in substitution for,
shares of its capital stock, or (iii) purchase, redeem or otherwise
acquire, any share of capital stock of Tessera or any other equity security
thereof or any right, warrant, or option to acquire any such share or other
security, or waive any right to do any of the foregoing;
(b) other than in accordance with Section 6.6(b), issue, deliver,
sell, pledge or otherwise encumber any share of its capital stock, any
other voting security issued by Tessera or any security convertible into,
or any right, warrant or option to acquire any such share or voting
security, grant any option, warrant or other stock right, or alter or allow
the acceleration of vesting or exercise of any outstanding option, warrant
or such right;
(c) amend its Articles of Organization, Bylaws or other comparable
organizational documents;
(d) acquire or agree to acquire (i) by merging or consolidating
with, or by purchasing a substantial portion of the assets of, or by any
other manner, any business or any Entity or division thereof, or (ii) any
assets that are material, individually or in the aggregate, to Tessera;
(e) subject to a Lien or sell, lease or otherwise dispose of any of
its properties or material assets, or license or transfer any Tessera
Intellectual Property Right (except for non-exclusive licenses in the
ordinary course of business consistent with past practices), or revalue any
assets or (except as required by GAAP) make any change in accounting
methods, principles or practices;
(f) incur any indebtedness for borrowed money or guarantee any such
indebtedness of another Person or issue or sell any debt security of
Tessera, guarantee any debt security of another Person or enter into any
"keep well" or other agreement to maintain the financial condition of
another Person, make any loan, advance (excluding advances to employees,
not exceeding $5,000, in the ordinary course of Tessera's business
consistent with past practices) or capital contribution to, or investment
in, any other Person, or settle or compromise any material claim or
litigation;
19
(g) pay any bonus to any employee, officer or director on or after
the date hereof other than to the Tessera Stockholders, other than in the
ordinary course of Tessera's business consistent with past practices;
(h) enter into any "golden parachute" or other severance
arrangement with any employee, officer or director, or increase or
otherwise change the rate or nature of the compensation (including wages,
salaries, benefits and bonuses) payable to any employee, officer or
director, except pursuant to existing compensation and fringe benefit
plans, practices and arrangements that have been disclosed in writing to
Parent, or enter into, renew, or allow the renewal of, any employment,
consulting or other similar agreement with any employee, officer or
director, or amend or modify any Tessera Benefit Plan in any material
respect or adopt any other such plan;
(i) enter into any new contract or agreement (other than a customer
agreement entered into in the ordinary course of business consistent with
past practices), or lease, involving an obligation in excess of $25,000, or
amend, waive any material default under, terminate (except for such as
terminate by their own terms) or modify in any material respect any Tessera
Contract or Lease; or
(j) authorize any of, or commit or agree to take any of, the foregoing
actions.
6.2 Access to Information. From the date hereof through the Effective
Time, Tessera shall afford to Parent and Parent's accountants, counsel and other
representatives reasonable access during normal business hours (and at such
other times as the parties may mutually agree) upon reasonable prior notice and
approval of Tessera, which shall not be unreasonably withheld, to its
properties, books, contracts, commitments, records and personnel and, during
such period, shall furnish promptly to Parent all information concerning its
business, properties and personnel as Parent may reasonably request. Parent and
its accountants, counsel and other representatives shall, in the exercise of the
rights described in this Section 6.2, not unduly interfere with the operation of
the business of Tessera. Parent and its agents shall maintain the
confidentiality of all information produced or disclosed pursuant to this
Section 6.2, on the terms and conditions of any non-disclosure agreement between
Parent and Tessera, and subject to applicable law, including securities laws or
NASDAQ rules.
6.3 Filings; Tax Elections. Tessera shall promptly provide Parent with
copies of all filings made by Tessera with any Governmental Entity in connection
herewith and the transactions contemplated hereby. Tessera shall, before
settling or compromising any material income tax liability of Tessera, consult
with Parent and its advisors as to the positions and elections that will be
taken or made with respect to such matter.
6.4 Public Announcements. The parties agree that, except as may
otherwise be required to comply with applicable laws and regulations (including
applicable securities laws or the NASDAQ rules) or to obtain consents required
hereunder (including approval and adoption hereof, and approval of the Merger,
by the stockholders of Tessera), public disclosure of the transactions
contemplated hereby shall be made only upon or after the consummation of the
Merger. Any such disclosure shall be coordinated by Parent, and Tessera shall
not directly or indirectly make any such disclosure without the prior written
consent of Parent.
20
6.5 Transfer and Gains Taxes and Certain Other Taxes and Expenses. Parent
agrees that, to the extent it is legally able to do so and except as otherwise
provided herein, the Surviving Corporation will pay all real property transfer,
gains and other similar taxes and all documentary stamps, filing fees, recording
fees and sales and use taxes, if any, and any penalties or interest with respect
thereto, payable in connection with consummation of the Merger.
6.6 Options; Warrants; Preferred Stock.
(a) Tessera hereby covenants and agrees that at the Effective Time,
all of the Tessera Stock Rights (all of which are either set forth on
Schedule 4.3(a) or shall be awarded and granted in accordance with Section
---------------
6.6(b)) shall, except as provided in Section 6.6(b), have been properly
canceled and all rights and obligations thereunder shall have been
terminated.
(b) Tessera hereby covenants and agrees that, at or prior to the
Closing, it shall grant and award to those employees of Tessera listed on
Schedule 6.6(b), or to such other employees as the parties may agree,
---------------
incentive stock options, with vesting schedules consistent with past
practices, in an aggregate amount not to exceed the balance of options
authorized but remaining available for issuance under the Tessera, Inc.
1995 Stock Option Plan (the "Plan"). Subject to Section 6.1, Parent will at
the Effective Time assume Tessera's obligations under Tessera's stock
option plan(s), with the shares underlying such options becoming Parent
Stock instead of Tessera Stock, and the exercise price being adjusted
inversely, in each case based on the same conversion ratio as provided
hereunder for Tessera Stock; provided, however, that the Parent Stock
underlying such options shall not have been registered under the Securities
Act or any other securities laws. Tessera shall, in accordance with Section
16(a)(i) of the Plan, take all actions necessary to effectuate the
provisions of this Section 6.6(b). Parent shall use commercially reasonable
efforts to file with the SEC, and have become effective within one year of
the Effective Time, a registration statement on Form S-8 with respect to
the Parent Stock underlying the options provided for in this Section
6.6(b), it being understood that such shares of Parent Stock underlying
these options are to be included in the first Form S-8 that is filed by
Parent.
(c) Parent hereby covenants and agrees that, at the Effective Time,
it will issue options to purchase 200,000 shares in aggregate of validly
issued, fully paid and nonassessable Parent Stock (provided, however, that
the Parent Stock underlying such options shall not have been registered
under the Securities Act or any other securities laws), to such employees
or officers of Tessera who will continue as employees of Surviving
Corporation, and in such respective amounts, at such exercise prices and
subject to such vesting schedules, as set forth on Schedule 6.6(c). Such
---------------
options will be issued subject to Parent's 1996 Stock Option Plan, as
amended, and pursuant to option award agreements substantially in the forms
of Exhibit "D" to the extent allowed under the Code or Exhibit "D-1"
----------- -------------
("Options"). Parent shall use commercially reasonable efforts to file with
the SEC, and have become effective within one year of the Effective Time, a
registration statement on Form S-8 with respect to the Parent Stock
underlying the options provided for in this Section 6.6(c), it being
understood that such shares of Parent Stock underlying these options are to
be included in the first Form S-8 that is filed by Parent.
(d) Tessera hereby covenants and agrees that, at or prior to the
Closing, it shall use its best efforts to cause all of the outstanding
Series A and Series D Preferred Stock to have
21
been converted into Tessera common stock in accordance with the terms
thereof, such that the holders thereof are entitled at the Closing to the
Merger consideration provided in Section 3.1(b).
(e) Tessera shall use commercially reasonable efforts (immediately
upon adoption and approval hereof and approval of the Merger by the
stockholders of Tessera) to cause each of its optionholders to execute and
deliver, at the Closing, a "lock-up" letter, substantially in the form of
Exhibit "E" ("Lock-up Letter), acknowledging that the Parent Stock
-----------
receivable by him upon exercise of his option in accordance with the terms
thereof, subject to Section 6.6(b), is subject to temporary restrictions on
Transfer,
(f) Tessera hereby covenants and agrees that, at or prior to the
Closing, it shall make the payment to the holder of the Series B Preferred
Stock required by Article IV, Section C.2.c of Tessera's Articles of
Organization, in cash, thereby causing a redemption of the Series B
Preferred Stock.
6.7 Xxxx-Xxxxx-Xxxxxx Notification. Parent and Tessera agree that as
soon as practicable, but in no event later than seven days after the execution
hereof, each will complete and file the "Antitrust Improvements Act Notification
and Report Form for Certain Mergers and Acquisitions" as, and if, required by
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and will promptly complete and file responses to all requests for
additional data and information which may be made under the HSR Act. If it is
determined that the HSR Act is inapplicable to the transactions contemplated
hereby, then Parent and Tessera shall each furnish the other with a certificate
setting forth the basis for such determination.
6.8 Further Assurances. From time to time after the Effective Time, upon
the reasonable request of any party hereto, the other party or parties hereto
shall execute and deliver or cause to be executed and delivered such further
instruments, and take such further action, as the requesting party may
reasonably request in order to effectuate fully the purposes, terms and
conditions hereof, at the sole cost of the requesting party, except as otherwise
provided in Article VIII.
6.9 Exclusivity. Tessera, on behalf of itself and each of its
stockholders, officers, directors and employees covenants and agrees that, until
such time as this Agreement has been terminated in accordance with Section 8.1,
it and each of them shall forebear directly or indirectly negotiating,
soliciting or accepting any offer with any other Person to purchase, acquire,
option, or merge or combine with, as applicable, Tessera, any of the Tessera
Stock, or the Tessera Business, or any interest in any of the foregoing. Without
limiting the generality of the foregoing:
(a) From and after the date hereof until the Effective Time or
termination of this Agreement pursuant to Section 8.1, Tessera shall not,
nor will they authorize or permit any of its officers, directors,
affiliates, stockholders or employees or any investment banker, attorney or
other advisor or representative retained by any of them to, directly or
indirectly, (i) solicit, initiate, encourage or induce the making,
submission or announcement of any Acquisition Proposal (as hereinafter
defined), (ii) participate in any discussions or negotiations regarding ,
or furnish to any person any non-public information with respect to, or
take any other action to facilitate any inquiries or the making of any
proposal that constitutes or may reasonably be expected to lead to, any
Acquisition Proposal, (iii) engage in discussions with any person with
22
respect to any Acquisition Proposal, except as to the existence of these
provisions, (iv) approve, endorse or recommend any Acquisition Proposal or
(v) enter into any letter of intent or similar document or any contract,
agreement or commitment contemplating or otherwise relating to any
Acquisition Transaction. Tessera shall immediately cease any and all
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any Acquisition Proposal. Without limiting the
foregoing, it is understood that any violation of the restrictions set
forth in the preceding two sentences by any officer, director or employee
of Tessera or any of its subsidiaries or any investment banker, attorney or
other advisor or representative of Tessera or any of its subsidiaries shall
be deemed to be a breach of this Section 6.9 by Tessera.
For purposes of this Agreement, "Acquisition Proposal" shall mean any bona
fide offer or proposal (other than an offer or proposal by Parent) relating to
any Acquisition Transaction. For the purposes of this Agreement, "Acquisition
Transaction" shall mean any transaction or series of related transactions other
than the transactions contemplated by this Agreement involving: (A) any
acquisition or purchase from Tessera by any person or "group" (as defined under
Section 13(d) of the Exchange Act and the rules and regulations thereunder) of
more than a 15% interest in the total outstanding voting securities of Tessera
or any of its subsidiaries or any tender offer or exchange offer that if
consummated would result in any person or "group" (as defined under Section
13(d) of the Exchange Act and the rules and regulations thereunder) beneficially
owning 15% or more of the total outstanding voting securities of Tessera or any
of its subsidiaries or any merger, consolidation, business combination or
similar transaction involving Tessera pursuant to which the stockholders of
Tessera immediately preceding such transaction hold less than 85% of the equity
interests in the surviving or resulting entity of such transaction; (B) any
sale, lease (other than in the ordinary course of business), exchange, transfer,
license (other than in the ordinary course of business), acquisition or
disposition of more than 50% of the assets of Tessera; or (C) any liquidation or
dissolution of Tessera.
6.10 Registration Statement. As promptly as practicable after the
execution of this Agreement, Parent will prepare and file with the SEC the
Registration Statement. Tessera shall cause PricewaterhouseCoopers LLC to
deliver as promptly as possible after the date hereof, and in any event within
three days hereafter, reviewed Tessera Financial Statements for the six month
periods ended June 30, 1998 and 1999. Each of Tessera and Parent will respond to
any comments of the SEC, will use its respective commercially reasonable efforts
to have the Registration Statement declared effective under the Securities Act
as promptly as practicable after such filing and Tessera shall cause the Proxy
Materials, which shall be in accordance with applicable law, to be mailed to its
stockholders at the earliest practicable time after the Registration Statement
is declared effective by the SEC, and in any event within three business days
thereafter. As promptly as practicable after the date of this Agreement, each of
Tessera and Parent will prepare and file any other filings required to be filed
by it under the Exchange Act, the Securities Act or any other Federal, foreign
or Blue Sky or related laws relating to the Merger and the transactions
contemplated by this Agreement (the "Other Filings"). Each of Tessera and Parent
will, on a continuing basis, cooperate with the other (including by making its
officers and directors or accountants and other advisors reasonably available to
respond to questions) and furnish and update, or cause to be furnished and
updated, all information, including financial statements, necessary or desirable
for inclusion in the Registration Statement or the other's Other Filings. Each
of Tessera and Parent will notify the other promptly upon the receipt of any
comments from the SEC or its staff or any other government officials and of any
request by the
23
SEC or it staff or any other governmental officials for amendments or
supplements to the Registration Statement or any Other Filing or for additional
information and will supply the other with copies of all correspondence between
such party or any of its representatives, on the one hand, and the SEC or its
staff or any other government officials, on the other hand, with respect to the
Registration Statement, the Merger or any Other Filing. Each of Tessera and
Parent will cause all documents that it is responsible for filing with the SEC
or other regulatory authorities under this Section 6.10 to comply in all
material respects with all applicable requirements of law and the rules and
regulations promulgated thereunder. Whenever any event occurs which is required
to be set forth in an amendment or supplement to the Registration Statement or
any Other Filing, Tessera or Parent, as the case may be, will promptly inform
the other of such occurrence and cooperate in filing with the SEC or its staff
or any other government officials, and/or mailing to stockholders of Tessera,
such amendment or supplement.
6.11 Meeting of stockholders of Tessera.
(a) At the earliest practicable time after the Registration
Statement is declared effective by the SEC, and in any event within three
business days thereafter, Tessera shall take all action necessary in
accordance with the applicable law and its Articles of Organization and
Bylaws to convene a meeting of the stockholders of Tessera (the
"Stockholders' Meeting") to be held as promptly as practicable after the
declaration of effectiveness of the Registration Statement, for the purpose
of voting upon this Agreement and the Merger. Tessera will use its
commercially reasonable efforts to solicit from its stockholders proxies in
favor of the adoption and approval of this Agreement and the approval of
the Merger and will take all other action necessary or advisable to secure
the vote or consent of its stockholders required by applicable law to
obtain such approvals. Tessera shall ensure that the Stockholders' Meeting
is called, noticed, convened, held and conducted, and that all proxies
solicited by Tessera in connection with the stockholders' Meeting are
solicited, in compliance with applicable law and its Articles of
Organization and Bylaws. Tessera's obligations to call, give notice of,
convene and hold the Stockholders' Meeting in accordance with this Section
6.11(a) shall not be limited to or otherwise affected by the commencement,
disclosure, announcement or submission to Tessera of any Acquisition
Proposal, or by any withdrawal, amendment or modification of the
recommendation of the Board of Directors of Tessera with respect to the
Merger.
(b) Tessera covenants and agrees that: (i) the Board of Directors
of Tessera shall recommend that Tessera's stockholders vote in favor of and
adopt and approve this Agreement and the Merger at the Stockholders'
Meeting; (ii) the Proxy Materials shall include a statement to the effect
that the Board of Directors of Tessera has recommended that Tessera's
stockholders vote in favor of and adopt and approve this Agreement and the
Merger at the Stockholders' Meeting; and (iii) neither the Board of
Directors of Tessera nor any committee thereof shall withdraw, amend or
modify, or propose or resolve to withdraw, amend or modify in a manner
adverse to Parent, the recommendation of the Board of Directors of Tessera
that Tessera's stockholders vote in favor of and adopt and approve this
Agreement and the Merger.
6.12 Contractual Restrictions. Prior to the Closing, Tessera shall use
its best efforts to cause:
24
(a) each stockholder of Tessera to execute and deliver a Lock-up
Letter, acknowledging that the Parent Stock to be received by him pursuant
to the Merger is subject to temporary restrictions on Transfer;
(b) each stockholder of Tessera to execute and deliver a letter, in
the form of Exhibit "F" ("Contractually Restricted Stock Letter"),
-----------
addressed to Parent, acknowledging that the Parent Stock to be received by
him pursuant to the Merger is subject to certain contractual restrictions
on Transfer;
(c) each stockholder of Tessera who is an "affiliate" of Tessera
for purposes of Rule 145 under the Securities Act ("Rule 145") to execute
and deliver a letter, in the form of Exhibit "G" ("Rule 145 Letter"),
-----------
addressed to Parent, acknowledging that the Parent Stock to be received by
him pursuant to the Merger is subject to certain restrictions on Transfer
under Rule 145; and
(d) all stockholders of Tessera listed on Schedule 6.12(d) (which
----------------
corresponds with Schedule 3.2(b) to the Voting and Indemnity Agreement) to
---------------
execute and deliver the noncompetition and non-solicitation agreement with
Parent, in the form of Exhibit "H".
-----------
25
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions to Obligations of Tessera to Effect the Merger. The
obligations of Tessera to effect the Merger shall be subject to the fulfillment
at or prior to the Effective Time of the following conditions:
(a) Parent and Sub shall have performed in all material respects
their respective agreements contained herein required to be performed at or
prior to the Effective Time, and the representations and warranties of
Parent and Sub contained herein shall be true in all material respects when
made and (except for representations and warranties made as of a specified
date, which need only be true as of such date) at and as of the Effective
Time as if made at and as of such time, except as contemplated hereby;
(b) (i) the appropriate officers of Parent shall have executed and
delivered to Tessera at the Closing, Parent's Closing Certificate, and (ii)
the appropriate officers of Sub shall have executed and delivered to
Tessera at the Closing, Sub's Closing Certificate;
(c) Parent shall have obtained all of the Consents, if any, listed
on Schedule 7.1(c);
---------------
(d) Tessera shall have received corporate certificates of good
standing for Parent and Sub, and a copy of the Certificate of Incorporation
for Parent and Sub, respectively, as certified by the Secretary of State of
Delaware;
(e) Tessera shall have received, at the Closing, a duly executed
opinion of counsel to Parent and Sub, substantially in the form of
Exhibit "I";
-----------
(f) the waiting period, including any extensions thereof, under the
HSR Act shall have expired or been terminated, and there shall have been no
adverse change to the Merger required in order to obtain approval under the
HSR Act;
(g) Tessera shall have received from Parent and Sub such other
documents as Tessera's counsel shall have reasonably requested, in form and
substance reasonably satisfactory to Tessera's counsel;
(h) Parent shall have executed and delivered at the Closing the
Options, in accordance with Section 6.6(c);
(i) This Agreement shall have been approved and adopted, and the
Merger shall have been duly approved, by the requisite vote, under
applicable law, of the stockholders of Tessera; and
(j) the Registration Statement shall have been declared effective
by the SEC.
26
7.2 Conditions to Obligations of Parent and Sub to Effect the Merger.
The obligations of Parent and Sub to effect the Merger shall be subject to the
fulfillment, at or prior to the Effective Time, of the following conditions:
(a) Tessera, the Tessera Stockholders and any other stockholders of
Tessera shall have performed in all material respects their respective
agreements contained herein or in the Voting and Indemnity Agreement
required to be performed at or prior to the Effective Time, and the
representations and warranties of Tessera and the Tessera Stockholders
contained herein or in the Voting and Indemnity Agreement shall be true in
all material respects when made and (except for representations and
warranties made as of a specified date, which need only be true as of such
date) at and as of the Effective Time as if made at and as of such time,
except as contemplated hereby;
(b) the appropriate officers of Tessera shall have executed and
delivered to Parent at the Closing, Tessera's Closing Certificate.
(c) Tessera shall have obtained or caused to be obtained all of the
Consents, if any, listed on Schedule 7.2(c);
(d) there shall have been delivered to Parent at the Closing, duly
executed, (i) by each stockholder of Tessera excluding stockholders of
Tessera (other than the Tessera Stockholders) holding in the aggregate
100,000 or fewer shares of Tessera Stock, a Lock-up Letter and a
Contractually Restricted Stock Letter; (ii) by each stockholder of Tessera
who is an "affiliate" of Tessera for purposes of Rule 145, a Rule 145
Letter; (iii) by all stockholders of Tessera listed on Schedule 6.12(d),
----------------
the Noncompetition Agreement; (iv) the Options; (v) by each Option
recipient, a Lock-up Letter; and (vi) by each of the Tessera Stockholders
listed on Schedule 7.2(d), the Employee Agreement in the form of
---------------
Exhibit "J" attached hereto (the "Employee Agreement").
-----------
(e) Parent shall have received a corporate certificate of good
standing for Tessera, and a copy of the Articles of Organization of
Tessera, both as certified by the Secretary of State of Tessera's state of
incorporation;
(f) Parent shall have received, at the Closing, a duly executed
opinion of counsel to Tessera and the Tessera Stockholders, substantially
in the form of Exhibit "K";
-----------
(g) the waiting period, including any extensions thereof, under the
HSR Act shall have expired or been terminated, and there shall have been no
adverse change to the Merger required, and no materially adverse
requirement imposed on Parent or Sub, in order to obtain approval under the
HSR Act;
(h) Parent shall have received evidence reasonably satisfactory to
it that at the Closing the assets and properties used in the Tessera
Business are free and clear of all Liens other than Permitted Liens;
(i) This Agreement shall have been approved and adopted, and the
Merger shall have been duly approved, by the requisite vote, under
applicable law, of the stockholders of Tessera;
27
(j) Parent shall have received from Tessera or the stockholders of
Tessera, as the case may be, such other documents as Parent's counsel shall
have reasonably requested, in form and substance reasonably satisfactory to
Parent's counsel;
(k) the aggregate number of shares owned by Dissenting Stockholders
shall not exceed 1% of Tessera Stock;
(l) the Registration Statement shall have been declared effective by
the SEC;
(m) each Tessera Stockholder under an existing employment agreement
with Tessera, as identified on Schedule 3.5 to the Voting and Indemnity
------------
Agreement, shall have terminated such agreement in accordance with
Section 3.5 of the Voting and Indemnity Agreement; and
(n) those agreements listed on Schedule 7.2(n) shall have been
---------------
terminated.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time prior to
the Effective Time:
(a) by mutual written consent of Parent and Tessera;
(b) by Tessera, upon a material breach hereof or of the Voting and
Indemnity Agreement on the part of Parent or Sub which has not been cured
and which would cause any condition set forth in Section 7.1 to be
incapable of being satisfied by January 31, 2000;
(c) by Parent, upon a material breach hereof or of the Voting and
Indemnity Agreement on the part of Tessera or any of the stockholders of
Tessera which has not been cured and which would cause any condition set
forth in Section 7.2 to be incapable of being satisfied by January 31,
2000;
(d) by Parent or Tessera if any court of competent jurisdiction
shall have issued, enacted, entered, promulgated or enforced any order,
judgment, decree, injunction or ruling which restrains, enjoins or
otherwise prohibits the Merger and such order, judgment, decree, injunction
or ruling shall have become final and nonappealable; or
(e) by either Parent or Tessera if the Merger shall not have been
consummated on or before January 31, 2000 (provided the terminating party
is not otherwise in material breach of its representations, warranties or
obligations hereunder).
28
8.2 Fees and Expenses; Remedies.
(a) If the Merger is consummated, then all costs and expenses
incurred in connection herewith and the transactions contemplated hereby
shall be paid by the Surviving Corporation.
(b) If the Merger is not consummated for a reason other than the
material breach hereof or of the Voting and Indemnity Agreement by a party,
then all further obligations of the parties hereunder or pursuant hereto
shall immediately terminate without further liability of any party, and all
fees and expenses incurred in connection herewith and the transactions
contemplated hereby shall be paid by the party incurring such fees or
expenses; provided, however, that the fees for the filings under the HSR
Act will be paid by Parent.
(c) If the Merger is not consummated because of a material breach
hereof or of the Voting and Indemnity Agreement by any party, then the
nonbreaching party or parties shall be entitled to pursue all legal or
equitable remedies against the breaching party for such breach, including
(as to Parent and Sub, and in addition to their remedies at law or
otherwise in equity) specific performance, and all fees and expenses
incurred by the nonbreaching party or parties in connection with enforcing
its or their rights hereunder with respect to such breach shall be paid by
the breaching party.
(d) Tessera hereby acknowledges that Tessera, its Business and
assets, and the Tessera Stock are unique, and that Parent and Sub have no
adequate remedy at law if Tessera or the stockholders of Tessera materially
breach this Agreement or the Voting and Indemnity Agreement; and Parent and
Sub are therefore entitled to bring an action for specific performance
hereof or thereof, and Tessera agrees that it shall not contest any such
action on the grounds that Parent and Sub have an adequate remedy at law.
8.3 Amendment. This Agreement may be amended by the mutual agreement of
Parent, Sub and Tessera at any time before or after approval and adoption hereof
and approval of the Merger by the stockholders of Tessera; provided, however,
that (a) after such approval, no amendment shall be made which (i) changes the
form or decreases the amount of the consideration to be received in the Merger,
(ii) in any way materially adversely affects the rights of the stockholders of
Tessera, or (iii) under applicable law would require approval of the
stockholders of Tessera, in any such case referred to in clauses (i), (ii) and
(iii), without the further approval of the stockholders of Tessera; and (b)
after the Effective Time, any such amendment must be approved by the former
holders of a majority of the Tessera Stock. This Agreement may not be amended
except by an instrument in writing signed on behalf of the parties hereto.
8.4 Waiver. At any time prior to the Effective Time, the parties hereto
may, to the extent permitted by applicable law, (i) extend the time for the
performance of any of the obligations or other acts of any other party hereto,
(ii) waive any inaccuracies in the representations and warranties by any other
party contained herein or in any documents delivered by any other party pursuant
hereto and (iii) waive compliance with any of the agreements of any other party
or with any conditions to its own obligations 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 an instrument in writing signed on behalf of such party.
29
ARTICLE IX
GENERAL PROVISIONS
9.1 Survival; Recourse. None of the agreements contained herein shall
survive the Merger, except that (i) the agreements contained in Article III and
the covenants contained in Article VI shall survive the Merger indefinitely
(except to the extent a shorter period of time is explicitly specified therein);
and (ii) the representations and warranties made in Articles IV and V shall
survive the Merger, and shall survive any independent investigation by the
parties, and any dissolution, merger or consolidation of Tessera or Parent, and
shall bind the legal representatives, assigns and successors of Tessera and
Parent, and, to the extent provided in the Voting and Indemnity Agreement, the
Tessera Stockholders, for a period of 18 months after the Effective Time (other
than the representations and warranties contained in Sections 4.18, 4.19, 4.20
or 4.24, which shall survive for the applicable statute of limitations).
9.2 Notices. All notices or other communications hereunder shall be in
writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in Person, by facsimile (with confirmation of receipt), or
by registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
If to Tessera: Tessera Enterprise Systems, Inc.
0 Xxxxxxx Xx.
Xxxxxxxxx, XX 00000
Attention: Xx. Xxx Xxxx, President
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a copy to: Prince, Xxxxx & Tye LLP
000 Xxxxxxxxxx Xx.
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Parent or Sub: iXL Enterprises, Inc.
0000 Xxxxx Xx., 0xx Xxxxx
Xxxxxxx, XX 00000
Attention: M. Xxxxx Xxxxxxxx, Exec. V. P.
Fax: 404/000-0000
Telephone: 404/000-0000
With copies to: Xxxxxx & Xxxxxx, A Professional Corporation
One Buckhead Plaza
0000 Xxxxxxxxx Xx., Xxx. 0000
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Fax: 404/000-0000
Telephone: 404/000-0000
30
and to: Xxxxx & Company
000 Xxxx Xxx., 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx XX, Esq.
Fax: 212/000-0000
Telephone: 212/000-0000
or to such other address as any party may have furnished to the other parties in
writing in accordance with this Section.
9.3 Entire Agreement. The Exhibits and Schedules hereto are incorporated
herein by reference. This Agreement, the Voting and Indemnity Agreement and the
documents, schedules and instruments referred to herein or therein and to be
delivered pursuant hereto or thereto constitute the entire agreement between the
parties pertaining to the subject matter hereof, and supersede all other prior
agreements and understandings, both written and oral, among the parties, or
between any of them, with respect to the subject matter hereof, except for the
non-disclosure letter agreement between Parent and Tessera dated as of
[July 26], 1999. There are no other representations or warranties, whether
written or oral, between the parties in connection the subject matter hereof,
except as expressly set forth herein or in the Voting and Indemnity Agreement.
9.4 Assignments; Parties in Interest. Neither this Agreement nor any of
the rights, interests or obligations hereunder may be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties (and any assignment otherwise shall be
void), except that the rights, interests, and obligations of Sub hereunder may
be assigned to any direct wholly owned Delaware subsidiary of Parent without
such prior consent. Subject to the preceding sentence, this Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and nothing
herein, express or implied, is intended to or shall confer upon any Person not a
party hereto any right, benefit or remedy of any nature whatsoever under or by
reason hereof, except as otherwise provided herein and except for the
obligations of Parent under the last sentence of Sections 6.6(b) and 6.6(c)
which shall inure to the benefit of the holders of options assumed by the Parent
pursuant to Section 6.6(b) and the holders of the Options pursuant to Section
6.6(c).
9.5 Governing Law. This Agreement, except to the extent that the DGCL
or the MBCL is mandatorily applicable to the Merger, or to the rights of the
stockholders of Tessera or the parties hereto with respect to the Merger, shall
be governed in all respects by the laws of the State of Georgia (without giving
effect to the provisions thereof relating to conflicts of law).
9.6 Headings; Interpretation; Incorporation. The descriptive headings
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation hereof. Words such as
"herein," "hereof," "hereto," "hereunder" or the like shall refer to this
Agreement as a whole. The words "include" or "including" shall be by way of
example rather than by limitation. The words "or," "either" or "any" shall not
be exclusive. Any pronoun used herein shall include the corresponding masculine,
feminine or neuter forms. The parties hereto have participated jointly in the
negotiation and drafting hereof; accordingly, no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship
hereof.
31
References to Sections, Articles, Schedules or Exhibits shall, unless the
context otherwise requires, be to Sections, Schedules or Exhibits hereof. The
Schedules and Exhibits hereto are incorporated herein by reference.
9.7 Counterparts. This Agreement may be executed in two or more
counterparts, including by facsimile, each of which shall be deemed an original
but all of which taken together shall constitute a single agreement.
9.8 Severability. If any term or other provision hereof is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions hereof shall nevertheless remain in full force
and effect provided that the economics or legal substance of the transactions
contemplated hereby are not affected in any manner materially adverse to any
party. Upon determination by a court of competent jurisdiction that any term or
other provision hereof is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
9.9 Certain Definitions. As used herein:
(a) the term "Permitted Liens" shall mean (a) Liens for taxes,
assessments or other governmental charges or levies not yet due; (b)
statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law created in the
ordinary course of business for amounts not yet due; (c) Liens (other than
any Lien imposed by ERISA) incurred or deposits made in the ordinary course
of business in connection with worker's compensation, unemployment
insurance or other types of social security; (d) minor defects of title,
easements, rights-of-way, restrictions and other similar charges or
encumbrances not materially detracting from the value of the Tessera Real
Property or interfering with the ordinary conduct of any of the Tessera
Business; and (e) those Liens listed on Schedule 9.9;
------------
(b) (i) any representation or warranty stated to be made "to the
knowledge" of a party shall refer to such party's knowledge following
reasonable inquiry as to the matter in question; and (ii) any
representation or warranty stated to be made "to the knowledge of Tessera"
shall refer also to the knowledge, subject to clause (i) above, of any of
the stockholders of Tessera; and
(c) the term "Subsidiary" or "Subsidiaries" means any Entity of
which Parent (either alone or through or together with any other
Subsidiary) owns, directly or indirectly, stock or other equity interests
the holders of which are entitled to more than 50% of the vote for the
election of the board of directors or other governing body of such Entity
(including Sub); provided, however, that with respect to the Parent, the
terms "Subsidiary" and "Subsidiaries" shall not include Tessera.
- SIGNATURES ON THE FOLLOWING PAGE -
32
IN WITNESS WHEREOF, Parent, Sub and Tessera have caused this Agreement to
be signed and delivered by their respective duly authorized officers as of the
date first written above.
"Tessera"
Tessera Enterprise Systems, Inc., a Massachusetts corporation
By: /s/ Xxxxxxx X. Xxxx
---------------------------------------------------
Title: President/CEO
-------------------------------------------------
"Parent"
iXL Enterprises, Inc., a Delaware corporation
By: /s/ M. Xxxxx Xxxxxxxx
---------------------------------------------------
Title: Executive Vice President
-------------------------------------------------
"Sub"
iXL-Massachusetts, Inc., a Delaware corporation
By: /s/ M. Xxxxx Xxxxxxxx
---------------------------------------------------
Title: Executive Vice President
-------------------------------------------------
33
LIST OF EXHIBITS
----------------
Exhibit A Sub's Closing Certificate
Exhibit B Tessera's Closing Certificate
Exhibit C Parent's Closing Certificate
Exhibit D Form of Option
Exhibit D-1 Form of Non-Qualified Stock Option Agreement
Exhibit E Lock-up Letter
Exhibit F Contractually Restricted Stock Letter
Exhibit G Rule 145 Letter
Exhibit H Noncompetition Agreement
Exhibit I Parent's Opinion of Counsel
Exhibit J Employee Agreement
Exhibit K Tessera's Opinion of Counsel
LIST OF SCHEDULES
-----------------
Schedule 4.1 State Qualifications
Schedule 4.3 Capitalization
Schedule 4.4 Subsidiaries
Schedule 4.5 Contracts Which Will Be Breached By Merger; Contracts
Which Require Consent Or Notice
Schedule 4.7 Absence of Changes
Schedule 4.8 Undisclosed Liabilities
Schedule 4.9 Title to Properties
Schedule 4.10 Tessera Equipment
Schedule 4.11(a) Proprietary Technology, Patents, Trademarks, Copyrights
Schedule 4.11(b) Material Computer Software
Schedule 4.11(c) Domain Names
Schedule 4.11(d) Invention and Confidentiality Agreements
Schedule 4.12 Real Property
Schedule 4.13 Leases
Schedule 4.14 Contracts
Schedule 4.15 Officers and Directors
Schedule 4.16 Bonuses and Extraordinary Compensation
Schedule 4.17 Litigation
Schedule 4.18 Employee Benefit Plans
Schedule 4.19 ERISA
Schedule 4.20 Taxes
Schedule 4.21 Licenses and Permits
Schedule 4.23 Brokers
Schedule 4.25 Interest in Customers, Suppliers and Competitors
Schedule 4.28 Insurance
Schedule 5.3 Conflicts, Required Filings and Consents
Schedule 5.4 Litigation
Schedule 5.5 Brokers
Schedule 6.6(b) Tessera Option Grants
Schedule 6.6(c) Parent Option Grants
Schedule 6.12(d) Noncompetition and Nonsolicitation Agreements
Schedule 7.1(c) Parent Consents
Schedule 7.2(c) Consents
Schedule 7.2(d) List of Employees Executing Employee Agreements
Schedule 7.2(n) Agreements To Be Terminated
Schedule 9.9 Permitted Liens
VOTING AND INDEMNITY AGREEMENT
by and among
iXL ENTERPRISES, INC.,
iXL-MASSACHUSETTS, INC.,
AND
THE TESSERA STOCKHOLDERS
Dated as of October 4, 1999
AGREEMENT
---------
THIS VOTING AND INDEMNITY AGREEMENT is entered into as of this 4th day of
October, 1999, by and among iXL Enterprises, Inc., a Delaware corporation
("Parent"), iXL-Massachusetts, Inc., a Delaware corporation, or its successors
or assigns ("Sub"), and certain of the stockholders of Tessera Enterprise
Systems, Inc., a Massachusetts corporation ("Tessera"), as listed on the
signature page hereto (collectively, the "Tessera Stockholders").
R E C I T A L S:
- - - - - - - -
A. Contemporaneously herewith, Tessera, Parent and Sub have entered into an
Agreement and Plan of Merger (the "Merger Agreement"), providing for Tessera to
merge with and into Sub (the "Merger").
B. Of the issued and outstanding capital stock of Tessera (the "Tessera
Stock"), a majority is owned by the Tessera Stockholders.
C. The respective Boards of Directors of Parent, Sub and Tessera, and the
stockholder of Sub, have approved the Merger, upon the terms and subject to the
conditions set forth in the Merger Agreement and herein.
D. The Board of Directors of Tessera has determined to recommend that the
stockholders of Tessera adopt and approve the Merger Agreement and approve the
Merger.
E. It is a condition and inducement to Parent's and Sub's willingness to
enter into the Merger Agreement that the Tessera Stockholders enter into this
Agreement; and it is a condition to Tessera's, Parent's and Sub's obligations to
complete the Merger (the "Closing"), that the stockholders of Tessera adopt and
approve the Merger Agreement and approve the Merger.
NOW, THEREFORE, in consideration of the mutual covenants, representations,
conditions and agreements set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, it
is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF THE TESSERA STOCKHOLDERS
Each of the Tessera Stockholders severally represents and warrants to Parent
and Sub as follows, which representations and warranties shall survive the
Closing in accordance with Section 6.1.
1.1 Authority. This Agreement has been duly executed and delivered by each
Tessera Stockholder, and assuming the due authorization, execution and delivery
by Parent and Sub, constitutes the valid and binding obligation of each Tessera
Stockholder, enforceable against each
Tessera Stockholder in accordance with its terms, subject, in each case, to
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
application relating to or affecting creditors' rights and to general principles
of equity, including principles of commercial reasonableness, good faith and
fair dealing.
1.2 No Conflicts, Required Filings and Consents. Except as set forth on
Schedule 1.2, none of (i) the execution and delivery hereof by the Tessera
------------
Stockholders, (ii) the consummation by the stockholders of Tessera of the
transactions contemplated hereby or by the Merger Agreement (including the
Merger) or (iii) compliance by the Tessera Stockholders with any of the
provisions hereof will:
(a) as to any Tessera Stockholder that is a corporation, partnership,
limited liability company, joint venture, association or other entity (any of
the foregoing, an "Entity"), conflict with or violate its governing documents;
or
(b) as to any Tessera Stockholder, result in a material violation or
material breach of, or constitute a material default (or an event that, with
notice or lapse of time or both, would become a material default) under, or give
to any other Person (as defined in the Merger Agreement) any material right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any Tessera Stock or other Tessera
securities pursuant to, any note, bond, mortgage or indenture, or any material
contract, agreement, arrangement, lease, license, permit, judgment, decree,
franchise or other instrument or obligation, to which he is a party or by which
he or any of his properties or assets may be bound or affected.
1.3 Accredited Investors; Investment Purpose. Each Tessera Stockholder
represents that he (a) is an "accredited investor" as such term is defined in
Rule 501 of Regulation D promulgated by the Securities and Exchange Commission
(the "SEC") under the Securities Act of 1933, as amended (the "Securities Act");
and (b) will not, directly or indirectly, offer, transfer, sell, pledge,
hypothecate or otherwise dispose of (any of the foregoing, a "Transfer") any
Parent Stock (or solicit any offers to buy, purchase or otherwise acquire or
take a pledge of any such shares) except in compliance with the Securities Act
and the rules and regulations thereunder, other applicable laws, rules and
regulations.
1.4 Restrictions on Transfer. Each Tessera Stockholder acknowledges that (a)
the Parent Stock to be received by him pursuant to the Merger (i) will be
subject to temporary restrictions on Transfer pursuant to a "lock-up" letter,
substantially in the form of Exhibit "E" to the Merger Agreement ("Lock-up
-----------
Letter"), and that he shall enter into a Lock-up Letter at the Closing; (ii) is
subject to contractual restrictions on Transfer as provided in Section 3.2(a)
and pursuant to a letter, in the form of Exhibit "F" to the Merger Agreement
-----------
("Contractually Restricted Stock Letter"), that he shall enter into a
Contractually Restricted Stock Letter at the Closing, and that he must continue
to bear the economic risk of the investment in Parent Stock for the period of
time provided therein; and (iii) may be subject to certain further restrictions
on resale pursuant to Rule 145 under the Securities Act ("Rule 145"), that he
understands the requirements of Rule 145 as they apply to him, and that he shall
at the Closing enter into a letter concerning Rule 145, in the form of Exhibit
-------
"G" to the Merger Agreement ("Rule 145 Letter"); (b) restrictive legends shall
---
be placed on the certificates representing Parent Stock; (c) any Transfer of
Parent Stock may only be made in accordance with the requirements of the
Securities Act and any other applicable securities laws; and
2
(d) appropriate stop-transfer instructions will be issued to the Parent's
transfer agent with respect to Parent Stock.
1.5 No Proxy. No Tessera Stockholder has appointed or granted any proxy,
which appointment or grant remains effective, with respect to any Tessera Stock
other than pursuant hereto.
1.6 Documents Received. Each Tessera Stockholder acknowledges receipt of
copies of the Merger Agreement, including all schedules and exhibits thereto,
and of Parent's Public Information (as defined in the Merger Agreement).
1.7 No Liens on Tessera Stock of the Tessera Stockholders. Each Tessera
Stockholder represents that, except as set forth on Schedule 1.7, the Tessera
------------
Stock held by him is free and clear of any lien, charge, security interest,
pledge, option, right of first refusal, voting proxy or other voting agreement,
or encumbrance of any kind or nature other than restrictions on transfer imposed
by federal and state securities laws.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Each of Parent and Sub jointly and severally represents and warrants to the
Tessera Stockholders as follows, which representation and warranties shall
survive the Closing in accordance with Section 6.1: Each of Parent and Sub has
the necessary corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery hereof and the consummation of the transactions contemplated hereby
by each of Parent and Sub have been duly and validly authorized and approved by
their respective board of directors and by Parent, in its capacity as Sub's sole
stockholder, and no other corporate or stockholder proceedings on the part of
either Parent or Sub, or their respective board of directors or stockholders,
are necessary to authorize or approve this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by each of Parent and Sub, and assuming the due authorization,
execution and delivery hereof by the Tessera Stockholders, constitutes the valid
and binding obligation of each of Parent and Sub, enforceable against each of
Parent and Sub in accordance with its terms, subject, in each case, to
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
application relating to or affecting creditors' rights and to general principles
of equity, including principles of commercial reasonableness, good faith and
fair dealing.
ARTICLE III
ADDITIONAL AGREEMENTS
3.1 Public Announcements. The parties agree that, except as may otherwise be
required to comply with applicable laws and regulations (including applicable
securities laws or the NASDAQ rules) or to obtain consents required hereunder,
public disclosure of the transactions contemplated hereby shall be made only
upon or after the consummation of the Merger. Any such
3
disclosure shall be coordinated by Parent, and none of the Tessera Stockholders
shall directly or indirectly make any such disclosure without the prior written
consent of Parent.
3.2 Contractual Restrictions on Tessera Stockholders.
(a) Each Tessera Stockholder covenants and agrees that, notwithstanding
that the Parent Stock to be issued to him pursuant to the Merger shall be
registered under the Securities Act on Parent's Registration Statement on
Form S-4, he shall not Transfer any such Parent Stock (except in the event of
his death) for a period (the "Initial Period") of 90 days after the date hereof
(the "Relevant Date"); provided, however, that if Parent has filed or files with
the SEC a registration statement on Form S-1 with respect to the registration of
any of Parent's Common Stock, and such registration statement is declared
effective no later than January 31, 2000, then the Initial Period shall be
extended through the period of 90 days after the effective date of such
registration statement, and the Relevant Date shall instead be such effective
date.
(i) After the Initial Period, each Tessera Stockholder (other than
such Tessera Stockholders listed on Schedule 3.2(a)(i)) may
------------------
Transfer all the shares of Parent Stock received by such
Tessera Stockholder in the Merger. Each Tessera Stockholder
listed on Schedule 3.2(a)(i) may Transfer up to 1/3 of of the
------------------
shares of Parent Stock received by such Tessera Stockholder in
the Merger upon the expiration of a further period of 90 days
(for a total of 180 days after the Relevant Date); and such
Tessera Stockholder may Transfer an additional 1/3 of such
shares upon the expiration of a still further period of 90
days (for a total of 270 days after the Relevant Date), so
that 100% of such shares may be transferred after a total of
270 days after the Relevant Date.
(ii) The Parent Stock issued to a Tessera Stockholder pursuant to
the Merger shall, accordingly, be legended as follows: "THE
SALE OR OTHER TRANSFER OF THE SHARES EVIDENCED HEREBY HAS BEEN
CONTRACTUALLY RESTRICTED. THE HOLDER AGREES THAT SUCH SHARES
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED WITHOUT THE PRIOR
WRITTEN CONSENT OF THE ISSUER, iXL ENTERPRISES, INC., UNTIL
THE EXPIRATION OF [90 OR 270 DAYS, AS APPLICABLE,] AFTER THE
LATER OF (A) THE DATE OF ISSUANCE HEREOF; OR (B) IF NO LATER
THAN JANUARY 31, 2000, THEN THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT WITH RESPECT TO A SECONDARY PUBLIC
OFFERING OF PARENT'S COMMON STOCK. THE SHARES EVIDENCED HEREBY
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY ONLY BE SOLD OR OTHERWISE TRANSFERRED IN
4
COMPLIANCE WITH APPLICABLE SECURITIES LAWS, INCLUDING
THE RESALE LIMITATIONS THEREUNDER."
(iii) Upon the expiration of the Initial Period, a Tessera
Stockholder may, as to all of such shares (or, instead,
in the case of any Tessera Stockholder listed on
Schedule 3.2(a)(i), as to 1/3 of such shares), exchange
his stock certificate(s) for new certificate(s) not so
legended; and, in the case of each Tessera Stockholder
listed on Schedule 3.2(a)(i), he may do so again (as to
1/3 of his shares) upon the expiration of each of two
further 90-day periods in accordance with Section
3.2(a)(i); and
(b) All Tessera Stockholders listed on Schedule 3.2(b) (which
---------------
corresponds with Schedule 6.12(d) to the Merger Agreement) covenant and agree
----------------
that they shall, in connection with the Closing, enter into the noncompetition
and non-solicitation agreement with Parent, in the form of Exhibit "H" to the
-----------
Merger Agreement.
3.3 Vote of Stockholders; Voting Proxy.
(a) Each of the Tessera Stockholders covenants and agrees (i) to appear
for the purpose of obtaining a quorum at any meeting of stockholders of Tessera,
or adjournment thereof, at which matters relating to the Merger are considered;
and (b) to vote, in person or by proxy (or, if applicable, execute written
consent in accordance with applicable law with respect to), all of his shares of
Tessera Stock (now owned or hereafter acquired or over which he has voting
control), at any meeting of, or in any action taken under applicable law
(including written consent) by, the stockholders of Tessera with respect to the
Merger, in favor of adopting and approving the Merger Agreement and approving
the Merger, in accordance with the terms and provisions of the Merger Agreement.
(b) In order to effectuate Section 3.3(a), each Tessera Stockholder
hereby grants to the Secretary of Parent an irrevocable proxy, pursuant to the
Massachusetts Business Corporation Law ("MBCL") or other applicable law, coupled
with an interest, solely for the purposes of demanding that the Secretary of
Tessera call a special meeting of stockholders to consider matters related to
the Merger, and of voting (or signing his name on any written consent in
accordance with applicable law with respect to) all of the shares of Tessera
Stock owned (now or hereafter acquired or over which he has voting control) by
the grantor of the proxy in favor of adopting and approving the Merger Agreement
and approving the Merger, in accordance with the terms and provisions of the
Merger Agreement.
(c) Each Tessera Stockholder shall perform such further acts and
execute such further instruments as required to vest in Parent and Sub the power
to carry out and give effect to the provisions hereof.
5
(d) Each Tessera Stockholder covenants and agrees that he shall not
hereafter enter into any voting agreement, or grant any other proxy or any power
of attorney, inconsistent herewith.
(e) Each Tessera Stockholder covenants and agrees that he shall not
Transfer his Tessera Stock, or any other Tessera securities, or any interest
therein, without Parent's prior written consent.
3.4 Tessera Stockholders Receiving Options. Each Tessera Stockholder
receiving Options, as defined in the Merger Agreement, pursuant to Section
6.6(c) thereof, covenants and agrees to execute and deliver, at the Closing, a
Lock-up Letter, acknowledging that the Parent Stock receivable by him upon
exercise of his Option in accordance with the terms thereof is subject to
temporary restrictions on Transfer,
3.5 Tessera Stockholders Under Employment Agreements. Each Tessera
Stockholder under an existing employment agreement with Tessera, as identified
on Schedule 3.5, shall at or prior to the Closing terminate such employment
------------
agreement, and such action shall not create or accelerate any right of such
Stockholder thereunder.
3.6 Tessera Stockholders Owning Tessera Preferred Stock. Each Tessera
Stockholder owning any Tessera Series A or Series D Preferred stock shall, at or
prior to the Closing, convert all shares of Preferred Stock, in accordance with
the terms thereof, into Tessera common stock. Each Tessera Stockholder owning
any Tessera Series B Preferred stock shall, at or prior to the Closing, have
accepted the payment required by Article IV, Section C.2.c of Tessera's Articles
of Organization in full redemption of such shares.
3.7 Employee Agreements. Each Tessera Stockholder listed on Schedule
3.2(a)(i) shall at the Closing enter into an "Employee Agreement" (as defined in
the Merger Agreement).
ARTICLE IV
INDEMNIFICATION
Upon the Closing, the following provisions shall apply:
4.1 Indemnification by Parent.
(a) Parent shall indemnify and hold the Tessera Stockholders
(collectively, the "Tessera Indemnified Parties") harmless from and against, and
agrees promptly to defend each of the Tessera Indemnified Parties from and
reimburse each of the Tessera Indemnified Parties for, any and all losses,
damages, costs, expenses, liabilities, obligations and claims of any kind
(including reasonable attorneys' fees and other legal costs and expenses)
(collectively, a "Tessera Loss") that any of the Tessera Indemnified Parties may
at any time suffer or incur, or become subject to, as a result of or in
connection with:
6
(i) any breach or inaccuracy of any of the representations and
warranties made by Parent or Sub in or pursuant hereto or in or pursuant to the
Merger Agreement, or in any instrument, certificate or affidavit delivered by
Parent or Sub at the Closing in accordance with the provisions hereof or of the
Merger Agreement;
(ii) any failure by Parent or Sub to carry out, perform, satisfy and
discharge any of its respective covenants, agreements, undertakings, liabilities
or obligations hereunder or under any of the documents and materials delivered
by Parent pursuant hereto or to the Merger Agreement; and
(iii) any suit, action or other proceeding arising out of, or in any
way related to, any of the matters referred to in this Section 4.1(a).
(b) Notwithstanding any other provision hereof to the contrary, Parent
shall not have any liability under Section 4.1(a)(i) (or Section 4.1(a) (iii),
to the extent arising from or based upon matters subject to Section 4.1 (a) (i))
(i) unless the aggregate of all Tessera Losses for which Parent would be liable
but for this sentence exceeds, on a cumulative basis, an amount equal to
$500,000 ("Basket"), and then only to the extent of such excess, (ii) absent
fraud, for Tessera Losses in excess of $12.5 million ("Cap") in the aggregate,
and (iii) unless the Tessera Stockholders has asserted a claim with respect to
the matters set forth in Section 4.1(a)(i), or 4.1(a)(iii) to the extent
applicable to Section 4.1(a)(i), within 18 months of the Effective Time (as
defined in the Merger Agreement). Notwithstanding any implication to the
contrary contained herein, the parties acknowledge and agree that a decrease in
the value of Parent Stock would not, by itself, constitute a Tessera Loss,
unless and then only to the extent a decrease in the value of Parent Stock has
been demonstrated to be as a result of any event described in Sections
4.1(a)(i), (ii) or (iii).
4.2 Indemnification by the Tessera Stockholders.
(a) The Tessera Stockholders, severally (in proportion to their
respective ownership percentages of Tessera Stock owned by the Tessera
Stockholders on an as-converted basis immediately prior to the Closing), shall
indemnify and hold Parent, Sub, Surviving Corporation (as defined in the Merger
Agreement) and their respective stockholders, directors, officers and employees
(collectively, the "Parent Indemnified Parties") harmless from and against, and
agree to defend promptly each of the Parent Indemnified Parties from and
reimburse each of the Parent Indemnified Parties for, any and all losses,
damages, costs, expenses, liabilities, obligations and claims of any kind
(including reasonable attorneys' fees and other legal costs and expenses)
(collectively, a "Parent Loss") that any of the Parent Indemnified Parties may
at any time suffer or incur, or become subject to, as a result of or in
connection with:
(i) any breach or inaccuracy of any of the representations and
warranties made by Tessera or any of the Tessera Stockholders in or pursuant
hereto or in or pursuant to the Merger Agreement, or in any instrument
certificate or affidavit delivered by any of the same at the Closing in
accordance with the provisions hereof or of the Merger Agreement;
(ii) any failure by Tessera or any of the stockholders of Tessera to
carry out, perform, satisfy and discharge any of their respective covenants,
agreements,
7
undertakings, liabilities or obligations hereunder or under any of
the documents and materials delivered by any of the same pursuant hereto or to
the Merger Agreement; and
(iii) any suit, action or other proceeding arising out of, or in any
way related to, any of the matters referred to in this Section 4.2.
(b) Notwithstanding the above, the Tessera Stockholders shall not have
any liability under Section 4.2(a)(i) (or Section 4.2(a)(iii), to the extent
arising from or based upon matters subject to Section 4.2(a)(i)) (i) unless the
aggregate of all Parent Losses for which the Tessera Stockholders would be
liable but for this sentence exceeds, on a cumulative basis, an amount equal to
the Basket, and then only to the extent of such excess, (ii) absent fraud, for
Parent Losses in excess of the Cap in the aggregate, and (iii) unless Parent has
asserted a claim with respect to the matters set forth in Sections 4.2(a)(i), or
4.2(a)(iii) to the extent applicable to Section 4.2(a)(i), within 18 months of
the Effective Time, except with respect to the matters arising under Sections
4.18, 4.19, 4.20 or 4.24 of the Merger Agreement, in which event Parent must
have asserted a claim within the applicable statute of limitations.
Notwithstanding any implication to the contrary contained herein, the parties
acknowledge and agree that a decrease in the value of Parent Stock would not, by
itself, constitute a Parent Loss, unless and then only to the extent a decrease
in the value of Parent Stock has been demonstrated to be as a result of any
event described in Sections 4.2(a)(i), (ii) or (iii). Notwithstanding anything
to the contrary contained herein, no Tessera Stockholder shall be liable for a
breach of any other Tessera Stockholder of any representation or warranty made
in or pursuant hereto. In addition, absent fraud, the Tessera Stockholders
shall each be liable for Parent Losses only up to the Cap multiplied by a
fraction, the numerator of which is the number of shares of Tessera Stock owned
by such Tessera Stockholder and the denominator of which is the total number of
shares of Tessera Stock owned by all of the Tessera Stockholders, all as
determined on an as-converted basis immediately prior to the Closing.
4.3 Notification of Claims; Election to Defend
(a) A party entitled to be indemnified pursuant to Section 4.1 or 4.2, as
the case may be (the "Indemnified Party"), shall notify the party liable for
such indemnification (the "Indemnifying Party") in writing of any claim or
demand (a "Claim") that the Indemnified Party has determined has given or could
give rise to a right of indemnification hereunder. Subject to the Indemnifying
Party's right to defend in good faith third party claims as hereinafter
provided, the Indemnifying Party shall satisfy its obligations under this
Article VIII within 30 days after the receipt of written notice thereof from the
Indemnified Party. Any amounts paid thereafter shall include interest thereon
for the period commencing at the end of such 30-day period and ending on the
actual date of payment, at a rate of 15% per annum, or, if lower, at the highest
rate of interest permitted by applicable law at the time of such payment.
(b) If the Indemnified Party shall notify the Indemnifying Party of any
Claim pursuant to Section 4.3(a), and if such Claim relates to a Claim asserted
by a third party against the Indemnified Party that the Indemnifying Party
acknowledges is a Claim for which it must indemnify or hold harmless the
Indemnified Party under Section 4.1 or 4.2, as the case may be, then the
Indemnifying Party shall have the right, at its sole cost and expense, to employ
counsel reasonably acceptable to the Indemnified Party to defend any such Claim
asserted against the Indemnified Party. Notwithstanding anything to the contrary
in the preceding sentence, if the
8
Indemnified Party (i) reasonably believes that its interests with respect to a
Claim (or any material portion thereof) are in conflict with the interests of
the Indemnifying Party with respect to such Claim (or portion thereof) and (ii)
promptly notifies the Indemnifying Party, in writing, of the nature of such
conflict, then the Indemnified Party shall be entitled to choose, at the sole
cost and expense of the Indemnifying Party, independent counsel to defend such
Claim (or the conflicting portion thereof). The Indemnified Party shall have the
right to participate in the defense of any Claim, at its own expense (except to
the extent provided in the preceding sentence), but the Indemnifying Party shall
retain control over such litigation (except as provided in the preceding
sentence). The Indemnifying Party shall notify the Indemnified Party in writing,
as promptly as possible (but in any case before the due date for the answer or
response to a Claim) after receipt of the notice of Claim given by the
Indemnified Party to the Indemnifying Party under Section 4.3(a), of its
election to defend in good faith any such third party Claim. For so long as the
Indemnifying Party is defending in good faith any such Claim asserted by a third
party against the Indemnified Party, the Indemnified Party shall not settle or
compromise such Claim without the prior written consent of the Indemnifying
Party. The Indemnified Party shall cooperate with the Indemnifying Party in
connection with any such defense and shall make available to the Indemnifying
Party or its agents all records and other materials in the Indemnified Party's
possession reasonably required by the Indemnifying Party for its use in
contesting any third party Claim; provided, however, that the Indemnifying Party
shall have agreed, in writing, to keep such records and other materials
confidential except (i) to the extent required for defense of the relevant Claim
or (ii) as required by law, rule or regulation or court order. Whether or not
the Indemnifying Party elects to defend any such Claim, the Indemnified Party
shall have no obligation to do so. Within 30 days after a final determination
(including a settlement) has been reached with respect to any Claim contested
pursuant to this Section 4.3(b), the Indemnifying Party shall satisfy its
obligations hereunder with respect thereto. Any amount paid thereafter shall
include interest thereon for the period commencing at the end of such 30-day
period and ending on the actual date of payment, at a rate of 15% per annum, or,
if lower, at the highest rate of interest permitted by applicable law at the
time of such payment.
4.4 Determination of Loss and Amount. For purposes of determining whether
any Loss has occurred, or the amount of any such Loss, the representations,
warranties, covenants and agreements of the parties set forth herein or in the
Merger Agreement or in any other instrument, certificate or affidavit delivered
in connection herewith or therewith shall be considered without regard to any
materiality qualification set forth herein or therein.
4.5 Payment. A Tessera Stockholder, as the Indemnifying Party, may, at his
discretion, pay all or part of any amount due under this Article IV by delivery
of shares of Parent Stock having a value equal to the amount due (to the extent
that such Indemnifying Party owns sufficient shares of Parent Stock); provided,
however, that such Tessera Stockholders may do so only to the extent and during
the period that their Parent Stock may not be resold pursuant to the Lock-up
Letter, the Rule 145 Letter and Section 3.2(a). For the purpose of this
provision, the value of Parent Stock shall be deemed to be the then current
market value of Parent Stock, as determined based on the average of the daily
closing price thereof, as reflected in The Wall Street Journal for the 10
business days prior to the date on which such payment is made.
9
ARTICLE V
TERMINATION, AMENDMENT AND WAIVER
5.1 Termination. This Agreement shall terminate upon termination of the
Merger Agreement in accordance with Section 8.1 thereof.
5.2 Amendment. This Agreement may be amended by the mutual agreement of
Parent, Sub and the Tessera Stockholders at any time before or after approval of
the Merger by the stockholders of Tessera; provided, however, that after such
approval, no amendment shall be made which (i) changes the form or decreases the
amount of the consideration to be received in the Merger, (ii) in any way
materially adversely affects the rights of the stockholders of Tessera, or (iii)
under applicable law would require approval of the stockholders of Tessera, in
any such case referred to in clauses (i), (ii) and (iii), without the further
approval of the stockholders of Tessera. This Agreement may not be amended
except by an instrument in writing signed on behalf of the parties hereto,
provided that after the Effective Time (as defined in the Merger Agreement), any
such amendment must be signed by the former holders of a majority of the Tessera
Stock.
5.3 Waiver. At any time prior to the Effective Time, the parties hereto may,
to the extent permitted by applicable law, (i) extend the time for the
performance of any of the obligations or other acts of any other party hereto,
(ii) waive any inaccuracies in the representations and warranties by any other
party contained herein or in any documents delivered by any other party pursuant
hereto and (iii) waive compliance with any of the agreements of any other party
or with any conditions to its own obligations 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 an instrument in writing signed on behalf of such party.
ARTICLE VI
GENERAL PROVISIONS
6.1 Survival; Recourse. None of the agreements contained herein shall
survive the Merger, except that (i) the covenants contained in Article III and
the obligations to indemnify contained in Article IV shall survive the Merger
indefinitely (except to the extent a shorter period of time is explicitly
specified therein); and (ii) the representations and warranties made in Articles
I and II shall survive the Merger, and shall survive any independent
investigation by the parties, and any dissolution, merger or consolidation of
Parent, and shall bind the legal representatives, assigns and successors of the
Tessera Stockholders and Parent, for a period of 18 months after the Effective
Time.
6.2 Notices. All notices or other communications under this Agreement shall
be in writing and shall be given (and shall be deemed to have been duly given
upon receipt) by delivery in person, by facsimile (with confirmation of
receipt), or by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
If to the Tessera To the address listed under the signature
Stockholders: line of the applicable Tessera Stockholder
10
With copies to: Tessera Enterprise Systems, Inc.
0 Xxxxxxx Xx.
Xxxxxxxxx, XX 00000
Attention: Xx. Xxx Xxxx, President
Telephone: (000) 000-0000
Fax: (000) 000-0000
and to: Prince, Xxxxx & Tye LLP
000 Xxxxxxxxxx Xx.
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Parent or Sub: iXL Enterprises, Inc.
0000 Xxxxx Xx., 0xx Xxxxx
Xxxxxxx, XX 00000
Attention: M. Xxxxx Xxxxxxxx, Exec. V. P.
Fax: 404/000-0000
Telephone: 404/000-0000
With copies to: Xxxxxx & Xxxxxx, A Professional Corporation
One Buckhead Plaza
0000 Xxxxxxxxx Xx., Xxx. 0000
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Fax: 404/000-0000
Telephone: 404/000-0000
and to: Xxxxx & Company
000 Xxxx Xxx., 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx XX, Esq.
Fax: 212/000-0000
Telephone: 212/000-0000
or to such other address as any party may have furnished to the other parties in
writing in accordance with this Section.
6.3 Entire Agreement. The schedules hereto are incorporated herein by
reference. This Agreement, the Merger Agreement and the documents, schedules
and instruments referred to herein or therein and to be delivered pursuant
hereto or thereto constitute the entire agreement between the parties pertaining
to the subject matter hereof, and supersede all other prior agreements and
understandings, both written and oral, among the parties, or between any of
them, with respect to the subject matter hereof. There are no other
representations or warranties, whether written or
11
oral, between the parties in connection the subject matter hereof, except as
expressly set forth herein or in the Merger Agreement.
6.4 Assignments; Parties in Interest. Neither this Agreement nor any of the
rights, interests or obligations hereunder may be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties (and any assignment otherwise shall be void),
except that the rights, interests, and obligations of Sub hereunder may be
assigned to any direct wholly owned Delaware subsidiary of Parent without such
prior consent. Subject to the preceding sentence, this Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and nothing
herein, express or implied, is intended to or shall confer upon any individual
or Entity not a party hereto any right, benefit or remedy of any nature
whatsoever under or by reason hereof, except as otherwise provided herein.
6.5 Governing Law. This Agreement, except to the extent that the Delaware
General Corporation Law or the MBCL is mandatorily applicable to the Merger, or
to the rights of the Tessera Stockholders or the other parties hereto with
respect to the Merger, shall be governed in all respects by the laws of the
State of Georgia (without giving effect to the provisions thereof relating to
conflicts of law).
6.6 Headings; Interpretation; Incorporation. The descriptive headings herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation hereof. Words such as "herein,"
"hereof," "hereto," "hereunder" or the like shall refer to this Agreement as a
whole. The words "include" or "including" shall be by way of example rather
than by limitation. The words "or," "either" or "any" shall not be exclusive.
Any pronoun used herein shall include the corresponding masculine, feminine or
neuter forms. The parties hereto have participated jointly in the negotiation
and drafting hereof; accordingly, no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship hereof.
References to Sections, Articles, Schedules or Exhibits shall, unless the
context otherwise requires, be to Sections, Schedules or Exhibits hereof. The
Schedules and Exhibits hereto are incorporated herein by reference.
6.7 Counterparts. This Agreement may be executed in two or more
counterparts, including by facsimile, each of which shall be deemed an original
but all of which taken together shall constitute a single agreement.
6.8 Severability. If any term or other provision hereof is invalid, illegal
or incapable of being enforced by any rule of law or public policy, all other
conditions and provisions hereof shall nevertheless remain in full force and
effect provided that the economics or legal substance of the transactions
contemplated hereby are not affected in any manner materially adverse to any
party. Upon determination by a court of competent jurisdiction that any term or
other provision hereof is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
6.9 Jurisdiction; Consent to Service of Process. Each of the Tessera
Stockholders:
12
(a) HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR HIMSELF AND HIS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THE SUPERIOR COURT LOCATED IN
SUFFOLK COUNTY, MASSACHUSETTS, OR THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF MASSACHUSETTS, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING HERETO OR TO THE MERGER
AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
MASSACHUSETTS OR, TO THE EXTENT PERMITTED BY LAW, FEDERAL COURTS. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING HEREIN OR IN THE MERGER
AGREEMENT SHALL AFFECT ANY RIGHT THAT PARENT OR SUB MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING HERETO OR TO THE MERGER AGREEMENT AGAINST ANY
TESSERA STOCKHOLDER OR HIS PROPERTY IN THE COURTS OF ANY JURISDICTION;
(b) HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
THAT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING HERETO OR TO THE MERGER AGREEMENT IN ANY COURT REFERRED TO IN
THE PRECEDING PARAGRAPH. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(c) EACH TESSERA STOCKHOLDER, AS WELL AS PARENT AND SUB, HEREBY
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN
SECTION 9.2. NOTHING HEREIN OR IN THE MERGER AGREEMENT SHALL AFFECT THE RIGHT OF
ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PROVIDED BY LAW.
- SIGNATURES ON THE FOLLOWING PAGES -
13
IN WITNESS WHEREOF, Parent and Sub have caused this Agreement to be signed and
delivered by their respective duly authorized officers, and each Tessera
Stockholder has signed and delivered this Agreement, all as of the date first
written above.
"Parent"
iXL Enterprises, Inc., a Delaware corporation
By: /s/ M. Xxxxx Xxxxxxxx
-----------------------------------
Title: Executive Vice President
--------------------------------
"Sub"
iXL-Massachusetts, Inc., a Delaware corporation
By: /s/ M. Xxxxx Xxxxxxxx
-----------------------------------
Title: Executive Vice President
--------------------------------
"Tessera Stockholders"
HIGHLAND CAPITAL PARTNERS III
LIMITED PARTNERSHIP
By: Highland Management Partners III
Limited Partnership, its General
Partner
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Address: Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
14
HIGHLAND ENTREPRENEURS' FUND III
LIMITED PARTNERSHIP
By: HEF III LLC, Its General
Partner
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Address: Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
MATRIX PARTNERS IV, L.P.
By: Matrix IV Management Co., L.P.,
its General Partner
By: /s/ W. Xxxxxxx Xxxxxxxxx
------------------------------
Address: Bay Colony Corporate Center
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxxxxx 00000
MATRIX IV ENTREPRENEURS FUND L.P.
By: Matrix IV Management Co., L.P.,
its General Partner
By: /s/ W. Xxxxxxx Xxxxxxxxx
-----------------------------
Address: Bay Colony Corporate Center
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxxxxx 00000
15
GREYLOCK EQUITY LIMITED PARTNERSHIP
By: GREYLOCK EQUITY GP LIMITED
PARTNERSHIP, its General
Partner
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------
Address:
------------------------
---------------------------------
/s/ Xxxx X. Xxxxx
---------------------------------
Xxxx X. Xxxxx
Address: 0 Xxxxxx Xxxx
-------------------------
Xxxxxxxxx, XX 00000
-------------------------
-------------------------
Facsimile: 000-000-0000
-----------------------
/s/ Xxxxxxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxxxxxx X. Xxxxxx:
Address: 00 Xxxxxxxxx Xxxxx
-------------------------
Xxxxxx, XX 00000
-------------------------
-------------------------
Facsimile: 000-000-0000
-----------------------
/s/ Xxxxxxx X. Xxxx
---------------------------------
Xxxxxxx X. Xxxx
Address: 00 Xxxxxxx Xxxx
-------------------------
Xxxxxxxx, XX 0000
-------------------------
-------------------------
Facsimile: 0-000-000-0000
-----------------------
16
/s/ Xxxxxx X. Xxxxx
---------------------------------
Xxxxxx X. Xxxxx
Address: 00 Xxxxxxx Xxxxxx
-------------------------
Xxxxxxx, XX 00000
-------------------------
-------------------------
Facsimile: 000-000-0000
-----------------------
LIST OF SCHEDULES
-----------------
Schedule 1.2 Conflicts, Required Filings and Consents
Schedule 1.7 Liens on Tessera Stock
Schedule 3.2(a)(i) Tessera Stockholders to Executive Employment Agreement and
Contractually-Restricted Lock-up Letter
Schedule 3.2(b) Tessera Stockholders to Execute Non-Competition and
Non-Solicitation Agreement
Schedule 3.5 Employment Agreements to be Terminated at or Prior to
Closing
