EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
INTERNET EXTRA CORPORATION,
NETRANSCEND SOFTWARE, INC. AND
RUIQING "XXXXXXX" JIANG AS PRINCIPAL SHAREHOLDER
Dated as of March 8, 1999
TABLE OF CONTENTS
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ARTICLE I The Merger........................................................ 1
1.1 The Merger........................................................ 1
1.2 Effective Time.................................................... 2
1.3 Effect of the Merger.............................................. 2
1.4 Articles of Incorporation; Bylaws................................. 2
1.5 Directors and Officers............................................ 2
1.6 Effect of Merger on Netranscend Capital Stock..................... 2
(a) Conversion of Netranscend Capital Stock...................... 3
(b) Procedure for Payment........................................ 3
(c) Company Stock Options........................................ 3
1.7 No Further Ownership Rights in Netranscend Capital Stock.......... 3
1.8 Tax Consequences.................................................. 4
1.9 Taking of Necessary Action; Further Action........................ 4
ARTICLE II Representations and Warranties of Netranscend and the Princ....... 4
2.1 Organization of Netranscend....................................... 4
2.2 Netranscend Capital Structure..................................... 5
2.3 Subsidiaries...................................................... 5
2.4 Authority......................................................... 5
2.5 No Conflict....................................................... 6
2.6 Consents.......................................................... 6
2.7 Company Financial Statements...................................... 6
2.8 No Undisclosed Liabilities........................................ 7
2.9 No Changes........................................................ 7
2.10 Tax Matters....................................................... 8
2.11 Title of Properties; Absence of Liens and Encumbrances............ 8
2.12 Intellectual Property............................................. 9
2.13 Agreements, Contracts and Commitments............................. 12
2.14 Interested Party Transactions..................................... 12
2.15 Governmental Authorization........................................ 12
2.16 Litigation........................................................ 13
2.17 Minute Books...................................................... 13
2.18 Environmental Matters............................................. 13
2.19 Brokers' and Finders' Fees........................................ 13
2.20 Employee Benefit Plans and Compensation........................... 13
2.21 No Interference or Conflict....................................... 13
2.22 Compliance with Laws.............................................. 13
2.23 Warranties; Indemnities........................................... 13
2.24 Complete Copies of Materials...................................... 14
2.25 Representations Complete.......................................... 14
TABLE OF CONTENTS
(continued)
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ARTICLE III Representations and Warranties Of The Principal Shareholder....... 14
3.1 No Registration................................................... 14
3.2 Sophistication.................................................... 14
3.3 Access to Information............................................. 14
3.4 Preexisting Business Relationship................................. 14
3.5 Investment........................................................ 14
3.6 Tax Advisors...................................................... 15
3.7 Counsel........................................................... 15
3.8 Resale Under Rule 144............................................. 15
3.9 Residency......................................................... 15
ARTICLE IV Representations and Warranties of IEC............................. 16
4.1 Organization of IEC............................................... 16
4.2 IEC Capital Structure............................................. 16
4.3 Subsidiaries...................................................... 16
4.4 Authority......................................................... 17
4.5 No Conflict....................................................... 17
4.6 Consents.......................................................... 17
4.7 No Financial Statements........................................... 18
4.8 Tax Matters....................................................... 18
4.9 Title to Property; Absence of Liens and Encumbrances.............. 18
4.10 Intellectual Property............................................. 18
4.11 Agreements, Contracts and Commitments............................. 19
4.12 Interested Party Transactions..................................... 19
4.13 Governmental Authorization........................................ 19
4.14 Litigation........................................................ 19
4.15 Minute Books...................................................... 20
4.16 Environmental Matters............................................. 20
4.17 Brokers' and Finders' Fees........................................ 20
4.18 Employee Benefit Plans and Compensation........................... 20
4.19 No Interference or Conflict....................................... 20
4.20 Compliance with Laws.............................................. 20
4.21 Warranties; Indemnities........................................... 20
4.22 Complete Copies of Materials...................................... 20
4.23 Representations Complete.......................................... 21
ARTICLE V Conduct Prior to the Effective Time............................... 21
5.1 Conduct of Business of Netranscend................................ 21
TABLE OF CONTENTS
(continued)
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5.2 No Solicitation................................................... 23
ARTICLE VI Additional Agreements............................................. 24
6.1 Shareholder Approval.............................................. 24
6.2 Restrictions on Transfer.......................................... 24
6.3 Access to Information............................................. 25
(a) Access by IEC................................................ 25
(b) Access by Netranscend........................................ 25
(c) No Modification.............................................. 25
6.4 Confidentiality................................................... 25
6.5 Expenses.......................................................... 26
6.6 Public Disclosure................................................. 26
6.7 Consents.......................................................... 26
6.8 FIRPTA Compliance................................................. 26
6.9 Reasonable Efforts................................................ 26
6.10 Notification of Certain Matters................................... 27
6.11 Additional Documents and Further Assurances....................... 27
6.12 Tax Free Reorganization........................................... 27
6.13 Employee Offers................................................... 27
ARTICLE VII Conditions to the Merger.......................................... 27
7.1 Conditions to Obligations of Each Party to Effect the Merger...... 27
(a) Shareholder Approval......................................... 27
(b) No Injunctions or Restraints; Illegality..................... 28
(c) Claims....................................................... 28
(d) Permits...................................................... 28
7.2 Additional Conditions to Obligations of Netranscend and the
Principal Shareholder........................................ 28
(a) Consideration Shares......................................... 28
(b) Employment Offers............................................ 28
(c) Stock Option Agreements...................................... 28
(d) Representations, Warranties and Covenants.................... 28
(e) No Material Adverse.......................................... 28
(f) Legal Opinion................................................ 29
(g) Certificate of IEC........................................... 29
(h) Good Standing Certificate.................................... 29
7.3 Additional Conditions to the Obligations of IEC................... 29
(a) Netranscend Share Certificates............................... 29
(b) Netranscend Options.......................................... 29
(c) Acceptance of Key Employee Offers............................ 29
TABLE OF CONTENTS
(continued)
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(d) Representations, Warranties and Covenants.................... 29
(e) Third Party Consents......................................... 30
(f) Legal Opinion................................................ 30
(g) No Material Adverse Effect................................... 30
(h) Shareholder Approval......................................... 30
(i) Certificate of Netranscend................................... 30
(j) Certificate of the Principal Shareholder..................... 30
(k) Good Standing Certificate.................................... 30
(l) Certificate of Satisfaction.................................. 31
(m) Escrow Agreement............................................. 31
(n) Agreement of Merger.......................................... 31
ARTICLE VIII Survival of Representations and Warranties; Escrow................ 31
8.1 Survival of Representations and Warranties........................ 31
8.2 Indemnification................................................... 31
(a) Indemnification of Losses.................................... 31
(b) Claims Against the Escrow Fund............................... 31
8.3 Escrow Arrangements............................................... 32
8.4 Escrow Agreement.................................................. 32
ARTICLE IX Termination, Amendment and Waiver................................. 32
9.1 Termination....................................................... 32
9.2 Effect of Termination............................................. 33
9.3 Amendment......................................................... 33
9.4 Extension; Waiver................................................. 33
ARTICLE X General Provisions................................................ 34
10.1 Notices........................................................... 34
10.2 Interpretation.................................................... 35
10.3 Counterparts...................................................... 35
10.4 Entire Agreement; Assignment...................................... 35
10.5 Severability...................................................... 35
10.6 Other Remedies.................................................... 35
10.7 Governing Law..................................................... 36
10.8 Rules of Construction............................................. 36
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made and
entered into as of March 8, 1999 by and among Internet Extra Corporation, a
California corporation ("IEC"), Netranscend Software, Inc., a California
corporation ("Netranscend"), and Ruiqing "Xxxxxxx" Jiang, the sole shareholder
of Netranscend (the "Principal Shareholder").
RECITALS
A. The Boards of Directors of IEC and Netranscend believe it is in the
best interests of each company and the shareholders of each company that IEC
acquire Netranscend through the statutory merger of Netranscend with and into
IEC (the "Merger") and, in furtherance thereof, have approved the Merger.
B. Pursuant to the Merger, among other things, (i) all of the issued and
outstanding shares (each, a "Netranscend Share") of capital stock of Netranscend
(the "Netranscend Capital Stock") shall be canceled and converted into the right
to receive cash and shares of common stock of IEC ("IEC Common Stock") and (ii)
all options to acquire any shares of Netranscend Capital Stock shall be canceled
and replaced by options to acquire shares of IEC Common Stock.
C. A portion of the shares of IEC Common Stock otherwise payable by IEC
in connection with the Merger shall be placed in escrow and held by an escrow
agent pursuant to an Escrow Agreement, substantially in the form attached hereto
as Exhibit I as set forth in Section VIII hereof and the release of such shares
shall be contingent upon certain events and conditions.
D. It is intended by the parties hereto that the Merger shall constitute
a reorganization within the meaning of Section 368 of the Internal Revenue Code
of 1986, as amended (the "Code").
E. IEC and Netranscend desire to make certain representations,
warranties, covenants and other agreements in connection with the Merger.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the parties agree as follows:
ARTICLE I
The Merger
1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of the California General Corporation Law ("California
Law"), Netranscend shall be merged with and into IEC, the separate corporate
existence of Netranscend shall cease and IEC shall continue as the surviving
corporation. IEC as the surviving corporation after the Merger is hereinafter
sometimes referred to as the "Surviving Corporation."
1.2 Effective Time. Unless this Agreement is earlier terminated pursuant
to Section 9.1, the closing of the Merger (the "Closing") will take place as
promptly as practicable, but no later than five (5) business days following
satisfaction or waiver of the conditions set forth in Article VII, at the
offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, 000 Xxxx
Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx, unless another place or time is agreed to in
writing by IEC and Netranscend. The date upon which the Closing actually occurs
is herein referred to as the "Closing Date." On the Closing Date, the parties
hereto shall cause the Merger to be consummated by filing an Agreement of Merger
in the form attached hereto as Exhibit A (the "Merger Agreement") with the
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Secretary of State of the State of California, in accordance with the relevant
provisions of applicable law (the time of acceptance by the Secretary of State
of California of such filing being referred to herein as the "Effective Time").
1.3 Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of California Law. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all the property, rights, privileges, powers and franchises of Netranscend
shall vest in the Surviving Corporation, and all debts, liabilities and duties
of Netranscend shall become the debts, liabilities and duties of the Surviving
Corporation.
1.4 Articles of Incorporation; Bylaws.
(a) Unless otherwise determined by IEC prior to the Effective Time, at
the Effective Time, the Articles of Incorporation of IEC, as amended, shall be
the Articles of Incorporation of the Surviving Corporation until thereafter
amended as provided by law and such Articles of Incorporation.
(b) Unless otherwise determined by IEC prior to the Effective Time, at
the Effective Time, the Bylaws of IEC as in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation until thereafter
amended.
1.5 Directors and Officers. The directors of IEC immediately prior to the
Effective Time shall be the directors of the Surviving Corporation, each to hold
office in accordance with the Articles of Incorporation and Bylaws of the
Surviving Corporation. The officers of IEC immediately prior to the Effective
Time shall be the officers of Surviving Corporation, each to hold office in
accordance with the Bylaws of the Surviving Corporation.
1.6 Effect of Merger on Netranscend Capital Stock. Subject to the terms
and conditions of this Agreement, as of the Effective Time, by virtue of the
Merger and without any action on the part of IEC, Netranscend or the Principal
Shareholder immediately prior to the Effective Time, the following shall occur:
(a) Conversion of Netranscend Capital Stock. At and as of the
Effective Time, all Netranscend Shares shall be converted into the right to
receive an aggregate of 1,979,000 shares (the "Consideration Shares") of IEC
Common Stock and cash in the amount of $430,000 (the "Cash Consideration," and
together with the Consideration Shares, the "Consideration"). No Netranscend
Capital Stock shall be deemed to be outstanding or to have any rights other than
those set forth in this Section 1.6 (a) after the Effective Time.
(b) Procedure for Payment. At the Effective Time, the Principal
Shareholder will deliver a certificate or certificates representing all issued
and outstanding Netranscend Shares to IEC, endorsed in blank or accompanied by
stock powers or other instruments of transfer executed by such Principal
Shareholder. Immediately after the Effective Time, IEC shall (a) deliver to the
Principal Shareholder a certificate or certificates bearing the legend set forth
in Section 6.2 hereof representing 1,679,000 shares of IEC Common Stock and (b)
deliver to the Escrow Agent (as defined in Section 8.3(a) below) a certificate
bearing the legend set forth in Section 6.2 hereof, representing 300,000 shares
of IEC Common Stock (the "Escrow Shares") to be deposited into the Escrow Fund
(as defined in Section 8.3(a) below), pursuant to the terms and conditions set
forth in Article VIII. IEC shall pay the Cash Consideration to the Principal
Shareholder in four installments, as follows: (i) $110,000 on the one-year
anniversary of the Closing Date; (ii) $110,000 on the two-year anniversary of
the Closing Date; (iii) $100,000 on the three-year anniversary of the Closing
Date; and (iv) $110,000 on the four-year anniversary of the Closing Date. All
payments of Consideration Shares and Cash Consideration shall be made to the
address set forth in Section 10.1 below unless the Principal Shareholder
delivers an alternate address to IEC.
(c) Company Stock Options.
(i) Conversion of Netranscend Options. At the Effective Time,
each outstanding option and warrant to purchase Netranscend Capital Stock (each,
a "Netranscend Option"), whether vested or unvested, shall be canceled by
Netranscend in connection with the Merger. IEC shall grant options to purchase
IEC Common Stock for each Netranscend Option so canceled by Netranscend under
this Agreement, each of which shall be subject to the terms and conditions of
the IEC 1999 Stock Option Plan (the "IEC Plan"), shall have an option exercise
price of $0.50 per share, shall be fully vested and exercisable at the Effective
Time and shall have the same termination date as of the canceled Netranscend
Option for which it was granted. Each Netranscend Option will be exercisable for
the same number of shares of IEC Common Stock as the number of shares of
Netranscend Common Stock that were issuable upon exercise of such Netranscend
Option immediately prior to the Effective Time.
(ii) Notice of Issuance. Promptly following the Effective
Time, IEC will issue to each holder of an outstanding Netranscend Option a stock
option agreement evidencing the foregoing conversion of such Netranscend Option
by IEC.
1.7 No Further Ownership Rights in Netranscend Capital Stock. The shares
of IEC Common Stock issued in accordance with the terms hereof shall be deemed
to be full satisfaction of all rights pertaining to shares of Netranscend
Capital Stock outstanding prior to the Effective Time,
and there shall be no further registration of transfers on the records of
Netranscend or the Surviving Corporation of shares of Netranscend Capital Stock
that were outstanding prior to the Effective Time.
1.8 Tax Consequences. It is intended by the parties hereto that the
Merger shall constitute a reorganization within the meaning of Section 368 of
the Code. The parties hereto adopt this Agreement as a "plan of reorganization"
within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States
Income Tax Regulations. Each party has consulted with its own tax advisers with
respect to the tax consequences of the Merger.
1.9 Taking of Necessary Action; Further Action. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of Netranscend and IEC, the officers and directors of Netranscend
and IEC are fully authorized in the name of their respective corporations or
otherwise to take, and will take, all such lawful and necessary action.
ARTICLE II
Representations and Warranties of
Netranscend and the Principal Shareholder
Netranscend and the Principal Shareholder hereby represent and warrant to
IEC, subject to such exceptions as are specifically disclosed in the disclosure
schedule (referencing the appropriate section and paragraph numbers) supplied by
Netranscend to IEC and attached hereto as Exhibit D (the "Disclosure Schedule")
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and dated as of the date hereof, that on the date hereof and as of the Effective
Time:
2.1 Organization of Netranscend. Netranscend is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California and has the requisite corporate power and authority to carry on its
business as presently conducted and as presently proposed to be conducted.
Netranscend is duly qualified to transact business and is in good standing in
the State of California and in each jurisdiction in which it owns or leases
properties or conducts any business so as to require such qualification in which
the failure to be so qualified would have a Material Adverse Effect. As used in
this Agreement, the term "Material Adverse Effect" with respect to a party means
any change, event or effect that is materially adverse to the business, assets
(including intangible assets), results of operations or financial condition of
such party. Netranscend has delivered a true and correct copy of its Articles
of Incorporation and Bylaws, each as amended to date, to IEC. Section 2.1 of the
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Disclosure Schedule lists the directors and officers of Netranscend. The
operations now being conducted by Netranscend have not been conducted under any
other name.
2.2 Netranscend Capital Structure.
(a) As of the Closing Date, the authorized capital stock of
Netranscend consists of 10,000,000 shares of authorized Common Stock, of which
3,000,000 are issued and outstanding and held by the Principal Shareholder as of
the date hereof, and no shares of Preferred Stock. All outstanding shares of
Netranscend Capital Stock are duly authorized, validly issued, fully paid and
non-assessable, are not subject to preemptive rights created by statute, the
Articles of Incorporation or Bylaws of Netranscend or any agreement to which
Netranscend is a party or by which it is bound and have been issued in
compliance with federal and state securities laws. There are no declared but
unpaid dividends with respect to any shares of Netranscend Capital Stock. The
Merger is not a dissolution, liquidation or winding up as defined in
Netranscend's Articles of Incorporation. Netranscend has no treasury shares or
other capital stock authorized, issued or outstanding.
(b) Section 2.2(b) of the Disclosure Schedule sets forth, the name of
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each stock option plan or other plan providing for equity compensation of any
person adopted or maintained by Netranscend. Section 2.2(b) of the Disclosure
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Schedule sets forth for each outstanding Netranscend Option the name of the
holder of such option, the domicile address of such holder, the number of shares
of Netranscend Capital Stock subject to such option, the exercise price of such
option and the vesting schedule for such option, including the extent vested to
date. There are no other options, warrants, calls, rights, commitments or
agreements of any character, written or oral, to which Netranscend is a party or
by which it is bound obligating Netranscend to issue, deliver, sell, repurchase
or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any
shares of Netranscend Capital Stock or obligating Netranscend to grant, extend,
accelerate the vesting of, change the price of, otherwise amend or enter into
any such option, warrant, call, right, commitment or agreement. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or other similar rights with respect to Netranscend. There are
no voting trusts, proxies, or other agreements or understandings with respect to
the voting stock of Netranscend. There are no warrants to purchase Netranscend
Capital Stock.
2.3 Subsidiaries. Netranscend does not have, and never has had, any
subsidiaries or affiliated companies and has not otherwise owned, any shares in
the capital of or any interest in, or control, directly or indirectly, any other
corporation, partnership, association, joint venture or other business entity.
2.4 Authority. Netranscend has all requisite power and authority to enter
into this Agreement and any Related Agreements (as hereinafter defined) to which
it is a party and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and any Related
Agreements to which it is a party and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of Netranscend, and no further action is required
on the part of Netranscend to authorize the Agreement, any Related Agreements to
which it is a party and the transactions contemplated hereby and thereby,
subject only to approval of this Agreement by the Principal Shareholder. This
Agreement and the Merger have been approved by all members of the Board of
Directors of Netranscend. This Agreement and any Related Agreements to which
Netranscend is a
party have been duly executed and delivered by Netranscend and, assuming the due
authorization, execution and delivery by the other parties hereto and thereto,
constitute the valid and binding obligation of Netranscend, enforceable in
accordance with their respective terms, subject to the laws of general
application relating to bankruptcy, insolvency and the relief of debtors and to
rules of law governing specific performance, injunctive relief or other
equitable remedies. The "Related Agreements" with respect to a party shall mean
all such ancillary agreements required in this Agreement to be executed and
delivered by such party in connection with the transactions contemplated hereby.
2.5 No Conflict. The execution and delivery of this Agreement and any
Related Agreements to which Netranscend is a party do not, and the consummation
of the transactions contemplated hereby and thereby will not, conflict with, or
result in any violation of, or default under (with or without notice or lapse of
time, or both), or give rise to a right of termination, cancellation,
modification or acceleration of any obligation or loss of any benefit under (any
such event, a "Conflict") (i) any provision of the Articles of Incorporation and
Bylaws of Netranscend, (ii) any mortgage, indenture, lease, contract or other
agreement or instrument, permit, concession, franchise, license, covenant or
commitment (each a "Contract") to which Netranscend or any of its properties or
assets are subject, or (iii) any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Netranscend or its properties or
assets.
2.6 Consents. No consent, waiver, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or other federal, state, county, local or other foreign governmental
authority, instrumentality, agency or commission ("Governmental Entity") or any
third party, including a party to any Contract with Netranscend (so as not to
trigger any Conflict), is required by or with respect to Netranscend and no
consent, waiver or approval of any party to any Contract is required for such
Contract to remain in effect without modification in connection with the
execution and delivery of this Agreement and any Related Agreements to which
Netranscend is a party or the consummation of the transactions contemplated
hereby and thereby, except for (i) such consents, waivers, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable securities laws, and (ii) the filing of the Certificate of Merger
with the Secretary of State of the State of California, and except that the
consummation of the transactions contemplated hereby requires the approval of
the shareholders of Netranscend.
2.7 Company Financial Statements. Section 2.7 of the Disclosure Schedule
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sets forth Netranscend's unaudited balance sheets as of December 31, 1998 and
the related unaudited statements of income and cash flow for the year ended
December 31, 1998 (collectively, the "Netranscend Financials"). Netranscend
Financials are correct in all material respects and have been prepared in
accordance with U.S. generally accepted accounting principles ("GAAP"), applied
on a basis consistent throughout the periods indicated and consistent with each
other. Netranscend Financials present fairly the financial condition, operating
results and cash flows of Netranscend as of the dates and during the periods
indicated therein.
2.8 No Undisclosed Liabilities. Netranscend does not have any liability,
indebtedness, obligation, expense, claim, deficiency, guaranty or endorsement of
any type, whether accrued, absolute, contingent, matured, unmatured or other
(whether or not required to be reflected in financial statements in accordance
with GAAP), which individually or in the aggregate (i) has not been reflected in
the Netranscend Financials, or (ii) has not arisen in the ordinary course of
business consistent with past practices since December 31, 1998.
2.9 No Changes. Except as expressly contemplated by this Agreement, since
December 31, 1998, there has not been, occurred or arisen any of the following
(unless approved in writing by IEC):
(a) any purchase or redemption of any shares of Netranscend Capital
Stock, except in connection with repurchases upon termination of employees
pursuant to pre-existing contractual obligations;
(b) any declaration or payment of any distribution with respect to any
shares of Netranscend Capital Stock;
(c) any amendment or restatement of the charter documents, bylaws or
other organizational documents of Netranscend;
(d) any execution of any agreement with any third party in respect of,
or license, sale, mortgage, rental, lease or other disposal of Netranscend's
intellectual property;
(e) any proposal or execution of an agreement with any person or
entity, other than IEC, providing for the possible merger (whether by way of
merger, purchase of capital stock, purchase of assets or otherwise) of
Netranscend with any person or entity or the purchase or sale of any material
portion of the capital stock or assets of Netranscend or of another entity by
Netranscend;
(f) any incurrence or guarantee of any indebtedness, or any other
liabilities outside of the ordinary course of business;
(g) any termination of employees or coercion of employees to resign;
(h) any commencement or settlement of any litigation;
(i) any sale, lease or other disposal of any of its properties or
assets, except in the ordinary course of business and consistent with past
practices;
(j) any incurrence of indebtedness for borrowed money or guarantee any
such indebtedness or issuance or sale of any debt securities or guarantee of any
debt securities of others;
(k) grant of any loans to others or purchase of debt securities of
others or amendment of the terms of any outstanding loan agreement;
(l) grant of any severance or termination pay (i) to any director or
officer or (ii) to any other employee except payments made pursuant to standard
written agreements outstanding as of the date hereof;
(m) payment, discharge or satisfaction, in an amount in excess of
$10,000 (in any one case) or $25,000 (in the aggregate), of any claim, liability
or obligation (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the ordinary
course of business consistent with past practice;
(n) making or changing any material election in respect of taxes,
adoption or change of any accounting method in respect of taxes, execution of
any closing agreement, settlement of any claim or assessment in respect of
taxes, or consent to any extension or waiver of the limitation period applicable
to any claim or assessment in respect of taxes; or
(o) execution of any strategic alliance or joint marketing arrangement
or agreement.
2.10 Tax Matters. Netranscend has filed when due all federal, state, local
and foreign tax returns required to be filed by it. Each such tax return is
true and complete in all materials respects and Netranscend has paid all taxes
due under such returns. There is no action, suit, proceeding, investigation,
audit or claim now pending against or with respect Netranscend in respect of any
tax or assessment, nor is any additional tax or assessment asserted by any
governmental authority. All taxes, interest, penalties, assessments or
deficiencies for periods prior to the Closing Date have been paid in full except
for taxes not yet due. The reserves established on the books of Netranscend for
taxes not yet due are adequate to satisfy all liabilities for taxes not yet due.
2.11 Title of Properties; Absence of Liens and Encumbrances.
(a) Netranscend does not own any real property, nor has it ever owned
any real property. Section 2.11(a) of the Disclosure Schedule sets forth a list
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of all real property currently leased by Netranscend, the name of the lessor,
the date of the lease and each amendment thereto and, with respect to any
current lease, the aggregate annual rental and/or other fees payable under any
such lease. All such current leases are in full force and effect, are valid and
effective in accordance with their respective terms, and there is not, under any
of such leases, any existing default or event of default (or event which with
notice or lapse of time, or both, would constitute a default).
(b) Netranscend has good and valid title to, or, in the case of leased
properties and assets, valid leasehold interests in, all of its tangible
properties and assets, real, personal and mixed, used or held for use in its
business, free and clear of any liens, except as reflected in the Netranscend
Financials and except for liens for taxes not yet due and payable and such
imperfections of title and encumbrances, if any, which are not material in
character, amount or extent, and which do not detract from the value, or
interfere with the present use, of the property subject thereto or affected
thereby.
(c) Section 2.11(c) of the Disclosure Schedule lists each item of
---------------
equipment with a purchase price of more than $10,000 (the "Equipment") owned or
leased by Netranscend and such Equipment is, (i) adequate in all material
respects for the conduct of the business of Netranscend as currently conducted
and (ii) in good operating condition, regularly and properly maintained, subject
to normal wear and tear.
(d) Netranscend has sole and exclusive ownership, free and clear of
any liens, of all customer files and other customer information relating to
customers of Netranscend's current and former customers (the "Customer
Information"). No person other than Netranscend possesses any claims or rights
with respect to use of the Customer Information.
2.12 Intellectual Property.
(a) For the purposes of this Agreement, the following terms have the
following definitions:
"Intellectual Property" shall mean any or all of the following and all
rights in, arising out of, or associated therewith anywhere in the world: (i)
all United States, international and foreign patents and applications therefor
and all reissues, divisions, renewals, extensions, provisionals, continuations
and continuations-in-part thereof; (ii) all inventions (whether patentable or
not), invention disclosures, improvements, trade secrets, proprietary
information, know how, technology, technical data and customer lists, and all
documentation relating to any of the foregoing; (iii) all copyrights, copyrights
registrations and applications therefor; (iv) all industrial designs and any
registrations and applications therefor throughout the world; (v) all trade
names, logos, common law trademarks and service marks; trademark and service
xxxx registrations and applications therefor and all goodwill associated
therewith throughout the world; and all other rights corresponding thereto
throughout the world; (vi) all mask works, mask work registrations and
applications therefor; (vii) all databases and data collections and all rights
therein throughout the world; (viii) all computer software including all source
code, object code, firmware, development tools, files, records and data, all
media on which any of the foregoing is recorded; (ix) all Web addresses, sites
and domain names; (x) any similar, corresponding or equivalent rights to any of
the foregoing and (xi) all documentation related to any of the foregoing.
"Netranscend Intellectual Property" shall mean any Intellectual
Property that is owned by, or exclusively licensed to, Netranscend.
"Registered Intellectual Property" shall mean all United States,
international and foreign: (i) patents, patent applications (including
provisional applications); (ii) registered trademarks, applications to register
trademarks, intent-to-use applications, or other registrations or applications
related to trademarks; (iii) registered copyrights and applications for
copyright registration; (iv) any mask work registrations and applications to
register mask works; and (v) any other Netranscend Intellectual Property that is
the subject of an application, certificate, filing, registration or other
document issued by, filed with, or recorded by, any state, government or other
public legal authority.
(b) Section 2.12(b) of the Disclosure Schedule lists all Registered
---------------
Intellectual Property owned by, licensed to or filed in the name of, Netranscend
(the "Netranscend Registered Intellectual Property"), and lists any proceedings
or actions before any court, tribunal (including the United States Patent and
Trademark Office (the "PTO") or equivalent authority anywhere in the world)
related to any of Netranscend Registered Intellectual Property.
(c) Netranscend (i) owns and has good and exclusive title to each item
of Netranscend Intellectual Property, including all Netranscend Registered
Intellectual Property listed on Section 2.12(b) of the Disclosure Schedule, free
---------------
and clear of any Liens, (ii) is the exclusive owner of all trademarks and trade
names used in connection with the operation or conduct of the business of
Netranscend, including the sale of any products or the provision of any services
by Netranscend and (iii) owns exclusively, and has good title to, all
copyrighted works that are Netranscend products or other works of authorship
that Netranscend otherwise purports to own.
(d) To the extent that any Intellectual Property has been developed or
created by a any person other than Netranscend for which Netranscend has
directly or indirectly paid, Netranscend has a written agreement with such
person with respect thereto and Netranscend thereby has obtained ownership of,
and is the exclusive owner of, all such Intellectual Property by operation of
law or by valid assignment.
(e) Netranscend has not transferred ownership of, or granted any
license of or right to use or authorized the retention of any rights to use, any
Intellectual Property that is or was Netranscend Intellectual Property, to any
other person.
(f) Other than "shrink-wrap" and similar widely available commercial
end-user licenses, the contracts, licenses and agreements listed in Section
-------
2.12(f) of the Disclosure Schedule include all contracts, licenses and
-------
agreements, to which Netranscend is a party with respect to any Intellectual
Property. No person other than Netranscend has ownership rights to improvements
made by Netranscend in Intellectual Property which has been licensed to
Netranscend.
(g) Section 2.12(g) of the Disclosure Schedule lists all contracts,
---------------
licenses and agreements between Netranscend and any other person wherein or
whereby Netranscend has agreed to, or assumed, any obligation or duty to
warrant, indemnify, reimburse, hold harmless, guaranty or otherwise assume or
incur any obligation or liability or provide a right of rescission with respect
to the infringement or misappropriation by Netranscend or such other person of
the Intellectual Property of any person other than Netranscend.
(h) The operation of the business of Netranscend as it currently is
conducted, including but not limited to Netranscend's design, development,
manufacture, import, use and sale of the products, technology or services
(including products, technologies or services currently under development) of
Netranscend, does not infringe or misappropriate the Intellectual Property of
any other person, and Netranscend has not received notice from any person
claiming that such operation or any act, product or service (including products,
technologies or services currently under
development) of Netranscend infringes or misappropriates the Intellectual
Property of any other person.
(i) Netranscend owns or has the right to all Intellectual Property
necessary to the conduct of its business as it is currently conducted including,
without limitation, the design, development, manufacture, use and sale of all
products and technology currently manufactured or sold by Netranscend or under
development by Netranscend and the performance of all services provided or
contemplated to be provided by Netranscend.
(j) To the knowledge of Netranscend, each item of Netranscend
Registered Intellectual Property is valid and subsisting. All necessary
registration, maintenance and renewal fees in connection with Registered
Intellectual Property have been paid and all necessary documents and
certificates in connection with such Netranscend Registered Intellectual
Property have been filed with the relevant patent, copyright, trademark or other
authorities in the United States or foreign jurisdictions, as the case may be,
for the purposes of maintaining such Registered Intellectual Property. Section
-------
2.12(j) of the Disclosure Schedule lists all actions that must be taken by
-------
Netranscend within sixty (60) days of the Closing Date, including the payment of
any registration, maintenance or renewal fees or the filing of any documents,
applications or certificates for the purposes of maintaining, perfecting or
preserving or renewing any Netranscend Intellectual Property. In each case in
which Netranscend has been assigned or purchased any Intellectual Property
rights from any other person, Netranscend has obtained a valid and enforceable
assignment sufficient to irrevocably transfer all rights in such Intellectual
Property (including the right to seek past and future damages with respect to
such Intellectual Property) to Netranscend and, to the maximum extent provided
for by, and in accordance with, applicable laws and regulations, Netranscend has
recorded each such assignment with the relevant governmental authorities,
including the PTO, the U.S. Copyright Office, or their respective equivalents in
any relevant foreign jurisdiction, as the case may be.
(k) There are no contracts, licenses or agreements between Netranscend
and any other person with respect to Netranscend Intellectual Property under
which there is any dispute known to Netranscend regarding the scope of such
agreement, or performance under such agreement including with respect to any
payments to be made or received by Netranscend thereunder.
(l) To the knowledge of Netranscend, no person is infringing or
misappropriating any Netranscend Intellectual Property.
(m) Netranscend has taken all steps reasonably required to protect
Netranscend's rights in confidential information and trade secrets of
Netranscend or provided by any third party to Netranscend. Without limiting the
foregoing, Netranscend has, and enforces, a policy requiring each employee,
consultant and contractor to execute proprietary information and confidentiality
and assignment agreements substantially in Netranscend's standard forms, and all
current and former employees, consultants and contractors of Netranscend have
executed such an agreement.
(n) No Netranscend Intellectual Property or product, technology or
service of Netranscend is subject to any proceeding or outstanding decree,
order, judgment, agreement or stipulation that restricts in any manner the use,
transfer or licensing thereof by Netranscend or may affect the validity, use or
enforceability of such Netranscend Intellectual Property.
(o) To the knowledge of Netranscend, no (i) product, technology,
service or publication of Netranscend (ii) material published or distributed by
Netranscend or (iii) conduct or statement of Netranscend constitutes obscene
material, a defamatory statement or material, false advertising or otherwise
violates any law or regulation.
2.13 Agreements, Contracts and Commitments. Netranscend is not bound by
any contract, agreement, lease or commitment other than (i) contracts for the
purchase of supplies and services that were entered into in the ordinary course
of business and that do not involve more than $50,000 and do not extend for more
than one (1) year beyond the date hereof, (ii) sales contracts entered into in
the ordinary course of business, and (iii) contracts terminable at will by
Netranscend on no more than thirty (30) days' notice without cost or liability
to Netranscend and that do not involve any employment or consulting arrangement
and are not material to the conduct of Netranscend's business. For the purpose
of this paragraph, employment and consulting contracts, and license agreements
and any other agreement relating to Netranscend's acquisition or disposition of
patent, copyright, trade secret or other proprietary rights or technology (other
than standard end-user license agreements) shall not be considered to be
contracts entered into in the ordinary course of business.
2.14 Interested Party Transactions. No officer or director of Netranscend
(nor, to the knowledge of Netranscend, any shareholder of Netranscend or any
ancestor, sibling, descendant, spouse, parent, subsidiary or other affiliate of
any officer, director or shareholder, or any trust, partnership or corporation
in which any of such persons has or has had an interest), has or has had,
directly or indirectly, (i) any interest in any entity that furnished or sold,
or furnishes or sells, services, products or technology that Netranscend
furnishes or sells, or proposes to furnish or sell, or (ii) any interest in any
entity that purchases from or sells or furnishes to Netranscend any goods or
services or (iii) a beneficial interest in any Contract; provided, however, that
ownership of no more than one percent (1%) of the outstanding voting stock of a
publicly traded corporation and no more than 5% of the outstanding equity of any
other entity shall not be deemed an "interest in any entity" for purposes of
this Section 2.14.
2.15 Governmental Authorization. Section 2.15 of the Disclosure Schedule
------------
accurately lists each consent, license, permit, grant or other authorization
issued to Netranscend by a Governmental Entity (i) pursuant to which Netranscend
currently operates or holds any interest in any of its properties or (ii) which
is required for the operation of its business or the holding of any such
interest (herein collectively called "Netranscend Authorizations"). Netranscend
Authorizations are in full force and effect and constitute all Netranscend
Authorizations required to permit Netranscend to operate or conduct its business
or hold any interest in its properties or assets.
2.16 Litigation. There is no action, suit or proceeding of any nature
pending, or to Netranscend's knowledge threatened, against Netranscend, its
properties or any of its officers or directors, nor, to the knowledge of
Netranscend, is there any reasonable basis therefor. There is no investigation
pending or, to Netranscend's knowledge threatened, against Netranscend, its
properties or any of its officers or directors (nor, to the best knowledge of
Netranscend, is there any reasonable basis therefor) by or before any
Governmental Entity. No Governmental Entity has at any time challenged or
questioned the legal right of Netranscend to conduct its operations as presently
or previously conducted.
2.17 Minute Books. The minute books of Netranscend delivered or made
available to counsel for IEC are the only minutes of Netranscend and contain a
reasonably accurate summary of all meetings of the Board of Directors (or
committees thereof) of Netranscend and its shareholders or actions by written
consent since the incorporation of Netranscend.
2.18 Environmental Matters. Netranscend is not in material violation of
any applicable statute, law or regulation relating to the environment or
occupational safety and health, and no material expenditures will be required in
order to comply with any such existing statute, law or regulation.
2.19 Brokers' and Finders' Fees. Netranscend has not incurred, nor will it
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or any similar charges in connection with this Agreement or
any transaction contemplated hereby.
2.20 Employee Benefit Plans and Compensation. Netranscend has no Employee
Benefit Plan, as defined in the Employee Retirement Income Security Act of 1974.
2.21 No Interference or Conflict. To the knowledge of Netranscend, no
shareholder, officer, employee or consultant of Netranscend is obligated under
any contract or agreement or subject to any judgment, decree or order of any
court or administrative agency, that would interfere with such person's efforts
to promote the interests of Netranscend or that would interfere with
Netranscend's business. Neither the execution nor delivery of this Agreement,
nor the carrying on of Netranscend's business as presently conducted or proposed
to be conducted nor any activity of such officers, directors, employees or
consultants in connection with the carrying on of Netranscend's business as
presently conducted or proposed to be conducted, will, to Netranscend's
knowledge, conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract or agreement under
which any of such officers, directors, employees or consultants are currently
bound.
2.22 Compliance with Laws. Netranscend has complied with, is not in
violation of, and has not received any notices of violation with respect to, any
foreign, federal, state or local statute, law or regulation.
2.23 Warranties; Indemnities. Netranscend has not given any warranties or
indemnities relating to products or technology sold or services rendered by
Netranscend.
2.24 Complete Copies of Materials. Netranscend has delivered or made
available true and complete copies of each document (or summaries of same) that
has been requested by IEC or its counsel.
2.25 Representations Complete. None of the representations or warranties
made by Netranscend herein (as modified by the Disclosure Schedule), nor any
statement made in any schedule or certificate furnished by Netranscend pursuant
to this Agreement, contains or will contain at the Effective Time, any untrue
statement of a material fact, or omits or will omit at the Effective Time to
state any material fact necessary in order to make the statements contained
herein or therein, in the light of the circumstances under which made, not
misleading.
ARTICLE III
Representations and Warranties
Of The Principal Shareholder
The Principal Shareholder represents and warrants to IEC that on the date
hereof and as of the Effective Time:
3.1 No Registration. The Principal Shareholder understands that the
Consideration Shares have not been registered under the Securities Act of 1933,
as amended (the "Act") and are being offered and sold pursuant to an exemption
from registration contained in the Act based in part upon the representations of
the Principal Shareholder below or otherwise made hereunder.
3.2 Sophistication. The Principal Shareholder has sophisticated knowledge
of business affairs to decide whether or not to make the investment contemplated
herein.
3.3 Access to Information. The Principal Shareholder has had full
opportunity to ask questions and receive answers concerning the terms and
conditions of the offering of the Consideration Shares and has had full access
to IEC's officers and such other information concerning IEC as he has requested.
3.4 Preexisting Business Relationship. The Principal Shareholder has
either: (i) a preexisting personal or business relationship with IEC or any of
its officers or directors, or (ii) by reason of the Principal Shareholder's
business or financial experience (or the business or financial experience of the
Principal Shareholder's professional advisors who are unaffiliated with and not
compensated by IEC) has the capacity to protect his own interests in connection
with the Merger and the transactions contemplated hereby.
3.5 Investment. The Principal Shareholder is acquiring the Consideration
Shares for investment in his own account, and not as a nominee or agent, and not
with a view to or for sale in connection with the distribution thereof. The
Principal Shareholder understands that he must bear the economic risk of this
investment indefinitely unless the Consideration Shares are registered
pursuant to the Act, or an exemption from such registration is available, and
that IEC has no present intention of registering the Consideration Shares. The
Principal Shareholder further understands that there is no assurance that any
exemption from the Act will be available or, if available, that such exemption
will allow the Principal Shareholder to dispose of or otherwise transfer any or
all of the Consideration Shares under the circumstances in the amounts or at the
times the Principal Shareholder might propose.
3.6 Tax Advisors. The Principal Shareholder has reviewed with his own tax
advisors the federal, state and local tax consequences of this investment, where
applicable, and the transactions contemplated by this Agreement. The Principal
Shareholder is relying solely on such advisors and not on any statements or
representations of IEC or any of its agents and understands that the Principal
Shareholder (and not IEC) shall be responsible for the Principal Shareholder's
own tax liability that may arise as a result of this investment or the
transactions contemplated by this Agreement.
3.7 Counsel. The Principal Shareholder acknowledges that he has had the
opportunity to review this Agreement, the exhibits and the schedules attached
hereto and the transactions contemplated by this Agreement with his own legal
counsel. The Principal Shareholder is relying solely on such counsel and not on
any statements or representations of IEC or any of its agents for legal advice
with respect to this investment or the transactions contemplated by this
Agreement.
3.8 Resale Under Rule 144. The Principal Shareholder acknowledges that he
is aware of Rule 144 promulgated under the Act, which permits limited public
resales of securities acquired in a nonpublic offering, subject to the
satisfaction of certain conditions. The Principal Shareholder understands that
under Rule 144, except as otherwise provided by section (k) of that Rule, the
conditions include, among other things: the availability of certain current
public information about the issuer, the resale occurring not less than one year
after the party has purchased and paid for the securities to be sold, and
limitations on the amount of securities to be sold and the manner of sale. The
Principal Shareholder acknowledges and understands that IEC may not be
satisfying the current public information requirement of Rule 144 at the time it
wishes to sell the Consideration Shares and that, in such event, he may be
precluded from selling such stock under such Rule, even if the other
requirements of such Rule have been satisfied. The Principal Shareholder
acknowledges that, in the event all of the requirements of Rule 144 are not met,
registration under the Act, compliance with the SEC's Regulation A or an
exemption from registration will be required for any disposition of the
Consideration Shares. The Principal Shareholder understands that, although Rule
144 is not exclusive, the SEC has expressed its opinion that persons proposing
to sell restricted securities received in a private offering other than in a
registered offering or pursuant to Rule 144 will have a substantial burden of
proof in establishing that an exemption from registration is available for such
offers or sales and that such persons and the brokers who participate in the
transactions do so at their own risk.
3.9 Residency. The residency of the Principal Shareholder is the State of
California.
ARTICLE IV
Representations and Warranties of IEC
IEC represents and warrants to Netranscend and the Principal Shareholder,
subject to such exceptions as are specifically disclosed in the disclosure
schedule (referencing the appropriate section and paragraph numbers) supplied by
IEC to Netranscend and the Principal Shareholder and attached hereto as Exhibit
-------
E (the "IEC Disclosure Schedule") and dated the date hereof, that on the date
-
hereof and as of the Effective Time:
4.1 Organization of IEC. Each of IEC and Subsidiary (as defined in
Section 4.3 below) is a corporation duly organized, validly existing and in good
standing under the laws of the State of California and each has the requisite
corporate power and authority to carry on its business as presently conducted
and as presently proposed to be conducted. IEC is duly qualified to transact
business and is in good standing in the State of California and in each
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification in which the failure to be so qualified would
have a Material Adverse Effect. IEC has delivered a true and correct copy of
its Articles of Incorporation and Bylaws, each as amended to date, to
Netranscend. Section 4.1 of the Disclosure Schedule lists the directors and
-----------
officers of IEC. The operations now being conducted by IEC have not been
conducted under any other name.
4.2 IEC Capital Structure. As of Closing Date, the authorized capital
stock of the Company consists of forty million (40,000,000) shares of Common
Stock and two million (2,000,000) shares of Preferred Stock, all of which have
been designated as Series A Preferred Stock. Immediately prior to the Closing
there will be issued and outstanding 11,877,219 shares of Common Stock, and
1,174,020 shares of Series A Preferred Stock. As of the Closing Date, there
will be no outstanding rights, options, warrants, conversion rights or
agreements for the purchase or acquisition from the Company of any shares of its
capital stock, except that (a) an aggregate of 1,174,020 shares of Common Stock
will have been reserved for issuance upon the conversion of the Series A
Preferred Stock of the Company; (b) options to purchase 5,741,050 shares of
Common Stock are outstanding; (c) an aggregate of 942,704 shares of Common Stock
will have been reserved for issuance upon conversion of an existing promissory
note, (d) an aggregate of 200,000 shares of Series A Preferred Stock will have
been reserved for issuance upon exercise of an existing warrant to purchase
Series A Preferred Stock; and (e) an aggregate of 9,000,000 shares of Common
Stock will have been reserved for issuance upon exercise of options granted, or
to be granted, to employees, directors and/or consultants of the Company. The
outstanding shares of Common Stock are all duly and validly authorized and
issued, fully paid and nonassessable, and were issued in accordance with the
registration or qualification provisions of the Act and any relevant state
securities laws or pursuant to valid exemptions therefrom.
4.3 Subsidiaries. Except for MediaPlex, Inc., a California corporation,
("Subsidiary"), IEC does not have, and has never had, any subsidiaries or
affiliated companies and does not otherwise own, and has not otherwise owned,
any shares in the capital of or any interest in, or
control, directly or indirectly, any other corporation, partnership,
association, joint venture or other business entity. IEC is the record and
beneficial owner of all the outstanding capital stock of Subsidiary. There are
no options, warrants, calls, rights, commitments or agreements of any character,
written or oral, to which either IEC or Subsidiary is a party or by which it is
bound obligating Subsidiary to issue, deliver, sell, repurchase or redeem, or
cause to be issued, delivered, sold, repurchased or redeemed, any shares of
capital stock of Subsidiary or obligating Subsidiary to grant, extend,
accelerate the vesting of, change the price of, otherwise amend or enter into
any such option, warrant, call, right, commitment or agreement. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or other similar rights with respect to Subsidiary.
4.4 Authority. IEC has all requisite power and authority to enter into
this Agreement and any Related Agreements to which it is a party and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and any Related Agreements to which it is a party and
the consummation of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate action on the part of IEC, and no
further action is required on the part of IEC to authorize the Agreement, any
Related Agreements to which it is a party and the transactions contemplated
hereby and thereby, subject only to approval of the principal terms of the
Merger by IEC's shareholders. This Agreement and the Merger have been approved
by all members of the Board of Directors of IEC. This Agreement and any Related
Agreements to which IEC is a party have been duly executed and delivered by IEC
and, assuming the due authorization, execution and delivery by the other parties
hereto and thereto, constitute the valid and binding obligation of IEC,
enforceable in accordance with their respective terms, subject to the laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and to rules of law governing specific performance, injunctive relief or other
equitable remedies.
4.5 No Conflict. The execution and delivery of this Agreement and any
Related Agreements to which it is a party do not, and the consummation of the
transactions contemplated hereby and thereby will not, conflict with, or result
in any violation of, or default under (with or without notice or lapse of time,
or both), or give rise to a Conflict under (i) any provision of the Articles of
Incorporation and Bylaws of IEC, (ii) any Contract to which IEC or any of its
properties or assets are subject, or (iii) any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to IEC or its properties or
assets.
4.6 Consents. No consent, waiver, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Entity or any
third party, including a party to any Contract with IEC (so as not to trigger
any Conflict), is required by or with respect to IEC and no consent, waiver or
approval of any party to any Contract is required for such Contract to remain in
effect without modification in connection with the execution and delivery of
this Agreement and any Related Agreements to which IEC is a party or the
consummation of the transactions contemplated hereby and thereby, except for (i)
such consents, waivers, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable securities laws,
and (ii) the filing of the Certificate of Merger with the Secretary of State of
the State of California, and except that the consummation of the transactions
contemplated hereby requires the approval of the shareholders of IEC.
4.7 No Financial Statements. IEC has not prepared financial statements in
accordance with general accounting principles or otherwise for any previous
periods. Except as set forth in Section 4.7 of the Disclosure Schedule, neither
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IEC nor Subsidiary has any material liabilities, and neither has entered into
any material agreements, contracts or instruments other than those described or
contemplated hereby.
4.8 Tax Matters. Each of IEC and Subsidiary has filed when due all
federal, state, local and foreign tax returns required to be filed by it. Each
such tax return is true and complete in all materials respects and each of IEC
and Subsidiary has paid all taxes due under such returns. There is no action,
suit, proceeding, investigation, audit or claim now pending against or with
respect IEC or Subsidiary in respect of any tax or assessment, nor is any
additional tax or assessment asserted by any governmental authority. All taxes,
interest, penalties, assessments or deficiencies for periods prior to the
Closing Date have been paid in full except for taxes not yet due. The reserves
established on the books of IEC for taxes not yet due are adequate to satisfy
all liabilities for taxes not yet due.
4.9 Title to Property; Absence of Liens and Encumbrances. Except (a) for
liens for current taxes not delinquent, (b) for liens imposed by law and
incurred in the ordinary course of business for obligations not past due to
carriers, warehousemen, laborers, materialmen and the like, (c) for liens in
respect of pledges or deposits under workers' compensation laws or similar
legislation, (d) for minor defects in title, none of which, individually or in
the aggregate, materially interferes with the use of such property, each of IEC
and Subsidiary owns its property and assets free and clear of all mortgages,
liens, claims and encumbrances. With respect to the property and assets each
leases, IEC and Subsidiary are in compliance with such leases and, to the best
of IEC's knowledge, hold a valid leasehold interest free of any liens, claims,
or encumbrances, subject to clauses (a)-(d) above.
4.10 Intellectual Property. As of the Closing Date, to IEC's knowledge
(but without having conducted any special investigation or patent search), each
of IEC and Subsidiary will have sufficient title and ownership of all patents,
trademarks, service marks, trade names, copyrights, trade secrets, information,
proprietary rights and processes necessary for its respective business as now
conducted without any conflict with or infringement of the rights of others.
Neither IEC nor Subsidiary has received any communications alleging that IEC or
Subsidiary has violated or, by conducting its business as proposed, would
violate any of the patents, trademarks, service marks, trade names, copyrights
or trade secrets or other proprietary rights of any other person or entity.
Neither IEC nor Subsidiary is aware that any of its employees or consultants is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court of administrative agency, that would interfere with the use of his or
her best efforts to promote the interests of IEC or Subsidiary or that would
conflict with IEC's or Subsidiary's business as presently or as proposed to be
conducted. Neither the execution nor delivery of this Agreement, nor the
carrying on of IEC's or Subsidiary's business by the employees of IEC or
Subsidiary, nor the conduct of IEC's or Subsidiary's business as proposed, will,
to IEC's knowledge, conflict with or result in a breach of the terms, conditions
or provisions of, or constitute
a default under, any contract, covenant or instrument under which any of such
employees or consultants is now obligated.
4.11 Agreements, Contracts and Commitments. Neither IEC nor Subsidiary
is bound by any contract, agreement, lease or commitment other than (i)
contracts for the purchase of supplies and services that were entered into in
the ordinary course of business and that do not involve more than $50,000 and do
not extend for more than one (1) year beyond the date hereof, (ii) sales
contracts entered into in the ordinary course of business, and (iii) contracts
terminable at will by IEC or Subsidiary on no more than thirty (30) days' notice
without cost or liability to IEC or Subsidiary and that do not involve any
employment or consulting arrangement and are not material to the conduct of
IEC's or Subsidiary's business. For the purpose of this paragraph, employment
and consulting contracts, and license agreements and any other agreement
relating to IEC's or Subsidiary's acquisition or disposition of patent,
copyright, trade secret or other proprietary rights or technology (other than
standard end-user license agreements) shall not be considered to be contracts
entered into in the ordinary course of business.
4.12 Interested Party Transactions. No officer or director of IEC or
Subsidiary (nor, to the knowledge of IEC, any shareholder of IEC or Subsidiary
or any ancestor, sibling, descendant, spouse, parent, subsidiary or other
affiliate of any officer, director or shareholder, or any trust, partnership or
corporation in which any of such persons has or has had an interest), has or has
had, directly or indirectly, (i) any interest in any entity that furnished or
sold, or furnishes or sells, services, products or technology that IEC furnishes
or sells, or proposes to furnish or sell, or (ii) any interest in any entity
that purchases from or sells or furnishes to IEC any goods or services or (iii)
a beneficial interest in any Contract; provided, however, that ownership of no
more than one percent (1%) of the outstanding voting stock of a publicly traded
corporation and no more than 5% of the outstanding equity of any other entity
shall not be deemed an "interest in any entity" for purposes of this Section
4.12.
4.13 Governmental Authorization. Each consent, license, permit, grant or
other authorization issued to IEC or Subsidiary by a Governmental Entity (i)
pursuant to which IEC or Subsidiary currently operates or holds any interest in
any of its properties or (ii) which is required for the operation of its
business or the holding of any such interest (herein collectively called "IEC
Authorizations") is in full force and effect, and collectively the IEC
Authorizations constitute all IEC Authorizations required to permit IEC to
operate or conduct its business or hold any interest in its properties or
assets.
4.14 Litigation. There is no action, suit or proceeding of any nature
pending, or to IEC's knowledge threatened, against IEC or Subsidiary, its
properties or any of its officers or directors, nor, to the knowledge of IEC, is
there any reasonable basis therefor. There is no investigation pending or, to
IEC's knowledge threatened, against IEC or Subsidiary, its properties or any of
its officers or directors (nor, to the best knowledge of IEC, is there any
reasonable basis therefor) by or before any Governmental Entity. No
Governmental Entity has at any time challenged or questioned the legal right of
IEC to conduct its operations as presently or previously conducted.
4.15 Minute Books. The minute books of IEC delivered or made available to
counsel for Netranscend are the only minutes of IEC and contain a reasonably
accurate summary of all meetings of the Board of Directors (or committees
thereof) of IEC and its shareholders or actions by written consent since the
incorporation of IEC.
4.16 Environmental Matters. To the best knowledge of IEC, neither IEC nor
Subsidiary is in material violation of any applicable statute, law or regulation
relating to the environment or occupational safety and health, and to the best
knowledge of IEC, no material expenditures will be required in order to comply
with any such existing statute, law or regulation.
4.17 Brokers' and Finders' Fees. IEC has not incurred, nor will it incur,
directly or indirectly, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with this Agreement or any
transaction contemplated hereby.
4.18 Employee Benefit Plans and Compensation. Except for IEC 1999 Stock
Option Plan and the 1997 Stock Option Plan, neither IEC nor Subsidiary has any
Employee Benefit Plan as defined in the Employee Retirement Income Security Act
of 1974.
4.19 No Interference or Conflict. To the knowledge of IEC, no
shareholder, officer, employee or consultant of IEC is obligated under any
contract or agreement or subject to any judgment, decree or order of any court
or administrative agency, that would interfere with such person's efforts to
promote the interests of IEC or Subsidiary or that would interfere with IEC's or
Subsidiary's business. Neither the execution nor delivery of this Agreement, nor
the carrying on of IEC's or Subsidiary's business as presently conducted or
proposed to be conducted nor any activity of such officers, directors, employees
or consultants in connection with the carrying on of IEC's or Subsidiary's
business as presently conducted or proposed to be conducted, will, to IEC's
knowledge, conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract or agreement under
which any of such officers, directors, employees or consultants are currently
bound.
4.20 Compliance with Laws. Each of IEC and Subsidiary has complied with,
is not in violation of, and has not received any notices of any such violation
with respect to, any applicable federal, state or local statute, law or
regulation with respect to the conduct of its business, or the ownership or
operation of its business, assets or properties the non-compliance with which
would have a material adverse effect on IEC's or Subsidiary's business and
assets.
4.21 Warranties; Indemnities. Other than in the ordinary course of
business, neither IEC nor Subsidiary has given any warranties and indemnities
relating to products or technologies sold or services rendered by them.
4.22 Complete Copies of Materials. IEC has delivered or made available
true and complete copies of each document (or summaries of same) that has been
requested by Netranscend or its counsel.
4.23 Representations Complete. None of the representations or warranties
made by IEC herein (as modified by the Disclosure Schedule), nor any statement
made in any schedule or certificate furnished by IEC pursuant to this Agreement,
contains or will contain at the Effective Time, any untrue statement of a
material fact, or omits or will omit at the Effective Time to state any material
fact necessary in order to make the statements contained herein or therein, in
the light of the circumstances under which made, not misleading.
ARTICLE V
Conduct Prior to the Effective Time
5.1 Conduct of Business of Netranscend. During the period from the date
of this Agreement and continuing until the earlier of the termination of this
Agreement or the Effective Time, Netranscend and the Principal Shareholder agree
(except to the extent that IEC shall otherwise consent in writing), to carry on
Netranscend's business in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted, to pay it debts and Taxes
when due, to pay or perform other obligations when due, and, to the extent
consistent with such business, use all reasonable efforts consistent with past
practice and policies to preserve intact Netranscend's present business
organization, keep available the services of Netranscend's present officers and
employees and preserve Netranscend's relationships with customers, suppliers,
distributors, licensors, licensees, and others having business dealings with it,
all with the goal of preserving unimpaired Netranscend's goodwill and ongoing
business at the Effective Time. Netranscend shall promptly notify IEC of any
event or occurrence or emergency not in the ordinary course of business of
Netranscend, and any material event involving Netranscend. Except as expressly
contemplated by this Agreement, Netranscend shall not, without the prior written
consent of IEC (which shall not be unreasonably withheld):
(a) Sell, transfer, convey or enter into any license agreement with
respect to Netranscend Intellectual Property or acquire or enter into any
license agreement with respect to the Intellectual Property of any person;
(b) Transfer or license to any person any rights to Netranscend
Intellectual Property;
(c) Enter into or amend any Contract pursuant to which any other
party is granted marketing, distribution or similar rights of any type or scope
with respect to any products or technology of Netranscend;
(d) Amend or otherwise modify (or agree to do so), except in the
ordinary course of business, or violate the terms of, any of the Contracts set
forth or described in the Disclosure Schedule;
(e) Commence or settle any litigation;
(f) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock or property) in respect of any of its
capital stock, or 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 capital stock of Netranscend, or repurchase,
redeem or otherwise acquire, directly or indirectly, any shares of its capital
stock of Netranscend (or options, warrants or other rights exercisable
therefor), except that Netranscend may repurchase shares of Netranscend Capital
Stock at their original purchase price (provided that Netranscend notifies IEC
of such repurchase);
(g) Issue, grant, deliver or sell or authorize or propose the
issuance, grant, delivery or sale of, or purchase or propose the purchase of,
any shares of its capital stock or securities convertible into, or
subscriptions, rights, warrants or options to acquire, or other agreements or
commitments of any character obligating it to issue or purchase any such shares
or other convertible securities;
(h) Cause or permit any amendments to its Articles of Incorporation
or Bylaws;
(i) Acquire or agree to acquire by merging or consolidating with, or
by purchasing any assets or equity securities of, or by any other manner, any
business or any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree to acquire any
assets which are material, individually or in the aggregate, to its business;
(j) Sell, lease, license or otherwise dispose of any of its
properties or assets, except in the ordinary course of business and consistent
with past practices;
(k) Incur any indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt securities or guarantee any debt
securities of others;
(l) Grant any loans to others or purchase debt securities of others
or amend the terms of any outstanding loan agreement;
(m) Grant any severance or termination pay (i) to any director or
officer or (ii) to any other employee except payments made pursuant to standard
written agreements outstanding on the date hereof and disclosed on the
Disclosure Schedule;
(n) Waive any stock repurchase rights, accelerate, amend or change
the period of exercisability of options or restricted stock, or reprice options
granted under any option plans or authorize cash payments in exchange for any
options granted under any of such plans;
(o) Adopt or amend any employee benefit plan, or enter into any
employment agreement, pay or agree to pay any special bonus or special
remuneration to any director or employee, or increase the salaries or wage rates
of its employees;
(p) Revalue any of its assets, including without limitation writing
down the value of inventory or writing off notes or accounts receivable;
(q) Take any action which could jeopardize the tax-free
reorganization hereunder (it being understood that each party will evaluate the
tax consequences of the Merger independently);
(r) Pay, discharge or satisfy, in an amount in excess of $5,000 (in
any one case) or $15,000 (in the aggregate), any claim, liability or obligation
(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction in the ordinary course of business of
liabilities reflected or reserved against in the Current Balance Sheet;
(s) Make or change any material election in respect of Taxes, adopt
or change any accounting method in respect of Taxes, enter into any closing
agreement, settle any claim or assessment in respect of Taxes, or consent to any
extension or waiver of the limitation period applicable to any claim or
assessment in respect of Taxes;
(t) Enter into any strategic alliance or joint marketing arrangement
or agreement;
(u) Hire or terminate any employee, or encourage any employee to
resign;
(v) Enter into any commitment or transaction not in the ordinary
course of business or any commitment or transaction of the type described in
Section 2.9 hereof; or
(w) Take, or agree in writing or otherwise to take, any of the
actions described in Sections 5.1(a) through (v) above, or any other action that
would prevent Netranscend from performing or cause Netranscend not to perform
its covenants hereunder.
5.2 No Solicitation. Until 90 days after the date of this Agreement,
Netranscend and the Principal Shareholder will not (nor will Netranscend permit
any of Netranscend's officers, directors, agents, representatives or affiliates
to) directly or indirectly, take any of the following actions with any party
other than IEC and its designees: (a) solicit, conduct discussions with or
engage in negotiations with any person, relating to the possible acquisition of
Netranscend (whether by way of merger, purchase of capital stock, purchase of
assets or otherwise) or any portion of its or their capital stock or assets, or
effect any such transaction, (b) provide information with respect to Netranscend
to any person, other than IEC, relating to the possible acquisition of
Netranscend (whether by way of merger, purchase of capital stock, purchase of
assets or otherwise) or any portion of its or their capital stock or assets, (c)
enter into an agreement with any person, other than IEC, providing for the
acquisition of Netranscend (whether by way of merger, purchase of capital stock,
purchase of assets or otherwise) or any portion of its or their capital stock or
assets or (d) make or authorize any statement, recommendation or solicitation in
support of any possible acquisition of
Netranscend or any of it subsidiaries (whether by way of merger, purchase of
capital stock, purchase of assets or otherwise) or any material portion of its
or their capital stock or assets by any person, other than by IEC. In addition
to the foregoing, if Netranscend receives prior to the Effective Time or the
termination of this Agreement any offer or proposal relating to any of the
above, Netranscend shall immediately notify IEC thereof, including information
as to the identity of the offeror or the party making any such offer or proposal
and the specific terms of such offer or proposal, as the case may be, and such
other information related thereto as IEC may reasonably request.
ARTICLE VI
Additional Agreements
6.1 Shareholder Approval. As promptly as practicable, Netranscend shall
submit this Agreement and the transactions contemplated hereby, including the
Merger, to the Principal Shareholder for approval and adoption as provided by
California Law and Netranscend's Articles of Incorporation and Bylaws.
6.2 Restrictions on Transfer
(a) Each certificate representing Consideration Shares, and any
shares issued or issuable in respect of any such shares upon any stock split,
stock dividend, recapitalization, or similar event, shall be stamped or
otherwise imprinted with legends in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT. THE TRANSFER RESTRICTIONS APPLICABLE
TO THESE SHARES ARE BINDING ON TRANSFEREES OF THESE SHARES.
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY ALSO BE SUBJECT TO A
STANDSTILL AGREEMENT IN CONNECTION WITH ANY INITIAL PUBLIC STOCK
OFFERING OF THE ISSUER. COPIES OF SUCH AGREEMENT ARE ON FILE AT THE
PRINCIPAL OFFICE OF THE ISSUER AND WILL BE FURNISHED UPON REQUEST TO
THE REGISTERED HOLDER HEREOF.
(b) The certificates evidencing the Consideration Shares shall also
bear any legend required by the Commissioner of Corporations of the State of
California or such as are required pursuant to any state, local or foreign law
governing such securities.
(c) The Consideration Shares will not be registered under the Act.
(d) The Principal Shareholder shall, if requested by IEC and an
underwriter of Common Stock (or other securities) of IEC in connection with
IEC's initial public stock offering, enter into an agreement not to sell or
otherwise transfer or dispose of any shares of capital stock (or other
securities) of IEC held by the Principal Shareholder during a period of time
determined by IEC and its underwriters (not to exceed 180 days) following the
effective date of the registration statement of IEC filed pursuant to the Act
relating to such public offering. Such agreement shall be in writing in a form
reasonably satisfactory to IEC and such underwriter. IEC may impose stop-
transfer instructions with respect to the Common Stock (or securities) subject
to the foregoing restriction until the end of said period.
6.3 Access to Information.
(a) Access by IEC. Netranscend shall afford IEC and its accountants,
counsel and other representatives reasonable access during normal business hours
during the period prior to the Effective Time to (a) all of Netranscend's
properties, books, contracts, commitments and records, (b) all other information
concerning the business, properties and personnel (subject to restrictions
imposed by applicable law) of Netranscend as IEC may reasonably request and (c)
all key employees of Netranscend, as determined by IEC. Netranscend agrees to
provide to IEC and its accountants, counsel and other representatives copies of
internal financial statements promptly upon request. Netranscend shall provide
IEC with copies of such information about Netranscend as IEC may reasonably
request and shall provide IEC with reasonable access to its executive officers
in this regard.
(b) Access by Netranscend. IEC shall afford Netranscend and its
accountants, counsel and other representatives reasonable access during normal
business hours during the period prior to the Effective Time to (a) all of IEC's
properties, books, contracts, commitments and records, (b) all other information
concerning the business, properties and personnel (subject to restrictions
imposed by applicable law) of IEC as Netranscend may reasonably request and (c)
all key employees of IEC, as determined by Netranscend. IEC agrees to provide
to Netranscend and its accountants, counsel and other representatives copies of
internal financial statements promptly upon request. IEC shall provide
Netranscend with copies of such information about IEC as Netranscend may
reasonably request and shall provide Netranscend with reasonable access to its
executive officers in this regard.
(c) No Modification. No information or knowledge obtained in any
investigation pursuant to this Section 6.3 shall affect or be deemed to modify
any representation or warranty contained herein or the conditions to the
obligations of the parties to consummate the Merger.
6.4 Confidentiality. Each of the parties hereto hereby agrees that the
information obtained in any investigation pursuant to Section 6.3, or pursuant
to the negotiation and execution of this Agreement or the effectuation of the
transactions contemplated hereby, shall be treated by the party receiving it as
confidential; provided, however, that the foregoing shall not apply to
information or knowledge which (a) a party can demonstrate was already lawfully
in its possession prior to the disclosure thereof by the other party, (b) is
generally known to the public and did not become so known through any violation
of law, (c) became known to the public through no fault of
such party, (d) is later lawfully acquired by such party from other sources, (e)
is required to be disclosed by order of court or government agency without
subpoena powers or (f) which is disclosed in the course of any litigation
between any of the parties hereto.
6.5 Expenses. Whether or not the Merger is consummated, all fees and
expenses incurred in connection with the Merger including, without limitation,
all legal, accounting, financial advisory, consulting and all other fees and
expenses of third parties ("Third Party Expenses") incurred by a party in
connection with the negotiation and effectuation of the terms and conditions of
this Agreement and the transactions contemplated hereby, shall be the obligation
of the respective party incurring such fees and expenses. Notwithstanding the
foregoing, if the Merger is consummated, IEC shall pay up to $25,000 of
Netranscend's reasonable, customary and documented Third Party Expenses at the
Closing, and if Netranscend terminates this Agreement pursuant to Section
9.1(e), IEC shall pay up to $10,000 of Netranscend's reasonable, customary and
documented Third Party Expenses within ninety (90) days of written demand
therefor.
6.6 Public Disclosure. Unless otherwise required by law, and as
necessary in connection with any IEC financing prior to the Effective Time, no
disclosure (whether or not in response to an inquiry) of the subject matter of
this Agreement shall be made by any party hereto unless approved by IEC and
Netranscend prior to release; provided, however, that such approval shall not be
unreasonably withheld.
6.7 Consents. Netranscend and the Principal Shareholder shall use best
efforts to obtain the consents, waivers and approvals under any of the Contracts
as may be required in connection with the Merger (all of such consents, waivers
and approvals are set forth in Disclosure Letter) so as to preserve all rights
of, and benefits to, Netranscend thereunder.
6.8 FIRPTA Compliance. On the Closing Date, Netranscend shall deliver to
IEC a properly executed statement in a form reasonably acceptable to IEC for
purposes of satisfying IEC's obligations under Treasury Regulation Section
1.1445-2(c)(3).
6.9 Reasonable Efforts. Subject to the terms and conditions provided in
this Agreement, each of the parties hereto shall use commercially reasonable
efforts to take promptly, or cause to be taken, all actions, and to do promptly,
or cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated hereby, to obtain all necessary waivers, consents and approvals and
to effect all necessary registrations and filings (including any filings or
registrations necessary to perfect IEC's ownership of any of Netranscend
Registered Intellectual Property after the Merger) and to remove any injunctions
or other impediments or delays, legal or otherwise, in order to consummate and
make effective the transactions contemplated by this Agreement for the purpose
of securing to the parties hereto the benefits contemplated by this Agreement;
provided, however, that IEC shall not be required to agree to any divestiture by
IEC or Netranscend or any of IEC's subsidiaries or affiliates of shares of
capital stock or of any business, assets or property of IEC or its subsidiaries
or affiliates or of Netranscend, its affiliates, or the imposition of any
material limitation on the ability of any of them to conduct their businesses or
to own or exercise control of such assets, properties and stock.
6.10 Notification of Certain Matters. Netranscend and the Principal
Shareholder shall give prompt notice to IEC, and IEC shall give prompt notice to
Netranscend, of (i) the occurrence or non-occurrence of any event, the
occurrence or non-occurrence of which is likely to cause any representation or
warranty of Netranscend and IEC, respectively, contained in this Agreement to be
untrue or inaccurate at or prior to the Effective Time and (ii) any failure of
Netranscend or IEC, as the case may be, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section 6.10
shall not limit or otherwise affect any remedies available to the party
receiving such notice. No disclosure by Netranscend pursuant to this Section
6.10 shall be deemed to amend or supplement the Disclosure Schedule or prevent
or cure any misrepresentation, breach of warranty or breach of covenant.
6.11 Additional Documents and Further Assurances. Each party hereto, at
the request of another party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be reasonably
necessary or desirable for effecting completely the consummation of the
transactions contemplated hereby.
6.12 Tax Free Reorganization. The parties intend to adopt this Agreement
and the Merger as a tax-free plan of reorganization under Section 368(a) of the
Code. The parties shall not take a position on any tax return inconsistent with
this Section 6.12. Neither IEC nor Netranscend shall take any action that could
reasonably be expected to cause the Merger not to be treated as a reorganization
within the meaning of Section 368 of the Code.
6.13 Employee Offers. At or prior to the Closing, IEC shall deliver
offers (the "Key Employee Offers") to the Principal Shareholder, Xxxxxxxx Xxx
and Xxxx-Xxxxx "Xxxx" Xxxx (collectively, the "Key Employees") for employment
and/or consulting arrangements with IEC, substantially as set forth in Exhibits
--------
F, G and H attached hereto.
- - -
ARTICLE VII
Conditions to the Merger
7.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) Shareholder Approval. This Agreement and the transactions
contemplated hereby, including without limitation the Merger hereof, shall have
been duly approved, under applicable law by holders of 100% of the shares
Netranscend Capital Stock. This Agreement and the transactions contemplated
hereby, including without limitation the Merger shall have been approved by
requisite vote under applicable law by shareholders of IEC.
(b) No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger shall be in effect, nor shall any
proceeding brought by an administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, seeking any of
the foregoing be pending; nor shall there be any action taken, or any statute,
rule, regulation or order enacted, entered, enforced or deemed applicable to the
Merger, which makes the consummation of the Merger illegal.
(c) Claims. There shall not have occurred any suit, claim or
proceeding of any nature pending, or overtly threatened, against IEC or
Netranscend, their respective properties or any of their officers or directors,
arising out of, or in any way connected with, the Merger or the other
transactions contemplated by the terms of this Agreement.
(d) Permits. All approvals from government authorities, including
any requisite Blue Sky approvals, which are appropriate or necessary for the
consummation of the Merger, shall have been obtained.
7.2 Additional Conditions to Obligations of Netranscend and the Principal
Shareholder. The obligations of Netranscend and the Principal Shareholder to
consummate and effect this Agreement and the transactions contemplated hereby
shall be subject to the satisfaction at or prior to the Effective Time of each
of the following conditions, any of which may be waived, in writing, exclusively
by Netranscend:
(a) Consideration Shares. The Principal Shareholder shall have
received from IEC a certificate representing the Consideration Shares, less the
Escrow Shares, and the Escrow Agent shall have received a certificate
representing the Escrow Shares, issued in the name of the Principal Shareholder,
pursuant to Section 1.6 and Section 1.7.
(b) Employment Offers. The Key Employees shall have received offers
of employment or consulting arrangements from IEC, substantially in the form of
Exhibits F, G and H hereto, pursuant to Section 6.14.
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(c) Stock Option Agreements. The holders of Netranscend Options
shall have received stock option agreements representing options to purchase
shares of IEC Common Stock, pursuant to IEC's 1999 Stock Option Plan, pursuant
to Section 1.6.
(d) Representations, Warranties and Covenants. The representations
and warranties of IEC in this Agreement shall be true and correct in all
material respects at and as of the Effective Time as though such representations
and warranties were made at and as of such time and IEC shall have performed and
complied in all material respects with all covenants and obligations of this
Agreement required to be performed and complied with by it as of the Effective
Time.
(e) No Material Adverse Effect. There shall not have occurred any
Material Adverse Effect with respect to IEC since December 31, 1998.
(f) Legal Opinion. Netranscend shall received a legal opinion from
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, legal counsel to
IEC, in substantially the form of Exhibit B hereto.
---------
(g) Certificate of IEC. Netranscend shall have been provided with a
certificate executed on behalf of IEC by the Chief Executive Officer or an
Executive Vice President of IEC to the effect that, as of the Effective Time:
(i) all representations and warranties made by IEC in this
Agreement are true and correct in all material respects as of the Effective Time
as though made on and as of such time;
(ii) all covenants and obligations of this Agreement to be
performed by IEC on or before such date have been so performed in all material
respects.
(iii) the condition set forth in Section 7.2 (e) has been
satisfied.
(h) Good Standing Certificate. Netranscend shall have been provided
with a certificate dated as of the most recent practicable date prior to the
Closing Date issued by the Secretary of State of the State of California to the
effect that IEC is qualified and in good standing.
7.3 Additional Conditions to the Obligations of IEC. The obligations of
IEC to consummate and effect this Agreement and the transactions contemplated
hereby shall be subject to the satisfaction at or prior to the Effective Time of
each of the following conditions, any of which may be waived, in writing,
exclusively by IEC:
(a) Netranscend Share Certificates. IEC shall have received
certificates representing all of the issued and outstanding shares of
Netranscend Capital Stock, endorsed in blank or accompanied by stock powers or
other instruments of transfer duly executed, pursuant to Section 1.6.
(b) Netranscend Options. IEC shall have received stock option
agreements representing all of the issued and outstanding Netranscend Options,
duly canceled by Netranscend and the holder of such option.
(c) Acceptance of Key Employee Offers. The Key Employees shall have
accepted employment with IEC and executed and delivered to IEC their respective
employment offer or employment agreement, substantially in the form set forth in
Exhibits F, G and H hereto.
---------- - -
(d) Representations, Warranties and Covenants. The representations
and warranties of Netranscend and the Principal Shareholder in this Agreement
shall be true and correct in all material respects on and as of the Effective
Time as though such representations and warranties were made on and as of the
Effective Time and Netranscend and the Principal Shareholder shall have
performed and complied in all material respects with all covenants and
obligations of this Agreement
required to be performed and complied with by them as of the Effective Time. The
representations and warranties of Netranscend and the Principal Shareholder
relating to litigation and third party claims contained in Article II hereof
shall not be materially incorrect at the Effective Time if a litigation or third
party claim arises after the date of this Agreement and a person knowledgeable
both as to the law and the facts surrounding such litigation or third party
claim reasonably determines that such litigation or third party claim arising
after the date of this Agreement is not bona fide or could not be considered
material to Netranscend.
(e) Third Party Consents. Any and all consents, waivers, and
approvals listed in the Disclosure Letter shall have been obtained.
(f) Legal Opinion. IEC shall have received a legal opinion from
Xxxxxx Xxxxxx White & XxXxxxxxx, legal counsel to Netranscend, in substantially
the form of Exhibit C hereto.
---------
(g) No Material Adverse Effect. There shall not have occurred any
Material Adverse Effect with respect to Netranscend since December 31, 1998.
(h) Shareholder Approval. Netranscend Shareholders holding 100% of
Netranscend Capital Stock shall have approved this Agreement and the Merger.
(i) Certificate of Netranscend. IEC shall have been provided with a
certificate executed on behalf of Netranscend by its Chief Executive Officer to
the effect that, as of the Effective Time:
(i) all representations and warranties made by Netranscend
in this Agreement are true and correct in all material respects as of the
Effective Time as though made on and as of such time;
(ii) all covenants and obligations of this Agreement to be
performed by Netranscend on or before such date have been so performed in all
material respects; and
(iii) the provisions set forth in Section 7.3 (e), (f), (h),
(i) and (j) have been satisfied.
(j) Certificate of the Principal Shareholder. IEC shall have been
provided with a certificate created by the Principal Shareholder to the effect
that, as of the Effective Time, all representations and warranties made by the
Principal Shareholder in this Agreement are true and correct in all material
respects as of the Effective Time as though made on and as of such time.
(k) Good Standing Certificate. IEC shall have been provided with a
certificate dated as of the most recent practicable date prior to the Closing
Date issued by the Secretary of State of the State of California to the effect
that Netranscend is qualified and in good standing.
(l) Certificate of Satisfaction. IEC shall have been provided with
certificate of satisfaction prior to the Closing Date issued by the Franchise
Tax Board of the State of California to the effect that all corporate taxes
imposed by law have been paid or secured.
(m) Escrow Agreement. The Principal Shareholder shall have executed
and delivered to IEC the Escrow Agreement.
(n) Agreement of Merger. Netranscend shall have executed and
delivered to IEC the Merger Agreement.
ARTICLE VIII
Survival of Representations and Warranties; Escrow
8.1 Survival of Representations and Warranties. All of Netranscend's and
the Principal Shareholder's representations and warranties in this Agreement or
in any instrument delivered pursuant to this Agreement shall survive the Merger
and continue for two (2) years after the Closing Date, except for the
representations and warranties set forth in Section 2.10 hereof, which shall
survive until expiration of the statute of limitations with respect thereto.
8.2 Indemnification.
(a) Indemnification of Losses. Netranscend and the Principal
Shareholder agree to indemnify and hold IEC and its officers, directors and
affiliates (the "Indemnified Parties") harmless against all claims, losses,
liabilities, damages, deficiencies, costs and expenses, including reasonable
attorneys' fees and expenses of investigation and defense (hereinafter
individually a "Loss" and collectively "Losses") incurred by IEC, its officers,
directors, or affiliates (including the Surviving Corporation) directly or
indirectly as a result of (i) any inaccuracy or breach of a representation or
warranty of Netranscend or the Principal Shareholder contained in this
Agreement, (ii) any failure by Netranscend or the Principal Shareholder to
perform or comply with any covenant contained in this Agreement or (iii) IEC's
or the Surviving Corporation's obligations pursuant to this Agreement.
(b) Claims Against the Escrow Fund. Claims against the Escrow Fund
(as defined below) shall be the primary but not the sole remedy against the
Principal Shareholder for indemnity obligations under this Agreement. Except in
the case of fraud or willful breaches ("Fraudulent Breaches"), claims for
indemnity shall be made on or before the 30th day following the two year
anniversary of the Closing Date. Amounts of IEC Common Stock received out of
escrow will be valued as of the time that the claim is made, with such fair
market value being determined in good faith by the Board of Directors of IEC.
Except in the case of Fraudulent Breaches, claims for indemnity shall be limited
to $150,000 in the aggregate.
8.3 Escrow Arrangements.
As security for the indemnity provided for in Section 8.2 hereof and by
virtue of this Agreement and the Merger Agreement, the Principal Shareholder
will be deemed to have received and deposited with the Escrow Agent (as defined
below) the Escrow Amount (plus any additional shares as may be issued upon any
stock split, stock dividend or recapitalization effected by IEC after the
Effective Time with respect to the Escrow Amount) without any act of Netranscend
or the Principal Shareholder. As soon as practicable after the Effective Time,
the Escrow Amount, without any act of the Principal Shareholder, will be
deposited with the Secretary of IEC, as escrow agent (the "Escrow Agent"), such
deposit to constitute an escrow fund (the "Escrow Fund") to be governed by the
terms of the Escrow Agreement. Nothing herein shall limit the liability of IEC
or Netranscend for any breach of any representation, warranty, or covenant
contained in this Agreement if the Merger does not close. If the Merger does
not close, the Principal Shareholder shall not have any liability under this
Agreement except for breaches of covenants of such Principal Shareholder
contained in this Agreement and in any Related Agreement to which the Principal
Shareholder is a party.
8.4 Escrow Agreement. The terms and conditions of the Escrow Fund not
set forth in this Agreement shall be governed by the Escrow Agreement.
ARTICLE IX
Termination, Amendment and Waiver
9.1 Termination. Except as provided in, and subject to, Section 9.2
below, this Agreement may be terminated and the Merger abandoned at any time
prior to the Effective Time:
(a) by mutual consent of Netranscend and IEC;
(b) by IEC or Netranscend if: (i) the Effective Time has not occurred
by May 31, 1999; provided, however, that the right to terminate this Agreement
under this Section 9.1(b)(i) shall not be available to any party whose action or
failure to act has been a principal cause of or resulted in the failure of the
Merger to occur on or before such date and such action or failure to act
constitutes a breach of this Agreement; (ii) there shall be a final
nonappealable order of a federal or state court in effect preventing
consummation of the Merger; or (iii) there shall be any statute, rule,
regulation or order enacted, promulgated or issued or deemed applicable to the
Merger by any Governmental Entity that would make consummation of the Merger
illegal;
(c) by IEC if there shall be any action taken, or any statute, rule,
regulation or order enacted, promulgated or issued or deemed applicable to the
Merger by any Governmental Entity, which would: (i) prohibit IEC's ownership or
operation of any portion of the business of Netranscend or (ii) compel IEC to
dispose of or hold separate all or a portion of the business or assets of
Netranscend or IEC as a result of the Merger;
(d) by IEC if it is not in material breach of its obligations under
this Agreement and there has been a material breach of any representation,
warranty, covenant or agreement contained in this Agreement on the part of
Netranscend and such breach has not been cured within ten (10) calendar days
after written notice to Netranscend; provided, however, that, no cure period
shall be required for a breach which by its nature cannot be cured;
(e) by Netranscend if it is not in material breach of its obligations
under this Agreement and there has been a material breach of any representation,
warranty, covenant or agreement contained in this Agreement on the part of IEC
and such breach has not been cured within ten (10) calendar days after written
notice to IEC; provided, however, that, no cure period shall be required for a
breach which by its nature cannot be cured;
(f) by IEC if an event having a Material Adverse Effect on
Netranscend shall have occurred after the date of this Agreement.
(g) by Netranscend if an event having a Material Adverse Effect on
IEC shall have occurred after the date of this Agreement.
9.2 Effect of Termination. In the event of termination of this Agreement
as provided in Section 9.1, this Agreement shall forthwith become void and there
shall be no liability or obligation on the part of IEC, Netranscend, or their
respective officers, directors or shareholders, provided, however, that each
party shall remain liable for any breaches of this Agreement prior to its
termination; and provided, further, that the provisions of Sections 6.4, 6.5.
6.6, Article VIII and Article IX of this Agreement shall remain in full force
and effect and survive any termination of this Agreement.
9.3 Amendment. This Agreement may be amended by the parties hereto at
any time by execution of an instrument in writing signed on behalf of each of
the parties hereto.
9.4 Extension; Waiver. At any time prior to the Effective Time, IEC and
Netranscend may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations of the other party hereto, (ii) waive any
inaccuracies in the representations and warranties made to such party contained
herein or in any document delivered pursuant hereto, and (iii) waive compliance
with any of the agreements or conditions for the benefit of such party 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 X
General Provisions
10.1 Notices. Every notice, consent and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed given if
delivered personally or by commercial messenger or courier service, or mailed by
registered or certified mail (return receipt requested) or sent via facsimile
(with acknowledgment of complete transmission) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice), provided, however, that notices sent by mail will not be deemed
guaranteed received:
(a) if to IEC or the Escrow Agent, to:
Internet Extra Corporation
000 Xxxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(b) if to Netranscend or the Principal Shareholder, to:
Netranscend Software Inc.
000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: _________________
Attention: Ruiqing "Xxxxxxx" Jiang
with a copy to:
Xxxxxx Xxxxxx White & XxXxxxxxx
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
10.2 Interpretation. The words "include," "includes" and "including" when
used herein shall be deemed in each case to be followed by the words "without
limitation." The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.3 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
10.4 Entire Agreement; Assignment. This Agreement and the Exhibits
hereto, and the documents and instruments and other agreements among the parties
hereto referenced herein: (a) constitute the entire agreement among the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings both written and oral, among the parties with respect to the
subject matter hereof; (b) are not intended to confer upon any other person any
rights or remedies hereunder; and (c) shall not be assigned by operation of law
or otherwise except as otherwise specifically provided, except that IEC may
assign its rights and delegate its obligations hereunder to its affiliates.
10.5 Severability. In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to
replace such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
10.6 Other Remedies. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
10.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
Each of the parties hereto irrevocably consents to the exclusive jurisdiction
and venue of any federal or state court within the Northern District, State of
California, in connection with any matter based upon or arising out of this
Agreement or the matters contemplated herein, agrees that process may be served
upon them in any manner authorized by the laws of the State of California for
such persons and waives and covenants not to assert or plead any objection which
they might otherwise have to such jurisdiction, venue and such process.
10.8 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
IN WITNESS WHEREOF, IEC, Netranscend and the Principal Shareholder have
caused this Agreement to be signed by their duly authorized respective officers,
all as of the date first written above.
INTERNET EXTRA CORPORATION
a California corporation
By:______________________________________
Xxxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
NETRANSCEND SOFTWARE, INC.
a California corporation
By:______________________________________
Ruiqing "Xxxxxxx" Jiang
PRINCIPAL SHAREHOLDER
Ruiqing "Xxxxxxx" Jiang
an individual
_________________________________________
INDEX OF EXHIBITS
Exhibit Description
------- -----------
Exhibit A Form of California Agreement of Merger
Exhibit B Form of Legal Opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
Professional Corporation
Exhibit C Form of Legal Opinion of Heller, Ehrman, White & XxXxxxxxx
Exhibit D Disclosure Schedule of Netranscend
Exhibit E Disclosure Schedule of IEC
Exhibit F Form of Employment Agreement - Ruiqing "Xxxxxxx" Xxxxx
Exhibit G Form of Consulting Agreement - Xxxxxxxx Xxx
Exhibit H Form of Employment Offer - Xxxx-Xxxxx "Xxxx" Xxxx
Exhibit I Form of Escrow Agreement
EXHIBIT A
---------
Form of Agreement of Merger
AGREEMENT OF MERGER
BY AND AMONG
INTERNET EXTRA CORPORATION
AND
NETRANSCEND SOFTWARE, INC.
This Agreement of Merger (the "Agreement") is made and entered into as of
February ___, 1999, by and between Internet Extra Corporation, a California
corporation ("IEC"), and Netranscend Software, Inc., a California corporation
("Netranscend" and together with IEC, the "Constituent Corporations").
RECITALS
WHEREAS, IEC, Netranscend and Ruiqing "Xxxxxxx" Jiang, the sole shareholder
of Netranscend (the "Principal Shareholder"), have entered into that certain
Agreement and Plan of Reorganization of even date herewith (the "Reorganization
Agreement"), providing, among other things, for the execution and filing of this
Agreement of Merger and the merger of Netranscend with and into IEC upon the
terms set forth in the Reorganization Agreement and this Agreement (the
"Merger");
WHEREAS, the respective Boards of Directors of each of the Constituent
Corporations deem it advisable and in the best interests of each of such
corporations and their respective shareholders that Netranscend be merged with
and into IEC and have approved this Agreement and the Merger;
WHEREAS, the Reorganization Agreement, this Agreement and the Merger have
been approved by the shareholders of IEC and Netranscend;
NOW, THEREFORE, in consideration of the mutual agreements and covenants set
forth herein, each of the Constituent Corporations hereby agrees that
Netranscend shall be merged with and into IEC in accordance with the
Reorganization Agreement and the provisions of the laws of the State of
California, upon the terms and subject to the conditions set forth as follows:
ARTICLE I
THE CONSTITUENT CORPORATIONS
1.1 IEC. IEC is a corporation duly organized and existing under the laws
---
of the State of California and, as of the date of this Agreement, has an
authorized capital of forty-two million
(42,000,000) shares, forty million (40,000,000) of which are designated "Common
Stock," no par value, 12,860,539 of which are issued and outstanding, and two
million (2,000,000) of which are designated "Preferred Stock," no par value, all
of which are designated Series A Preferred Stock, 1,206,000 of which are issued
and outstanding as of the date hereof. IEC was incorporated under the laws of
the State of California on September 9, 1996.
1.2 Netranscend. Netranscend is a corporation duly organized and existing
-----------
under the laws of the State of California and has an authorized capital of ten
million (10,000,000) shares, all of which are designated "Common Stock," no par
value, three million (3,000,000) of which are issued and outstanding, all of
which are held by the Principal Shareholder, and none of which are designated
"Preferred Stock." Netranscend was incorporated under the laws of the State of
California on November 25, 1996.
ARTICLE II
THE MERGER
2.1 The Merger. At the Effective Time (as defined in Section 2.2) and
----------
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of the General Corporation Law of the State of California
("California Law"), Netranscend shall be merged with and into IEC, the separate
corporate existence of Netranscend shall cease and IEC shall continue as the
surviving corporation. The surviving corporation after the Merger is hereinafter
sometimes referred to as the "Surviving Corporation."
2.2 Filing and Effectiveness. This Agreement, together with the officers'
------------------------
certificates of each of the Constituent Corporations required by California Law
(the "Officers' Certificates"), shall be filed with the Secretary of State of
the State of California at the time specified in the Reorganization Agreement.
The Merger shall become effective upon the filing of this Agreement and the
Officers' Certificates with the Secretary of State of the State of California
(the "Effective Time").
2.3 Effect of the Merger. At the Effective Time, the effect of the Merger
--------------------
shall be as provided in the applicable provisions of California Law. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all the property, rights, privileges, powers and franchises of IEC and
Netranscend shall vest in the Surviving Corporation, and all debts, liabilities
and duties of IEC and Netranscend shall become the debts, liabilities and duties
of the Surviving Corporation.
2.4 Articles of Incorporation and Bylaws. At the Effective Time, the
------------------------------------
Articles of Incorporation and Bylaws of IEC in effect immediately prior to the
Effective Time shall be the Articles of Incorporation and Bylaws, respectively,
of the Surviving Corporation.
2.5 Directors and Officers. The directors of IEC immediately prior to the
----------------------
Effective Time shall be the directors of the Surviving Corporation, each to hold
office in accordance with the Articles of Incorporation and Bylaws of the
Surviving Corporation. The officers of IEC
immediately prior to the Effective Time shall be the officers of Surviving
Corporation, each to hold office in accordance with the Bylaws of the Surviving
Corporation.
2.6 Effect of Merger on the Capital Stock of Netranscend.
----------------------------------------------------
(a) Certain Definitions. For all purposes of this Agreement, the
-------------------
following terms shall have the following meanings:
"Cash Consideration" shall mean cash in the amount of $430,000,
payable to the Principal Shareholder in four installments as specified in
Section 2.7(b) hereof.
"Closing Date" shall mean the date on which the closing of the
Merger occurs.
"Consideration" shall mean the Cash Consideration and the
Consideration shares.
"Consideration Shares" shall mean 1,979,000 shares of IEC Common
Stock.
"IEC Common Stock" shall mean shares of Common Stock, no par
value, of IEC.
"Netranscend Shares" shall mean shares of Netranscend Common
Stock, and shares of any other capital stock of Netranscend.
"Netranscend Common Stock" shall mean shares of common stock of
Netranscend.
"Netranscend Options" shall mean all issued and outstanding
options to purchase or otherwise acquire Netranscend Capital Stock (whether or
not vested) held by employees or directors of or consultants to Netranscend.
2.7 Effect of Merger on the Capital Stock of Netranscend. Subject to
----------------------------------------------------
the terms and conditions of this Agreement, as of the Effective Time, by virtue
of the Merger and without any action on the part of IEC, Netranscend or the
Principal Shareholder immediately prior to the Effective Time, the following
shall occur:
(a) Conversion of Netranscend Capital Stock. At and as of the
---------------------------------------
Effective Time, all Netranscend Shares shall be converted into the right to
receive, in aggregate, the Consideration. No Netranscend Capital Stock shall be
deemed to be outstanding after the Effective Time.
(b) Procedure for Payment. At the Effective Time, the Principal
---------------------
Shareholder will deliver a certificate or certificates representing all issued
and outstanding Netranscend Shares to IEC, endorsed in blank or accompanied by
stock powers or other instruments of transfer executed by such Principal
Shareholder. With respect to the Consideration Shares portion of the
Consideration, immediately after the Effective Time, IEC shall (a) deliver to
the Principal Shareholder a certificate or certificates bearing the legend set
forth in Section 2.7(d) hereof representing 1,679,000 shares of IEC Common Stock
and (b) deliver to the Secretary of IEC, as escrow agent (the "Escrow Agent") a
certificate bearing the legend set forth in Section 2.7(d) hereof representing
300,000 shares of IEC Common Stock (the "Escrow Shares") to be deposited into an
escrow fund, pursuant to the terms and conditions set forth in Article VIII and
the Escrow Agreement, of even date herewith, by and between IEC and the
Principal Shareholder. With respect to the Cash Consideration portion of the
Consideration, IEC shall pay the Cash Consideration to the Principal Shareholder
in four installments, as follows: (i) $110,000 on the one-year anniversary of
the Closing Date; (ii) $110,000 on the two-year anniversary of the Closing Date;
(iii) $100,000 on the three-year anniversary of the Closing Date; and (iv)
$110,000 on the four-year anniversary of the Closing Date.
(c) Company Stock Options.
---------------------
(i) Conversion of Netranscend Options. At the Effective Time,
---------------------------------
each outstanding Netranscend Option shall be canceled by Netranscend in
connection with the Merger. IEC shall grant options to purchase IEC Common Stock
for each Netranscend Option so canceled by Netranscend under this Agreement
which shall be subject to the terms and conditions of the IEC 1999 Stock Option
Plan (the "IEC Plan"), shall have an option exercise price of $0.50 per share
and shall be fully vested and exercisable at the Effective Time. Each
Netranscend Option will be exercisable for the same number of shares of IEC
Common Stock as the number of shares of Netranscend Common Stock that were
issuable upon exercise of such Netranscend Option immediately prior to the
Effective Time.
(ii) Notice of Issuance. Promptly following the Effective Time,
------------------
IEC will issue to each holder of an outstanding Netranscend Option a stock
option agreement evidencing the foregoing conversion of such Netranscend Option
by IEC.
(d) Legends.
-------
(i) Each certificate representing Consideration Shares, and any
shares issued or issuable in respect of any such shares upon any stock split,
stock dividend, recapitalization, or similar event, shall be stamped or
otherwise imprinted with legends in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SHARES REPRESENTED
BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT. THE
TRANSFER RESTRICTIONS APPLICABLE TO THESE SHARES ARE BINDING ON
TRANSFEREES OF THESE SHARES.
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY ALSO BE SUBJECT TO A
STANDSTILL AGREEMENT IN CONNECTION WITH ANY INITIAL PUBLIC STOCK
OFFERING OF THE ISSUER. COPIES OF SUCH AGREEMENT ARE ON FILE AT THE
PRINCIPAL OFFICE OF THE ISSUER AND WILL BE FURNISHED UPON REQUEST TO
THE REGISTERED HOLDER HEREOF.
(ii) The certificates evidencing the Consideration Shares shall
also bear any legend required by the Commissioner of Corporations of the State
of California or such as are required pursuant to any state, local or foreign
law governing such securities.
2.8 No Further Ownership Rights in Netranscend Capital Stock. The shares
--------------------------------------------------------
of IEC Common Stock issued in accordance with the terms hereof shall be deemed
to be full satisfaction of all rights pertaining to shares of Netranscend
Capital Stock outstanding prior to the Effective Time, and there shall be no
further registration of transfers on the records of Netranscend or the Surviving
Corporation of shares of Netranscend Capital Stock that were outstanding prior
to the Effective Time.
2.9 Effect of Merger on the Capital Stock of IEC. Each share of IEC
--------------------------------------------
capital stock issued and outstanding as of the Effective Time shall remain
issued and outstanding.
2.10 Tax Consequences. It is intended by the parties hereto that the
----------------
Merger shall constitute a reorganization within the meaning of Section 368 of
the Code. The parties hereto adopt this Agreement as a "plan of reorganization"
within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States
Income Tax Regulations. Each party has consulted with its own tax advisers with
respect to the tax consequences of the Merger.
2.11 Taking of Necessary Action; Further Action. If, at any time after the
------------------------------------------
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of Netranscend and IEC, the officers and directors of Netranscend
and IEC are fully authorized in the name of their respective corporations or
otherwise to take, and will take, all such lawful and necessary action.
ARTICLE III
MISCELLANEOUS
3.1 Termination by Mutual Agreement. Notwithstanding the approval of this
-------------------------------
Agreement by the shareholders of IEC and Netranscend, this Agreement may be
terminated at any time prior to the Effective Time by mutual agreement of the
Board of Directors of IEC and Netranscend.
3.2 Termination of Agreement and Plan of Reorganization. Notwithstanding
---------------------------------------------------
the approval of this Agreement by the shareholders of IEC and Netranscend, this
Agreement shall terminate forthwith in the event that the Reorganization
Agreement shall be terminated as therein provided.
3.3 Amendment. This Agreement may be amended by the parties hereto at any
---------
time before or after approval hereof by the shareholders of either Netranscend
or IEC, but, after any such approval, no amendment will be made which, under the
applicable provisions of California Law, requires the further approval of
shareholders without obtaining such further approval. This
Agreement shall not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
3.4 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one agreement.
3.5 Governing Law. This Agreement shall be governed in all respects,
-------------
including validity, interpretation and effect by the laws of the State of
California.
IN WITNESS WHEREOF, IEC and Netranscend have caused this Agreement to be
signed by their duly authorized respective officers, all as of the date first
written above.
INTERNET EXTRA CORPORATION
a California corporation
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx
Secretary
NETRANSCEND SOFTWARE, INC.
a California corporation
By: /s/ Ruiquing "Xxxxxxx" Jiang
--------------------------------
Ruiqing "Xxxxxxx" Jiang
President
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Xxxxx X. Xxxxxxxxx
Secretary
[SIGNATURE PAGE TO AGREEMENT OF MERGER]
EXHIBIT B
---------
Form of Legal Opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional
Corporation
[LETTERHEAD OF XXXXXX XXXXXXX XXXXXXXX & XXXXXX APPEARS HERE]
March 23, 1999
Netranscend Software, Inc.
000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Re: Agreement and Plan of Reorganization
Ladies and Gentlemen:
We have acted as counsel to Internet Extra Corporation, a California
corporation ("IEC"), in connection with the merger (the "Merger") of
Netranscend Software, Inc., a California corporation ("Netranscend"), with
and into IEC pursuant to an Agreement and Plan of Reorganization, of even
date herewith (the "Reorganization Agreement"), by and among IEC, Netranscend
and Ruiqing "Xxxxxxx" Jiang, the sole shareholder of Netranscend (the
"Principal Shareholder") and the Agreement of Merger between IEC and
Netranscend, of even date herewith, and the related officers' certificates
(collectively, the "Merger Agreement" and together with the Reorganization
Agreement, the "Agreements"). This opinion is furnished to you pursuant to
Section 7.2(f) of the Reorganization Agreement. Unless otherwise specified
herein, the capitalized terms used in this opinion have the meaning given to
them in the Reorganization Agreement.
We have acted as counsel for the IEC in connection with the
negotiation of the Agreements and the effectuation of the Merger. As such
counsel, we have made such legal and factual examinations and inquiries as we
have deemed advisable or necessary for the purposes of rendering this
opinion. In addition, we have examined originals or copies of documents,
corporate records and other writings which we consider relevant for the
purposes of this opinion including originals or copies of the Amended and
Restated Articles of Incorporation (the "Articles") and Bylaws of IEC and the
records of the IEC Board of Directors relating to the Merger. In addition, in
connection with the Merger, we have reviewed the Agreements. In such
examination, we have assumed the genuineness of all signatures on original
documents, the conformity to original documents of all copies submitted to us
and the due execution and delivery of all documents by any party other than
the IEC where due execution and delivery are a prerequisite to the
effectiveness thereof.
As used in this opinion, the expression "to our knowledge" or "known
to us" with reference to matters of fact means that, after an examination of
documents made available to us by IEC, and after inquiries of officers of
IEC, but without any further independent factual investigation, we find no
reason to believe that the opinions expressed herein are factually incorrect.
Further, the expression "to our knowledge" with reference to matters of fact
refers to the current actual knowledge of the attorneys of this firm who have
worked on matters for IEC solely in connection with the Reorganization
Agreement and the transactions contemplated thereby. Except to the extent
expressly set forth herein, we have not undertaken any independent
Netranscend Software, Inc.
March 22, 1999
Page 2
investigation to determine the existence or absence of any fact, and no
inference as to our knowledge of the existence or absence of any fact should be
drawn from our representation of IEC or the rendering of the opinion set forth
below.
For purposes of this opinion, we are assuming that you have all requisite
power and authority, and have taken any and all necessary corporate action, to
execute and deliver the Agreements, and we assume that the representations and
warranties made by you in the Reorganization Agreement and pursuant thereto are
true and correct. We are also assuming the Principal Shareholder has purchased
all outstanding shares of Netranscend capital stock for value, in good faith,
and without notice of any adverse claim within the meaning of the Uniform
Commercial Code.
In rendering this opinion we have also assumed that there are no extrinsic
agreements or understandings among you or the Principal Shareholder and IEC in
relation to the Agreements that would modify or interpret the terms of the
Agreements or the respective rights or obligations of the parties thereunder.
The opinions hereinafter expressed are subject to the following
qualifications:
a. Our opinions are qualified by the effect of bankruptcy,
insolvency, fraudulent conveyance, reorganization, arrangement, moratorium, or
other similar laws relating to or affecting the rights of creditors generally,
including, without limitation, laws relating to fraudulent transfers or
conveyances, preferences and equitable subordination;
b. Our opinions are qualified by the limitations imposed by
general principles of equity upon the availability of equitable remedies or the
enforcement of provisions of the Agreements; and the effect of judicial
decisions which have held that certain provisions are unenforceable when their
enforcement would violate the implied covenant of good faith and fair dealing,
or would be commercially unreasonable, or if their breach is not material;
c. A requirement that provisions of the Agreements may only be
waived in writing will not be enforced to the extent an oral agreement has been
entered into modifying provisions of the Agreements;
d. Our opinions are qualified by the effect of judicial
decisions that may permit the introduction of extrinsic evidence to modify the
terms or the interpretation of the Agreements;
e. We express no opinion as to the enforceability of provisions
of the Agreements providing for arbitration of disputes to the extent that
arbitration of a particular dispute would be against public policy;
Netranscend Software, Inc.
March 22, 1999
Page 3
f. We express no opinion as to the enforceability of provisions
of the Agreements that purport to establish evidentiary standards or to make
determinations conclusive;
g. We express no opinion as to the enforceability of provisions
of the Agreements that purport to establish particular courts as the forum
for the adjudication of any controversy relating to the Agreements;
h. We express no opinion as to the enforceability of provisions
of the Agreements expressly or by implication waiving broadly or vaguely
stated rights, or waiving rights granted by law where such waivers are
against public policy;
i. We express no opinion as to the enforceability of provisions
of the Agreements providing that rights or remedies are not exclusive, that
every right or remedy is cumulative, or that the election of a particular
remedy or remedies does not preclude recourse to one or more other remedies;
j. We express no opinion as to the enforceability of any
indemnification provisions contained in the Agreements to the extent the
provisions thereof may be subject to limitations of public policy and the
effect of applicable statutes and judicial decisions;
k. Our opinions are based upon current statutes, rules,
regulations, cases and official interpretive opinions, and it covers certain
items that are not directly or definitively addressed by such authorities;
l. We express no opinion as to compliance with applicable anti-
fraud statutes, rules or regulations of applicable state and federal laws
concerning the issuance or sale of securities;
m. We express no opinion as to the enforceability of the non-
compete and non-solicit provisions of the Employment Agreements or Consulting
Agreement to the extent the provisions thereof may be subject to limitations
of public policy and the effect of applicable statutes and judicial
decisions;
n. We express no opinion as to the enforceability of the
arbitration provisions of the Agreements to the extent such provisions
purport to be binding upon the relevant parties;
o. In rendering the opinion set forth in paragraph 1 below, as
to the good standing of IEC, we have relied exclusively on certificates of
public officials;
Netranscend Software, Inc.
March 22, 1999
Page 4
p. We are members of the Bar of the State of California and we
are not expressing any opinion as to any matter relating to the laws of any
jurisdiction other than the laws of the United States of America and the laws
of the State of California.
Based upon our examination of and reliance upon the foregoing and
subject to the limitations, exceptions, qualifications and assumptions set
forth herein and except as otherwise set forth in the Reorganization
Agreement or the Disclosure Schedule, we are of the opinion that as of the
date hereof:
1. IEC is a corporation duly organized, validly existing and in good
standing under the laws of the State of California. IEC has all
requisite corporate power and authority to own and operate its
properties and to carry on its business as now being conducted.
2. The shares of IEC Common Stock to be issued pursuant to the
Merger, when issued in accordance with the terms of the
Reorganization Agreement, will be validly issued, fully paid and
nonassessable.
3. IEC has all requisite corporate power and authority to execute,
deliver and perform its obligations under the Agreements and to
consummate the Merger and the other transactions contemplated
thereby. The execution and delivery by IEC of the Agreements, and
the performance by IEC of its obligations thereunder, have been
duly authorized by all necessary corporate action and proceedings
on the part of IEC. The Reorganization Agreement and the Merger
Agreement have been duly executed and delivered by IEC and
assuming due execution and delivery by the other parties thereto,
constitute the valid and binding obligations of IEC.
4. Neither the execution, delivery nor performance by IEC of the
Reorganization Agreement or the Merger Agreement, nor the
consummation of the transactions contemplated thereby, conflicts
with, or will result in any Conflict with, (i) any provision of
the Articles and Bylaws of IEC, (ii) any material mortgage,
indenture, lease, contract or other agreement or instrument,
permit, concession, franchise or license which is listed in the
IEC Disclosure Schedule attached to the Reorganization Agreement,
or (iii) to our knowledge, any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to IEC or its
respective properties or assets.
5. Based in part upon the representations of the Principal
Shareholder contained in Article III of the Reorganization
Agreement, no consent, waiver, approval, order or authorization
of, or registration, declaration or filing with any Governmental
Netranscend Software, Inc.
March 22, 1999
Page 5
Entity is required by or with respect to IEC in connection with
the execution and delivery of the Reorganization Agreement and
the Merger Agreement or the consummation of the transactions
contemplated thereby, other than post-sale filings required by
state securities laws. Upon the filing and acceptance of the
Merger Agreement with the Secretary of State of the State of
California, the Merger shall become legally effective in
accordance with California Law.
6. To our knowledge, there is no action, suit or proceeding of any
nature pending or threatened against IEC, its properties or its
officers or directors which is not disclosed in the Disclosure
Schedule, nor to our knowledge is there any action, suit or
proceeding of any nature pending or threatened against IEC, its
properties or any of its officers or directors which challenges
or seeks to enjoin, alter or materially delay any of the
transactions contemplated by the Agreements.
This opinion is rendered as of the date first written above solely for
your benefit in connection with the Agreements and the transactions
contemplated thereby, and may not be made available to or relied upon by any
person other than you, or for any other purpose, without our express prior
written consent. Our opinion is expressly limited to the matters set forth
above and we render no opinion, whether by implication or otherwise, as to
any other matters relating to the Agreements or the transactions contemplated
thereby. We assume no obligation to advise you of facts, circumstances,
events or developments which hereafter may be brought to our attention and
which may alter, affect or modify the opinions expressed herein.
Very truly yours,
XXXXXX XXXXXXX XXXXXXXX & XXXXXX
Professional Corporation
/s/ Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
EXHIBIT C
---------
Form Of Legal Opinion Of Xxxxxx Xxxxxx White & XxXxxxxxx
[LETTERHEAD OF XXXXXX XXXXXX WHITE & XxXXXXXXX APPEARS HERE]
March 23, 1999
Internet Extra Corporation
000 Xxxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
We have acted as counsel to Netranscend Software, Inc., a California
corporation (the "Company"), in connection with the Agreement and Plan of
Reorganization (the "Agreement") dated as of March 8, 1999 by and between the
Company, Internet Extra Corporation ("IEC") and Ruiqing "Xxxxxxx" Jiang (the
"Principal Shareholder"), the Agreement of Merger between the Company and IEC
dated as of March 24, 1999 and the related officers' certificates (collectively,
the "Transactional Agreements"). Capitalized terms used without definition in
this opinion have the meanings given to them in the Agreement (including the
schedules thereto) or, if the Agreement does not define them, in the Restated
Articles.
I.
In connection with this opinion, we have assumed the authenticity of all
records, documents, and instruments submitted to us as originals, the
genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all records, documents, and instruments submitted
to us as copies. We have also assumed that there are no facts or circumstances
relating to you that might prevent you from enforcing any of the rights to which
our opinion relates (for example, lack of due incorporation, regulatory
prohibitions, or failure to qualify to do business in the State of California).
We have based our opinion upon our review of the following records, documents
and instruments:
(a) The Articles of Incorporation of the Company certified by the
California Secretary of State November 27, 1996 and the Certificate of
Amendment of the Articles of Incorporation dated December 10, 1997
certified to us by an officer of the Company as being complete and in
full force and effect as of the date of this opinion;
Internet Extra Corporation
March 23, 1999
Page 2
(b) The Bylaws of the Company certified to us by an officer of the Company
as being complete and in full force and effect as of the date of this
opinion;
(c) Records certified to us by an officer of the Company as constituting
all records of proceedings and actions of the Board of Directors and
the shareholders of the Company relating (i) to the transactions
contemplated by the Transactional Agreements and (ii) to the issuance
of all of the issued and outstanding shares of the Company's capital
stock;
(d) The Agreement;
(e) The Agreement of Merger;
(f) A Certificate of Status-Domestic Corporation relating to the Company
issued by the Secretary of State of the State of California dated
March 23, 1999;
(g) A letter from the Franchise Tax Board of the State of California dated
March 23, 1999 stating that the Company is in good standing with that
agency;
(h) A Certificate of the President and the Secretary of the Company as to
the material agreements, material instruments, judgments, and decrees
to which the Company is a party or by which the Company's properties
or assets are bound and as to certain factual matters (the "Officer's
Certificate");
(i) The agreements and instruments identified in the Officer's
Certificate;
(j) The stock records of the Company evidencing the outstanding capital
stock of the Company and certified to us by an officer of the Company
as being complete and correct; and
(k) The stock certificates representing the shares being purchased by you
(the "Shares").
With your consent, we have based our opinion expressed in paragraph 1 below
as to the good standing of the Company under the laws of the State of California
solely upon the documents enumerated in (f) and (g) above. In addition, we have,
with your consent, (i) based our opinion expressed in paragraph 8 below that
shares of the Company's capital stock are fully paid and nonassessable solely
upon the statement in the Officer's Certificate that the Company has received
the consideration recited in the applicable agreements and resolutions of the
Company's Board of Directors, (ii) based our opinion expressed in paragraph 8
below regarding the capitalization of the Company solely upon
Internet Extra Corporation
March 23, 1999
Page 3
our review of the records identified as items (c) and (j) above, and (iii)
relied upon the Officer's Certificate with respect to factual matters relevant
to this opinion.
In connection with our opinion relating to the agreements and instruments
identified in the Officer's Certificate, we have not reviewed, and express no
opinion on, (i) financial covenants or similar provisions requiring financial
calculations or determinations to ascertain compliance, (ii) provisions relating
to the occurrence of a "material adverse event" or words of similar import, or
(iii) parol evidence bearing on interpretation or construction. Moreover, to the
extent that any of the Transactional Agreements or any of the agreements and
instruments identified in item (i) above is governed by the laws of any
jurisdiction other than the federal laws of the United States or the laws of the
State of California, our opinion relating to those agreements and instruments is
based solely upon the plain meaning of their language without regard to
interpretation or construction that might be indicated by the laws governing
those agreements or instruments.
Where our opinion relates to our "knowledge", such knowledge is based upon
our examination of the records, documents, instruments, and certificates
enumerated or described above and the actual knowledge of attorneys in this firm
who are currently involved in substantive legal representation of the Company.
With your consent, we have not examined any records of any court, administrative
tribunal or other similar entity in connection with our opinion expressed in
paragraph 7 below.
II.
We express no opinion as to any anti-fraud provisions of applicable federal
or state securities laws, any tax, anti-trust, land use, export, safety,
environmental or hazardous materials laws, rules or regulations.
This opinion is limited to the federal laws of the United States of America
and the laws of the State of California. We disclaim any opinion as to the laws
of any other jurisdiction and we further disclaim any opinion as to any statute,
rule, regulation, ordinance, order or other promulgation of any regional or
local governmental body.
III.
Based upon the foregoing and our examination of such questions of law as we
have deemed necessary or appropriate for the purpose of this opinion, and
subject to the limitations and qualifications expressed below, it is our opinion
that:
Internet Extra Corporation
March 23, 1999
Page 4
1. The Company has been duly incorporated and is validly existing and in
good standing under the laws of the State of California.
2. The Company has all requisite corporate power and corporate authority
to enter into and perform the Transactional Agreements, to own its
properties, and to carry on its business as, to our knowledge, it is
now conducted and proposed to be conducted as contemplated by the
Transactional Agreements.
3. Each of the Transactional Agreements has been duly authorized by all
necessary corporate action on the part of the Company, its directors,
and shareholders and has been duly executed and delivered on behalf of
the Company.
4. Each of the Transactional Agreements is a valid and binding obligation
of the Company, enforceable against the Company in accordance with its
terms, subject, as to enforcement, (i) to bankruptcy, insolvency,
reorganization, arrangement, moratorium, and other laws of general
applicability relating to or affecting creditors' rights and (ii) to
general principles of equity, whether such enforcement is considered
in a proceeding in equity or at law.
5. No governmental consents, approvals, authorizations, registrations,
declarations, or filings are required for the execution and delivery
of the Transactional Agreements on behalf of the Company and
consummation of the Transactional Agreements by the Company except the
filing of the Merger Agreement in the Office of the Secretary of State
of the State of California.
6. The execution and delivery of the Transactional Agreements on behalf
of the Company does not (i) conflict with any provision of the Amended
and Restated Articles of Incorporation or Bylaws of the Company, (ii)
violate any law applicable to the Company, or (iii) result in a breach
or violation of, or constitute a default under, any term of any
agreements, instruments, judgments, or decrees identified in the
Officer's Certificate.
7. To our knowledge, there are no pending or threatened actions, suits,
proceedings, or governmental investigations against the Company.
8. The authorized capital stock of the Company consists of 10,000,000
shares of Common Stock. Immediately prior to the Closing, the stock
records of the Company indicate that 3,000,000 shares of Common Stock
were issued and outstanding, all of which were held by the Principal
Shareholder. All
Internet Extra Corporation
March 23, 1999
Page 5
such issued and outstanding shares of the Company's capital stock have
been duly authorized and validly issued and are fully paid and
nonassessable. To our knowledge, there are no options, warrants,
conversion privileges, preemptive rights, or other rights outstanding
granted by the Company to purchase or otherwise acquire any authorized
but unissued shares of capital stock or other securities of the
Company.
IV.
We further advise you that:
A. As noted, the enforceability of the Transactional Agreements is
subject to the effect of general principles of equity. These
principles include, without limitation, concepts of commercial
reasonableness, materiality and good faith and fair dealing. As
applied to the Transactional Agreements, these principles will require
you to act reasonably, in good faith and in a manner that is not
arbitrary or capricious in the administration and enforcement of the
Transactional Agreements and will preclude you from invoking penalties
for defaults that bear no reasonable relation to the damage suffered
or that would otherwise work a forfeiture. In addition, the
enforceability of the Transactional Agreements is subject to the
effect of Section 1670.5 of the California Civil Code, which provides
that a court may refuse to enforce, or may limit the enforcement of, a
contract or clause of a contract that the court finds as a matter of
law to have been unconscionable at the time it was made.
B. The effectiveness of indemnities, rights of contribution, exculpatory
provisions and waivers of the benefits of statutory provisions may be
limited on public policy grounds.
C. Section 1717 of the California Civil Code provides that, in any action
on a contract where the contract specifically provides that attorneys'
fees and costs incurred to enforce that contract shall be awarded
either to one of the parties or to the prevailing party, then the
party who is determined to be the party prevailing in the action,
whether that party is the party specified in the contract or not,
shall be entitled to reasonable attorneys' fees in addition to other
costs.
D. Any provisions of the Transactional Agreements requiring that waivers
must be in writing may not be binding or enforceable if a non-
executory oral agreement has been created modifying any such provision
or an
Internet Extra Corporation
March 23, 1999
Page 6
implied agreement by trade practice or course of conduct has given
rise to a waiver.
This opinion is rendered to you in connection with the Agreement and is
solely for your benefit. This opinion may not be relied upon by you for any
other purpose, or relied upon by any other person, firm, corporation, or other
entity for any purpose, without our prior written consent. We disclaim any
obligation to advise you of any developments in areas covered by this opinion
that occur after the date of this opinion.
Very truly yours,
/s/ Xxxxxx Xxxxxx White & McAulife
EXHIBIT D
---------
Disclosure Schedule of Netranscend
DISCLOSURE SCHEDULES
--------------------
These Disclosure Schedules set forth exceptions to the representations and
warranties specified in Article II of the Agreement and Plan of Reorganization
by and among Internet Extra Corporation, Netranscend Software, Inc. (the
"Company") and Ruiging "Xxxxxxx" Jiang dated March ___, 1999 (the "Agreement").
Unless the context otherwise requires all capitalized terms herein have the same
meaning as defined in the Agreement. The Section numbers indicated herein have
the same meaning as defined in the Agreement. The Section numbers indicated
herein refer to Sections in the Agreement; however, the exceptions set forth
herein shall apply to any of the representations and warranties where
appropriate.
Schedule 2.1
------------
Xxxxxxx Xxxxx is the sole director of the Company. Xx. Xxxxx is also the
President, Chief Executive Officer and Chief Financial Officer of the Company.
Xxxxx Xxxxxxxxx is the Secretary of the Company.
Schedule 2.2(b)
---------------
The Company has not adopted a Stock Option Plan. The Company has issued
three nonstatutory options as follows'
Number Exercise Vesting Expiration
------ -------- ------- ----------
Name Address of Shares Price Schedule Date
---- ------- --------- ----- -------- ----
Xxxxx Xxxx 0000 Xxxxxx Xxx., 5,000 $0.002 no vesting November 1
San Jose, CA schedule; fully- 2002
95129 vested
Xxxx-Xxxxx 00000 Xxxxxxxx 24,000 $0.002 vested 1/3 on August 1,
(Andy) Yang Dr., Fremont, CA 2/1/98, 8/1/98 2002
94539 and 2/1/99;
fully-vested
Xxxxxxxx Xxx 6155 Regency 30,000 $0.002 vested 1/3 on August 1,
Oak, San Jose, CA 2/1/98, 8/1/98 2002
95129 and 2/1/99;
fully-vested
Schedule 2.7
------------
The Company's financial statements are attached.
Schedule 2.11 (a)
-----------------
Real property leased: N/A
--------------------------------------------------------
Name of Lessor: N/A
--------------------------------------------------------------
Date of Lease: N/A
---------------------------------------------------------------
Date(s) of any amendments: N/A
---------------------------------------------------
Annual Rental (including any other fees payable): N/A
----------------------------
Schedule 2.11 (c)
-----------------
List of Equipment with a Purchase Price Greater than $10,000: N/A
Schedule 2.12(b)
----------------
List of All Registered Patents, Trademarks, Copyrights: N/A
Schedule 2.12(f)
----------------
List of All Contracts, Licenses and Agreements relating to Intellectual
Property: N/A
Schedule 2.12(g)
----------------
List of All Contracts, Licenses and Agreements relating to Warranties and
Indemnification: N/A
Schedule 2.12(g)
----------------
List of All Actions Necessary within the next 60 days to perfect, maintain,
preserve or renew Netranscend Intellectual Property: N/A
Schedule 2.15
-------------
The Company is incorporated in California and is in good standing and
qualified to do business in such state.
[LETTERHEAD OF X.X. XXXXXXXX APPEARS HERE]
Netranscend Software, Inc
Sunnyvale, California
Gentlemen:
I have compiled the accompanying statement of assets, liabilities, and
equity-income tax basis of Netranscend Software, Inc. as of December 31, 1998,
and the related statement of revenues, expenses and retained earnings-income tax
basis for the year then ended, in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute of Certified
Public Accountants. The financial statements have been prepared on the
accounting basis used by the Company for income tax purposes, which is a
comprehensive basis of accounting other then generally accepted accounting
principles.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. I have not audited or
reviewed the accompanying financial statements and, accordingly, do not express
an opinion or any other form of assurance on them.
Management has elected to omit substantially all of the disclosures
ordinarily included in financial statements prepared on the income tax basis of
accounting. If the omitted disclosures were included in the financial
statements, they might influence the user's conclusions about the Company's
assets, liabilities, equity, revenues and expenses. Accordingly, these financial
statements are not designed for those who are not informed about such matters.
X.X. Xxxxxxxx, CPA
/s/ X.X. Xxxxxxxx, CPA
Sunnyvale, California
March 4, 1999
NETRANSCEND SOFTWARE, INC
Statement of Assets, Liabilities and Equity
(Income Tax Basis)
December 31, 1998
ASSETS
------
Current Assets
Cash $ 536
--------
Total current assets 536
Fixed Assets
Computer equipment $ 3,691
Less accumulated depreciation 1,940
--------
1,751
Other Assets
Organization costs $ 1,600
Less accumulated amortization 667
--------
993
--------
$ 3,220
--------
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
Long-term debt
Loans from stockholders 17,607
Stockholder's Equity
Common stock 1,600
Retained earnings (deficit) (15,987)
--------
(14,387)
--------
$ 3,220
========
The accompanying accountant's compilation report is an integral part of these
financial statements.
NETRANSCEND SOFTWARE, INC
Statement of Revenues, Expenses and Retained Earnings
(Income Tax Basis)
December 31, 1998
Revenues $ 0
--------
Operating Expenses:
Auto expenses 3,843
Amortization of organization costs 320
Depreciation 712
Dues and subscriptions 154
Internet charges 360
Legal and professional fees 1,133
Meals and entertainment 1,549
Miscellaneous 58
Office and computer supplies 269
Rent 354
California franchise tax 838
Telephone 318
Travel 530
--------
Total expenses 10,438
--------
Net income (loss) for the year ( 10,438)
Retained earnings (deficit) beginning of year ( 5,549)
--------
Retained earnings (deficit) end of year ($15,987)
---------
The accompanying accountant's compilation report is an integral part of these
financial statements.
NETRANSCEND SOFTWARE, INC
General Journal
For the Period From Jan 1, 1998 to Dec 31, 1998
Filter Criteria includes: Report order is by Date. Report is printed with
Accounts having Zero Amounts and with Truncated Transaction Descriptions and in
Detail Format.
-----------------------------------------------------------------------------------------------------------------------
Date Account ID Reference Trans Description Debit Amt Credit Amt
-----------------------------------------------------------------------------------------------------------------------
1/1/98 15100 0101 PC (12/96) incl memory & acc. 3,475.86
17900 96 & 97 depr on computer equip 1,228.00
19100 Organization costs (12.96) 1,600.00
19200 96 & 97 amort of organiz. costs 347.00
29700 96 & 97 payments by stockholder 7,450.32
39005 96 & 97 adjusted losses 5,549.46
39003 Beginning investment 1,600.00
12/30/98 76500 1201 Paid by BJ personally, airline ticket 530.00
71000 Paid by BJ personally, off suppl 60.55
64500 Paid by BJ personally, book 77.05
61000 Paid by BJ personally, parking 28.25
76000 Paid by BJ personally, cel phone 112.64
70500 Paid by BJ personally, meals 1,164.67
27900 Paid by BJ personally in 1998 1,973.16
12/30/98 61000 1202 12080 miles @ $.325 less $111 gas paid by c 3,815.00
27900 12080 miles @ $.325 less $111 gas paid by c 3,815.00
12/31/98 60500 1203 1998 amortization of org costs 320.00
19200 1998 amortization of org costs 320.00
64000 1998 depreciation 712.00
17900 1998 depreciation 712.00
----------- -----------
Total 17,445.48 17,445.48
=========== ===========
NETRANSCEND SOFTWARE, INC.
Balance Sheet
December 31, 1998
ASSETS
Current Assets
Cash, Xxxxx Fargo checking $ 535.82
----------
Total Current Assets 535.82
Property and Equipment
Computer Equipment 3,691.28
Accumulated Depreciation (1,940.00)
----------
Total Property and Equipment 1,751.28
Other Assets
Organization Costs 1,600.00
Accumulated Amortization (667.00)
----------
Total Other Assets 933.00
----------
Total Assets $ 3,220.10
==========
LIABILITIES AND CAPITAL
Current Liabilities
-----------
Total Current Liabilities 0.00
Long-Term Liabilities
Loans from Stockholders $ 17,607.49
-----------
Total Long-Term Liabilities 17,607.49
-----------
Total Liabilities 17,604.49
Capital
Common Stock 1,600.00
Retained Earnings (5,549.46)
Net Income (10,437.93)
-----------
Total Capital (14,387.39)
-----------
Total Liabilities & Capital $ 3,200.10
===========
Unaudited - For Management Purposes Only
NETRANSCEND SOFTWARE, INC.
Account Reconciliation
As of Mar 31, 1998
10200 - Cash, Xxxxx Fargo checking
Bank Statement Date: March 31, 1998
Filter Criteria includes: Report is printed in Detail Format.
--------------------------------------------------------------------------------
Beginning GL Balance 436.47
Add: Cash Receipts 2,500.00
Less: Cash Disbursements (976.08)
Add (Less) Other
--------
Ending GL Balance 1,960.39
========
Ending Bank Balance 687.72
Add back deposits in transit
Mar 21, 1998 0301 1,500.00
--------
Total deposits in transit 1,500.00
(Less) outstanding checks Mar 22, 1998 105 (227.33)
--------
Total outstanding checks (227.33)
Add (Less) Other --------
Total other
Unreconciled difference 0.00
--------
Ending GL Balance 1,960.39
========
NETRANSCEND SOFTWARE, INC.
Chart of Accounts
As of Dec 31, 1998
Filter Criteria includes: ) Active Accounts. Report order is by ID. Report is
printed with Accounts having Zero Amounts and in Detail Format.
----------------------------------------------------------------------------------
Account ID Account Description Account Type
----------------------------------------------------------------------------------
10200 Cash, Xxxxx Fargo checking Cash
10400 Savings Account Cash
10900 Cash on Hand Cash
11000 Accounts Receivable Accounts Receivable
11500 Allowance for Doubtful Acc Accounts Receivable
12000 Inventory Inventory
14100 Employee Advances Other Current Assets
14700 Prepaid Expenses Other Current Assets
15000 Furniture and Fixtures Fixed Assets
15100 Computer Equipment Fixed Assets
15400 Leasehold Improvements Fixed Assets
17900 Accumulated Depreciation Fixed Assets
19000 Security Deposits Other Assets
19100 Organization Costs Other Assets
19200 Accumulated Amortization Other Assets
20100 Current Portion Long-term Other Current Liabilities
21200 Accounts Payable Accounts Payable
23100 Sales Tax Payable Other Current Liabilities
23200 Wages Payable Other Current Liabilities
23400 Federal Payroll Taxes Withh Other Current Liabilities
23600 State Payroll Taxes Withhel Other Current Liabilities
27000 Notes Payable, Long-term Long Term Liabilities
27900 Loans from Stockholders Long Term Liabilities
39003 Common Stock Equity-doesn't close
39004 Paid-in Capital Equity-doesn't close
39005 Retained Earnings Equity-Retained Earnings
39007 Dividends Paid Equity-gets closed
40000 Service Fees Income
40200 Sales Income Income
45500 Shipping Charges Reimburs Income
48900 Sales Returns & Allowances Income
49000 Sales Discounts Income
50000 Cost of Goods Sold #1 Cost of Sales
51100 Purchases Cost of Sales
51800 Purchase Returns & Allowa Cost of Sales
51900 Purchase Discounts Cost of Sales
57000 Direct Labor Cost of Sales
57500 Freight In Cost of Sales
58500 Inventory Adjustments Cost of Sales
60000 Advertising Expense Expenses
60500 Amortization, Organiz. Cost Expenses
61000 Auto Expenses Expenses
61500 Bad Debt Expense Expenses
62000 Bank Charges Expenses
63500 Commissions Expenses
64000 Depreciation Expense Expenses
64500 Dues and Subscriptions Expenses
65500 Freight Expense Expenses
67000 Insurance, general Expenses
67200 Insurance, Medicall Expenses
67500 Interest Expense Expenses
68000 Internet Charges Expenses
68500 Legal and Professional Fees Expenses
69000 Licenses and Permits Expenses
70500 Meals and Entertainment Expenses
70900 Miscellaneous Expenses Expenses
NETRANSCEND SOFTWARE, INC.
Chart of Accounts
As of Dec 31, 1998,
Filter Criteria includes: 1) Active Accounts, Report order is by ID, Report is
printed with Accounts having Zero Amounts and in Detail Format.
--------------------------------------------------------------------------------
Account ID Account Description Account Type
--------------------------------------------------------------------------------
71000 Office Supplies & Expenses Expenses
71100 Computer Supplies Expenses
73000 Pension/Profit-Sharing Plan Expenses
73500 Postage Expenses
74000 Rent Expenses
74500 Repairs and Maintenance Expenses
75000 Salaries Expenses
75500 Taxes, Payroll Expenses
75600 Taxes, Personal Property Expenses
75700 Taxes, CA Franchise Expenses
75900 Taxes, Penalties Expenses
76000 Telephone Expenses
76500 Travel, Transportation Expenses
76600 Travel, Lodging Expenses
76700 Travel, Meals Expenses
76800 Travel, Other Expenses
77000 Utilities Expenses
90000 Gain/Loss on Sale of Assets Expenses
90100 Interest Income Income
90500 Other Income Income
NETRANSCEND SOFTWARE, INC.
Account Reconciliation
As of Jul 31, 1998
10200 - Cash, Xxxxx Fargo checking
Bank Statement Date: July 31, 1998
Filter Criteria includes: Report is printed in Detail Format
-------------------------------------------------------------------------------
Beginning GL Balance 827.08
Add: Cash Receipts
Less: Cash Disbursements (275.47)
Add (Less) Other --------
Ending GL Balance 551.61
========
Ending Bank Balance 822.08
Add back deposits in transit --------
Total deposits in transit
(less) outstanding checks
Jul 25, 1998 114 (30.00)
Jul 25, 1998 115 (201.98)
Jul 25, 1998 116 (38.49)
--------
Total outstanding checks (270.47)
Add Other
--------
Total other
Unreconciled difference 0.00
--------
Ending GL Balance 551.61
========
NETRANSCEND SOFTWARE, INC.
Account Reconciliation
As of Sep 30, 1998
10200 - Cash, Xxxxx Fargo checking
Bank Statement Date: September 30, 1998
Filter Criteria includes: Report is printed in Detail Format
-------------------------------------------------------------------------------
Beginning GL Balance 478.24
Add: Cash Receipts
Less: Cash Disbursements (228.00)
Add (Less) Other
--------
Ending GL Balance 250.24
========
Ending Bank Balance 319.43
Add back deposits in transit
-----------
Total deposits in transit
(Less) outstanding checks
Sep 20, 1998 120 (30.00)
Sep 26, 1998 121 (39.19)
-----------
Total outstanding checks (69.19)
Add (Less) Other
Total other
Unreconciled difference 0.00
-----------
Ending GL Balance 250.24
===========
NETRANSCEND SOFTWARE, INC.
Account Reconciliation
As of Dec 31, 1998
10200 - Cash, Xxxxx Fargo checking
Bank Statement Date: December 31 1998
Filter Criteria includes: Report is printed in Detail Format
-------------------------------------------------------------------------------
Beginning GL Balance 599.09
Add: Cash Receipts
Less: Cash Disbursements (63.27)
Add (Less) Other
-------
Ending GL Balance 535.82
=======
Ending Bank Balance 594.09
Add back deposits in transit
----------
Total deposits in transit
(Less) outstanding checks
Dec 25, 1998 130 (30.00)
Dec 25, 1998 131 (28.27)
----------
Total outstanding checks (58.27)
Add (Less) Other ----------
Total other
Unreconciled difference 0.00
------
Ending GL Balance 535.82
======
NETRANSCEND SOFTWARE, INC.
Income Statement
For the Twelve Months Ending December 31, 1998
Current Month Year to Date
Revenues ------------- --------------
Total Revenues 0.00 0.00 0.00 0.00
------------- --------------
Cost of Sales ------------- --------------
Total Cost of Sales 0.00 0.00 0.00 0.00
Gross Profit 0.00 0.00 0.00 0.00
Expenses
Amortization, Organiz. Costs $ 320.00 0.00 $ 320.00 0.00
Auto Expenses 3,843.25 0.00 3,843.25 0.00
Bank Charges 5.00 0.00 57.89 0.00
Depreciation Expense 712.00 0.00 712.00 0.00
Dues and Subscriptions 77.05 0.00 154.10 0.00
Internet Charges 30.00 0.00 360.00 0.00
Legal and Professional Fees 0.00 0.00 1,133.25 0.00
Meals and Entertainment 1,164.67 0.00 1,549.16 0.00
Office Supplies & Expenses 60.55 0.00 168.29 0.00
Computer Supplies 0.00 0.00 100.56 0.00
Rent 0.00 0.00 353.81 0.00
Taxes, CA Franchise 0.00 0.00 800.00 0.00
Taxes, Penalties 0.00 0.00 37.68 0.00
Telephone 140.91 0.00 317.94 0.00
Travel, Transportation 530.00 0.00 530.00 0.00
------------ --------------
Total Expenses 883.43 0.00 10,437.93 0.00
------------ --------------
Net Income $ (6,883.43) 0.00 $ (10,437.93) 0.00
------------ --------------
For Management Purpose Only
EXHIBIT E
---------
Disclosure Schedule of IEC
EXHIBIT E
---------
Disclosure Schedule of IEC
March 8, 1999
Pursuant to Section IV of the Agreement and Plan of Reorganization, dated
as of March 8, 1999 (the "Agreement"), by and among Internet Extra Corporation,
a California corporation ("IEC"), Netranscend Software, Inc., a California
corporation ("Netranscend"), and Ruiqing "Xxxxxxx" Jiang, the sole shareholder
of Netranscend (the "Principal Shareholder"), IEC hereby delivers this
Disclosure Schedule (this "Schedule"). Capitalized terms used in this Schedule,
unless otherwise specified, have the same meanings given them in the Agreement.
The disclosures set forth in this Schedule are numbered to refer to the primary
section of the Agreement to which they relate. Each exception set forth herein
shall be deemed to modify each representation and warranty of IEC to which they
relate.
Section 4.1 Organization of IEC.
-------------------
The directors of IEC are Xxxxxxx X. Xxxxxxx and Xxx Xxxxx Xxxxxxx. The officers
of IEC are as follows:
Xxxxxxx X. Xxxxxxx Chairman, Chief Executive Officer and Secretary
Xxx Xxxxx Xxxxxxx President
Xxxxxx Xxxxxxxx Chief Operating Officer
Section 4.2 IEC Capital Structure.
---------------------
IEC has recently begun negotiations with several venture capital firms
relating to an investment in Series B Preferred Stock of IEC. Pursuant to such
an investment or investments, IEC expects to raise between $7 million and $11
million at a pre-money valuation of between $30 million and $35 million. There
can be no assurance that such a transaction will be consummated on favorable
terms, if at all.
Section 4.7 No Financial Statements.
-----------------------
IEC has prepared certain unaudited financial statements in the ordinary
course of business..
Section 4.10 Intellectual Property.
---------------------
On December 2, 1998, WebConnect, a Florida general partnership, and Xxxxxx
Xxxxxx, a former employee of WebConnect and a current employee of IEC, signed a
settlement agreement providing for the dismissal of two lawsuits relating to
claims by WebConnect of, among other things, the alleged misappropriation of
trade secrets and the alleged breach of a Non-Competition and Confidentiality
Agreement by Xx. Xxxxxx. The settlement agreement provides for certain
restrictions upon Xx. Xxxxxx'x business activities, including restrictions on
Xx. Xxxxxx'x solicitation of WebConnect's customers and
use of WebConnect's confidential information. IEC does not believe that any of
such restrictions are material to IEC or materially impair the performance of
Xx. Xxxxxx'x duties as an employee of IEC.
Section 4.11 Agreement, Contracts and Commitments.
------------------------------------
Attached as Annex 4.11 to this Schedule is a list of IEC's material
----------
contracts and commitments. See also Section 4.2 of this Schedule.
Section 4.14 Litigation.
----------
See Section 4.10 of this Schedule.
Section 4.19 No Interference or Conflict.
---------------------------
See Section 4.10 of this Schedule.
Annex 4.11
----------
List of Material Contracts
1. MediaPlex Insertion Orders for Datek Online, dated December 16, 1998, in
the amount of $250,000 per month for the period beginning January 1, 1999
and ending December 31, 1999.
2. MediaPlex Insertion Orders for Creative Computers, Inc. / uBid, dated June
8, 1998, in the amount of $24,750.00 per month for the period beginning
June 15, 1998 and ending June 14, 1999.
3. MediaPlex Insertion Orders for Creative Computers, Inc. / uBid, dated June
27, 1998, in the amount of $25,000.00 per month for the period beginning
July 6, 1998 and ending July 5, 1999.
4. MediaPlex Insertion Orders for Creative Computers, Inc. / uBid, dated
December 30, 1998, in the amount of $20,000.00 per month for the period
beginning January 1, 1999 and ending March 31, 1999.
5. MediaPlex Insertion Orders for uBid Inc., dated December 30, 1998, in the
amount of $9,451.00 per month for the period beginning January 1, 1999 and
ending December 31, 1999.
6. MediaPlex Insertion Orders for uBid Inc., dated November 19, 1998, in the
amount of $58,140.00 per month for the period beginning January 1, 1999 and
ending December 31, 2000.
7. MediaPlex Insertion Orders for uBid Inc., dated December 8, 1998, in the
amount of $5,800 per month for the period beginning December 8, 1998 and
ending March 8, 1999.
8. The Office Lease Agreement, dated December 24, 1998, by and between Cypress
Building Associates, As Landlord, and MediaPlex, Inc., as Tenant for the
twelve months beginning January 1, 1999 and ending December 31, 1999.
9. The Office Lease for 000 Xxxxxxx Xxxxxx, Xxxxxx Xxxxx, to be entered into
on or before March 1, 1999 with Prentice Properties and MediaPlex, Inc.
10. Co-Location Space Agreement for access to certain network and computer
equipment located on the 00xx xxxxx xx Xxxxxxxx Xxxxx office building at 00
Xxxx Xxx Xxxxxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx, dated February 8, 1998,
with AboveNet Communications, Inc.
EXHIBIT F
---------
Form of Employment Agreement - Ruiqing "Xxxxxxx" Xxxxx
Internet Extra Corporation
000 Xxxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
March 24, 1999
Mr. Ruiqing "Xxxxxxx" Jiang
Netranscend Software, Inc.
000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Xxxxxxx:
I am very pleased to offer you the position of Chief Technology Officer
with Internet Extra Corporation (the "Company") commencing on the effectiveness
of the merger between Netranscend Software, Inc. ("Netranscend") and the
Company. We at the Company are delighted that you have decided to join our
enterprise and help MediaPlex become a success. I would like to take this
opportunity to set out the terms of your employment more fully:
1. Effectiveness. This agreement (this "Agreement") is being entered in
connection with the Agreement and Plan of Reorganization (the "Reorganization
Agreement"), dated as of March 8, 1999, by and among the Company, Netranscend
and you, and all capitalized terms used but not defined herein shall have the
meaning ascribed to them in the Reorganization Agreement. Your employment under
this Agreement shall become effective as of the Effective Time of the Merger. In
the event that the Reorganization Agreement is terminated prior to the Effective
Time of the Merger, this Agreement shall terminate and be of no further force
and effect.
2. Employment.
(a) Duties. The Company shall employ you, and you shall initially
serve as, the Company's Chief Technology Officer, subject at all times and in
all cases and respects to the ultimate control and direction of the board of
directors of the Company. In such capacity, you shall perform all such services,
accept all such responsibilities and discharge all such duties and
responsibilities as are consistent and commensurate with your position and as
may be assigned to or required of you from time to time by the Company. You
shall perform such services, accept such responsibilities and discharge such
duties within the policies and guidelines established from time to time by the
Company, subject at all times and in all cases and respects to the ultimate
control and direction of the Company. The Company shall have the right to review
and revise your services, responsibilities and duties at any time and from time
to time during the Term (as defined below) in any and all respects, provided
--------
that any revised services, responsibilities and duties, taken as a whole,
continue to reflect your knowledge, skill and experience. Such services shall be
primarily performed in the Company's offices in Cupertino, California, although
you may be required to travel to other locations as necessary and consistent
with your position with the Company.
(b) Exclusive Employment. At all times during the Term, you shall
devote all of your business time, attention and energies to the performance,
fulfillment and satisfaction of your duties and responsibilities to the Company
under this Agreement, and shall not undertake or be engaged in any other
activities, whether or not pursued for gain, profit or other pecuniary
advantage, which could impair your ability to perform, fulfill and satisfy your
duties and responsibilities to the Company under this Agreement, in any case
without the prior written consent of the Company which consent will not be
unreasonably withheld.
(c) Affirmation of Fiduciary Responsibilities. At all times during
the Term, you shall perform, satisfy, fulfill and carry out your duties and
responsibilities to the Company under this Agreement with fidelity and loyalty,
in a diligent manner, to the best of your ability, experience and talent, and in
a manner consistent with your fiduciary responsibilities to the Company.
3. Compensation.
(a) Base Salary and Incentive Compensation. Your annual base salary
during the Term shall be paid at the annual rate of $150,000 for the remainder
of calendar year 1999, $168,000 for the calendar year 2000 and $180,000 for the
calendar year 2001 ("Base Salary"), payable in accordance with the Company's
standard payroll practices. Notwithstanding the foregoing, your Base Salary
shall be increased to the annual rate of $180,000 for the remainder of calendar
year 1999, $198,000 for the calendar year 2000 and $218,000 for the calendar
year 2001, upon the closing by the Company of a financing providing aggregate
gross proceeds of at least $5,000,000. Unless otherwise specified herein, the
Company shall make such deductions, withholdings and other payments from all
sums payable pursuant to this Agreement which you request or that are required
by law for taxes and other charges.
(b) Stock Options. You shall receive, as of the Effective Time, an
option (the "New Stock Option") to acquire 600,000 shares of Common Stock of the
Company (the "Option Shares"), at an exercise price equal to $0.50 per share.
The New Stock Option shall be immediately exercisable with respect to all of the
Option Shares, and the Company shall have the right to repurchase the Option
Shares at the exercise price in the event your employment is terminated. The
Company's right of repurchase shall expire with respect to one-sixth (1/6th) of
the Option Shares on the six month anniversary of the Effective Time, and with
respect to an additional 1/36th of the Option Shares on the same day of each
month during the thirty (30) months thereafter or until your employment is
earlier terminated. All other terms governing such options shall be set out in
the Company's standard option agreement and stock option plan.
(c) Benefits Plans. You will be entitled to participate in or receive
benefits under the Company's employee benefit plans and policies in effect from
time to time in which you are eligible to participate, subject to the applicable
terms and conditions of the particular benefit plan. The Company may change,
amend, modify or terminate to the extent legally allowable, any benefit plan
from time to time and without prior notice. To the extent benefits provided by
the Company are affected by seniority (i.e. length of service), you shall be
credited for time you served at Netranscend, to the fullest extent permitted by
law and consistent with the Company's current benefit plans.
(d) Expenses. You shall be entitled to prompt reimbursement by the
Company for all reasonable ordinary and necessary travel, entertainment, and
other expenses incurred by you during the Term (in accordance with the policies
and procedures established by the Company for its senior executive officers) in
the performance of your duties and responsibilities under this Agreement;
provided, that you shall properly account for such expenses in accordance with
--------
Company policies and procedures. Any necessary air travel shall be coach class
domestically and business class internationally.
(e) Vacation and Holidays. You shall be entitled to four (4) weeks
paid vacation and Company holidays in accordance with the Company's policies in
effect from time to time for its senior executive officers.
(f) Bonus. You shall be eligible to participate in any management
bonus plan or similar incentive compensation program adopted by the Company on
terms comparable to other senior officers of the Company.
4. Term; Termination; Severance Payments.
(a) Term. Unless otherwise terminated as hereinafter provided, the
term of your employment under this Agreement (the "Term") shall commence upon
the Effective Time as defined in the Reorganization Agreement and shall continue
until and terminate on the date that is the three year anniversary of the
Effective Time. Upon expiration of the Term, you shall be an "at will" employee
of the Company, subject to such policies, benefits and practices and procedures
that are then applicable with respect to an at will employee of the Company (the
"IEC Policies"). Notwithstanding the foregoing, the Company may terminate your
employment with the Company during the Term for Cause (as defined below).
(b) Cause. As used in this Agreement, "Cause" shall mean:
(i) Your personally engaging in or knowingly authorizing
conduct that you reasonably should know, or that you intend, to be
materially injurious to the Company or its employees;
(ii) Your (A) being convicted of a felony under the laws of the
United States or any State, (B) violating a federal or state law or
regulation applicable to the Company, (C) making any material
misrepresentation to the Company, or (D) committing a material act of
dishonesty or fraud against, or the material misappropriation of property
belonging to, the Company;
(iii) Your unreasonable failure or refusal to perform the
material duties of your position after written notice of such failure to
perform and you shall not have cured such failure by the tenth (10th)
business day after notice by the Company to you of such failure;
(iv) Your knowingly and intentionally breaching in any material
respect the terms of this Agreement or the Confidential Information and
Invention Assignment Agreement (attached hereto); provided that, except for
--------
those breaches which, by their nature, are incurable, you shall not have
cured such breach by the tenth (10th) business day after notice by the
Company to you of such breach; or
(v) Your commencement of employment with another employer.
(c) Termination and Severance Benefits.
(i) Termination for Cause or Resignation. If your employment is
terminated for Cause or if you resign your employment voluntarily, no other
compensation or payments will be provided to you for any periods following the
date when such termination of employment is effective.
(ii) Termination without Cause; Constructive Termination. If
your employment is terminated by the Company without Cause, or if you are
Constructively Terminated (as defined below), you will be entitled to receive
the severance payments provided for in Section 4(c)(iv) below (if any) upon such
termination. No other compensation or payments will be made pursuant to this
Agreement other than those to which you are entitled through your last day of
active service or under the applicable IEC Policies and benefit plans. For
purposes of this Section 4(c)(ii), the term "Constructively Terminated" shall be
deemed to mean (i) a reduction of your Base Salary, (ii) your refusal to
relocate to a facility or location which is located beyond twenty-five (25)
miles from Sunnyvale, California, or (iii) an alteration during the Term of the
services to be performed by, and the responsibilities and duties assigned to,
you under this Agreement if such services, responsibilities and duties, taken as
a whole, materially fail to reflect your knowledge, skill and experience;
provided that a change in your title will not in and of itself constitute
--------
Constructive Termination; provided further that, your expenses-paid travel to
--------
the Company's headquarters in San Francisco, California at the Company's
request will not in and of itself constitute Constructive Termination; and
provided further that, in each case, you have resigned in writing from your
--------
position with the Company within thirty (30) calendar days of the commencement
of any Constructive Termination.
(iii) Death or Disability.
(A) Your employment shall terminate in the event of your
death.
(B) The Company may terminate your employment for
Disability by giving you 30 days' advance notice in writing. For all purposes
under this Agreement, "Disability" shall mean that you, at the time notice is
given, have been unable to substantially perform your duties under this
Agreement for a period of not less than six (6) consecutive months as the result
of your incapacity due to physical or mental illness. In the event that you
resume the performance of substantially all of your duties hereunder before the
termination of your employment under this subparagraph (B) becomes effective,
the notice of termination shall automatically be deemed to have been revoked.
(C) No compensation or benefits will be paid or provided to
you under this Agreement on account of termination for death or Disability, or
for periods following the date when such a termination of employment is
effective. Your rights under the benefit plans of the Company in the event of
your death or Disability shall be determined under the provisions of those
plans.
(iv) Severance Payments. During the Term, in the event your
employment with the Company is terminated without cause or if you are
Constructively Terminated, the Company's sole obligation to you will be to pay
you a severance payment ("Severance Payment") in the amount equal to 1/26 of
your effective Base Salary for the year in which you are so terminated for each
complete month during the Term worked by you; provided, however, the Severance
--------
Payment shall, in no case, exceed 1/2 of your Base Salary for such year.
5. Assignment
(a) Successors and Assigns. Any of the Company's affiliates may
assume the liabilities and obligations, and succeed to the rights and interests,
of the Company under this Agreement at any time and without limitation. In
addition to the foregoing, any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise), or to all or substantially all of the Company's business and/or
assets, shall assume the obligations under this Agreement and agree expressly to
perform the obligations under this Agreement in the same manner and to the same
extent as the Company would be required to perform such obligations in the
absence of such succession. For all purposes of and under this Agreement, the
term "Company" shall include any successor to the Company's business and/or
assets which executes and delivers the assumption agreement required by this
Section 5, or which otherwise becomes bound by the terms of this Agreement by
operation of law. Any such assumption and/or succession under this Section 5
shall not be deemed to be a termination of your employment hereunder.
(b) The terms of this Agreement and all of your rights hereunder
shall inure to the benefit of, and be enforceable by, your personal or legal
representatives, executors, administrators, successor, heirs, distributees,
devisees or legatees.
6. Covenant Not to Compete.
(a) Definitions. As used in this Agreement, the terms:
(i) "Restricted Business" shall mean any business related to (i)
advertising, marketing, media placement or banner serving, (ii) enterprise
software applications and/or enterprise integration relating to online or
traditional (including, without limitation, television, print, direct mail,
radio or the like) advertising, marketing, media placement or banner serving or
(iii) the transacting of business, or shopping, purchasing, or subscribing to or
registering for services, products, programs or information, or downloading or
obtaining software programs or information; or participating in other similar
types of transactions, in each case which specifically arise from banners served
by the Company.
(ii) "Restricted Territory" shall mean the larger of: (A) all of
the countries of the world or (B) if (A) is found unenforceable, the countries
in which the Company's products are available during the term of the non-compete
obligations specified in this Section 6.
(b) Non-Compete. In consideration of: (i) the several agreements made
by the Company with you in and pursuant to the Reorganization Agreement, (ii)
the issuance by the Company to you of the New Stock Option, (iii) the Company's
willingness to enter into the Reorganization Agreement, and (iv) the
consideration payable to you hereunder, you agree that until: (A) the three (3)
year anniversary of the Effective Time or (B) in the event that the period set
forth in clause (A) is determined to be unenforceable by a court of competent
jurisdiction, the maximum period allowable, you will not, directly or
indirectly, engage in (whether as an officer, employee, consultant, director,
proprietor, partner, consultant or otherwise), or have any ownership interest
in, or participate in the financing, operation, management or control of, any
person, firm, corporation or business that engages in a Restricted Business in a
Restricted Territory. It is agreed that ownership of no more than two percent
(2%) of the outstanding voting stock of a publicly-traded or privately-held
corporation shall not constitute a violation of this section. It is further
agreed that the foregoing consideration is not intended to constitute liquidated
damages for a violation of this section.
(c) Non-Solicit. You agree that until the expiration of the non-
compete obligations specified above in subsection (b), you shall not:
(i) take any action to, or do anything reasonably intended to,
divert business from the Company, or any of its affiliates, or influence or
attempt to influence any retailer, dealer, vendor, supplier, customer or
potential customer of the Company, or any of its affiliates, in each case as
existing on the date of your termination (the "Termination Date"), to cease
doing business with the Company, or any of its affiliates, as the case may be,
or to alter its business relationship with the Company, or any of its
affiliates, in each case as existing on the Termination Date; or
(ii) recruit, attempt to hire, solicit, or assist others in
recruiting or hiring, any person who is an employee of the Company, or any of
its affiliates, in each case as of the Termination Date, or induce or attempt to
induce any such employee to terminate his or her employment with the Company, or
any of its affiliates.
(d) REMEDIES. YOU HEREBY RECOGNIZE AND ACKNOWLEDGE THAT A MATERIAL
VIOLATION OF THE TERMS AND PROVISIONS OF THIS SECTION 6 WOULD CAUSE IRREPARABLE
INJURY TO THE COMPANY, OR ONE OR MORE OF ITS AFFILIATES, AS THE CASE MAY BE, FOR
WHICH THE COMPANY, OR ANY OF ITS AFFILIATES, WOULD HAVE NO ADEQUATE REMEDY AT
LAW. ACCORDINGLY, IN THE EVENT THAT YOU SHALL FAIL TO MATERIALLY COMPLY WITH THE
TERMS AND PROVISIONS OF THIS SECTION 6 IN ANY RESPECT, AND YOU HAVE BEEN GIVEN
NOTICE OF SUCH VIOLATION AND AN OPPORTUNITY TO CURE SUCH VIOLATION, THE COMPANY,
OR ANY OF ITS AFFILIATES, SHALL BE ENTITLED TO PRELIMINARY AND OTHER INJUNCTIVE
RELIEF AND TO SPECIFIC PERFORMANCE OF THE TERMS AND PROVISIONS HEREOF. IN
FURTHERANCE AND NOT IN LIMITATION OF THE FOREGOING, YOU
HEREBY WAIVE ANY CLAIM OR DEFENSE RELATING TO ANY VIOLATION OR BREACH BY YOU OF
THE TERMS AND PROVISIONS OF THIS SECTION 6 THAT THE COMPANY, OR ANY OF ITS
AFFILIATES, HAS AN ADEQUATE REMEDY AT LAW OR THAT MONEY DAMAGES WOULD PROVIDE AN
ADEQUATE REMEDY FOR SUCH VIOLATION OR BREACH.
(e) Severability. The parties intend that the covenants contained in
the preceding paragraphs shall be construed as a series of separate covenants,
one for each county, city, state and other political subdivision of each country
in the Restricted Territory. Except for geographic coverage, each separate
covenant shall be deemed identical in terms to the covenant contained in the
preceding paragraphs. If, in any judicial proceeding, a court shall refuse to
enforce any of the separate covenants (or any part thereof) deemed included in
said paragraphs, then such unenforceable covenant (or such part) shall be deemed
eliminated from this Agreement for the purpose of those proceedings to the
extent necessary to permit the remaining separate covenants (or portions
thereof) to be enforced by such court. It is the intent of the parties that the
covenants set forth herein be enforced to the maximum degree permitted by
applicable law.
7. Entire Agreement. This Agreement and the Confidential Information and
Invention Assignment Agreement set forth the entire agreement and understanding
of the parties with respect to the subject matter hereof and thereof, and
supersede any other written or oral negotiations, agreements, understandings,
representations or practices concerning such subject matter hereof (including
without limitation any employment agreement or offer letter extended by the
Company at any time). In the event of any conflict between the provisions
hereof and the provisions of the Confidential Information and Invention
Assignment Agreement the, provisions hereof shall control.
8. Notices. Any notice, report or other communication required or
permitted to be given hereunder shall be in writing and shall be deemed given on
the date of delivery if delivered, or five days after mailing, if mailed first-
class mail, postage prepaid, return receipt requested, or delivered to a
nationwide overnight delivery service charges prepaid, return receipt requested,
to the following addresses:
(a) If to the Company: Internet Extra Corporation
000 Xxxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
(b) If to you: To the address for notice set forth on the
signature page hereto or to such other
address as any party hereto may hereafter
designate by notice given as herein
provided.
9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of California without giving effect to principles
regarding conflict of laws. Any action or proceeding brought by any party
against another arising out of or related to this Agreement shall be brought in
a state or federal court of competent subject matter jurisdiction located within
Santa Xxxxx County in the State of California, and each of the parties to this
Agreement consents to the personal jurisdiction of those courts.
10. Arbitration. In the event of any dispute or claim relating to or
arising out of our employment relationship, you and the Company agree that all
such disputes shall be fully and finally resolved by binding arbitration
conducted by the American Arbitration Association in San Francisco, California.
HOWEVER, we agree that this arbitration provision shall not apply to any
disputes or claims relating to or arising out of the misuse or misappropriation
of the Company's trade secrets or proprietary information.
11. Amendments. This Agreement shall not be changed or modified in whole
or in part except by an instrument in writing signed by the Company and you nor
shall any covenant or provision of this Agreement be waived except by an
instrument in writing signed by the party against whom enforcement of such
waiver is sought.
12. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be an original, but all of which shall together constitute
one and the same agreement.
13. Effect of Headings. The section headings herein are for convenience
only and shall not effect the construction or interpretation of the Agreement.
14. Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to either party upon any breach or default of the other
party hereto shall impair any such right, power or remedy of such non-defaulting
party, nor shall it be construed to be a waiver of any such breach or default or
an acquiescence therein, or of any similar breach or default thereafter
occurring; nor shall any waiver of a breach or default be deemed to be a waiver
of any other breach or default.
15. Rules of Construction. You and the Company each acknowledge that they
have been represented by, or had an opportunity to consult with, competent
counsel during the negotiation and execution of this Agreement and therefore,
waive the application of any law, regulation, holding or rule of construction
providing that ambiguities in any agreement will be construed against the party
drafting such agreement.
[The remainder of this page is intentionally left blank.]
To indicate your acceptance of the terms of this Agreement, please sign and
date this letter in the space provided below and return it to me. A duplicate
original is enclosed for your records. This letter, along with the agreement
relating to proprietary rights between you and the Company, set forth the terms
of your employment with the Company and supersede any prior representations or
agreements, whether written or oral.
We look forward to working with you at Internet Extra Corporation.
Sincerely,
Internet Extra Corporation
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxxx
Chief Executive Officer
ACCEPTED AND AGREED TO this
____ day of March, 1999.
_______________________________________
Ruiqing "Xxxxxxx" Jiang
Address for notices:
_________________________________
_________________________________
_________________________________
Enclosures: Duplicate Original Letter
Confidential Information and Invention Assignment Agreement
[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]
To indicate your acceptance of the terms of this Agreement, please sign and
date this letter in the space provided below and return it to me. A duplicate
original is enclosed for your records. This letter, along with the agreement
relating to proprietary rights between you and the Company, set forth the terms
of your employment with the Company and supersede any prior representations or
agreements, whether written or oral.
We look forward to working with you at Internet Extra Corporation.
Sincerely,
Internet Extra Corporation
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxxx
Chief Executive Officer
ACCEPTED AND AGREED TO this
24 day of March, 1999.
/s/ Ruiqing "Xxxxxxx" Jiang
---------------------------------------
Ruiqing "Xxxxxxx" Jiang
Address for notices:
000 Xxxxxxx XX.
---------------------------------
Xxxxxxxxx, XX 00000
---------------------------------
_________________________________
Enclosures: Duplicate Original Letter
Confidential Information and Invention Assignment Agreement
[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]
To indicate your acceptance of the terms of this Agreement, please sign and
date this letter in the space provided below and return it to me. A duplicate
original is enclosed for your records. This letter, along with the agreement
relating to proprietary rights between you and the Company, set forth the terms
of your employment with the Company and supersede any prior representations or
agreements, whether written or oral.
We look forward to working with you at Internet Extra Corporation.
Sincerely,
Internet Extra Corporation
__________________________________________
Xxxxxxx X. Xxxxxxx
Chief Executive Officer
ACCEPTED AND AGREED TO this
24 day of March, 1999.
/s/ Ruiqing "Xxxxxxx" Jiang
---------------------------------------
Ruiqing "Xxxxxxx" Jiang
Address for notices:
000 Xxxxxxx XX.
---------------------------------
Xxxxxxxxx, XX 00000
---------------------------------
_________________________________
Enclosures: Duplicate Original Letter
Confidential Information and Invention Assignment Agreement
[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]
To indicate your acceptance of the terms of this Agreement, please sign and
date this letter in the space provided below and return it to me. A duplicate
original is enclosed for your records. This letter, along with the agreement
relating to proprietary rights between you and the Company, set forth the terms
of your employment with the Company and supersede any prior representations or
agreements, whether written or oral.
We look forward to working with you at Internet Extra Corporation.
Sincerely,
Internet Extra Corporation
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxxx
Chief Executive Officer
ACCEPTED AND AGREED TO this
____ day of March, 1999.
_______________________________________
Ruiqing "Xxxxxxx" Jiang
Address for notices:
_________________________________
_________________________________
_________________________________
Enclosures: Duplicate Original Letter
Confidential Information and Invention Assignment Agreement
[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]
EXHIBIT G
---------
Form of Consulting Agreement - Xxxxxxxx Xxx
Internet Extra Corporation
000 Xxxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
March 24, 1999
Xx. Xxxxxxxx Xxx
Netranscend Software, Inc.
000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Shuangli:
I am very pleased to offer you the position of consultant to Internet Extra
Corporation (the "Company") commencing on the effectiveness of the merger
between Netranscend Software, Inc. ("Netranscend") and the Company. We at the
Company are delighted that you have decided to join our efforts and help
MediaPlex become a success. I would like to take this opportunity to set out
the terms of our relationship more fully:
1. Effectiveness. This agreement (this "Agreement") is being entered in
connection with the Agreement and Plan of Reorganization (the "Reorganization
Agreement"), dated as of March 8, 1999, by and among the Company, Netranscend
and Ruiquing "Xxxxxxx" Jiang, and all capitalized terms used but not defined
herein shall have the meaning ascribed to them in the Reorganization Agreement.
Your relationship with the Company under this Agreement shall become effective
as of the Effective Time of the Merger. In the event that the Reorganization
Agreement is terminated prior to the Effective Time of the Merger, this
Agreement shall terminate and be of no further force and effect.
2. Employment.
(a) Duties. You agree to use your best efforts to perform the services
requested by the Company, including the duties and tasks described on Exhibit A
---------
hereto. You agree to devote such time to these duties as the Company and you
reasonably agree from time to time. Your immediate supervisor is also listed on
Exhibit A.
---------
(b) Independent Contractor; No Agency. It is agreed that your
consulting services are made available to the Company on the basis that you will
retain your individual professional status and that your relation ship with the
Company is that of an independent consultant and not that of an employee. You
will not be eligible for any employee benefits, nor will the Company make
deductions from your fees for taxes, insurance, bonds or any other subscription
of any kind. You will use your own discretion in performing the tasks assigned,
within the scope of work specified by the Company. You are not an agent of the
Company and do not have the authority to bind the Company, nor will you hold
yourself out to third parties as having the authority to bind the Company.
(c) Affirmation of Fiduciary Responsibilities. At all times during
the Term, you shall perform, satisfy, fulfill and carry out your duties and
responsibilities to the Company under this Agreement with fidelity and loyalty,
in a diligent manner, to the best of your ability, experience and talent, and in
a manner consistent with your fiduciary responsibilities to the Company.
3. Compensation.
(a) Cash Compensation. As full and exclusive consideration for all
services to be rendered and performed under this Agreement, and for assigning
the rights to inventions, designs, software, patents, mask-work rights,
trademarks, and copyrights as hereinafter provided, you will be paid at the rate
specified on Exhibit A.
---------
(b) Stock Options. You shall receive, as of the Effective Time,
options (the "New Stock Options") to acquire 20,000 shares of Common Stock of
the Company, at an exercise price equal to $0.50 per share. One-fourth of such
shares shall become exercisable on the first anniversary of the Effective Time,
and an additional 1/16th of such shares become exercisable on the same day of
each third month during the three (3) years thereafter or until this Agreement
is earlier terminated. All other terms governing such options shall be set out
in the Company's standard option agreement and stock option plan.
(c) Expenses. You shall be entitled to prompt reimbursement by the
Company for all reasonable ordinary and necessary travel, entertainment, and
other expenses incurred by you during the Term (in accordance with the policies
and procedures established by the Company for its consultants) in the
performance of your duties and responsibilities under this Agreement; provided,
--------
that you shall properly account for such expenses in accordance with Company
policies and procedures. Any necessary air travel shall be coach class
domestically and business class internationally.
4. Term. Either you or the Company may terminate this Agreement at any
time for any reason or no reason, with or without cause. Notwithstanding the
foregoing, the provisions of Section 6 shall survive any termination of this
Agreement.
5. Assignment
(a) Successors and Assigns. Any of the Company's affiliates may
assume the liabilities and obligations, and succeed to the rights and interests,
of the Company under this Agreement at any time and without limitation. In
addition to the foregoing, any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise), or to all or substantially all of the Company's business and/or
assets, shall assume the obligations under this Agreement and agree expressly to
perform the obligations under this Agreement in the same manner and to the same
extent as the Company would be required to perform such obligations in the
absence of such succession. For all purposes of and under this Agreement, the
term "Company" shall include any successor to the Company's business and/or
assets which executes and delivers the assumption agreement required by this
Section 5, or which otherwise becomes bound by the terms of this Agreement by
operation of law. Any such assumption and/or succession under this Section 5
shall not be deemed to be a termination of your relationship with the Company
hereunder.
(b) The terms of this Agreement and all of your rights hereunder shall
inure to the benefit of, and be enforceable by, your personal or legal
representatives, executors, administrators, successor, heirs, distributees,
devisees or legatees.
6. Covenant Not to Compete.
(a) Definitions. As used in this Agreement, the terms:
(i) "Restricted Business" shall mean any business related
to (i) advertising, marketing, media placement or banner serving, (ii)
enterprise software applications and/or enterprise integration relating to
online or traditional (including, without limitation, television, print, direct
mail, radio or the like)
advertising, marketing, media placement or banner serving or (iii) the
transacting of business; shopping, purchasing, or subscribing to or registering
for services, products, programs or information; downloading or obtaining
software programs or information; or participating in other similar types of
transactions which specifically arise from banners served by the Company.
(ii) "Restricted Territory" shall mean the larger of: (A)
all of the countries of the world or (B) if (A) is found unenforceable, the
countries in which the Company's products are available during the term of the
non-compete obligations specified in this Section 6.
(b) Non-Compete. In consideration of: (i) the several agreements
made by the Company in and pursuant to the Reorganization Agreement, (ii) the
issuance by the Company to you of the New Stock Options, (iii) the Company's
willingness to enter into the Reorganization Agreement, and (iv) the
consideration payable to you hereunder, you agree that until: (A) the three (3)
year anniversary of the Effective Time or (B) in the event that the period set
forth in clause (A) is determined to be unenforceable by a court of competent
jurisdiction, the maximum period allowable, you will not, directly or
indirectly, engage in (whether as an officer, employee, consultant, director,
proprietor, partner, consultant or otherwise), or have any ownership interest
in, or participate in the financing, operation, management or control of, any
person, firm, corporation or business that engages in a Restricted Business in a
Restricted Territory. It is agreed that ownership of no more than two percent
(2%) of the outstanding voting stock of a publicly-traded or privately-held
corporation shall not constitute a violation of this section. It is further
agreed that the foregoing consideration is not intended to constitute liquidated
damages for a violation of this section.
(c) Non-Solicit. You agree that until the expiration of the non-
compete obligations specified above in subsection (b), you shall not:
(i) take any action to, or do anything reasonably intended
to, divert business from the Company, or any of its affiliates, or influence or
attempt to influence any retailer, dealer, vendor, supplier, customer or
potential customer of the Company, or any of its affiliates, in each case as
existing on the date of your termination (the "Termination Date"), to cease
doing business with the Company, or any of its affiliates, as the case may be,
or to alter its business relationship with the Company, or any of its
affiliates, in each case as existing on the Termination Date; or
(ii) recruit, attempt to hire, solicit, or assist others in
recruiting or hiring, any person who is an employee of the Company, or any of
its affiliates, in each case as of the Termination Date, or induce or attempt to
induce any such employee to terminate his or her employment with the Company, or
any of its affiliates.
(d) REMEDIES. YOU HEREBY RECOGNIZE AND ACKNOWLEDGE THAT A MATERIAL
VIOLATION OF THE TERMS AND PROVISIONS OF THIS SECTION 6 WOULD CAUSE IRREPARABLE
INJURY TO THE COMPANY, OR ONE OR MORE OF ITS AFFILIATES, AS THE CASE MAY BE, FOR
WHICH THE COMPANY, OR ANY OF ITS AFFILIATES, WOULD HAVE NO ADEQUATE REMEDY AT
LAW. ACCORDINGLY, IN THE EVENT THAT YOU SHALL FAIL TO MATERIALLY COMPLY WITH
THE TERMS AND PROVISIONS OF THIS SECTION 6 IN ANY RESPECT, AND YOU HAVE BEEN
GIVEN NOTICE OF SUCH VIOLATION AND AN OPPORTUNITY TO CURE SUCH VIOLATION, THE
COMPANY, OR ANY OF ITS AFFILIATES, SHALL BE ENTITLED TO PRELIMINARY AND OTHER
INJUNCTIVE RELIEF AND TO SPECIFIC PERFORMANCE OF THE TERMS AND PROVISIONS
HEREOF. IN FURTHERANCE AND NOT IN LIMITATION OF THE FOREGOING, YOU HEREBY WAIVE
ANY CLAIM OR DEFENSE RELATING TO ANY VIOLATION OR BREACH BY YOU OF THE TERMS AND
PROVISIONS OF THIS SECTION 6 THAT THE COMPANY, OR ANY OF ITS
AFFILIATES, HAS AN ADEQUATE REMEDY AT LAW OR THAT MONEY DAMAGES WOULD PROVIDE AN
ADEQUATE REMEDY FOR SUCH VIOLATION OR BREACH.
(e) Severability. The parties intend that the covenants contained in
the preceding paragraphs shall be construed as a series of separate covenants,
one for each county, city, state and other political subdivision of each country
in the Restricted Territory. Except for geographic coverage, each separate
covenant shall be deemed identical in terms to the covenant contained in the
preceding paragraphs. If, in any judicial proceeding, a court shall refuse to
enforce any of the separate covenants (or any part thereof) deemed included in
said paragraphs, then such unenforceable covenant (or such part) shall be deemed
eliminated from this Agreement for the purpose of those proceedings to the
extent necessary to permit the remaining separate covenants (or portions
thereof) to be enforced by such court. It is the intent of the parties that the
covenants set forth herein be enforced to the maximum degree permitted by
applicable law.
7. Compliance with Applicable Laws. You agree to comply with all
applicable laws and regulations. You shall hold harmless and indemnify the
Company for any damages resulting to the Company from a breach of this paragraph
by you.
8. Entire Agreement. This Agreement and the Confidential Information and
Invention Assignment Agreement set forth the entire agreement and understanding
of the parties with respect to the subject matter hereof and thereof, and
supersede any other written or oral negotiations, agreements, understandings,
representations or practices concerning such subject matter hereof (including
without limitation any employment agreement or offer letter extended by the
Company at any time). In the event of any conflict between the provisions
hereof and the provisions of the Confidential Information and Invention
Assignment Agreement the, provisions hereof shall control.
9. Notices. Any notice, report or other communication required or
permitted to be given hereunder shall be in writing and shall be deemed given on
the date of delivery if delivered, or five days after mailing, if mailed first-
class mail, postage prepaid, return receipt requested, or delivered to a
nationwide overnight delivery service charges prepaid, return receipt requested,
to the following addresses:
(a) If to the Company: Internet Extra Corporation
000 Xxxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
(b) If to you: To the address for notice set forth on the
signature page hereto or to such other
address as any party hereto may hereafter
designate by notice given as herein
provided.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of California without giving effect to principles
regarding conflict of laws. Any action or proceeding brought by any party
against another arising out of or related to this Agreement shall be brought in
a state or federal court of competent subject matter jurisdiction located within
Santa Xxxxx County in the State of California, and each of the parties to this
Agreement consents to the personal jurisdiction of those courts.
11. Arbitration. In the event of any dispute or claim relating to or
arising out of our employment relationship, you and the Company agree that all
such disputes shall be fully and finally resolved by binding arbitration
conducted by the American Arbitration Association in San Francisco, California.
HOWEVER, we agree that this arbitration provision shall not apply to any
disputes or claims relating to or arising out of the misuse or misappropriation
of the Company's trade secrets or proprietary information.
12. Amendments. This Agreement shall not be changed or modified in whole
or in part except by an instrument in writing signed by the Company and you nor
shall any covenant or provision of this Agreement be waived except by an
instrument in writing signed by the party against whom enforcement of such
waiver is sought.
13. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be an original, but all of which shall together constitute
one and the same agreement.
14. Effect of Headings. The section headings herein are for convenience
only and shall not effect the construction or interpretation of the Agreement.
15. Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to either party upon any breach or default of the other
party hereto shall impair any such right, power or remedy of such non-defaulting
party, nor shall it be construed to be a waiver of any such breach or default or
an acquiescence therein, or of any similar breach or default thereafter
occurring; nor shall any waiver of a breach or default be deemed to be a waiver
of any other breach or default.
16. Rules of Construction. You and the Company each acknowledge that they
have been represented by, or had an opportunity to consult with, competent
counsel during the negotiation and execution of this Agreement and therefore,
waive the application of any law, regulation, holding or rule of construction
providing that ambiguities in any agreement will be construed against the party
drafting such agreement.
[The remainder of this page is intentionally left blank.]
To indicate your acceptance of the terms of this Agreement, please sign and
date this letter in the space provided below and return it to me. A duplicate
original is enclosed for your records. This letter, along with the agreement
relating to proprietary rights between you and the Company, set forth the terms
of your employment with the Company and supersede any prior representations or
agreements, whether written or oral.
We look forward to working with you at Internet Extra Corporation.
Sincerely,
Internet Extra Corporation
__________________________________________
Xxxx Xxxxxxx
Chief Executive Officer
ACCEPTED AND AGREED TO this
____ day of March, 1999.
/s/ Shuangli Coa
---------------------------------
Xxxxxxxx Xxx
Address for notices:
0000 Xxxxxxx Xxxxx Xx
---------------------------------
Xxx Xxxx XX 00000
---------------------------------
_________________________________
Enclosures: Duplicate Original Letter
Confidential Information and Invention Assignment Agreement
[SIGNATURE PAGE TO CONSULTING AGREEMENT]
To indicate your acceptance of the terms of this Agreement, please sign and
date this letter in the space provided below and return it to me. A duplicate
original is enclosed for your records. This letter, along with the agreement
relating to proprietary rights between you and the Company, set forth the terms
of your employment with the Company and supersede any prior representations or
agreements, whether written or oral.
We look forward to working with you at Internet Extra Corporation.
Sincerely,
Internet Extra Corporation
/s/ Xxxx X. Xxxxxxx
-----------------------------------------------
Xxxx Xxxxxxx
Chief Executive Officer
ACCEPTED AND AGREED TO this
____ day of March, 1999.
---------------------------------
Xxxxxxxx Xxx
Address for notices:
_________________________________
_________________________________
_________________________________
Enclosures: Duplicate Original Letter
Confidential Information and Invention Assignment Agreement
[SIGNATURE PAGE TO CONSULTING AGREEMENT]
EXHIBIT A
---------
Consulting Agreement between Internet Extra and Xxxxxxxx Xxx
Duties:
Supervisor:
Compensation:
EXHIBIT H
---------
Form of Employment Offer - Xxxx-xxxxx "Andy" Yang
Internet Extra Corporation
000 Xxxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
March __, 1999
Xx. Xxxx-Xxxxx Yang
Netranscend Software, Inc.
000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Xxxx-Xxxxx:
I am very pleased to offer you the position of _________________ with
Internet Extra Corporation (the "Company") commencing on the effectiveness of
the merger between Netranscend Software, Inc. ("Netranscend") and the Company.
We at the Company are delighted that you have decided to join our enterprise and
help MediaPlex become a success. I would like to take this opportunity to set
out the terms of your employment more fully:
1. Effectiveness. This agreement (this "Agreement") is being entered in
connection with the Agreement and Plan of Reorganization (the "Reorganization
Agreement"), dated as of March, __, 1999, by and among the Company, Netranscend
and Ruiqing "Xxxxxxx" Jiang, and all capitalized terms used but not defined
herein shall have the meaning ascribed to them in the Reorganization Agreement.
Your employment under this Agreement shall become effective as of the Effective
Time of the Merger. In the event that the Reorganization Agreement is
terminated prior to the Effective Time of the Merger, this Agreement shall
terminate and be of no further force and effect.
2. Employment.
(a) Duties. The Company shall employ you, and you shall initially
serve as, ____________ for the Company, subject at all times and in all cases
and respects to the ultimate control and direction of the Company. In such
capacity, you shall perform all such services, accept all such responsibilities
and discharge all such duties and responsibilities as are consistent and
commensurate with your position and as may be assigned to or required of you
from time to time by the Company. You shall perform such services, accept such
responsibilities and discharge such duties within the policies and guidelines
established from time to time by the Company, subject at all times and in all
cases and respects to the ultimate control and direction of the Company. The
Company shall have the right to review and revise your services,
responsibilities and duties at any time and from time to time in any and all
respects.
(b) Exclusive Employment. At all times during the Term, you shall
devote all of your business time, attention and energies to the performance,
fulfillment and satisfaction of your duties and responsibilities to the Company
under this Agreement, and shall not undertake or be engaged in any other
activities, whether or not pursued for gain, profit or other pecuniary
advantage, which could impair your ability to perform, fulfill and satisfy your
duties and responsibilities to the Company under this Agreement, in any case
without the prior written consent of the Company which consent will not be
unreasonably withheld.
(c) Affirmation of Fiduciary Responsibilities. At all times during
the Term, you shall perform, satisfy, fulfill and carry out your duties and
responsibilities to the Company under this Agreement with fidelity and loyalty,
in a diligent manner, to the best of your ability, experience and talent, and in
a manner consistent with your fiduciary responsibilities to the Company.
Internet Extra Corporation
000 Xxxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
March __, 1999
Xx. Xxxx-Xxxxx Xxxx
Netranscend Software, Inc.
000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Xxxx-Xxxxx:
I am very pleased to offer you the position of _________________ with
Internet Extra Corporation (the "Company") commencing on the effectiveness of
the merger between Netranscend Software, Inc. ("Netranscend") and the Company.
We at the Company are delighted that you have decided to join our enterprise and
help MediaPlex become a success. I would like to take this opportunity to set
out the terms of your employment more fully:
1. Effectiveness. This agreement (this "Agreement") is being entered in
connection with the Agreement and Plan of Reorganization (the "Reorganization
Agreement"), dated as of March, __, 1999, by and among the Company, Netranscend
and Ruiqing "Xxxxxxx" Jiang, and all capitalized terms used but not defined
herein shall have the meaning ascribed to them in the Reorganization Agreement.
Your employment under this Agreement shall become effective as of the Effective
Time of the Merger. In the event that the Reorganization Agreement is
terminated prior to the Effective Time of the Merger, this Agreement shall
terminate and be of no further force and effect.
2. Employment.
(a) Duties. The Company shall employ you, and you shall initially
serve as, ____________ for the Company, subject at all times and in all cases
and respects to the ultimate control and direction of the Company. In such
capacity, you shall perform all such services, accept all such responsibilities
and discharge all such duties and responsibilities as are consistent and
commensurate with your position and as may be assigned to or required of you
from time to time by the Company. You shall perform such services, accept such
responsibilities and discharge such duties within the policies and guidelines
established from time to time by the Company, subject at all times and in all
cases and respects to the ultimate control and direction of the Company. The
Company shall have the right to review and revise your services,
responsibilities and duties at any time and from time to time in any and all
respects.
(b) Exclusive Employment. At all times during the Term, you shall
devote all of your business time, attention and energies to the performance,
fulfillment and satisfaction of your duties and responsibilities to the Company
under this Agreement, and shall not undertake or be engaged in any other
activities, whether or not pursued for gain, profit or other pecuniary
advantage, which could impair your ability to perform, fulfill and satisfy your
duties and responsibilities to the Company under this Agreement, in any case
without the prior written consent of the Company which consent will not be
unreasonably withheld.
(c) Affirmation of Fiduciary Responsibilities. At all times during
the Term, you shall perform, satisfy, fulfill and carry out your duties and
responsibilities to the Company under this Agreement with fidelity and loyalty,
in a diligent manner, to the best of your ability, experience and talent, and in
a manner consistent with your fiduciary responsibilities to the Company.
3. Compensation.
(a) Base Salary and Incentive Compensation. Your base salary shall be
paid at the annual rate of $___________ ("Base Salary"), payable in accordance
with the Company's standard payroll practices. Unless otherwise specified
herein, the Company shall make such deductions, withholdings and other payments
from all sums payable pursuant to this Agreement which you request or that are
required by law for taxes and other charges.
(b) Stock Options. You shall receive, as of the Effective Time,
options (the "New Stock Options") to acquire 30,000 shares of Common Stock of
the Company, at an exercise price equal to $0.50 per share. One-fourth of such
shares shall become exercisable on the first anniversary of the Effective Time,
and an additional 1/16th of such shares become exercisable on the same day of
each third month during the three (3) years thereafter or until this Agreement
is earlier terminated. All other terms governing such options shall be set out
in the Company's standard option agreement and stock option plan.
(c) Benefits Plans. You will be entitled to participate in or receive
benefits under the Company's employee benefit plans and policies in effect from
time to time in which you are eligible to participate, subject to the applicable
terms and conditions of the particular benefit plan. The Company may change,
amend, modify or terminate to the extent legally allowable, any benefit plan
from time to time and without prior notice. To the extent benefits provided by
the Company are affected by seniority (i.e. length of service), you shall be
credited for time you served at Netranscend, to the fullest extent permitted by
law and consistent with the Company's current benefit plans.
(d) Expenses. You shall be entitled to prompt reimbursement by the
Company for all reasonable ordinary and necessary travel, entertainment, and
other expenses incurred by you during the Term (in accordance with the policies
and procedures established by the Company for its employees) in the performance
of your duties and responsibilities under this Agreement; provided, that you
--------
shall properly account for such expenses in accordance with Company policies and
procedures. Any necessary air travel shall be coach class domestically and
business class internationally.
(e) Vacation and Holidays. You shall be entitled to __________ weeks
paid vacation and Company holidays in accordance with the Company's policies in
effect from time to time for its senior executive officers.
4. Term. You shall be an "at-will" employee of the Company. Either you
or the Company may terminate this Agreement at any time for any reason or no
reason, with or without cause. Notwithstanding the foregoing, the provisions of
Section 6 shall survive any termination of this Agreement.
5. Assignment
(a) Successors and Assigns. Any of the Company's affiliates may
assume the liabilities and obligations, and succeed to the rights and interests,
of the Company under this Agreement at any time and without limitation. In
addition to the foregoing, any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise), or to all or substantially all of the Company's business and/or
assets, shall assume the obligations under this Agreement and agree expressly to
perform the obligations under this Agreement in the same manner and to the same
extent as the Company would be required to perform such obligations in the
absence of such succession. For all purposes of and under this Agreement, the
term "Company" shall include any successor to the Company's business and/or
assets which executes and delivers the assumption agreement required by this
Section 5, or which otherwise becomes bound by the terms of this
Agreement by operation of law. Any such assumption and/or succession under this
Section 5 shall not be deemed to be a termination of your employment hereunder.
(b) The terms of this Agreement and all of your rights hereunder shall
inure to the benefit of, and be enforceable by, your personal or legal
representatives, executors, administrators, successor, heirs, distributees,
devisees or legatees.
6. Covenant Not to Compete.
(a) Definitions. As used in this Agreement, the terms:
(i) "Restricted Business" shall mean any business related
to (i) advertising, marketing, media placement or banner serving, (ii)
enterprise software applications and/or enterprise integration relating to
online or traditional (including, without limitation, television, print, direct
mail, radio or the like) advertising, marketing, media placement or banner
serving or (iii) the transacting of business; shopping, purchasing, or
subscribing to or registering for services, products, programs or information;
downloading or obtaining software programs or information; or participating in
other similar types of transactions which specifically arise from banners served
by the Company.
(ii) "Restricted Territory" shall mean the larger of: (A)
all of the countries of the world or (B) if (A) is found unenforceable, the
countries in which the Company's products are available during the term of the
non-compete obligations specified in this Section 6.
(b) Non-Compete. In consideration of: (i) the several agreements
made by the Company in and pursuant to the Reorganization Agreement, (ii) the
issuance by the Company to you of the New Stock Options, (iii) the Company's
willingness to enter into the Reorganization Agreement, and (iv) the
consideration payable to you hereunder, you agree that until: (A) the three (3)
year anniversary of the Effective Time or (B) in the event that the period set
forth in clause (A) is determined to be unenforceable by a court of competent
jurisdiction, the maximum period allowable, you will not, directly or
indirectly, engage in (whether as an officer, employee, consultant, director,
proprietor, partner, consultant or otherwise), or have any ownership interest
in, or participate in the financing, operation, management or control of, any
person, firm, corporation or business that engages in a Restricted Business in a
Restricted Territory. It is agreed that ownership of no more than two percent
(2%) of the outstanding voting stock of a publicly-traded or privately-held
corporation shall not constitute a violation of this section. It is further
agreed that the foregoing consideration is not intended to constitute liquidated
damages for a violation of this section.
(c) Non-Solicit. You agree that until the expiration of the non-
compete obligations specified above in subsection (b), you shall not:
(i) take any action to, or do anything reasonably intended
to, divert business from the Company, or any of its affiliates, or influence or
attempt to influence any retailer, dealer, vendor, supplier, customer or
potential customer of the Company, or any of its affiliates, in each case as
existing on the date of your termination (the "Termination Date"), to cease
doing business with the Company, or any of its affiliates, as the case may be,
or to alter its business relationship with the Company, or any of its
affiliates, in each case as existing on the Termination Date; or
(ii) recruit, attempt to hire, solicit, or assist others in
recruiting or hiring, any person who is an employee of the Company, or any of
its affiliates, in each case as of the Termination Date,
or induce or attempt to induce any such employee to terminate his or her
employment with the Company, or any of its affiliates.
(d) REMEDIES. YOU HEREBY RECOGNIZE AND ACKNOWLEDGE THAT A MATERIAL
VIOLATION OF THE TERMS AND PROVISIONS OF THIS SECTION 6 WOULD CAUSE IRREPARABLE
INJURY TO THE COMPANY, OR ONE OR MORE OF ITS AFFILIATES, AS THE CASE MAY BE, FOR
WHICH THE COMPANY, OR ANY OF ITS AFFILIATES, WOULD HAVE NO ADEQUATE REMEDY AT
LAW. ACCORDINGLY, IN THE EVENT THAT YOU SHALL FAIL TO MATERIALLY COMPLY WITH
THE TERMS AND PROVISIONS OF THIS SECTION 6 IN ANY RESPECT, AND YOU HAVE BEEN
GIVEN NOTICE OF SUCH VIOLATION AND AN OPPORTUNITY TO CURE SUCH VIOLATION, THE
COMPANY, OR ANY OF ITS AFFILIATES, SHALL BE ENTITLED TO PRELIMINARY AND OTHER
INJUNCTIVE RELIEF AND TO SPECIFIC PERFORMANCE OF THE TERMS AND PROVISIONS
HEREOF. IN FURTHERANCE AND NOT IN LIMITATION OF THE FOREGOING, YOU HEREBY WAIVE
ANY CLAIM OR DEFENSE RELATING TO ANY VIOLATION OR BREACH BY YOU OF THE TERMS AND
PROVISIONS OF THIS SECTION 6 THAT THE COMPANY, OR ANY OF ITS AFFILIATES, HAS AN
ADEQUATE REMEDY AT LAW OR THAT MONEY DAMAGES WOULD PROVIDE AN ADEQUATE REMEDY
FOR SUCH VIOLATION OR BREACH.
(e) Severability. The parties intend that the covenants contained in
the preceding paragraphs shall be construed as a series of separate covenants,
one for each county, city, state and other political subdivision of each country
in the Restricted Territory. Except for geographic coverage, each separate
covenant shall be deemed identical in terms to the covenant contained in the
preceding paragraphs. If, in any judicial proceeding, a court shall refuse to
enforce any of the separate covenants (or any part thereof) deemed included in
said paragraphs, then such unenforceable covenant (or such part) shall be deemed
eliminated from this Agreement for the purpose of those proceedings to the
extent necessary to permit the remaining separate covenants (or portions
thereof) to be enforced by such court. It is the intent of the parties that the
covenants set forth herein be enforced to the maximum degree permitted by
applicable law.
7. Compliance with Applicable Laws. You agree to comply with all
applicable laws and regulations. You shall hold harmless and indemnify the
Company for any damages resulting to the Company from a breach of this paragraph
by you.
8. Entire Agreement. This Agreement and the Confidential Information and
Invention Assignment Agreement set forth the entire agreement and understanding
of the parties with respect to the subject matter hereof and thereof, and
supersede any other written or oral negotiations, agreements, understandings,
representations or practices concerning such subject matter hereof (including
without limitation any employment agreement or offer letter extended by the
Company at any time). In the event of any conflict between the provisions
hereof and the provisions of the Confidential Information and Invention
Assignment Agreement the, provisions hereof shall control.
9. Notices. Any notice, report or other communication required or
permitted to be given hereunder shall be in writing and shall be deemed given on
the date of delivery if delivered, or five days after mailing, if mailed first-
class mail, postage prepaid, return receipt requested, or delivered to a
nationwide overnight delivery service charges prepaid, return receipt requested,
to the following addresses:
(a) If to the Company: Internet Extra Corporation
000 Xxxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
(b) If to you: To the address for notice set forth on the
signature page hereto or to such other address as
any party hereto may hereafter designate by notice
given as herein provided.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of California without giving effect to principles
regarding conflict of laws. Any action or proceeding brought by any party
against another arising out of or related to this Agreement shall be brought in
a state or federal court of competent subject matter jurisdiction located within
Santa Xxxxx County in the State of California, and each of the parties to this
Agreement consents to the personal jurisdiction of those courts.
11. Arbitration. In the event of any dispute or claim relating to or
arising out of our employment relationship, you and the Company agree that all
such disputes shall be fully and finally resolved by binding arbitration
conducted by the American Arbitration Association in San Francisco, California.
HOWEVER, we agree that this arbitration provision shall not apply to any
disputes or claims relating to or arising out of the misuse or misappropriation
of the Company's trade secrets or proprietary information.
12. Amendments. This Agreement shall not be changed or modified in whole
or in part except by an instrument in writing signed by the Company and you nor
shall any covenant or provision of this Agreement be waived except by an
instrument in writing signed by the party against whom enforcement of such
waiver is sought.
13. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be an original, but all of which shall together constitute
one and the same agreement.
14. Effect of Headings. The section headings herein are for convenience
only and shall not effect the construction or interpretation of the Agreement.
15. Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to either party upon any breach or default of the other
party hereto shall impair any such right, power or remedy of such non-defaulting
party, nor shall it be construed to be a waiver of any such breach or default or
an acquiescence therein, or of any similar breach or default thereafter
occurring; nor shall any waiver of a breach or default be deemed to be a waiver
of any other breach or default.
16. Rules of Construction. You and the Company each acknowledge that they
have been represented by, or had an opportunity to consult with, competent
counsel during the negotiation and execution of this Agreement and therefore,
waive the application of any law, regulation, holding or rule of construction
providing that ambiguities in any agreement will be construed against the party
drafting such agreement.
[The remainder of this page is intentionally left blank.]
To indicate your acceptance of the terms of this Agreement, please sign and
date this letter in the space provided below and return it to me. A duplicate
original is enclosed for your records. This letter, along with the agreement
relating to proprietary rights between you and the Company, set forth the terms
of your employment with the Company and supersede any prior representations or
agreements, whether written or oral.
We look forward to working with you at Internet Extra Corporation.
Sincerely,
Internet Extra Corporation
_________________________________________
Xxxx Xxxxxxx
Chief Executive Officer
ACCEPTED AND AGREED TO this
____ day of March, 1999.
_______________________________________
Hung-Xxxxx Xxxx
Address for notices:
_________________________________
_________________________________
_________________________________
Enclosures: Duplicate Original Letter
Confidential Information and Invention Assignment Agreement
[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]
To indicate your acceptance of the terms of this Agreement, please sign and
date this letter in the space provided below and return it to me. A duplicate
original is enclosed for your records. This letter, along with the agreement
relating to proprietary rights between you and the Company, set forth the terms
of your employment with the Company and supersede any prior representations or
agreements, whether written or oral.
We look forward to working with you at Internet Extra Corporation.
Sincerely,
Internet Extra Corporation
/s/ Xxxx X. Xxxxxxx
-----------------------------------------
Xxxx Xxxxxxx
Chief Executive Officer
ACCEPTED AND AGREED TO this
____ day of March, 1999.
_______________________________________
Hung-Xxxxx Xxxx
Address for notices:
_________________________________
_________________________________
_________________________________
Enclosures: Duplicate Original Letter
Confidential Information and Invention Assignment Agreement
[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]
To indicate your acceptance of the terms of this Agreement, please sign and
date this letter in the space provided below and return it to me. A duplicate
original is enclosed for your records. This letter, along with the agreement
relating to proprietary rights between you and the Company, set forth the terms
of your employment with the Company and supersede any prior representations or
agreements, whether written or oral.
We look forward to working with you at Internet Extra Corporation.
Sincerely,
Internet Extra Corporation
/s/ Xxxx X. Xxxxxxx
-----------------------------------------
Xxxx Xxxxxxx
Chief Executive Officer
ACCEPTED AND AGREED TO this
____ day of March, 1999.
_______________________________________
Hung-Xxxxx Xxxx
Address for notices:
_________________________________
_________________________________
_________________________________
Enclosures: Duplicate Original Letter
Confidential Information and Invention Assignment Agreement
[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]
EXHIBIT I
---------
Form of Escrow Agreement
ESCROW AGREEMENT
This ESCROW AGREEMENT (the "Agreement") is made and entered into as of
March 25, 1999 by and among (i) Internet Extra Corporation, a California
corporation ("IEC"), (ii) Ruiqing "Xxxxxxx" Jiang, both as Principal Shareholder
(the "Principal Shareholder") and as shareholder representative (the
"Shareholder Representative") for the sole shareholder of Netranscend Software,
Inc., a California corporation ("Netranscend") and (iii) Xxxx Xxxxxxx, the
corporate secretary of IEC, as escrow agent (the "Escrow Agent"). Capitalized
terms not defined herein shall have the meanings ascribed to them in the
Reorganization Agreement (as defined below).
Recitals
WHEREAS, IEC, Netranscend and the Principal Shareholder have entered into
an Agreement and Plan of Reorganization, of even date herewith (the
"Reorganization Agreement") whereby IEC shall acquire Netranscend through the
statutory merger of Netranscend with and into IEC (the "Merger");
WHEREAS, pursuant to the Merger, among other things, all of the issued and
outstanding shares of common stock of Netranscend shall be converted into the
right to receive cash and shares of IEC Common Stock;
WHEREAS, pursuant to the Reorganization Agreement, a portion of the shares
of IEC Common Stock otherwise payable by IEC in connection with the Merger shall
be placed in escrow and held by the Escrow Agent pursuant to the escrow terms
hereof and the release of such shares shall be contingent upon certain events
and conditions;
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the parties agree as follows:
Agreement
1. Escrow Fund. At the Closing, the Principal Shareholder and IEC shall
deliver to the Escrow Agent the Escrow Shares, and such deposit with the Escrow
Agent shall constitute the Escrow Fund.
2. Escrow Period; Delivery of Balance of Escrow Fund Upon Termination of
Escrow Period. Subject to the terms hereof, the Escrow Fund shall be in
existence immediately following the Effective Time and shall terminate at 5:00
p.m. PST, two (2) years after the Closing Date (the "Escrow Period"); provided,
however, that the Escrow Period shall not terminate with respect to such
remaining portion of the Escrow Fund (or some portion thereof) that in the
reasonable judgement of IEC, subject to the objection of the Shareholder Agent
(as defined below) and the subsequent arbitration of the matter in the manner
provided herein, is necessary to satisfy (x) any then pending unsatisfied claims
specified in any Officer's Certificate delivered to the Escrow Agent prior to
the termination of the Escrow Period and (y) any unsatisfied claims specified in
any Officer's
Certificate delivered to the Escrow Agent prior to termination of the Escrow
Period with respect to facts and circumstances existing prior to the termination
of such Escrow Period. As soon as all such claims have been resolved, the Escrow
Agent shall deliver to the Principal Shareholder the remaining portion of the
Escrow Fund not required to satisfy such claims. Notwithstanding the above, all
Escrow Shares shall be released from the Escrow Fund within five (5) years of
the Closing Date except in the event that there is a bona fide dispute over to
whom the Escrow Shares should be so released.
3. Protection of Escrow Fund. The Escrow Agent shall hold and safeguard
the Escrow Fund during the Escrow Period, shall treat such fund as a trust fund
in accordance herewith and not as the property of IEC and shall hold and dispose
of the Escrow Fund only in accordance herewith. Any shares of IEC Common Stock
or other equity securities issued or distributed by IEC (including shares issued
upon a stock split) ("New Shares") in respect of the Escrow Shares which have
not been released from the Escrow Fund shall be added to the Escrow Fund and
become a part thereof. New Shares issued in respect of Escrow Shares which have
been released from the Escrow Fund shall not be added to the Escrow Fund but
shall be distributed to record holder of such shares. Cash dividends on IEC
Common Stock shall not be added to the Escrow Fund but shall be distributed to
the Principal Shareholder. As the record holder of the Escrow Shares, the
Escrow Agent shall vote such shares in accordance with the instructions of the
Principal Shareholder and shall promptly deliver copies of all proxy
solicitation materials to the Principal Shareholder. IEC shall show the Escrow
Shares as issued and outstanding on its balance sheet.
4. Claims Upon the Escrow Fund. Upon receipt by the Escrow Agent at any
time on or before the last day of the Escrow Period of a certificate signed by
any officer of IEC (an "Officer's Certificate"): (A) stating that IEC has paid
or properly accrued or reasonably anticipates that it will have to pay or accrue
Losses, and (B) specifying in reasonable detail the individual items of Losses
included in the amount so stated, the date each such item was paid or properly
accrued, or the basis for such anticipated liability, and the nature of the
misrepresentations, breach of warranty or covenant to which such items is
related, the Escrow Agent shall, subject to the provisions of the Escrow
Instructions, deliver to IEC out of the Escrow Fund as promptly as practicable
(subject to Section 5 hereof), such number of shares of IEC Common Stock held in
the Escrow Fund with a value equal to such Losses. For the purposes of
determining the number of shares of IEC Common Stock to be delivered to IEC out
of the Escrow Fund, the shares of IEC Common Stock shall be valued at the fair
market value as determined in good faith by the IEC Board of Directors.
5. Objections to Claims. At the time of delivery of any Officer's
Certificate to the Escrow Agent, a duplicate copy of such Officer's Certificate
shall be delivered to the Shareholder Agent (as defined herein), and for a
period of thirty (30) days after such delivery, the Escrow Agent shall make no
delivery to IEC of any Escrow Shares unless the Escrow Agent shall have received
written authorization from the Shareholder Agent to make such delivery. After
the expiration of such thirty (30) day period, the Escrow Agent shall make
delivery of shares of IEC Common Stock from the Escrow Fund, provided that no
such payment or delivery may be made if the Shareholder Agent shall object in a
written statement to the claim made in the Officer's Certificate, and such
statement shall have been delivered to the Escrow Agent prior to the expiration
of such thirty (30) day period.
6. Resolution of Claims; Arbitration.
(i) In case the Shareholder Representative shall so object in
writing to any claim or claims made in any Officer's Certificate, the
Shareholder Representative and IEC shall attempt in good faith to agree upon the
rights of the respective parties with respect to each of such claims. If the
Shareholder Representative and IEC should so agree, a memorandum setting forth
such agreement shall be prepared and signed by both parties and shall be
furnished to the Escrow Agent. The Escrow Agent shall be entitled to rely on any
such memorandum and distribute Escrow Shares in accordance with the terms
thereof.
(ii) If no such agreement can be reached after good faith
negotiation, either IEC or the Shareholder Representative may demand arbitration
of the matter unless the amount of the damage or loss is at issue in pending
litigation with a third party, in which event arbitration shall not be commenced
until such amount is ascertained or both parties agree to arbitration; and in
either such event the matter shall be settled by arbitration conducted by one
arbitrator mutually agreeable to IEC and the Shareholder Representative. In the
event that within forty-five (45) days after submission of any dispute to
arbitration, IEC and the Shareholder Representative cannot mutually agree on one
arbitrator, IEC and the Shareholder Representative shall each select one
arbitrator, and the two arbitrators so selected shall select a third arbitrator.
The arbitrator or arbitrators, as the case may be, shall set a limited time
period and establish procedures designed to reduce the cost and time for
discovery while allowing the parties an opportunity, adequate in the sole
judgement of the arbitrator or majority of the three arbitrators, as the case
may be, to discover relevant information from the opposing parties about the
subject matter of the dispute. The arbitrator or a majority of the three
arbitrators, as the case may be, shall rule upon motions to compel or limit
discovery and shall have the authority to impose sanctions, including attorneys'
fees and costs, to the extent as a court of competent law or equity, should the
arbitrator or a majority of the three arbitrators, as the case may be, determine
that discovery was sought without substantial justification or that discovery
was refused or objected to without substantial justification. The decision of a
the arbitrator or a majority of the three arbitrators, as the case may be, as to
the validity and amount of any claim in such Officer's Certificate shall be
binding and conclusive upon the parties to this Agreement, and notwithstanding
anything to the contrary herein, the Escrow Agent shall be entitled to act in
accordance with such decision and make or withhold payments out of the Escrow
Fund in accordance therewith. Such decision shall be written and shall be
supported by written findings of fact and conclusions which shall set forth the
award, judgment, decree or order awarded by the arbitrator(s).
(iii) Judgment upon any award rendered by the arbitrator(s) may be
entered in any court having jurisdiction. Any such arbitration shall be held in
San Francisco, California under the rules then in effect of the American
Arbitration Association. The arbitrator(s) shall determine how all expenses
relating to the arbitration shall be paid, including without limitation, the
respective expenses of each party, the fees of each arbitrator and the
administrative fee of the American Arbitration Association.
7. Shareholder Representative; Power of Attorney. In the event that the
Merger is approved, effective upon such vote, the Principal Shareholder shall
act as Shareholder Representative until such time as he shall appoint another
person as agent and attorney-in-fact for the Principal Shareholder. As used
herein, the term "Shareholder Representative" shall refer to the Principal
Shareholder, and such agent and attorney-in-fact , if any is appointed. The
Shareholder Representative shall have the authority to give and receive notices
and communications, to authorize delivery to IEC of Escrow Shares from the
Escrow Fund in satisfaction of claims by IEC, to object to such deliveries, to
agree to, negotiate, enter into settlements and compromises of, and demand
arbitration and comply with orders of courts and awards of arbitrators with
respect to such claims, and to take all actions necessary or appropriate in the
judgment of Shareholder Representative for the accomplishment of the foregoing.
Such agency may be changed by the Principal Shareholder from time to time upon
not less than thirty (30) days prior written notice to IEC. No bond shall be
required of the Shareholder Representative, and the Shareholder Representative
shall not receive compensation for his or her services. Notices or
communications to or from the Shareholder Representative shall constitute notice
to or from the Principal Shareholder. The Shareholder Representative shall not
be liable for any act done or omitted hereunder as Shareholder Representative
while acting in good faith and in the exercise of reasonable judgment. The
Principal Shareholder shall indemnify the Shareholder Representative and hold
the Shareholder Representative harmless against any loss, liability or expense
incurred without negligence or bad faith on the part of the Shareholder
Representative and arising out of or in connection with the acceptance or
administration of the Shareholder Representative's duties hereunder, including
the reasonable fees and expenses of any legal counsel retained by the
Shareholder Representative.
8. Actions of the Shareholder Representative. A decision, act, consent
or instruction of the Shareholder Representative shall constitute a decision of
the Principal Shareholder and shall be final, binding and conclusive upon the
Principal Shareholder, and the Escrow Agent and IEC may rely upon any such
decision, act, consent or instruction of the Shareholder Representative as being
the decision, act, consent or instruction of the Principal Shareholder. The
Escrow Agent and IEC are hereby relieved from any liability to any person for
any acts done by them in accordance with such decision, act, consent or
instruction of the Shareholder Representative.
9. Third-Party Claims. In the event IEC becomes aware of a third-party
claim which IEC believes may result in a demand against the Escrow Fund, IEC
shall notify the Shareholder Representative of such claim, and the Shareholder
Representative and the Principal Shareholder (if applicable) shall be entitled,
at their expense, to participate in any defense of such claim. IEC shall have
the right in its sole discretion to settle any such claim; provided, however,
that except with the consent of the Shareholder Representative, no settlement of
any such claim with third-party claimants shall be determinative of the amount
of any claim against the Escrow Fund. In the event that the Shareholder
Representative has consented to any such settlement, the Shareholder
Representative shall have no power or authority to object to the amount of any
claim by IEC against the Escrow Fund with respect to such settlement.
10. Escrow Agent's Duties.
(i) The Escrow Agent shall be obligated only for the performance of
such duties as are specifically set forth herein, and in any additional written
escrow instructions which the Escrow Agent may receive after the date of this
Agreement which are signed by an officer of IEC and the Shareholder
Representative, and may rely and shall be protected in relying or refraining
from acting on any instrument reasonably believed to be genuine and to have been
signed or presented by the proper party or parties. The Escrow Agent shall not
be liable for any act done or omitted hereunder as Escrow Agent while acting in
good faith and in the exercise of reasonable judgment, and any act done or
omitted pursuant to the advice of counsel shall be conclusive evidence of such
good faith.
(ii) The Escrow Agent is hereby expressly authorized to disregard
any and all warnings given by any of the parties hereto or by any other person,
excepting only orders or process of courts of law, and is hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court. In
case the Escrow Agent obeys or complies with any such order, judgment or decree
of any court, the Escrow Agent shall not be liable to any of the parties hereto
or to any other person by reason of such compliance, notwithstanding any such
order, judgment or decree being subsequently reversed, modified, annulled, set
aside, vacated or found to have been entered without jurisdiction.
(iii) The Escrow Agent shall not be liable in any respect on account
of the identity, authority or rights of the parties executing or delivering or
purporting to execute or deliver the Reorganization Agreement, this Agreement or
any documents or papers deposited or called for hereunder.
(iv) The Escrow Agent shall not be liable for the expiration of any
rights under any statute of limitations with respect to the Reorganization
Agreement, this Agreement or any documents deposited with the Escrow Agent.
(v) In performing any duties under the Escrow Instructions, the
Escrow Agent shall not be liable to any party for damages, losses, or expenses,
except for negligence or willful misconduct on the part of the Escrow Agent. The
Escrow Agent shall not incur any such liability for (A) any act or failure to
act made or omitted in good faith, or (B) any action taken or omitted in
reliance upon any instrument, including any written statement of affidavit
provided for in this Escrow Instructions that the Escrow Agent shall in good
faith believe to be genuine, nor will the Escrow Agent be liable or responsible
for forgeries, fraud, impersonations, or determining the scope of any
representative authority. In addition, the Escrow Agent may consult with the
legal counsel in connection with Escrow Agent's duties under the Escrow
Instructions and shall be fully protected in any act taken, suffered, or
permitted by him/her in good faith in accordance with the advice of counsel. The
Escrow Agent is not responsible for determining and verifying the authority of
any person acting or purporting to act on behalf of any party to the
Reorganization Agreement or this Agreement.
(vi) If any controversy arises between the parties to the
Reorganization Agreement, this Agreement, or with any other party, concerning
the subject matter of the Escrow Instructions, its terms or conditions, the
Escrow Agent will not be required to determine the controversy or to take any
action regarding it. The Escrow Agent may hold all documents and shares of IEC
Common Stock and may wait for settlement of any such controversy by final
appropriate legal proceedings or other means as, in the Escrow Agent's
discretion, the Escrow Agent may be required, despite what may be set forth
elsewhere in the Escrow Instructions. In such event, the Escrow Agent will not
be liable for damages. Furthermore, the Escrow Agent may at its option, file an
action of interpleader requiring the parties to answer and litigate any claims
and rights among themselves. The Escrow Agent is authorized to deposit with the
clerk of the court all documents and shares of IEC Common Stock held in escrow,
except all cost, expenses, charges and reasonable attorney fees incurred by the
Escrow Agent due to the interpleader action and which the parties jointly and
severally agree to pay. Upon initiating such action, the Escrow Agent shall be
fully released and discharged of and from all obligations and liability imposed
by the terms of the Escrow Instructions.
(vii) The parties and their respective successors and assigns agree
jointly and severally to indemnify and hold Escrow Agent harmless against any
and all losses, claims, damages, liabilities, and expenses, including reasonable
costs of investigation, counsel fees, including allocated costs of in-house
counsel and disbursements that may be imposed on Escrow Agent or incurred by
Escrow Agent in connection with the performance of his/her duties under the
Escrow Instructions, including but not limited to any litigation arising from
the Escrow Instructions or involving its subject matter other than arising out
of its negligence or willful misconduct.
(viii) The Escrow Agent may resign at any time upon giving at least
fifteen (15) days written notice to IEC and the Shareholder Representative;
provided, however, that no such resignation shall become effective until the
appointment of a successor escrow agent which shall be accomplished as follows:
the parties shall use their best efforts to mutually agree on a successor escrow
agent within fifteen (15) days after receiving such notice. If the parties fail
to agree upon a successor escrow agent within such time, the Escrow Agent shall
have the right to appoint a successor escrow agent authorized to do business in
the state of California. The successor escrow agent shall execute and deliver
an instrument accepting such appointment and it shall, without further acts, be
vested with all the estates, properties, rights, powers, and duties of the
predecessor escrow agent as if originally named as escrow agent. Upon
appointment of a successor escrow agent, the Escrow Agent shall be discharged
from any further duties and liability under the Escrow Instructions.
11. Escrow Agent Fees. All fees of the Escrow Agent for performance of
its duties hereunder shall be paid by IEC in accordance with the standard fee
schedule of the Escrow Agent. It is understood that the fees and usual charges
agreed upon for services of the Escrow Agent shall be considered compensation
for ordinary services as contemplated by the Escrow Instructions. In the event
that the conditions of the Escrow Agreement are not promptly fulfilled, or if
the Escrow Agent renders any service not provided for in the Escrow Instructions
or if the parties request a substantial modification of its terms, or if any
controversy arises, or if the Escrow Agent is made a party to, or intervenes in,
any litigation pertaining to the Escrow Fund or its subject matter, the Escrow
Agent
shall be reasonably compensated for such extraordinary services and reimbursed
for all costs, attorney's fees, including allocated costs of in-house counsel,
and expenses occasioned by such default, delay, controversy or litigation. IEC
promises to pay these sums upon demand.
12. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail with
postage and fees prepaid, addressed to each of the other parties entitled at the
following addresses, or at such other addresses as a party may designate by ten
days' advance written notice to each of the other parties thereto:
(i) If to IEC to:
Internet Extra Corporation
000 Xxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(ii) If to the Principal Shareholder or the Shareholder
Representative, to:
Netranscend Software Inc.
000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: _________________
Attention: Ruiqing "Xxxxxxx" Jiang
with a copy to:
Heller, Ehrman, White & XxXxxxxxx
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
13. Successors and Assignees. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, and their respective successors and
permitted assignees.
14. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
15. Severability. In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to
replace such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
IN WITNESS WHEREOF, the parties have caused this Escrow Agreement to be
signed by their duly authorized respective officers, all as of the date first
written above.
INTERNET EXTRA CORPORATION
a California corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------
Xxxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
PRINCIPAL SHAREHOLDER
Ruiqing "Xxxxxxx" Jiang
an individual
______________________________________________
SHAREHOLDER REPRESENTATIVE
Ruiqing "Xxxxxxx" Jiang
an individual
______________________________________________
ESCROW AGENT
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------
Xxxxxxx X. Xxxxxxx, Secretary of
Internet Extra Corporation, a California
corporation
IN WITNESS WHEREOF, the parties have caused this Escrow Agreement to be
signed by their duly authorized respective officers, all as of the date first
written above.
INTERNET EXTRA CORPORATION
a California corporation
By: ____________________________________________
Xxxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
PRINCIPAL SHAREHOLDER
Ruiqing "Xxxxxxx" Jiang
an individual
/s/ Ruiquing "Xxxxxxx" Jiang
------------------------------------------------
SHAREHOLDER REPRESENTATIVE
Ruiqing "Xxxxxxx" Jiang
an individual
/s/ Ruiquing "Xxxxxxx" Jiang
------------------------------------------------
ESCROW AGENT
By:_____________________________________________
Xxxxxxx X. Xxxxxxx, Secretary of
Internet Extra Corporation, a California
corporation
IN WITNESS WHEREOF, the parties have caused this Escrow Agreement to be
signed by their duly authorized respective officers, all as of the date first
written above.
INTERNET EXTRA CORPORATION
a California corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------
Xxxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
PRINCIPAL SHAREHOLDER
Ruiqing "Xxxxxxx" Jiang
an individual
______________________________________________
SHAREHOLDER REPRESENTATIVE
Ruiqing "Xxxxxxx" Jiang
an individual
______________________________________________
ESCROW AGENT
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------
Xxxxxxx X. Xxxxxxx, Secretary of
Internet Extra Corporation, a California
corporation
IN WITNESS WHEREOF, the parties have caused this Escrow Agreement to be
signed by their duly authorized respective officers, all as of the date first
written above.
INTERNET EXTRA CORPORATION
a California corporation
By: ____________________________________________
Xxxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
PRINCIPAL SHAREHOLDER
Ruiqing "Xxxxxxx" Jiang
an individual
/s/ Ruiquing "Xxxxxxx" Jiang
------------------------------------------------
SHAREHOLDER REPRESENTATIVE
Ruiqing "Xxxxxxx" Jiang
an individual
/s/ Ruiquing "Xxxxxxx" Jiang
------------------------------------------------
ESCROW AGENT
By:_____________________________________________
Xxxxxxx X. Xxxxxxx, Secretary of
Internet Extra Corporation, a California
corporation
